Exhibit 10.3

 

Form No. DMB 234 (Rev. 1/96)

AUTHORITY: Act 431 of 1984

COMPLETION: Required

PENALTY: Contract will not be executed unless form is filed

 

STATE OF MICHIGAN

DEPARTMENT OF MANAGEMENT AND BUDGET

OFFICE OF PURCHASING

P.O. BOX 30026, LANSING, MI 48909

OR

530 W. ALLEGAN, LANSING, MI 48933

 

CONTRACT NO.                                 

between

THE STATE OF MICHIGAN

and

 

NAME & ADDRESS OF VENDOR    TELEPHONE           

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     VENDOR NUMBER/MAIL CODE           

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     BUYER (517) 335-0230      Irene Pena

Contract Administrator: Cheryl Bupp

Comprehensive Health Care Program (CHCP) Services for Medicaid Beneficiaries in
Selected Michigan Counties — Department of Community Health

CONTRACT PERIOD:

  From: October 1, 2000   To: October 1, 2004*

TERMS  

 

NA

  SHIPMENT  

 

NA

F.O.B.  

 

NA

  SHIPPED FROM  

 

NA

MINIMUM DELIVERY REQUIREMENTS

*  Plus three (3) each possible one-year extensions

MISCELLANEOUS INFORMATION:

The terms and conditions of this Contract are those of ITB #071I0000251, this
Contract Agreement and the vendor’s quote dated 5-1-00, and subsequent Best And
Final Offer. In the event of any conflicts between the specifications, terms and
conditions indicated by the State and those indicated by the vendor, those of
the State take precedence.

 

Estimated Contract Value: The exact dollar value of this contract is unknown;
the Contractor will be paid based on actual beneficiary enrollment at the rates
(prices) specified in Attachment A to the Contract

 

THIS IS NOT AN ORDER: This Contract Agreement is awarded on the basis of our
inquiry bearing the ITB No.071I0000251. A Purchase Order Form will be issued
only as the requirements of the State Departments are submitted to the Office of
Purchasing. Orders for delivery may be issued directly by the State Departments
through the issuance of a Purchase Order Form.

 

All terms and conditions of the invitation to bid are made a part hereof.

 

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FOR THE VENDOR:       FOR THE STATE:            

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Firm Name       Signature            

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Authorized Agent Signature       Name          State Purchasing Director

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        Authorized Agent (Print or Type)       Title            

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Date       Date

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CONTRACT #071B [GRAPHIC]

 

TABLE OF CONTENTS

SECTION I

 

CONTRACTUAL SERVICES TERMS AND CONDITIONS

 

I-A

  

PURPOSE

   1

I-B

  

ISSUING OFFICE

   1

I-C

  

CONTRACT ADMINISTRATOR

   1

I-D

  

TERM OF CONTRACT

   2

I-E

  

PRICE

   2

I-F

  

COST LIABILITY

   2

I-G

  

CONTRACTOR RESPONSIBILITIES

   2

I-H

  

NEWS RELEASES

   3

I-I

  

DISCLOSURE

   3

I-J

  

CONTRACT INVOICING AND PAYMENT

   3

I-K

  

ACCOUNTING RECORDS

   4

I-L

  

INDEMNIFICATION

   4

     1.

  

General Indemnification

   4

     2.

  

Patent/Copyright Infringement Indemnification

   5

     3.

  

Indemnification Obligation Not Limited

   5

     4.

  

Continuation of Indemnification Obligation

   5

     5.

  

Exclusion

   5

I-M

  

CONTRACTOR’S LIABILITY INSURANCE

   5

I-N

  

LITIGATION

   7

I-O

  

CANCELLATION

   7

I-P

  

ASSIGNMENT

   8

I-Q

  

DELEGATION

   8

I-R

  

CONFIDENTIALITY

   8

I-S

  

NON-DISCRIMINATION CLAUSE

   8

I-T

  

MODIFICATION OF CONTRACT

   9

I-U

  

ACCEPTANCE OF PROPOSAL CONTENT

   9

I-V

  

RIGHT TO NEGOTIATE EXPANSION

   9

I-W

  

MODIFICATIONS, CONSENTS AND APPROVALS

   9

I-X

  

ENTIRE AGREEMENT AND ORDER OF PRECEDENCE

   10

I-Y

  

NO WAIVER OF DEFAULT

   10

I-Z

  

SEVERABILITY

   10

I-AA

  

DISCLAIMER

   10

I-BB

  

RELATIONSHIP OF THE PARTIES (INDEPENDENT CONTRACTOR)

   10

I-CC

  

NOTICES

   10

I-DD

  

UNFAIR LABOR PRACTICES

   11

I-EE

  

SURVIVOR

   11

I-FF

  

GOVERNING LAW

   11

 

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CONTRACT #071B [GRAPHIC]

 

SECTION II

 

WORK STATEMENT

 

II-A  

  

BACKGROUND/PROBLEM STATEMENT

   12

1.  

  

Value Purchasing

   12

2.  

  

Managed Care Direction

   12

II-B  

  

OBJECTIVES

   13

1.  

  

Objectives

   13

2.  

  

Objectives for Special Needs

   13

3.  

  

Objectives for Contractor Accountability

   13

II-C  

  

SPECIFICATIONS

   14

II-D  

  

TARGETED GEOGRAPHICAL AREA FOR IMPLEMENTATION OF THE CHCP

   14

1.  

  

Regions

   14

2.  

  

Multiple Region Service Areas

   15

3.  

  

Alternative Regions

   15

II-E  

  

MEDICAID ELIGIBILITY AND CHCP ENROLLMENT

   16

1.  

  

Medicaid Eligible Groups Who Must Enroll in the CHCP:

   16

2.  

  

Medicaid Eligible Groups Who May Voluntarily Enroll in the CHCP:

   16

3.  

  

Medicaid Eligible Groups Excluded From Enrollment in the CHCP:

   16

II-F  

  

ELIGIBILITY DETERMINATION

   16

II-G  

  

ENROLLMENT IN THE CHCP

   17

1.  

  

Enrollment Services

   17

2.  

  

Initial Enrollment

   17

3.  

  

Enrollment Lock-in

   17

4.  

  

Rural Area Exception

   18

5.  

  

Enrollment date

   18

6.  

  

Newborn Enrollment

   19

7.  

  

Open Enrollment

   19

8.  

  

Automatic Re-enrollment

   19

9.  

  

Enrollment Errors by the Department

   19

10.

  

    Enrollees who move out of the Contractor’s Service Area

   19

11.

  

    Disenrollment Requests Initiated by the Contractor

   19

12.

  

    Medical Exception

   20

13.

  

    Disenrollment for Cause Initiated by the Enrollee

   20

14.

  

    Termination of Coverage

   20

II-H  

  

SCOPE OF COMPREHENSIVE BENEFIT PACKAGE

   22

1.  

  

Services Included

   22

2.  

  

Enhanced Services

   23

3.  

  

Services Covered Outside of the Contract

   23

4.  

  

Services Prohibited or Excluded Under Medicaid:

   24

II-I   

  

SPECIAL COVERAGE PROVISIONS

   24

1.  

  

Emergency Services

   24

2.  

  

Out-of-Network Services

   25

3.  

  

Family Planning Services

   25

4.  

  

Maternal and Infant Support Services

   25

5.  

  

Federally Qualified Health Centers (FQHCs)

   26

6.  

  

Co-payments

   27

7.  

  

Abortions

   27

 

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CONTRACT #071B [GRAPHIC]

 

8.    

 

Pharmacy

   27

9.    

 

Well Child Care/Early and Periodic Screening, Diagnosis & Treatment (EPSDT)
Program

   28

10.  

 

Immunizations

   29

11.  

 

Transportation

   30

12.  

 

Transplant Services

   30

13.  

 

Post-Partum Stays

   30

14.  

 

Communicable Disease Services

   30

15.  

 

Restorative Health Services

   30

16.  

 

School Based/School Linked (Adolescent) Health Centers

   31

17.  

 

Hospice Services

   31

18.  

 

20 Visit Mental Health Outpatient Benefit

   31

II-J     

 

OBSERVANCE OF FEDERAL, STATE AND LOCAL LAWS

   31

1.    

 

Special Waiver Provisions for CHCP

   31

2.    

 

Fiscal Soundness of the Risk-Based Contractor

   32

3.    

 

Suspended Providers

   32

4.    

 

Public Health Reporting

   32

5.    

 

Compliance with CMS Regulation

   32

6.    

 

Compliance with HIPAA Regulation

   32

7.    

 

Advanced Directives Compliance

   33

8.    

 

Medicaid Policy

   33

II-K    

 

CONFIDENTIALITY

   33

II-L    

 

CRITERIA FOR CONTRACTORS

   33

1.    

 

Administrative and Organizational Criteria

   33

2.    

 

Financial Criteria

   34

3.    

 

Provider Network and Health Service Delivery Criteria

   34

II-M    

  CONTRACTOR ORGANIZATIONAL STRUCTURE, ADMINISTRATIVE SERVICES, FINANCIAL
REQUIREMENTS AND PROVIDER NETWORKS    34

1.    

 

Organizational Structure

   34

2.    

 

Administrative Personnel

   35

(a)

 

Executive Management

   35

(b)

 

Medical Director

   35

(c)

 

Quality Improvement/Utilization Director

   35

(d)

 

Chief Financial Officer

   36

(e)

 

Support/Administrative Staff

   36

(f)

 

Member Services Director

   36

(g)

 

Provider Services Director

   36

(h)

 

Grievance/Complaint Coordinator

   36

(i)

 

Management Information System (MIS) Director

   36

(j)

 

Compliance Officer

   36

3.    

 

Administrative Requirements

   36

4.    

 

Management Information Systems

   37

5.    

 

Governing Body

   37

6.    

 

Provider Network in the CHCP

   38

(a)

 

General

   38

(b)

 

Mainstreaming

   39

(c)

 

Coordination of Care with Public and Community Providers and Organizations

   40

 

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CONTRACT #071B [GRAPHIC]

 

(d)

 

Coordination of Care with Local Behavioral Health and Developmental Disability
Providers

   40

(e)

 

Network Changes

   41

(f)

 

Provider Contracts

   41

(g)

 

Disclosure of Physician Incentive Plan

   42

(h)

 

Provider Credentialing

   42

(i)

 

PCP Standards

   42

II-N    

 

PAYMENT TO PROVIDERS

   43

1.    

 

Electronic Billing Capacity

   44

2.    

 

Prompt Payment

   44

3.    

 

Payment Resolution Process

   44

4.    

 

Arbitration

   44

5.    

 

Post-payment Review

   45

6.    

 

Total Payment

   45

7.    

 

Case Rate Payments for Emergency Services

   45

8.    

 

Enrollee Liability for Payment

   45

II-O    

 

PROVIDER SERVICES (Network and Out-of-Network)

   45

II-P    

 

QUALITY ASSESSMENT AND PERFORMANCE IMPROVEMENT PROGRAM STANDARDS

   46

1.    

 

Quality Assessment and Performance Improvement Program Standards

   46

2.    

 

Annual Effectiveness Review

   47

3.    

 

Annual Performance Improvement Projects

   47

4.    

 

Performance Monitoring Standards

   47

5.    

 

External Quality Review

   48

6.    

 

Consumer Survey

   48

II-Q    

 

UTILIZATION MANAGEMENT

   48

II-R    

 

THIRD PARTY RESOURCE REQUIREMENTS

   49

II-S    

 

MARKETING

   49

1.    

 

Allowed Marketing Locations/Practices directed at the general population:

   49

2.    

 

Prohibited Marketing Locations/Practices that target individual Beneficiaries:

   50

3.    

 

Marketing Materials

   50

II-T    

 

MEMBER AND ENROLLEE SERVICES

   50

1.    

 

General

   50

2.    

 

Enrollee Education

   51

3.    

 

Member Handbook/Provider Directory

   51

4.    

 

Protection of Enrollees Against Liability for Payment and Balanced Billing

   53

II-U    

 

GRIEVANCE/APPEAL PROCEDURES

   54

1.    

 

Contractor Grievance/Appeal Procedure Requirements

   54

2.    

 

Notice to Enrollees of Grievance Procedure

   54

3.    

 

Notice to Enrollees of Appeal Procedure

   54

4.    

 

State Medicaid Appeal Process

   55

5.    

 

Expedited Appeal Process

   55

II-V    

 

CONTRACTOR On-Site Reviews

   55

II-W    

 

CONTRACT REMEDIES AND SANCTIONS

   56

II-X    

 

DATA REPORTING

   56

1.    

 

HEDIS®

   57

2.    

 

Encounter Data Reporting

   57

3.    

 

Financial and Claims Reporting Requirements

   57

4.    

 

Quality Assessment and Performance Improvement Program Reporting

   57

 

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CONTRACT #071B [GRAPHIC]

 

5. 

  

Semi-annual Grievance and Appeal Report

   58

II-Y  

  

RELEASE OF REPORT DATA

   58

II-Z  

  

MEDICAL RECORDS

   58

1. 

  

Medical Record Maintenance

   58

2. 

  

Medical Record Confidentiality/Access

   58

II-AA

  

SPECIAL PAYMENT PROVISIONS

   59

1. 

  

Payment of Rural Access Incentive

   59

2. 

  

Contractor Performance Bonus

   59

II-BB

  

RESPONSIBILITIES OF THE DEPARTMENT OF COMMUNITY HEALTH

   59

II-CC

  

PROGRAM INTEGRITY

   60

 

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CONTRACT #071B

 

SECTION III

 

CONTRACTOR INFORMATION

 

III-A

   BUSINESS ORGANIZATION    62

III-B

   AUTHORIZED CONTRACTOR EXPEDITER    62      APPENDICES     

A

   MODEL LOCAL AGREEMENT WITH LOCAL HEALTH DEPARTMENTS & MATRIX FOR COORDINATION
OF SERVICES     

B

   MODEL LOCAL AGREEMENT WITH BEHAVIORAL PROVIDER     

C

   MODEL LOCAL AGREEMENT WITH DEVELOPMENTAL DISABILITY PROVIDER     

D

   FORMAT FOR PROFILES OF PRIMARY CARE PROVIDERS, SPECIALISTS, & ANCILLARY
PROVIDER     

E

   KEY CONTRACTOR PERSONNEL AUTHORIZATION FOR RELEASE OF INFORMATION     

F

   HEALTH PLAN REPORTING FORMAT AND SCHEDULE           ATTACHMENTS     

A

   CONTRACTOR’S AWARDED PRICES     

B

   APPROVED SERVICE AREAS     

C

   CORRECTIVE ACTION PLANS (to be developed at a later date)     

D

   MEDICAID MANAGED CARE PERFORMANCE MONITORING STANDARDS     

E

   MODEL HEALTH PLAN/HOSPITAL CONTRACT     

 

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CONTRACT #071B [GRAPHIC]

 

DEFINITIONS/EXPLANATION OF TERMS

 

Abuse    Provider practices that are inconsistent with sound fiscal, business,
or medical practices, and result in an unnecessary cost to the Medicaid program,
or in reimbursement for services that are not medically necessary or that fail
to meet professionally recognized standards for health care. It also includes
beneficiary practices that result in unnecessary cost to the Medicaid program.
ACIP    Advisory Committee on Immunization Practices. A federal advisory
committee convened by the Center for Disease Control, Public Health Service,
Health & Human Services to make recommendations on the appropriate use and
scheduling of vaccines and immunizations for the general public. Administrative
Law Judge    A person designated by DCH to conduct the Administrative Hearing in
an impartial or unbiased manner. Advance directive    A written instruction,
such as a living will or durable power of attorney for health care, recognized
under State law, relating to the provision of health care when the individual is
incapacitated. Appeal   

A request for review of a Contractor’s decision that results in any of the
following actions:

 

•        The denial or limited authorization of a requested service, including
the type or level of service;

 

•        The reduction, suspension, or termination of a previously authorized
service;

 

•        The denial, in whole or in part, of payment for a properly authorized
and covered service;

 

•        The failure to provide services in a timely manner, as defined by the
State;

 

•        The failure of a Contractor to act within the established timeframes
for grievance and appeal disposition;

 

•        For a resident of a rural area with only one Medicaid Health Plan, the
denial of a Medicaid enrollee’s request to exercise his or her right, under 42
CFR 438.52(b)(2)(ii), to obtain services outside the network.

Balanced Budget Act    The Balanced Budget Act (BBA) of 1997 (Public law 105-33)
was signed into law by President Clinton in August 1997. This legislation enacts
the most significant changes to the Medicare and Medicaid Programs since their
inception. Additionally, it expands the services provided through the new Child
Health Insurance Program (Title XXI). Beneficiary    Any person determined
eligible for the Medical Assistance Program as defined below. Blanket Purchase
Order    Alternative term for “Contract” used in the State’s computer system
(Michigan Automated Information Network) MAIN. Business Day    Monday through
Friday except those days identified by the State as holidays. CAC    Clinical
Advisory Committee appointed by the DCH.

 

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CONTRACT #071B [GRAPHIC]

 

Capitation Rate    A fixed per person monthly rate payable to the Contractor by
the DCH for provision of all Covered Services defined within this Contract. This
rate shall not exceed the limits set forth in 42 CFR 447.361. CFR    Code of
Federal Regulations CHCP    Comprehensive Health Care Program. Capitated health
care services for Medicaid Beneficiaries in specified counties provided by
Contractors that contract with the State. Clean Claim    Clean Claim means that
as defined in MCL 400.111i and the Michigan Office of Financial and Insurance
Services Bulletin 2000/09. CMHSP    Community Mental Health Services Program CMS
   Centers for Medicare and Medicaid Services Contract    A binding agreement
between the State of Michigan and the Contractor (see also “Blanket Purchase”).
Contractor    A successful Bidder who is awarded a Contract to provide services
under CHCP. In this Contract, the terms Contractor, HMO, Contractor’s plan,
Health Plan, Qualified Health Plan, and QHP, are used interchangeably. Covered
Services    All services provided under Medicaid, as defined in Section II-H
(1)-(2) that the Contractor has agreed to provide or arrange to be provided.
CSHCS    Children’s Special Health Care Services. DCH or MDCH    The Department
of Community Health or the Michigan Department of Community Health and its
designated agents. DCH Administrative Hearing    Also called a fair hearing, an
impartial review by DCH of a decision made by the Contractor that the Enrollee
believes is inappropriate. An Administrative Law Judge conducts the
Administrative Hearing. Department    The Department of Community Health and its
designated agents. DMB    The Department of Management and Budget. Emergency
Medical Care/Services    Those services necessary to treat an emergency medical
condition. Emergency medical condition means a medical condition manifesting
itself by acute symptoms of sufficient severity (including severe pain) such
that a prudent lay person, With an average knowledge of health and medicine,
could reasonably expect the absence of immediate medical attention to result in:
(i) serious jeopardy to the health of the individual or, in the case of a
pregnant woman, the health of the woman or her unborn child; (ii) serious
impairment to bodily functions; or (iii) serious dysfunction of any bodily organ
or part Enrollee    Any Medicaid Beneficiary who is currently enrolled in
Medicaid managed care in a given Medicaid Health Plan.

 

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CONTRACT #071B [GRAPHIC]

 

Enrollment Capacity    The number of persons that the Contractor can serve
through its provider network under a Contract with the State. Enrollment
Capacity is determined by a Contractor based upon its provider network and
organizational capacity. The DCH will verify that the provider network is under
contract and of sufficient size before accepting the enrollment capacity
statement. Enrollment Service    An entity contracted by the DMB to contact and
educate general Medicaid and Children’s Special Health Care Services
Beneficiaries about managed care and to enroll, disenroll, and change
enrollment(s) for these Beneficiaries. Expedited Appeal    An appeal conducted
when the Contractor determines (based on the Enrollee request) or the provider
indicates (in making the request on the enrollee’s behalf or supporting the
enrollee’s request) that taking the time for a standard resolution could
seriously jeopardize the Enrollee’s life, health, or ability to attain,
maintain, or regain maximum function. Expedited Authorization Decision    An
authorization decision required to be expedited due to a request by the provider
or determination by the Contractor that following the standard timeframe could
seriously jeopardize the Enrollee’s life or health. FIA    Family Independence
Agency, formerly the Department of Social Services. FFS    Fee-for-service. A
reimbursement methodology that provides a payment amount for each individual
service delivered. FQHC    Federal Qualified Health Center Fraud    An
intentional deception or misrepresentation made by a person with the knowledge
that the deception could result in some unauthorized benefit to himself or some
other person. It includes any act that constitutes fraud under applicable
Federal or State law. Grievance    Grievance means an expression of
dissatisfaction about any matter other than an action subject to appeal. Health
Plans    Managed care organizations that provide or arrange for the delivery of
comprehensive health care services in exchange for a fixed prepaid sum or Per
Member Per Month prepaid payment without regard to the frequency, extent, or
kind of health care services. A Health Plan must be licensed as a Health
Maintenance Organization (HMO) not later than October 1, 2000. (See also
“Contractor.”) HEDIS    Health Employer Data and Information Set. HMO    An
entity that has received and maintains a state license to operate as an HMO.
Long Term Care Facility    Any facility licensed and certified by the Michigan
Department of Community Health, in accordance with 1978 PA 368, as amended, to
provide inpatient nursing care services.

 

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CONTRACT #071B [GRAPHIC]

 

Marketing    Marketing means any communication, from a Contractor directed to a
Medicaid Beneficiary who is not enrolled in the Contractor’s plan, that can
reasonably be interpreted as intended to influence the Beneficiary to enroll in
that particular Contractor’s Medicaid product, or either to not enroll in, or to
disenroll from, another health plan’s Medicaid product. Medicaid/Medical
Assistance Program    A federal/state program authorized by the Title XIX of the
Social Security Act, as amended, 42 U.S.C. 1396 et seq.; and section 105 of 1939
PA 280, as amended, MCL 400.105; which provides federal matching funds for a
Medical Assistance Program. Specified medical and financial eligibility
requirements must be met. MSA    Medical Services Administration, the agency
within the Department of Community Health responsible for the administration of
the Medicaid Program. PCP    Primary Care Provider. Those providers within the
Health Plans who are designated as responsible for providing or arranging health
care for specified Enrollees of the Contractor. A PCP may be any of the
following: family practice physician, general practice physician, internal
medicine physician, OB/GYN specialist, or pediatric physician when appropriate
for an Enrollee, other physician specialists when appropriate for an Enrollee’s
health condition, nurse practitioner, and physician assistants. Persons with
Special Health Care Needs    Enrollees who lose eligibility for the Children’s
Special Health Care Services (CSHCS) program due to the program’s age
requirements. PMPM    Per Member Per Month. Prevalent Language    Specific
Non-English Language that is spoken as the primary language by more than 5% of
the Contractor’s Enrollees. Provider    Provider means a health facility or a
person licensed, certified, or registered under parts 61 to 65 or 161 to 182 of
Michigan’s Public Health code, 1978 PA 368, as amended, MCL 333.6101-333.6523
and MCL 333.16101-333.18237. Purchasing Office    The Office of Purchasing
within the Department of Management and Budget that is the sole point of contact
throughout the procurement process. QIC    Quality Improvement Committee
appointed by the Contractor. QHP    A Qualified Health Plan awarded a Contract
to provide services under CHCP. (See also “Contractor”). RFP    Request for
Proposal. Interchangeable with ITB, (Invitation to Bid). A procurement document
that describes the services required, and instructs prospective Bidders how to
prepare a response.

 

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CONTRACT #071B [GRAPHIC]

 

Rural    Rural is defined as any county not included in a standard metropolitan
area (SMA). State    The State of Michigan. State Purchasing Director    The
Director of the Office of Purchasing within the Department of Management and
Budget. Also referred to as Director of Purchasing. Subcontractor    A
subcontractor is any person or entity that performs a required, ongoing function
of the Contractor under this Contract. A health care provider included in the
network of the Contractor is not considered a subcontractor for purposes of this
Contract unless otherwise specifically noted in this Contract. Contracts for
one-time only functions or service contracts, such as maintenance or insurance
protection, are not intended to be covered by this section. Successful Bidder   
The Bidder (Contractor) awarded a Contract as a result of a proposal submitted
in response to the ITB. VFC    Vaccines for Children program. A federal program
which makes vaccine available free in immunize children age 18 and under who are
Medicaid eligible, who have no health insurance, who are native Americans or
Alaskans, or who have health insurance but not for immunizations and receive
their immunization at a FQHC. Well Child Visits/EPSDT    Early and periodic
screening, diagnosis, and treatment program. A child health program of
prevention and treatment intended to ensure availability and accessibility of
primary, preventive, and other necessary health care resources and to help
Medicaid children and their families to effectively use these resources.

 

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CONTRACT #071B [GRAPHIC]

 

SECTION I

CONTRACTUAL SERVICES TERMS AND CONDITIONS

 

I-A PURPOSE

 

The State of Michigan, by the Department of Management and Budget (DMB), Office
of Purchasing, hereby enters into a Contract with the Contractor identified in
Section III-A for the Michigan Department of Community Health (DCH).

 

The purpose of this Contract is to obtain the services of the Contractor to
provide Comprehensive Health Care Program (CHCP) Services for Medicaid
beneficiaries (Beneficiaries) in the service area as described in Attachment B
to this Contract. This is a unit price (Per Member Per Month [PMPM] Capitated
Rate) Contract, see Attachment A. The term of the Contract shall be effective
October 1, 2000 and continue until October 1, 2004. The Contract may be extended
for no more than one (1) one year extensions after September 30, 2004.

 

I-B ISSUING OFFICE

 

This Contract is issued by DMB, Office of Purchasing (Office of Purchasing), for
and on the behalf of DCH. Where actions are a combination of those of the Office
of Purchasing and DCH, the authority will be known as the State.

 

The Office of Purchasing is the sole point of contact in the State with regard
to all procurement and contractual matters relating to the services describe
herein. The Office of Purchasing is the only office authorized to change,
modify, amend, clarify, or otherwise alter the prices, specifications, terms,
and conditions of this Contract. The OFFICE OF PURCHASING will remain the SOLE
POINT OF CONTACT until such time as the Director of Purchasing shall direct
otherwise in writing. See Paragraph I-C below. All communications with the DMB
must be addressed to:

 

Irene Pena

Office of Purchasing

Department of Management & Budget

P.O. Box 30026

Lansing, MI 48909

 

I-C CONTRACT ADMINISTRATOR

 

Upon receipt by the Office of Purchasing of the properly executed Contract, it
is anticipated that the Director of Purchasing will direct that the person named
below be authorized to administer the Contract on a day-to-day basis during the
term of the Contract. However, administration of this Contract implies no
authority to change, modify, clarify, amend, or otherwise alter the prices,
terms, conditions, and specifications of the Contract. That authority is
retained by the Office of Purchasing. The Contract Administrator for this
project is:

 

Cheryl Bupp, Manager

Plan Management Section

Comprehensive Health Plan Division

Michigan Department of Community Health

P.O. Box 30479

Lansing, Michigan 48909-7979

 

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I-D TERM OF CONTRACT

 

The term of this Contract shall be from October 1, 2000 through September 30,
2002. The Contract may be extended for no more than three (3) one year
extensions after September 30, 2002. The State’s fiscal year is October 1st
through September 30th. Payments in any given fiscal year are contingent upon
and subject to enactment of legislative appropriations.

 

Because Beneficiaries must have a choice among Contractors, the State cannot
guarantee an exact number of Enrollees to any Contractor.

 

I-E PRICE

 

Price adjustments for the second year period of the Contract and for any
Contract extension thereafter may be proposed by the State or the Contractor.
Price adjustments proposed by the Contractor must be submitted in writing to the
Director of Purchasing no later than June 15th of each contract year. Price
adjustments proposed by the State will be submitted to the Contractor in no
later than June 15th of each contract year.

 

Any changes requested by either party are subject to negotiation and written
acceptance by the State Purchasing Director before becoming effective. In the
event the State and the Contractor cannot agree to changes by August 31st of
each contract year, the Contract may be canceled pursuant to Section I-O (6)
CANCELLATION. The exact dollar value of this Contract is unknown; the Contractor
will be paid based on actual Beneficiary enrollment at the rates (prices)
specified in Attachment “A” (Awarded Prices) of the Contract.

 

I-F COST LIABILITY

 

The State assumes no responsibility or liability for costs incurred by the
Contractor prior to the signing of this Contract by all parties. Total liability
of the State is limited to the terms and conditions of this Contract.

 

I-G CONTRACTOR RESPONSIBILITIES

 

The Contractor will be required to assume responsibility for all contractual
activities relative to this Contract whether or not that Contractor performs
them. Further, the State will consider the Contractor to be the sole point of
contact with regard to contractual matters, including payment of any and all
charges resulting from the Contract. Although it is anticipated that the
Contractor will perform the major portion of the duties as requested,
subcontracting by the Contractor for performance of any of the functions
requires prior notice to the State. The Contractor must identify all
subcontractors, including firm name and address, contact person, complete
description of work to be subcontracted, and descriptive information concerning
subcontractor’s organizational abilities. The Contractor must also outline the
contractual relationship between the Contractor and each subcontractor. The
State reserves the right to approve subcontractors for administrative functions
for this project and to require the Contractor to replace subcontractors found
to be unacceptable. The Contractor is totally responsible for adherence by the
subcontractor to all provisions of the Contract.

 

A subcontractor is any person or entity that performs a required, ongoing
function of the Contractor under this Contract. A health care provider included
in the network of the Contractor is not considered a subcontractor for purposes
of this Contract unless otherwise specifically noted in this Contract. Contracts
for one-time only functions or service contracts, such as maintenance or
insurance protection, are not intended to be covered by this section.

 

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Although Contractors may enter into subcontracts, all communications shall take
place between the Contractor and the State directly; therefore, all
communication by subcontractors must be with the Contractor only, not with the
State.

 

If a Contractor elects to use a subcontractor not specified in the Contractor’s
response, the State must be provided with a written request at least 21 days
prior to the use of such subcontractor. Use of a subcontractor not approved by
the State may be cause for termination of the Contract.

 

In accordance with 42 CFR 434.6(b), all subcontracts entered into by the
Contractor must be in writing and fulfill the requirements of 42 CFR 434.6(a)
that are appropriate to the service or activity delegated under the subcontract.
All subcontracts must be in compliance with all State of Michigan statutes and
will be subject to the provisions thereof. All subcontracts must fulfill the
requirements of this Contract that are appropriate to the services or activities
delegated under the subcontract. For each portion of the proposed services to be
arranged for and administered by a subcontractor, the technical proposal must
include: (1) the identification of the functions to be performed by the
subcontractor, and (2) the subcontractor’s related qualifications and
experience. All employment agreements, provider contracts, or other
arrangements, by which the Contractor intends to deliver services required under
this Contract, whether or not characterized as a subcontract, shall be subject
to review and approval by the State and must meet all other requirements of this
paragraph appropriate to the service or activity delegated under the agreement.

 

The Contractor shall furnish information to the State as to the amount of the
subcontract, the qualifications of the subcontractor for guaranteeing
performance, and any other data that may be required by the State. All
subcontracts held by the Contractor shall be made available on request for
inspection and examination by appropriate State officials, and such
relationships must meet with the approval of the State.

 

The Contractor shall furnish information to the State necessary to administer
all requirements of the Contract. The State shall give Contractors at least 30
days notice before requiring new information.

 

I-H NEWS RELEASES

 

News releases pertaining to this document or the services, study, data, or
project to which it relates will not be made without prior written State
approval, and then only in accordance with the explicit written instructions
from the State. No information or data related to this Contract is to be
released without prior approval of the designated State personnel.

 

I–I DISCLOSURE

 

All information in this Contract is subject to the provisions of the Freedom of
Information Act, 1976 PA 442, as amended, MCL 15.231, et seq.

 

I-J CONTRACT INVOICING AND PAYMENT

 

This Contract reflects a fixed reimbursement mechanism and the specific payment
schedule for this Contract will be monthly. The services will be under a fixed
price per covered member multiplied by the actual member count assigned to the
Contractor in the month for which payment is made. DCH will generate reports to
the Contractor prior to month’s end identifying expected enrollment for the
following service month. At the beginning of the service month, DCH will
automatically generate invoices based on actual member enrollment. The
Contractor will receive one lump-sum payment

 

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approximately at mid-service month. A process will be in place to ensure timely
payments and to identify Enrollees that the Contractor was responsible for
during the month but for which no payment was received in the service month
(e.g., newborns).

 

The application of Contract remedies and performance bonus payments as described
in Section II of this Contract will affect the lump sum payment. Payments in any
given fiscal year are contingent upon and subject to enactment of legislative
appropriations.

 

I-K ACCOUNTING RECORDS

 

The Contractor will be required to maintain all pertinent financial and
accounting records and evidence pertaining to the Contract in accordance with
generally accepted accounting principles and other procedures specified by the
State of Michigan. Financial and accounting records shall be made available,
upon request, to the Health Care Financing Administration (CMS), the State of
Michigan, its designees, the Department of Attorney General, or the Office of
Auditor General at any time during the Contract period and any extension
thereof, and for six (6) years from expiration date and final payment on the
Contract or extension thereof.

 

I-L INDEMNIFICATION

 

  1. General Indemnification

 

The Contractor shall indemnify, defend and hold harmless the State, its
departments, divisions, agencies, sections, commissions, officers, employees and
agents, from and against all losses, liabilities, penalties, fines, damages and
claims (including taxes), and all related costs and expenses (including
reasonable attorneys’ fees and disbursements and costs of investigation,
litigation, settlement, judgments, interest and penalties), arising from or in
connection with any of the following:

 

  (a) Any claim, demand, action, citation or legal proceeding against the State,
its employees and agents arising out of or resulting from (1) the products and
services provided or (2) performance of the work, duties, responsibilities,
actions or omissions of the Contractor or any of its subcontractors under this
Contract;

 

  (b) Any claim, demand, action, citation or legal proceeding against the State,
its employees and agents arising out of or resulting from a breach by the
Contractor of any representation or warranty made by the Contractor in the
Contract;

 

  (c) Any claim, demand, action, citation or legal proceeding against the State,
its employees and agents arising out of or related to occurrences that the
Contractor is required to insure against as provided for in this Contract;

 

  (d) Any claim, demand, action, citation or legal proceeding against the State,
its employees and agents arising out of or resulting from the death or bodily
injury of any person, or the damage, loss or destruction of any real or tangible
personal property, in connection with the performance of services by the
Contractor, by any of its subcontractors, by anyone directly or indirectly
employed by any of them, or by anyone for whose acts any of them may be liable;

 

  (e) Any claim, demand, action, citation or legal proceeding against the State,
its employees and agents which results from an act or omission of the Contractor
or any of its subcontractors in its or their capacity as an employer of a
person.

 

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  2. Patent/Copyright Infringement Indemnification

 

The Contractor shall indemnify, defend and hold harmless the State, its
employees and agents from and against all losses, liabilities, damages
(including taxes), and all related costs and expenses (including reasonable
attorney’s fees and disbursements and costs of investigation, litigation,
settlement, judgments, interest and penalties) incurred in connection with any
action or proceeding threatened or brought against the State to the extent that
such action or proceeding is based on a claim that any piece of equipment,
software, commodity or service supplied by the Contractor or its subcontractors,
or the operation of such equipment, software, commodity or service, or the use
or reproduction of any documentation provided with such equipment, software,
commodity or service infringes any United States of America or foreign patent,
copyright, trade secret or other proprietary right of any person or entity,
which right is enforceable under the laws of the United States of America. In
addition, should the equipment, software, commodity, or service, or the
operation thereof, become or in the Contractor’s opinion be likely to become the
subject of a claim of infringement, the Contractor shall at the Contractor’s
sole expense (i) procure for the State the right to continue using the
equipment, software, commodity or service or, if such option is not reasonably
available to the Contractor, (ii) replace or modify the same with equipment,
software, commodity or service of equivalent function and performance so that it
becomes non-infringing, or, if such option is not reasonably available to the
Contractor, (iii) accept its return by the State with appropriate credits to the
State against the Contractor’s charges and reimburse the State for any losses or
costs incurred as a consequence of the State ceasing its use and returning it.

 

  3. Indemnification Obligation Not Limited

 

In any and all claims against the State of Michigan, or any of its agents or
employees, by any employee of the Contractor or any of its subcontractors, the
indemnification obligation under the Contract shall not be limited in any way by
the amount or type of damages, compensation or benefits payable by or for the
Contractor or any of its subcontractors under worker’s disability compensation
acts, disability benefits acts, or other employee benefits acts. This
indemnification clause is intended to be comprehensive. Any overlap in
subclauses, or the fact that greater specificity is provided as to some
categories of risk, is not intended to limit the scope of indemnification under
any other subclause.

 

  4. Continuation of Indemnification Obligation

 

The duty to indemnify will continue in full force and effect notwithstanding the
expiration or early termination of the Contract with respect to any claims based
on facts or conditions that occurred prior to termination.

 

  5. Exclusion

 

The Contractor is not required to indemnify the State of Michigan for services
provided by health care providers mandated under federal statute or State
policy, unless the health care provider is a voluntary contractual member of the
Contractor’s provider network. Local agreements with Community Mental Health
Services program (CMHSP) do not constitute network provider contracts.

 

I-M CONTRACTOR’S LIABILITY INSURANCE

 

The Contractor shall purchase and maintain such insurance as will protect it
from claims set forth below, which may arise out of or result from the
Contractor’s operations under the Contract whether such operations are by it or
by any subcontractor or by anyone

 

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directly or indirectly employed by any of them, or by anyone for whose acts any
of them may be liable:

 

  1. Claims under workers’ disability compensation, disability benefit, and
other similar employee benefit act. A non-resident Contractor shall have
insurance for benefits payable under Michigan’s Workers’ Disability Compensation
Law for any employee resident of and hired in Michigan; and as respects any
other employee protected by workers’ disability compensation laws of any other
state the Contractor shall have insurance or participate in a mandatory State
fund to cover the benefits payable to any such employee.

 

In the event any work is subcontracted, the Contractor shall require the
subcontractor similarly to provide workers’ compensation insurance for all the
subcontractor’s employees working in the State, unless those are covered by the
workers’ compensation protection afforded by the Contractor. Any subcontract
executed with a firm not having the requisite workers’ compensation coverage
will be considered void by the State.

 

  2. Claims for damages because of bodily injury, occupational sickness or
disease, or death of its employees.

 

  3. Claims for damages because of bodily injury, sickness or disease, or death
of any person other than its employees, subject to limits of liability of not
less than $1,000,000.00 each occurrence and, when applicable, $2,000,000.00
annual aggregate for non-automobile hazards and as required by law for
automobile hazards.

 

  4. Claims for damages because of injury to or destruction of tangible
property, including loss of use resulting there from, subject to a limit of
liability of not less than $50,000.00 each occurrence for non-automobile hazards
and as required by law for automobile hazards.

 

  5. Insurance for subparagraphs (3) and (4) non-automobile hazards on a
combined single limit of liability basis shall not be less than $1,000,000.00
each occurrence and when applicable, $2,000,000.00 annual aggregate.

 

  6. Director’s and Officer’s Errors and Omissions coverage that includes
coverage of the Contractor’s peer review and care management activities and has
limits of at least $1,000,000.00 per occurrence and $3,000,000.00 aggregate.

 

  7. The Contractor shall also require that each of its subcontractors maintain
insurance coverage as specified above, except for subparagraph (6), or have the
subcontractors provide coverage for each subcontractor’s liability and
employees. The Contractor must provide proof, upon request of the DCH, of its
Provider’s medical professional liability insurance in amounts consistent with
the community accepted standards for similar professionals. The provision of
this clause shall not be deemed to limit the liability or responsibility of the
Contractor or any of its subcontractors herein.

 

  8. The insurance shall be written for not less than any limits of liability
herein specified or required by law, whichever is greater, and shall include
contractual liability insurance as applicable to the Contractor’s obligations
under the Indemnification clause of the Contract.

 

  9.

Before starting work, the contractor’s insurance agency must furnish to the
director of the office of purchasing, original certificate(s) of insurance
verifying that the required liability coverage is in effect for the amounts
specified in the contract. The contract number must be shown on the certificate
of insurance to ensure correct filing. The Contractor must immediately notify
the State of any changes in type,

 

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CONTRACT #071B [GRAPHIC]

 

 

amount, or duration of insurance coverage. These certificates shall contain a
provision to the effect that the policy will not be canceled until at least
fifteen days prior written notice has been given to the State. The written
notice will have the Contract number and must be received by the Director of
Purchasing.

 

I-N LITIGATION

 

The State, its departments, and its agents shall not be responsible for
representing or defending the Contractor, Contractor’s personnel, or any other
employee, agent or subcontractor of the Contractor, named as a defendant in any
lawsuit or in connection with any tort claim.

 

The State and the Contractor agree to make all reasonable efforts to cooperate
with each other in the defense of any litigation brought by any person or
persons not a party to the Contract.

 

The Contractor shall submit annual litigation reports in a format established by
DCH, providing the following detail for all civil litigation that the
Contractor, subcontractor, or the Contractor’s insurers or insurance agents are
parties to:

 

Case name and docket number

Name of plaintiff(s) and defendant(s)

Names and addresses of all counsel appearing

Nature of the claim

Status of the case.

 

The provisions of this section shall survive the expiration or termination of
the Contract.

 

I-O CANCELLATION

 

  1. The State may cancel the Contract for default of the Contractor. Default is
defined as the failure of the Contractor to fulfill the obligations of the
proposal or Contract. In case of default by the Contractor, the State may
immediately cancel the Contract without further liability to the State, its
departments, agencies, and employees, and procure the articles or services from
other sources, and hold the Contractor responsible for all costs occasioned
thereby.

 

  2. The State may cancel the Contract in the event the State no longer needs
the services or products specified in the Contract, or in the event, program
changes, changes in laws, rules, or regulations occur. The State may cancel the
Contract without further liability to the State, its departments, divisions,
agencies, sections, commissions, officers, agents, and employees by giving the
Contractor written notice of such cancellation 30 days prior to the date of
cancellation.

 

  3. The State may cancel the Contract for lack of funding. The Contractor
acknowledges that the term of this Contract extends for several fiscal years and
that continuation of this Contract is subject to appropriation of funds for this
project. If funds to enable the State to effect continued payment under this
Contract are not appropriated or otherwise made available, the State shall have
the right to terminate this Contract without penalty at the end of the last
period for which funds have been appropriated or otherwise made available by
giving written notice of termination to the Contractor. The State shall give the
Contractor written notice of such non-appropriation within 30 days after it
receives notice of such non-appropriation.

 

  4.

The State may immediately cancel the Contract without further liability to the
State, its departments, divisions, agencies, sections, commissions, officers,
agents and employees if the Contractor, an officer of the Contractor, or an
owner of a 25% or greater share of the Contractor, is convicted of a criminal
offense incident to the

 

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CONTRACT #071B [GRAPHIC]

 

 

application for or performance of a State, public, or private contact or
subcontract; or convicted of a criminal offense including but not limited to any
of the following: embezzlement, theft, forgery, bribery, falsification or
destruction of records, receiving stolen property, attempting to influence a
public employee to breach the ethical conduct standards for State of Michigan
employees; convicted under state or federal antitrust statutes; or convicted of
any other criminal offense, which, in the sole discretion of the State, reflects
poorly on the Contractor’s business integrity.

 

  5. The State may immediately cancel the Contract in whole or in part by giving
notice of termination to the Contractor if any final administrative or judicial
decision or adjudication disapproves a previously approved request for purchase
of personal services pursuant to Constitution 1963, Article 11, Section 5, and
Civil Service Rule 4-6.

 

  6. The State may, with 30 days written notice to the Contractor, cancel the
Contract in the event prices proposed for Contract modification/extension are
unacceptable to the State. (See Sections I-E, Price, and I-T, Modification of
Contract).

 

  7. Either the State or the Contractor may, upon 90 days written notice, cancel
the contract for the convenience of either party.

 

In the event that a Contract is canceled, the Contractor will cooperate with the
State to implement a transition plan for Enrollees. The Contractor will be paid
for Covered Services provided during the transition period in accordance with
the Capitation Rates in effect between the Contractor and the State at the time
of cancellation. Contractors will be provided due process before the termination
of any Contract.

 

I-P ASSIGNMENT

 

The Contractor shall not have the right to assign or delegate any of its duties
or obligations under this Contract to any other party (whether by operation of
law or otherwise), without the prior written consent of the State Purchasing
Director. To obtain consent for assignment of this Contract to another party,
documentation must be provided to the State Purchasing Director to demonstrate
that the proposed assignee meets all of the requirements for a Contractor under
this Contract. Any purported assignment in violation of this Section shall be
null and void. Further, the Contractor may not assign the right to receive money
due under the Contract without consent of the Director of Purchasing.

 

I-Q DELEGATION

 

The Contractor shall not delegate any duties or obligations under this Contract
to a subcontractor other than a subcontractor named in the bid unless the State
Purchasing Director has given written consent to the delegation.

 

I-R CONFIDENTIALITY

 

The use or disclosure of information regarding Enrollees obtained in connection
with the performance of this Contract shall be restricted to purposes directly
related to the administration of services required under the Contract.

 

I-S NON-DISCRIMINATION CLAUSE

 

The Contractor shall comply with the Elliott-Larsen Civil Rights Act, 1976 PA
453, as amended, MCL 37.2101 et seq., the Persons with Disabilities Civil Rights
Act, 1976 PA 220, as amended, MCL 37.1101 et seq., and all other federal, state
and local fair employment practices and equal opportunity laws and covenants
that it shall not discriminate against any employee or applicant for employment,
to be employed in the

 

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CONTRACT #071B [GRAPHIC]

 

performance of this Contract, with respect to his or her hire, tenure, terms,
conditions, or privileges of employment, or any matter directly or indirectly
related to employment, because of his or her race, religion, color, national
origin, age, sex, height, weight, marital status, or physical or mental
disability that is unrelated to the individual’s ability to perform the duties
of a particular job or position. The Contractor agrees to include in every
subcontract entered into for the performance of this Contract this covenant not
to discriminate in employment. A breach of this covenant is a material breach of
this Contract.

 

I-T MODIFICATION OF CONTRACT

 

The Director of Purchasing reserves the right to modify Covered Services
required under this Contract during the course of this Contract. Such
modification may include adding or deleting tasks that this service shall
encompass and/or any other modifications deemed necessary. Any changes in
pricing proposed by the Contractor resulting from the requested changes are
subject to acceptance by the State. Changes may be increases or decreases.
Contract changes will not be necessary in order for the Contractor to keep
current with changes in the delivery of Covered Services that may result from
new technology or new drugs.

 

In the event prices submitted as the result of a modification of covered service
are not acceptable to the state, the contract may be terminated and the contract
may be subject to competitive

 

Bidding and award based upon the new modified covered services if adequate
capacity is not readily available to serve beneficiaries in the affected service
area through existing contracts with other contractors.

 

I-U ACCEPTANCE OF PROPOSAL CONTENT

 

The contents of the RFP and the Contractor’s proposal resulting in this Contract
are contractual obligations.

 

I-V RIGHT TO NEGOTIATE EXPANSION

 

The State reserves the right to negotiate expansion of the services outlined
within this Contract to accommodate the related service needs of additional
selected State agencies, or of additional entities within DCH.

 

Such expansion shall be limited to those situations approved and negotiated by
the Office of Purchasing at the request of DCH or another State agency. The
Contractor shall be obliged to expeditiously evaluate and respond to specified
needs submitted by the Office of Purchasing with a proposal outlining requested
services and pricing. All pricing for expanded services shall be shown to be
consistent with the cost elements and /or unit pricing of the original Contract.

 

In the event that a Contract expansion proposal is accepted by the State, the
Office of Purchasing shall issue a Contract change notice to the Contract as
notice to the Contractor to provide the work specified. Compensation is not
allowed the Contractor until such time as a Contract change notice is issued.

 

I-W MODIFICATIONS, CONSENTS AND APPROVALS

 

This Contract will not be modified, amended, extended, or augmented, except by a
writing executed by the parties hereto, and any breach or default by a party
shall not be waived or released other than in writing signed by the other party.

 

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I-X ENTIRE AGREEMENT AND ORDER OF PRECEDENCE

 

The following documents constitute the complete and exclusive statement of the
agreement between the parties as it relates to this transaction. In the event of
any conflict among the documents making up the Contract, the following order of
precedence shall apply (in descending order of precedence):

 

  A. This Contract and any Addenda thereto

 

  B. State’s RFP and any Addenda thereto

 

  C. Contractor’s proposal to the State’s RFP and Addenda

 

  D. Policy manuals of the Medical Assistance Program and subsequent
publications

 

In the event of any conflict over the interpretation of the specifications,
terms, and conditions indicated by the State and those indicated by the
Contractor, those of the State take precedence.

 

This Contract supersedes all proposals or other prior agreements, oral or
written, and all other communications between the parties.

 

I-Y NO WAIVER OF DEFAULT

 

The failure of the State to insist upon strict adherence to any term of this
Contract shall not be considered a waiver or deprive the State of the right
thereafter to insist upon strict adherence to that term, or any other term, of
the Contract.

 

I-Z SEVERABILITY

 

Each provision of this Contract shall be deemed to be severable from all other
provisions of the Contract and, if one or more of the provisions shall be
declared invalid, the remaining provisions of the Contract shall remain in full
force and effect.

 

I-AA DISCLAIMER

 

All statistical and fiscal information contained within the Contract and its
attachments, and any amendments and modifications thereto, reflect the best and
most accurate information available to DCH at the time of drafting. No
inaccuracies in such data shall constitute a basis for legal recovery of
damages, either real or punitive.

 

Captions and headings used in this Contract are for information and organization
purposes. Captions and headings, including inaccurate references, do not, in any
way, define or limit the requirements or terms and conditions of this Contract.

 

I-BB RELATIONSHIP OF THE PARTIES (INDEPENDENT CONTRACTOR)

 

The relationship between the State and the Contractor is that of client and
independent contractor. No agent, employee, or servant of the Contractor or any
of its subcontractors shall be deemed to be an employee, agent, or servant of
the State for any reason. The Contractor will be solely and entirely responsible
for its acts and the acts of its agents, employees, servants, and subcontractors
during the performance of a contract resulting from this Contract.

 

I-CC NOTICES

 

Any notice given to a party under this Contract must be written and shall be
deemed effective, if addressed to such party at the address indicated in
sections I-B, I-C and III-A of this Contract upon (i) delivery, if hand
delivered; (ii) receipt of a confirmed

 

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transmission by telefacsimile if a copy of the notice is sent by another means
specified in this Section; (iii) the third (3rd) Business Day after being sent
by U.S. mail, postage pre-paid, return receipt requested; or (iv) the next
Business Day after being sent by a nationally recognized overnight express
courier with a reliable tracking system.

 

Either party may change its address where notices are to be sent by giving
written notice in accordance with this Section.

 

I-DD UNFAIR LABOR PRACTICES

 

Pursuant to 1980 PA 278, as amended, MCL 423.321 et seq., the State shall not
award a contract or subcontract to an employer or any subcontractor,
manufacturer or supplier of the employer, whose name appears in the current
register compiled by the Michigan Department of Consumer and Industry Services.
The State may void any contract if, subsequent to award of the Contract, the
name of the Contractor as an employer, or the name of the subcontractor,
manufacturer of supplier of the contractor appears in the register.

 

I-EE SURVIVOR

 

Any provisions of the Contract that impose continuing obligations on the parties
including, but not limited to, the Contractor’s indemnity and other obligations,
shall survive the expiration or cancellation of this Contract for any reason.

 

I-FF GOVERNING LAW

 

This Contract shall in all respects be governed by, and construed in accordance
with, the laws of the State of Michigan.

 

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SECTION II

WORK STATEMENT

 

II-A BACKGROUND/PROBLEM STATEMENT

 

  1. Value Purchasing

 

The creation of DCH through Executive Order 1996-1 brought together policy,
programs, and resources to enable the State to become a more effective purchaser
of health care services for the Medicaid population. As the single State agency
responsible for health policy and purchasing of health care services using State
appropriated and federal matching funds, DCH intends to get better value while
ensuring quality and access. DCH will focus on “value purchasing.” Value
purchasing involves aligning financing incentives to stimulate appropriate
changes in the health delivery system that will:

 

  • Bring organization and accountability for the full range of benefits,

 

  • Provide greater flexibility in the range of services;

 

  • Improve access to and quality of care;

 

  • Achieve greater cost efficiency; and

 

  • Link performance of Contractors to improvements in the health status of the
community.

 

  2. Managed Care Direction

 

Under the Comprehensive Health Care Program (CHCP), the State selectively
contracts with Contractors who will accept financial risk for managing
comprehensive care through a performance contract. The managed care direction is
the health care purchasing direction for Michigan’s future. Change in health
care delivery systems is happening at the national and state levels. Michigan
will proactively work to shape the health care marketplace as a purchaser of
services. The focus will be on quality of care, accessibility, and
cost-effectiveness.

 

It is critical that Michigan act now to bring the rate of growth in Medicaid
more in line with the forecasted rate of growth in State revenues. Since 1990,
State revenues have grown by about 3% per year. The growth of the Medicaid
budget must be slowed but, at the same time, access to quality health care for
the Medicaid population must be ensured.

 

There are three basic ways to slow down cost growth: restrict eligibility,
reduce benefits, or stimulate more efficiency in the health delivery system
through managed care. DCH has chosen not to make program cuts, but rather to use
the efficiency approach because other important health care goals can be
achieved at the same time.

 

There are two categories of specialized services that are available outside of
the CHCP. These are behavioral health services and services for persons with
developmental disabilities. These specialized services are clearly defined as
beyond the scope of benefits that are included in the CHCP. Any Contractor
contracting with the State as a capitated managed care provider will be
responsible for coordinating access to these specialized services with those
providers designated by the State to provide them. The criteria for contracted
Qualified Health Plans (MHPs) include the implementation of local agreements
with the behavioral health and developmental disability providers who are under
contract with DCH. Model agreements between Contractors and behavioral health
and developmental disability providers are included in the appendix to this
Contract.

 

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II-B OBJECTIVES

 

  1. Objectives

 

The Contract objectives of the State are:

 

  • The assurance of access to primary and preventive care;

 

  • The coordination for all necessary health care services;

 

  • The provision of medical care that is of high quality, provides continuity
and is appropriate for the individual; and

 

  • The delivery of health care in a manner that makes costs more predictable
for the Medicaid population.

 

  2. Objectives for Special Needs

 

When providing services under the CHCP, the Contractor must take into
consideration the requirements of the Medicaid program and how to best serve the
Medicaid population in the CHCP. As an objective, the Contractor must also
stress the collaborative effort of both the State and the private sector to
operate a managed care system that meets the special needs of these Enrollees.

 

It is recognized that special needs will vary by individual and by county or
region. Contractors must have an underlying organizational capacity to address
the special needs of their Enrollees, such as: responding to requests for
assignment of specialists as Primary Care Providers (PCP), assisting in
coordinating with other support services, and generally responding and
anticipating needs of Enrollees with special needs. Under their Covered Service
responsibilities, Contractors are expected to provide early prevention and
intervention services for recipients with special needs, as well as all other
recipients.

 

As an example, while support services for persons with developmental
disabilities may be outside of the direct service responsibility of the
Contractor, the Contractor does have responsibility to assist in coordinating
arrangements to receive necessary support services. This coordination must be
consistent with the person-centered planning principles established within the
revised Michigan’s Mental Health Code.

 

Another example would be for Enrollees who have chronic illnesses such as
diabetes or end-stage renal disease. In these instances, the PCP assignment may
be more appropriately located with a specialist within the Contractor’s network.
When a Contractor designates a physician specialist as the PCP, that PCP will be
responsible for coordinating all continuing medical care for the assigned
Enrollee.

 

  3. Objectives for Contractor Accountability

 

Contractor accountability must be established in order to ensure that the
State’s objectives for managed care and goal for immunizations are met and the
objectives for special populations are addressed. Contractors contracting with
the State will be held accountable for:

 

  • Ensuring that all Covered Services are available and accessible to Enrollees
with reasonable promptness and in a manner, which ensures continuity. Medically
necessary services shall be available and accessible 24 hours a day and 7 days a
week.

 

  • Delivering health care services in a manner that focuses on health promotion
and disease prevention and features disease management strategies.

 

  • Demonstrating the Contractor’s capacity to adequately serve the Contractor’s
expected enrollment of Enrollees.

 

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  • Providing access to appropriate providers, including qualified specialists
for all medically necessary services including those specialists described under
model agreements for behavioral health and developmental disabilities.

 

  • Providing assurances that it will not deny enrollment to, expel, or refuse
to re-enroll any individual because of the individual’s health status or need
for services, and that it will notify all eligible persons of such assurances at
the time of enrollment.

 

  • Paying providers in a timely manner for all Covered Services.

 

  • Establishing an ongoing internal quality improvement and utilization review
program.

 

  • Providing procedures to ensure program integrity through the detection and
elimination of fraud and abuse and cooperate with DCH and the Department of
Attorney General as necessary.

 

  • Reporting encounter data and aggregate data including data on inpatient and
outpatient hospital care, physician visits, pharmaceutical services, and other
services specified by the Department.

 

  • Providing procedures for hearing and timely resolving grievances between the
Contractor and Enrollees.

 

  • Providing for outreach and care coordination to Enrollees to assist them in
using their health care resources appropriately.

 

  • Collaborating, through local agreements, with specialized behavioral and
developmental disability services contractors on services provided by them to
the Contractor’s Enrollees.

 

  • Providing assurances for the Contractor’s solvency and guaranteeing that
Enrollees and the State will not be liable for debts of the Contractor.

 

  • Meeting all standards and requirements contained in this Contract, and
complying with all applicable federal and state laws, administrative rules, and
policies promulgated by DCH.

 

  • Cooperating with the State and/or CMS in all matters related to fulfilling
Contract requirements and obligations.

 

II-C SPECIFICATIONS

 

The following sections provide an explanation of the specifications and
expectations that the Contractor must meet and the services that must be
provided under the Contract. The Contractor is not, however, constrained from
supplementing this with additional services or elements deemed necessary to
fulfill the intent of the CHCP.

 

II-D TARGETED GEOGRAPHICAL AREA FOR IMPLEMENTATION OF THE CHCP

 

  1. Regions

 

The State will divide the delivery of Covered Services into ten regions.

 

Contractor’s plans for Region 1 and 10 must be tailored to each county in terms
of the provider network, Enrollment Capacity and Capitation Rates. Region 1
(Wayne County) and Region 10 (Oakland County) may have partial county service
areas.

 

Contractor’s plans for Regions 2 through 9 must establish:

 

  (a) a network of providers that guarantees access to required services for the
entire region; or

 

  (b) a network of providers that guarantees access to required services for a
significant portion of the region.

 

Under alternative (b) the Contract must specifically identify the contiguous
portion of the region that will be served along (entire counties) with a
description of the available provider network.

 

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The counties included in the specific regions are as follows:

 

Region 1:

   Wayne

Region 2:

   Hillsdale, Jackson, Lenawee, Livingston, Monroe, and Washtenaw

Region 3:

   Barry, Berrien, Branch, Calhoun, Cass, Kalamazoo, St. Joseph, Van Buren

Region 4:

   Allegan, Antrim, Benzie, Charlevoix, Cheboygan, Emmet, Grand Traverse, Ionia,
Kalkaska, Kent, Lake, Leelanau Manistee, Mason, Mecosta, Missaukee, Montcalm,
Muskegon, Newaygo, Oceana, Osceola, Ottawa, and Wexford

Region 5:

   Clinton, Eaton, Ingham

Region 6:

   Genesee, Lapeer, Shiawassee

Region 7:

   Alcona, Alpena, Arenac, Bay, Clare, Crawford, Gladwin, Gratiot, Huron, Iosco,
Isabella, Midland, Montmorency, Ogemaw, Oscoda, Otsego, Presque Isle, Roscommon,
Saginaw, Sanilac, Tuscola

Region 8:

   Alger, Baraga, Chippewa, Delta, Dickinson, Gogebic Houghton, Iron, Keweenaw,
Luce, Mackinac, Marquette, Menominee, Ontonagon, Schoolcraft

Region 9:

   Macomb and St. Clair

Region 10:

   Oakland

 

  2. Multiple Region Service Areas

 

Although Contractors may propose to contract for services in more than one of
the above-described regions, the Contractor agrees to tailor its services to
each individual region in terms of the provider network, Enrollment Capacity,
and Capitation Rates. DCH may determine Contractors to be qualified in one
region but not in another.

 

Contractor may request service area expansion at any time during the term of the
Contract using the provider profile information form contained in Appendix D of
the Contract. If Contractor seeks approval in a region which it did not seek or
receive a service area approval under the original RFP (071I0000251), DCH may
negotiate a contract modification covering that service area that is within the
parameters of approved pricing already in place for other contractors already
approved in the same county.

 

  3. Alternative Regions

 

Contractors may propose alternatives to the regions listed above under the
following condition:

 

  • One or more contiguous counties from other listed regions may be included in
the service area for the Contract. The counties must be contiguous to the
original region under Contract. Under this alternative, the proposed provider
network and Enrollment Capacity shall be included with the original region.
However, the Capitation Rates, under this alternative, must be specific for the
contiguous county(ies) in addition to the regional Capitation Rates.

 

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II-E MEDICAID ELIGIBILITY AND CHCP ENROLLMENT

 

The Michigan Medicaid program arranges for and administers medical assistance to
approximately 1.2 million Beneficiaries. This includes the categorically needy
(those individuals eligible for, or receiving, federally-aided financial
assistance or those deemed categorically needy) and the medically needy
populations. Eligibility for Michigan’s Medicaid program is based on a
combination of financial and non-financial factors. Within the Medicaid eligible
population, there are groups that must enroll in the CHCP, groups that may
voluntarily enroll, and groups that are excluded from participation in the CHCP
as follows:

 

  1. Medicaid Eligible Groups Who Must Enroll in the CHCP:

 

  • Families with children receiving assistance under the Financial Independence
Program (FIP)

 

  • Persons receiving Mich-Care Medicaid or Medicaid for pregnant women

 

  • Persons under age 21 who are receiving Medicaid.

 

  • Persons receiving Medicaid for caretaker relatives and families with
dependent children who do not receive FIP

 

  • Supplemental Security Income (SSI) Beneficiaries who do not receive Medicare

 

  • Persons receiving Medicaid for the blind or disabled

 

  • Persons receiving Medicaid for the aged

 

  • Pregnant women

 

  2. Medicaid Eligible Groups Who May Voluntarily Enroll in the CHCP:

 

  • Migrants

 

  • Native Americans

 

  • Persons in the Traumatic Brain Injury program

 

  3. Medicaid Eligible Groups Excluded From Enrollment in the CHCP:

 

  • Persons without full Medicaid coverage, including those in the State Medical
Program or PlusCare

 

  • Persons with Medicaid who reside in an ICF/MR (intermediate care facilities
for the mentally retarded), or a State psychiatric hospital.

 

  • Persons receiving long term care (custodial care) in a licensed nursing
facility

 

  • Persons being served under the Home & Community Based Elderly Waiver

 

  • Persons enrolled in Children’s Special Health Care Services (CSHCS)

 

  • Persons with commercial HMO coverage, including Medicare HMO coverage.

 

  • Persons in PACE (Program for All-inclusive Care for the Elderly)

 

  • Spend-down clients

 

  • Children in Foster Care or Child Care Institutions

 

  • Persons in the Refugee Assistance Program

 

  • Persons in the Repatriate Assistance Program

 

  • Persons with both Medicare and Medicaid eligibility

 

II-F ELIGIBILITY DETERMINATION

 

The State has the sole authority for determining whether individuals or families
meet any of the eligibility requirements as specified for enrollment in the
CHCP.

 

Individuals who attain eligibility due to a pregnancy are usually guaranteed
eligibility for comprehensive services through 60 days post-partum or post-loss
of pregnancy. Their newborns are usually guaranteed coverage for 60 days and may
be covered for one full year.

 

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II-G ENROLLMENT IN THE CHCP

 

  1. Enrollment Services

 

The State is required to contract for services to help Beneficiaries make
informed choices regarding their health care, assist with client satisfaction
and access surveys, and assist Beneficiaries in the appropriate use of the
Contractor’s complaint and grievance systems. DCH contracts with an Enrollment
Services contractor to contact and educate general Medicaid and CSHCS
Beneficiaries about managed care and to enroll, disenroll, and change enrollment
for these Beneficiaries. Although this Contract indicates that the enrollment
and disenrollment process and related functions will be performed by DCH,
generally, these activities are part of the Enrollment Services contract.
Enrollment Services references to DCH are intended to indicate functions that
will be performed by either DCH or the Enrollment Services contractor. All
Contractors agree to work closely with DCH and provide necessary information,
including provider files.

 

  2. Initial Enrollment

 

After a person applies to FIA for Medicaid, he or she will be assessed for
eligibility in a Medicaid managed care program. If they are determined eligible
for the CHCP, they will be given marketing material on the Contractors available
to them, and the opportunity to speak with an Enrollee counselor to obtain more
in-depth information and to get answers to any questions or concerns they may
have. DCH will provide access to a toll-free number to call for information or
to designate their preferred Contractor. Beneficiaries eligible for the CHCP
will have full choice of Contractors within their county of residence.
Beneficiaries must decide on the Contractor they wish to enroll in within 30
days from the date of approval of Medicaid eligibility. If they do not
voluntarily choose a Contractor within 30 days of approval, DCH will
automatically assign the Beneficiaries to Contractors within their county of
residence.

 

Under the automatic enrollment process, Beneficiaries will be automatically
assigned to Contractors based on performance of the Contractor in areas
specified by DCH. DCH will automatically assign a larger proportion of
Beneficiaries to Contractors with a higher performance ranking. The capacity of
the Contractor to accept new Enrollees and to provide reasonable accessibility
for the Enrollees also will be taken into consideration in automatic Beneficiary
enrollment. Individuals in a family unit will be assigned together whenever
possible. DCH has the sole authority for determining the methodology and
criteria to be used for automatic enrollment.

 

  3. Enrollment Lock-in

 

Except as stated in this subsection, enrollment into a Contractor’s plan will be
for a period of 12 months with the following conditions:

 

  • At least 60 days before the start of each enrollment period and at least
once a year, DCH, or the Enrollment Services contractor, will notify Enrollees
of their right to disenroll;

 

  • Enrollees will be provided with an opportunity to select any Contractor
approved for their area during this open enrollment period;

 

  • Enrollees will be notified that if they do nothing, their current enrollment
will continue;

 

  • Enrollees who choose to remain with the same Contractor will be deemed to
have had their opportunity for disenrollment without cause and declined that
opportunity;

 

  • New Enrollees, those who have changed from one Contractor to another or are
new to Medicaid eligibility, will have 90 days within which they may change
Contractors without cause;

 

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  • Enrollees who change enrollment within the 90-day period will have another
90 days within which they may change Contractors without cause and this may
continue throughout the year;

 

  • An Enrollee who has already had a 90-day period with a particular Contractor
will not be entitled to another 90-day period within the year with the same
Contractor;

 

  • Enrollees who disenroll from a Contractor will be required to change
enrollment to another Contractor;

 

  • All such changes will be approved and implemented by DCH on a calendar month
basis.

 

  4. Rural Area Exception

 

The DCH will establish a Rural Exception Policy consistent with 42 CFR 438.52
and with the approval from The Centers for Medicare and Medicaid Services that
permits a rural exception to the waiver requirement of having two HMOs in every
county. This exception will permit mandatory enrollment of beneficiaries into a
single health plan. This policy will only be implemented in counties that are
designated as “Rural.” A Rural County is defined as any county that is
non-urban. The beneficiary much be permitted to choose from at least two
physicians or case managers. The beneficiary must have the option of obtaining
services from any other provider if the following conditions exist:

 

  • The type of service or specialist is not available within the HMO,

 

  • The provider is not part of the network, but is the main source of a service
to the beneficiary,

 

  • The only provider available to the beneficiary does not, because of moral or
religious objections, provide the service the enrollee seeks,

 

  • Related services must be performed by the same provider and all of the
services are not available within network,

 

  • The State determines other circumstances that warrant out of network
treatment.

 

The State shall determine the rural counties to be part of this exception. The
State will determine the method of Health Plan Selection and Payment based on
Benchmark status, performance measures, provider network, current enrollment,
and/or other factors relevant to the area. Attachment A (Awarded Price) will be
amended, if applicable, if the health plan is awarded a rural exception county.

 

  5. Enrollment date

 

Any changes in enrollment will be approved and implemented by DCH on a calendar
month basis.

 

If a Beneficiary is determined eligible during a month, he or she is eligible
for the entire month. In some cases, Enrollees may be retroactively determined
eligible. Once a Beneficiary (other than a newborn) is determined to be Medicaid
eligible, enrollment in the CHCP and assignment to a Contractor will occur on
the first day of the month following the eligibility determination. Contractors
will not be responsible for paying for health care services during a period of
retroactive eligibility and prior to the date of enrollment in their health
plan, except for newborns (Refer to II-G6). Only full-month capitation payments
will be made to the Contractor.

 

If the Beneficiary is in an inpatient hospital setting on the date of enrollment
(first day of the month), the Contractor will not be responsible for the
inpatient stay or any charges incurred prior to the date of discharge. The
Contractor will be responsible for all care from the date of discharge forward.
Similarly, if an Enrollee is disenrolled from a Contractor and is in an
inpatient hospital setting on the date

 

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CONTRACT #071B [GRAPHIC]

 

of disenrollment (last day of the month), the Contractor will be responsible for
all charges incurred until the date of discharge.

 

  6. Newborn Enrollment

 

Newborns of eligible CHCP mothers who were enrolled at the time of the child’s
birth will be automatically enrolled with the mother’s Contractor. The
Contractor is responsible for submitting a newborn notification form to DCH. The
Contractor will be responsible for all Covered Services for the newborn until
notified otherwise by DCH. At a minimum, newborns are eligible for the month of
their birth and may be eligible for up to one year or longer. The Contractor
will receive a capitation payment for the month of birth and for all subsequent
months of enrollment.

 

  7. Open Enrollment

 

Open enrollment will occur for all Beneficiaries at least once every 12 months.
Enrollees will be offered the choice to stay in the health plan they are in or
to change to another Contractor within their county at the end of the 12-month
lock-in. If the beneficiary resides in a county currently operating under the
Rural Exception, there will be no open enrollment period.

 

  8. Automatic Re-enrollment

 

Enrollees who are disenrolled from a Contractor’s plan due to loss of Medicaid
eligibility will be automatically re-enrolled or assigned to the same Contractor
should they regain eligibility within three months. If more than three months
have elapsed, Beneficiaries will have full choice of Contractors within their
county of residence.

 

  9. Enrollment Errors by the Department

 

If DCH enrolls a non-eligible person with a Contractor, DCH will retroactively
disenroll the person as soon as the error is discovered and will recoup the
capitation paid to the Contractor. Contractor may then recoup payments from its
providers if that is permissible under its provider contracts.

 

  10. Enrollees who move out of the Contractor’s Service Area

 

The Contractor agrees to be responsible for services provided to an Enrollee who
has moved out of the Contractor’s service area after the effective date of
enrollment until the Enrollee is disenrolled from the Contractor. DCH will
permit Contractor to submit information that an Enrollee has moved out of
service area only if such information can be corroborated by an independent
third party acceptable to DCH. DCH will expedite prospective disenrollments of
Enrollees and process all such disenrollments effective the next available month
after notification from FIA that the Enrollee has left the Contractor’s service
area. Until the Enrollee is disenrolled from the Contractor, the Contractor will
receive a Capitation Rate for these Enrollees at a rate consistent with the
highest rate approved for the Contractor. The Contractor is responsible for all
medically necessary Covered Services for these Enrollees until they are
disenrolled. The Contractor may use its utilization management protocols for
hospital admissions and specialty referrals for Enrollees in this situation.
Contractors are responsible for all medically necessary authorized services
until a member is disenrolled from a plan. Contractors may require members to
return to use network providers and provide transportation and Contractors may
authorize out of network providers to provide medically necessary services.
Enrollment of Beneficiaries who reside out of the service area of a Contractor
before the effective date of enrollment will be considered an “enrollment error”
as described above.

 

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  11. Disenrollment Requests Initiated by the Contractor

 

The Contractor may initiate special disenrollment requests to DCH based on
Enrollee actions inconsistent with Contractor membership—for example, if there
is fraud, abuse of the Contractor, or other intentional misconduct; or if, in
the opinion of the attending PCP, the Beneficiary’s behavior makes it medically
infeasible to safely or prudently render Covered Services to the Enrollee.
Special disenrollment requests are divided into three categories:

 

  • Violent/life-threatening situations involving physical acts of violence;
physical or verbal threats of violence made against Contractor providers, staff,
or the public at Contractor locations; or stalking situations.

 

  • Fraud/misrepresentation involving alteration or theft of prescriptions,
misrepresentation of Contractor membership, or unauthorized use of CHCP
benefits.

 

  • Other noncompliance situations involving the failure to follow treatment
plan; repeated use of non-Contractor providers; Contractor provider refusal to
see the Enrollee; repeated emergency room use; and other situations that impede
care.

 

Disenrollment requests may also be initiated by the Contractor if the Enrollee
becomes medically eligible for services under Title V of the Social Security Act
as described in Section II-U-4-cv (page 56) or is admitted to a nursing facility
for custodial care. The Contractor must provide DCH with medical documentation
to support this type of disenrollment request. Information must be provided in a
timely manner using the format specified by DCH. DCH reserves the right to
require additional information from the Contractor to assess the need for
Enrollee disenrollment and to determine the Enrollee’s eligibility for special
services.

 

  12. Medical Exception

 

The Beneficiary may request an exception to enrollment in the CHCP if he or she
has a serious medical condition and is undergoing active treatment for that
condition with a physician that does not participate with the Contractor at the
time of enrollment. The Beneficiary must submit a medical exception request to
DCH.

 

  13. Disenrollment for Cause Initiated by the Enrollee

 

The Enrollee may request a disenrollment for cause from a Contractor’s plan at
any time during the enrollment period. Reasons cited in a request for
disenrollment for cause may include poor quality care or lack of access to
necessary specialty services covered under the Contract. Beneficiaries must
demonstrate that adequate care is not available by providers within the Health
Plan’s provider network. Further criteria, as necessary, will be developed by
DCH. Enrollees who are granted a disenrollment for cause will be required to
change enrollment to another Contractor.

 

  14. Termination of Coverage

 

  (a) The Contractor shall be responsible for the Enrollee’s medical care until
the Department notifies the Contractor that its responsibility for the Enrollee
is no longer in effect.

 

  (b)

DCH will not retroactively disenroll any Enrollees unless the person was
enrolled in error, the person died before the beginning of the month in which a
capitation payment was made, or for CSHCS enrollment as described under (c) (v)
below. Recoupments of capitation will be collected by DCH for all retroactive
disenrollments. DCH shall only retroactively enroll newborns. During Contract
year beginning October 1, 2001, the DCH will initiate a process to prospectively
re-enroll Medicaid Beneficiaries with the Contractor who have regained
eligibility within 93 days from the date eligibility was lost. Until that
process is implemented, the Contractor will remain responsible for medically
necessary

 

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CONTRACT #071B [GRAPHIC]

 

 

services provided to Beneficiaries who were retroactively reinstated with the
Contractor.

 

  (c) Coverage for an Enrollee shall terminate whenever any of the following
occurs:

 

  i. This Contract is terminated for any reason.

 

  ii. The Enrollee is no longer eligible for Medicaid and does not regain
eligibility within ninety-three (93) days.

 

  iii. The Enrollee dies. The Contractor shall be entitled to a capitation
payment for such person through the last day of the month in which death
occurred.

 

  iv. Enrollee moves outside the Contractor’s service area. In such instances,
the Enrollee shall be disenrolled effective the first (1st) day of the month
following DCH’s implementation of the change of address. The Contractor shall
remain responsible for all medically necessary Covered Services until the
effective date of disenrollment

 

  v. The Enrollee is medically eligible for CSHCS and has elected to enroll in
CSHCS. When the Enrollee has joined CSHCS, the Enrollee will be disenrolled from
the Contractor’s health plan effective with the first day of the month for which
CSHCS medical eligibility was determined. The Contractor will assist DCH in
determining medical eligibility by promptly providing medical documentation to
DCH using standard forms and will also assist the DCH in CSHCS enrollment
education efforts after medical eligibility has been confirmed.

 

  vi. The Enrollee is eligible for long-term custodial services in a nursing
facility following discharge from an acute care inpatient facility.

 

  • The Contractor shall involve DCH in discharge planning for Enrollees whom
the Contractor believes will require custodial long-term care services in a
nursing facility upon discharge from the inpatient setting. If DCH is involved
and if DCH agrees that the Enrollee meets the criteria for admission to a
nursing facility for long-term custodial care upon discharge from the inpatient
setting, DCH will disenroll the Enrollee from the Contractor’s plan upon
discharge from the inpatient setting.

 

  • If the Contractor fails to provide DCH with sufficient notice of the
impending discharge or does not include DCH in discharge planning for the
Enrollee, the Contractor will be responsible for all services required by the
Enrollee for up to 45 days.

 

  • The Contractor is responsible for all restorative and rehabilitative
services required by its Enrollees (including care in a nursing facility). The
Contractor is not responsible for Covered Services provided in a nursing
facility that was not authorized by the Contractor.

 

  • DCH has sole responsibility for the determination of eligibility for
long-term care services paid for by DCH.

 

  vii. The Enrollee is admitted to a state psychiatric hospital. An Enrollee
admitted to a state psychiatric hospital shall be disenrolled at the end of the
month. The Contractor shall not be responsible for reimbursing the state
psychiatric hospital.

 

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II-H SCOPE OF COMPREHENSIVE BENEFIT PACKAGE

 

  1. Services Included

 

The Covered Services that the Contractor has available for Enrollees must
include, at a minimum, the Covered Services listed below. The Contractor may
limit services to those which are medically necessary and appropriate, and which
conform to professionally accepted standards of care. Contractors must operate
consistent with all applicable Medicaid provider manuals and publications for
coverages and limitations. If new services are added to the Michigan Medicaid
Program, or if services are expanded, eliminated, or otherwise changed, the
Contractor must implement the changes consistent with State direction in
accordance with the provisions of Contract Section I-T.

 

Although the Contractor must provide the full range of Covered Services listed
below, they may choose to provide services over and above those specified.

 

The services provided to Enrollees under this Contract include, but are not
limited to, the following:

 

  • Ambulance and other emergency medical transportation

 

  • Blood lead follow-up services for individuals under the age of 21

 

  • Certified nurse midwife services

 

  • Certified pediatric and family nurse practitioner services

 

  • Chiropractic services for persons under age 21

 

  • Diagnostic lab, x-ray and other imaging services

 

  • Durable medical equipment and supplies

 

  • Emergency services

 

  • End Stage Renal Disease services

 

  • Family planning services

 

  • Health education

 

  • Hearing & speech services

 

  • Hearing aids for persons under age 21

 

  • Home Health services

 

  • Hospice services (if requested by the Enrollee)

 

  • Immunizations

 

  • Inpatient and outpatient hospital services

 

  • Intermittent or short-term restorative or rehabilitative nursing care (in or
out of a facility)

 

  • Maternal and Infant Support Services (MSS/ISS)

 

  • Medically necessary weight reduction services

 

  • Mental health care up to 20 outpatient visits per Contract year

 

  • Out-of-state services authorized by the Contractor

 

  • Outreach for included services, especially, pregnancy related and well-child
care

 

  • Parenting and birthing classes

 

  • Pharmacy services

 

  • Podiatry services for persons under age 21

 

  • Practitioners’ services (such as those provided by physicians, optometrists
and dentists enrolled as a Medicaid Provider Type 10)

 

  • Prosthetics & orthotics

 

  • Therapies, (speech, language, physical, occupational)

 

  • Transplant services

 

  • Transportation

 

  • Treatment for sexually transmitted disease (STD)

 

  • Vision services

 

  • Well child/EPSDT for persons under age 21

 

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CONTRACT #071B [GRAPHIC]

 

  2. Enhanced Services

 

In conjunction with the provision of Covered Services, the Contractor agrees to
do the following:

 

  • Place strong emphasis on programs to enhance the general health and
well-being of Enrollees;

 

  • Makes available health promotion programs to the Enrollees;

 

  • Promote the availability of health education classes for Enrollees;

 

  • Consider providing education for Enrollees with, or at risk for, a specific
disability;

 

  • Consider providing education to Enrollees, Enrollees’ families, and other
health care providers about early intervention and management strategies for
various illnesses and/or exacerbations related to that disability or
disabilities.

 

The Contractor agrees that the enhanced services must comply with the marketing
and other relevant guidelines established by DCH. DCH will be receptive to
innovation in the provision of health promotion services and, if appropriate,
will seek any federal waivers necessary for the Contractor to implement a
desired innovative program.

 

The Contractor may not charge an Enrollee a fee for participating in health
education services that fall under the definition of a Covered Service under
this section of the Contract. A nominal fee may be charged to an Enrollee if the
Enrollee elects to participate in programs beyond the Covered Services.

 

  3. Services Covered Outside of the Contract

 

The following services are not Contractor requirements:

 

  • Dental services

 

  • Services provided by a school district and billed through the Intermediate
School District

 

  • Inpatient hospital psychiatric services (Contractors are not responsible for
the physician cost related to providing psychiatric admission physical and
histories. However, if physician services are required for other than
psychiatric care during a psychiatric inpatient admission, the Contractor would
be responsible for covering the cost, provided the service has been prior
authorized and is a covered benefit.)

 

  • Outpatient partial hospitalization psychiatric care

 

  • Mental health services in excess of 20 outpatient visits each contract year

 

  • Substance abuse services through accredited providers including:

 

  • Screening and assessment

 

  • Detoxification

 

  • Intensive outpatient counseling and other outpatient services

 

  • Methadone treatment

 

  • Services provided to persons with developmental disabilities and billed
through Provider Type 21

 

  • Custodial care in a nursing facility

 

  • Home and Community based waiver program services

 

  • Personal care or home help services

 

  • Transportation for services not covered in the CHCP

 

  • Pharmacy and related services prescribed by providers under the State’s
Contract for specialty behavioral services or the State’s Contract for specialty
services for persons with developmental disabilities

 

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  4. Services Prohibited or Excluded Under Medicaid:

 

  • Elective abortions and related services

 

  • Experimental/Investigational drugs, procedures or equipment

 

  • Elective cosmetic surgery

 

II-I SPECIAL COVERAGE PROVISIONS

 

Specific coverage and payment policies apply to certain types of services and
providers, including the following:

 

  • Emergency services

 

  • Out-of-network services

 

  • Family planning services

 

  • Maternal and Infant Support Services

 

  • Federally Qualified Health Center (FQHC)

 

  • Co-payments

 

  • Abortions

 

  • Pharmacy services

 

  • Early and Periodic Screening, Diagnosis & Treatment (EPSDT) Program

 

  • Immunizations

 

  • Transportation

 

  • Transplant services

 

  • Post-partum stays

 

  • Communicable disease services

 

  • Restorative health services

 

  • Adolescent health centers

 

  1. Emergency Services

 

The Contractor must cover Emergency Services as well as medical screening exams
consistent with the Emergency Medical Treatment and Active Labor Act (EMTALA)
(41 USCS 1395 dd (a)). The Enrollee must be screened and stabilized without
requiring prior authorization.

 

The Contractor must ensure that Emergency Services are available 24 hours a day
and 7 days a week. The Contractor is responsible for payment of all out-of-plan
or out-of-area Emergency Services and medical screening and stabilization
services provided in an emergency department of a hospital consistent with the
legal obligation of the emergency department to provide such services. The
Contractor will not be responsible for paying for non-emergency treatment
services that are not authorized by the Contractor.

 

  (a) Emergency Transportation

 

The Contractor agrees to provide emergency transportation for Enrollees. In the
absence of a contract between the emergency transportation provider and the
Contractor, a properly completed and coded claim form for emergency transport,
which includes an appropriate ICD-9-CM diagnosis code as described in Medicaid
policy, will receive timely processing and payment by the Contractor.

 

  (b) Professional Services

 

The Contractor agrees to provide professional services that are needed to
evaluate or stabilize an emergency medical condition that is found to exist
using a prudent layperson standard. Contractors acknowledge that hospitals that
offer emergency services are required to perform a medical screening examination
on emergency room clients leading to a clinical determination by the examining
physician that an emergency medical condition does or does not

 

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CONTRACT #071B [GRAPHIC]

 

exist. The Contractor further acknowledges that if an emergency medical
condition is found to exist, the examining physician must provide whatever
treatment is necessary to stabilize that condition of the Enrollee.

 

  (c) Facility Services

 

The Contractor agrees to ensure that Emergency Services continue until the
Enrollee is stabilized and can be safely discharged or transferred. If an
Enrollee requires hospitalization or other health care services that arise out
of the screening assessment provided by the emergency department, then the
Contractor may require prior authorization for such services. However, such
services shall be deemed prior authorized if the Contractor does not respond
within the timeframe established under rules of the federal Balanced Budget Act
of 1997 for responding to a request for authorization being made by the
emergency department.

 

  2. Out-of-Network Services

 

Services may be Contractor authorized either out of the area or out of the
Contractor’s network of providers. Unless otherwise noted in this Contract, the
Contractor is responsible for coverage and payment of all emergency and
authorized care provided outside of the established network. Out-of-network
claims must be paid at established Medicaid fees that currently exist for paying
participating Medicaid providers as established by Medicaid policy.

 

  3. Family Planning Services

 

Family planning services include any medically approved diagnostic evaluation,
drugs, supplies, devices, and related counseling for the purpose of voluntarily
preventing or delaying pregnancy or for the detection or treatment of sexually
transmitted diseases (STDs). Services are to be provided in a confidential
manner to individuals of child bearing age including minors who may be sexually
active, who voluntarily choose not to risk initial pregnancy, or wish to limit
the number and spacing of their children.

 

The Contractor agrees:

 

  • That Enrollees will have full freedom of choice of family planning
providers, both in-plan and out-of-plan;

 

  • To encourage the use of public providers in their network;

 

  • To pay providers of family planning services who do not have contractual
relationships with the Contractor, or who do not receive PCP authorization for
the service at established Medicaid fee-for-service (FFS) fees that currently
exist for paying participating Medicaid providers;

 

  • To encourage family planning providers to communicate with PCPs once any
form of medical treatment is undertaken;

 

  • To maintain accessibility for family planning services through promptness in
scheduling appointments, particularly for teenagers;

 

  • That family planning services do not include treatment for infertility.

 

  4. Maternal and Infant Support Services

 

In regard to MSS/ISS, the Contractor agrees:

 

  • That maternal and infant support services are specialized preventive
services provided to pregnant women, mothers and their infants to help reduce
infant mortality and morbidity;

 

  • That these support services are effectively provided by a multidisciplinary
team of health professionals who concentrate on social services, nutrition, and
health education;

 

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CONTRACT #071B [GRAPHIC]

 

  • That it will ensure that the mothers and infants have proper nutrition,
psychosocial support, transportation for all health services, assistance in
understanding the importance of receiving routine prenatal care, Well Child
Visits and immunizations, as well as other necessary health services, care
coordination, counseling and social casework, Enrollee advocacy, and appropriate
referral services;

 

  • That the support services are intended for those Enrollees who are most
likely to experience serious health problems due to psychosocial or nutritional
conditions;

 

  • Certified providers must provide that maternal and infant support services.

 

The Contractor agrees that during the course of providing prenatal or infant
care, support services will be provided if any of the following conditions are
likely to affect the pregnancy:

 

  • Disadvantageous social situation

 

  • Negative or ambivalent feelings about the pregnancy

 

  • Mother under age 18 and has no family support

 

  • Need for assistance to care for herself and infant

 

  • Mother with cognitive emotional or mental impairment

 

  • Nutrition problem

 

  • Need for transportation to keep medical appointments

 

  • Need for childbirth education

 

  • Abuse of alcohol or drugs or smoking

 

The Contractor agrees that infant support services are home based services and
will be provided if any of the following conditions exist with the mother or
infant:

 

  • Abuse of alcohol or drugs (especially cocaine) or smoking

 

  • Mother is under age 18 and has no family support

 

  • Family history of child abuse or neglect

 

  • Failure to thrive

 

  • Low birth weight (less than 2500 grams)

 

  • Mother with cognitive, emotional or mental impairment

 

  • Homeless or dangerous living/home situation

 

  • Any other condition that may place the infant at risk for death, illness or
significant impairment

 

Due to the potentially serious nature of these conditions, some Enrollees will
need the assistance of the FIA Children’s Protective Services. The Contractor
agrees to work cooperatively and on an ongoing basis with local FIA office to
establish and maintain a referral protocol and working relationship.

 

  5. Federally Qualified Health Centers (FQHCs)

 

The Contractor agrees to provide Enrollees with access to services provided
through a Federally Qualified Health Center (FQHC) if the Enrollee resides in
the FQHC’s service area and if the Enrollee requests such services. For purposes
of this requirement, the service area will be defined as the county in which the
FQHC is located. The Contractor must inform Enrollees of this right in their
member handbooks. If a Contractor has an FQHC in its provider network and allows
members to receive medically necessary services from the FQHC, the Contractor
has fulfilled its responsibility to provide FQHC services and does not need to
allow its members to access FQHC services out-of-network.

 

If a Contractor does not include an FQHC in its provider network and an FQHC
exists in the service area (county), the Contractor will have to pay FQHC
charges if an Enrollee member requests such services.

 

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CONTRACT #071B [GRAPHIC]

 

For services furnished on or after October 1, 1997, FQHCs are entitled, pursuant
to the Social Security Act, to reasonable cost-based reimbursement as
subcontractors of section 1903 (m) organizations. Section 4712(b)(2) requires
that rates of payments between FQHCs and Managed Care Organizations (Health
Plans) shall not be less than the amount of payment for a similar set of
services with a non-

 

FQHC. States are required to make supplemental payments, at least on a quarterly
basis, for the difference between the rates paid by section 1903 (m)
organizations (Health Plans) and the reasonable cost of FQHC subcontracts with
the 1903 (m) organization (Health Plans). Beginning in Fiscal Year (FY) 2000,
the difference states will be required to pay begins to phase down from 100
percent; specifically, 95 percent of reasonable cost in FY 2000, 2001, and 2002;
90 percent in FY 2003; and 85 percent in FY 2004.

 

FQHC services must be prior authorized by the Contractor, however the Contractor
may not refuse to authorize medically necessary services if the Contractor does
not have a FQHC in the network for the service area (county). Contractors may
expect a sharing of information and data and appropriate network referrals from
FQHCs.

 

  6. Co-payments

 

The Contractor may subject Enrollees to co-payment requirements, consistent with
state and federal guidelines, including, but not limited to, 42 CFR 447.50
through 447.60. In regard to co-payments, the Contractor agrees that it will not
implement co-payments without DCH approval and that co-payments will only be
implemented following the annual open enrollment period. Enrollees must be
informed of co-payments during the open enrollment period.

 

Subject to the same limitations identified in this subsection, the DCH will
permit co-payments to be implemented by Health Plans outside of the annual
enrollment period if the Health Plan provides notification to all of their
Medicaid Enrollees and waives the 12-month lock-in from date of notification to
enrollees through 30 days following the effective date of the co-payment.
Approval outside of the annual open enrollment period will be permitted only
once a year consistent with a DCH developed schedule.

 

No provider may deny services to an individual who is eligible for the services
due to the individual’s inability to pay the co-payment.

 

  7. Abortions

 

Medicaid funds cannot be used to pay for elective abortions (and related
services) to terminate pregnancy unless a physician certifies that the abortion
is medically necessary to save the life of the mother. Elective abortions must
also be covered if the pregnancy is a result of rape or incest. Treatment for
medical complications occurring as a result of an elective abortion will be
covered. Treatments for spontaneous, incomplete, or threatened abortions and for
ectopic pregnancies will be covered.

 

  8. Pharmacy

 

The Contractor may have a prescription drug management program that includes a
drug formulary. DCH may review a formulary if Enrollee complaints regarding
access have been filed regarding the formulary. The Contractor agrees to have a
process to approve physicians’ requests to prescribe any medically appropriate
drug that is covered under the Medicaid fee-for-services program.

 

Drug coverages must include over-the-counter products such as insulin syringes,
reagent strips, psyllium, and aspirin, as covered by the Medicaid
fee-for-services program. Condoms must also be made available to all eligible
Enrollees.

 

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CONTRACT #071B [GRAPHIC]

 

The Contractor agrees to act as DCH’s third party administrator and reimburse
pharmacies for psychotropic drugs. In the performance of this function:

 

  (a) The Contractor must follow Medicaid Fee-For-Service utilization controls
for Medicaid psychotropic prescriptions. The Contractor must prior authorize
only the psychotropic drugs that are prior authorized by Medicaid
Fee-For-Service.

 

  (b) The Contractor agrees that it and its pharmacy benefit managers are
precluded from billing manufacturer rebates on psychotropic drugs.

 

  (c) The Contractor agrees to provide payment files to DCH in the format and
manner prescribed by DCH.

 

  (d) DCH agrees to use the payment files to reimburse the Contractor for the
payments made on behalf of CMHSPs using the following formula:

 

  • 100% of all anti-psychotics

 

  • 100% of antiparkinson drugs, anticholinergic

 

  • 60% all other psychotropic drugs

 

  (e) In order to meet the terms of this sub-section, the Contractor will have
to enroll with DCH as a Medicaid pharmacy provider; however, that enrollment is
limited to fulfilling the terms of this part of the Contract.

 

  (f) Contractor is responsible for covering lab and x-ray services related to
the ordering of psychotropic drug prescriptions for CMHSP clients who are also
Enrollees of the contractor’s health plan but may limit access to its contracted
lab and x-ray providers.

 

  9. Well Child Care/Early and Periodic Screening, Diagnosis & Treatment (EPSDT)
Program

 

Well Child/EPSDT is a Medicaid child health program of early and periodic
screening, diagnosis and treatment services for children, adolescents, and young
adults under the age of 21. It supports two goals: to ensure access to necessary
health resources, and to assist parents and guardians in appropriately using
those resources. The Contractor agrees to provide the following program:

 

  (a) As specified in federal regulations, the screening component includes a
general health screening most commonly known as a periodic well-child exam. The
required Well Child/EPSDT screening guidelines, based on the American Academy of
Pediatrics’ recommendations for preventive pediatric health care, include:

 

  • Health and developmental history

 

  • Developmental/behavioral assessment

 

  • Age appropriate unclothed physical examination

 

  • Height and weight measurements, and age appropriate head circumference

 

  • Blood pressure for children 3 and over

 

  • Immunization review and administration of appropriate immunizations

 

  • Health education including anticipatory guidance

 

  • Nutritional assessment

 

  • Hearing, vision and dental assessments

 

  • Lead toxicity screening ages 1-5, with blood sample for lead level
determination as indicated

 

  • Interpretive conference and appropriate counseling for parents or guardians

 

Additionally, objective testing for developmental behavior, hearing, and vision
must be performed in accordance with the periodicity schedule included in
Medicaid policy. Laboratory services for tuberculin testing, hematocrit,
urinalysis, hemoglobin, or other needed testing as determined by the physician
must be provided.

 

  (a) Vision services under Well Child/EPSDT must include at least diagnosis and
treatment for defective vision, including glasses if appropriate.

 

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CONTRACT #071B [GRAPHIC]

 

  (b) Dental services under Well Child/EPSDT must include at least relief of
pain and infections, restoration of teeth, and maintenance of dental health.
(The Contractor is responsible for screening and referral only.)

 

  (c) Hearing services must include at least diagnosis and treatment for hearing
defects, including hearing aids as appropriate.

 

  (d) Other health care, diagnostic services, treatment, or services covered
under the State Medicaid Plan necessary to correct or ameliorate defects,
physical or mental illnesses, and conditions discovered during a screening. A
medically necessary service may be available under Well Child/EPSDT if listed in
a federal statute as a potentially covered service, even if Michigan’s Medicaid
program does not cover the service under its State plan for Medical Assistance
Program.

 

Appropriate referrals must be made for a diagnostic or treatment service
determined to be necessary. Oral screening should be part of a physical exam;
however, each child must have a direct referral to a dentist after age two. It
is the Contractor’s responsibility to ensure that an appropriate dental provider
sees the child. Children should also be referred to a hearing and speech clinic,
optometrist or ophthalmologist, or other appropriate provider for objective
hearing and vision services as necessary. Referral to community mental health
services also may be appropriate. If a child is found to have elevated blood
lead levels in accordance with standards disseminated by DCH, a referral should
be made to the local health department for follow-up services that may include
an epidemiological investigation to determine the source of blood lead
poisoning.

 

The Contractor shall provide or arrange for outreach services to Medicaid
beneficiaries who are due or overdue for well-child visits. Outreach contacts
may be by phone, home visit, or mail. The Contractor will meet this requirement
by contracting with local health departments and the provision to local health
departments of the names of children due or overdue for well child visits.

 

  10. Immunizations

 

The Contractor agrees to provide all Enrollees with all vaccines and
immunizations in accordance with the Advisory Committee on Immunization
Practices (ACIP) guidelines. The Contractor must ensure that all providers use
vaccines available free under the Vaccine for Children (VFC) program for
children 18 years old and younger, and use vaccines for adults such as hepatitis
B available at no cost from local health departments under the Vaccine
Replacement Program. Immunizations should be given in conjunction with
Well-Child/EPSDT care. The Contractor must participate in the locally accessed
Michigan Children’s Immunization Registry that will maintain a database of child
vaccination histories and enable tracking and recall.

 

Contractor will be responsible for the reimbursement of immunization that
Enrollees have obtained from local health departments at
Medicaid-Fee-For-Service rates. This policy is effective without Contractor
prior authorization and regardless of whether a contract exists between the
Contractor and the local health departments.

 

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CONTRACT #071B [GRAPHIC]

 

  11. Transportation

 

The Contractor must ensure transportation and travel expenses determined to be
necessary for Enrollees to secure medically necessary medical examinations and
treatment. The Contractor agrees to provide a description, upon request, of the
method(s) used to ensure this requirement is met. Contractors will receive
supplemental funding for non-emergency transportation.

 

  12. Transplant Services

 

The Contractor agrees to cover all costs associated with transplant surgery and
care. Related care may include but is not limited to organ procurement, donor
searching and typing, harvesting of organs, related donor medical costs. Cornea
and kidney transplants and related procedures are covered services. Extrarenal
organ transplants (heart, lung, heart-lung, liver, pancreas, bone marrow
including allogenic, autologous and peripheral stem cell harvesting, and small
bowel) must be covered on a patient-specific basis when determined medically
necessary according to currently accepted standards of care. The Contractor must
have a process in place to evaluate, document, and act upon such requests.

 

  13. Post-Partum Stays

 

Contractors agree to cover a minimum length of post-partum stay at a hospital
that is consistent with the minimum hospital stay standards of the American
Academy of Pediatrics and the American College of Obstetricians and
Gynecologists.

 

  14. Communicable Disease Services

 

The Contractor agrees that Enrollees may receive treatment services for
communicable diseases from local health departments without prior authorization
by the Contractor. For purposes of this section, communicable diseases are
HIV/AIDS, STDs, tuberculosis, and vaccine-preventable communicable diseases.

 

To facilitate coordination and collaboration, Contractors are encouraged to
enter into agreements with local health departments. Such agreements should
provide details regarding confidentiality, service coordination and instances
when local health departments will provide direct care services for the
Contractor’s Enrollees. Agreements should also discuss, where appropriate,
reimbursement arrangements between the Contractor and the local health
department.

 

If a local agreement is not in effect, and an Enrollee receives services for a
communicable disease from a local health department, the Contractor is
responsible for payment to the local health department at established Medicaid
fee-for-service fees that currently exist for participating providers.

 

  15. Restorative Health Services

 

The Contractor is responsible for providing up to 45 days of restorative health
care services as long as medically necessary and appropriate for Enrollees.

 

Restorative health services means intermittent or short-term “restorative” or
rehabilitative nursing care that may be provided in or out of health care
facilities.

 

The Contractor will be expected to help facilitate support services such as home
help services that are not the direct responsibility of the Contractor but are
services to which Enrollees may be entitled. Such care coordination should be
provided consistent with the individual or person-centered planning that is
necessary for Enrollee members with special health care needs.

 

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  16. School Based/School Linked (Adolescent) Health Centers

 

The Contractor acknowledges that Enrollees may choose to obtain services from a
School Based/School Linked Health Center (SBLHC) without prior authorization
from the Contractor. If the SBLHC does not have a contractual relationship with
the Contractor, then the Contractor is responsible for payment to the SBLHC at
Medicaid fee-for-service rates in effect on the date of service.

 

Contractors may contract with an SBLHC to deliver Covered Services as part of
the Contractor’s network. Covered Services shall be medically necessary and
administered, or arranged for, by a designated PCP. The SBLHC will meet the
Contractor’s written credentialing and re-credentialing policies and procedures
for ensuring quality of care and ensuring that all providers rendering services
to Enrollees are licensed by the State and practice within their scope of
practice as defined for them in Michigan’s Public Health Code.

 

If a contract exists between the SBLHC and the Contractor, then the SBLHC is to
be reimbursed according to the provisions of the contractual agreement.

 

  17. Hospice Services

 

Contractor is responsible for all medically necessary and authorized hospice
services, including the “room and board” component of the hospice benefit when
provided in a nursing home. Members who have elected the hospice benefit will
not be disenrolled after 45 days in a nursing home as otherwise permitted under
subsection (15) of the section.

 

  18. 20 Visit Mental Health Outpatient Benefit

 

The Contractor shall provide the 20 Visit Mental Health Outpatient Benefit
consistent with the policy and procedures established by Medicaid Policy
Bulletin (QHP 00-08). Services may be provided through contracts with Community
Mental Health Services Programs (CMHSP) or through contracts with other
appropriate providers within the service area.

 

II-J OBSERVANCE OF FEDERAL, STATE AND LOCAL LAWS

 

The Contractor agrees that it will comply with all state and federal statutes,
regulations and administrative procedures that become effective during the term
of this Contract. Federal regulations governing contracts with risk-based
managed care plans are specified in section 1903(m) of the Social Security Act
and 42 CFR Part 434, and will govern this Contract. The State is not precluded
from implementing any changes in state or federal statutes, rules or
administrative procedures that become effective during the term of this Contract
and will implement such changes pursuant to Contract Section (I-T).

 

  1. Special Waiver Provisions for CHCP

 

DCH’s waiver renewal application to CMS under the auspices of section
1915(b)(1)(2), requesting that section 1902 (a)(23) of the Social Security Act
be waived, has been approved. The renewal was approved by CMS for the period
April 22, 2003 through April 22, 2005. Under this waiver, Beneficiaries will be
enrolled with a Contractor in the county of their residence. All health care for
Enrollees will be arranged for or administered by the Contractor only. Federal
approval of the waiver is required prior to commitment of the federal financing
share of funds under this Contract. No other waiver is necessary to implement
this Contract.

 

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  2. Fiscal Soundness of the Risk-Based Contractor

 

Federal regulations require that the risk-based Contractors maintain a fiscally
solvent operation and DCH has the right to evaluate the ability of the
risk-based Contractor to bear the risk of potential financial losses, or to
perform services based on determinations of payable amounts under the Contract.
The State will require a minimum net worth and a set reserve amount as a
condition of maintaining status as a Contractor.

 

  3. Suspended Providers

 

Federal regulations and State law preclude reimbursement for any services
ordered, prescribed, or rendered by a provider who is currently suspended or
terminated from direct and indirect participation in the Michigan Medicaid
program or federal Medicare program. An Enrollee may purchase services provided,
ordered, or prescribed by a suspended or terminated provider, but no Medicaid
funds may be used. DCH publishes a list of providers who are terminated,
suspended, or otherwise excluded from participation in the program. The
Contractor must ensure that its provider networks do not include these
providers.

 

Pursuant to Section 1932(d)(1) of the Social Security Act, a Contractor may not
knowingly have a director, officer, partner, or person with beneficial ownership
of more than 5% of the entity’s equity who is currently debarred or suspended by
any federal agency. Contractors are also prohibited from having an employment,
consulting, or any other agreement with a debarred or suspended person for the
provision of items or services that are significant and material to the
Contractor’s contractual obligation with the State.

 

The United States General Services Administration (GSA) maintains a list of
parties excluded from federal programs. The “excluded parties lists” (EPLS) and
any rules and/or restrictions pertaining to the use of EPLS data can be found on
GSA’s homepage at the following Internet address: www.arnet.gov/epls.

 

  4. Public Health Reporting

 

State law requires that health professionals comply with specified reporting
requirements for communicable disease and other health indicators. The
Contractor agrees to ensure compliance with all such reporting requirements
through its provider contracts.

 

  5. Compliance with CMS Regulation

 

Contractors are required to comply with all CMS regulations, including, but not
limited to, the following:

 

  • Enrollee Payments: As required by 42 CFR Part 432.22, DCH will deny payment
for new Enrollees when payment for those Enrollees are denied by CMS pursuant to
42 CFR 434.67(e).

 

  • Enrollment and Disenrollment: As required by 42 CFR 438.56, Contractors must
meet all the requirements specified for enrollment and disenrollment
limitations.

 

  • Provision of Covered Services: As required by 42 CFR 438.102(2), Contractors
are required to provide all covered services listed in Section II-H or II-I of
the contract.

 

  6. Compliance with HIPAA Regulation

 

The Contractor shall comply with all applicable provisions of the Health
Insurance Portability and Accountability Act of 1996 by the required deadlines
(codified at 45 CFR Parts 160 through 164).

 

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  7. Advanced Directives Compliance

 

The Contractor shall comply with all provisions for advance directives as
required under 42 CFR 434.28. The Contractor must have in effect, written
policies and procedures for the use and handling of advance directives written
for any adult individual receiving medical care by or through the Contractor.
The policies and procedures must include at least the following provisions:

 

  • The Enrollees’ right to have and exercise advance directives under the law
of the State of Michigan, [MCL 700.5506-700.5512 (Act 386 of 1998) and MCL
333.1051-333.1064 (Act 193 of 1996)]. Changes to State law must be updated in
the policies no later than 90 days after the changes occur, if applicable.

 

  • The Contractor’s procedures for respecting those rights, including any
limitations if applicable

 

  8. Medicaid Policy

 

As required, Contractors shall comply with provisions of Medicaid policy
developed under the formal policy consultation process, as established by the
Medical Assistance Program.

 

II-K CONFIDENTIALITY

 

All Enrollee information, medical records, data and data elements collected,
maintained, or used in the administration of this Contract shall be protected by
the Contractor from unauthorized disclosure. The Contractor must provide
safeguards that restrict the use or disclosure of information concerning
Enrollees to purposes directly connected with its administration of the
Contract.

 

The Contractor must have written policies and procedures for maintaining the
confidentiality of data, including medical records, client information,
appointment records for adult and adolescent sexually transmitted disease, and
family planning services.

 

II-L CRITERIA FOR CONTRACTORS

 

The Contractor agrees to maintain its capability to deliver Covered Services to
Enrollees by meeting the following criteria:

 

  1. Administrative and Organizational Criteria

 

The Contractor will:

 

  • Provide organizational and administrative structure and key specified
personnel;

 

  • Provide management information systems capable of collecting processing,
reporting and maintaining information as required;

 

  • Have a governing body that meets the requirements defined in this Contract;

 

  • Meet the specified administrative requirements, i.e., quality improvement,
utilization management, provider network, reporting, member services, provider
services, staffing;

 

  • Be accredited as a managed care organization by either the National
Committee for Quality Assurance (NCQA) or Joint Commission on Accreditation of
Health Care Organizations (JCAHO) no later than September 30, 2003.

 

  • Be incorporated within the State of Michigan.

 

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  2. Financial Criteria

 

The Contractor agrees to comply with all HMO financial requirements and maintain
financial records for its Medicaid activities separate from other financial
records.

 

  3. Provider Network and Health Service Delivery Criteria

 

The Contractor:

 

  • Has a network of qualified providers in sufficient numbers and locations to
provide appropriate access to Covered Services;

 

  • Provides or arranges appropriate accessible care 24 hours a day, 7 days a
week to the enrolled population.

 

  • Has local agreements with DCH contracted behavioral health and developmental
disability providers and coordinates care.

 

  • Complies with Medicaid Policy regarding procedures for authorization and
reimbursement for out of network providers.

 

II-M  CONTRACTOR ORGANIZATIONAL STRUCTURE, ADMINISTRATIVE SERVICES, FINANCIAL
REQUIREMENTS AND PROVIDER NETWORKS

 

  1. Organizational Structure

 

The Contractor will maintain an administrative and organizational structure that
supports a high quality, comprehensive managed care program. The Contractor’s
management approach and organizational structure will ensure effective linkages
between administrative areas such as: provider services, member services,
regional network development, quality improvement and utilization review,
grievance/complaint review, and management information systems.

 

The Contractor will be organized in a manner that facilitates efficient and
economic delivery of services that conforms to acceptable business practices
within the State. The Contractor will employ senior level managers with
sufficient experience and expertise in health care management, and must employ
or contract with skilled clinicians for medical management activities.

 

The Contractor must not include persons who are currently suspended or
terminated from the Medicaid program in its provider network or in the conduct
of the Contractor’s affairs.

 

The Contractor will provide, upon request from DCH, a copy of the current
organizational chart with reporting structures, names, and positions. A written
narrative which documents the operation of the organization and the educational
background, relevant work experience, and current job description for the key
personnel identified in the organizational chart must be available upon request.

 

The Contractor will not employ, or hold any contracts or arrangements with, any
individuals who have been suspended, debarred, or otherwise excluded under the
Federal Acquisition Regulation as described in 42 CFR 438.610. This prohibition
includes all individuals responsible for the conduct of the Contractor’s
affairs, or their immediate families, or any legal entity in which they or their
families have a financial interest exceeding 5% of the stock or assets of the
entity.

 

The Contractor will provide, upon request, a disclosure statement fully
disclosing to DCH the nature and extent of any contracts or arrangements between
the individuals responsible for the conduct of the Contractor’s affairs (or
their immediate families, or any legal entity in which they or their families
have a financial interest exceeding 5% of the stock or assets of the entity) and
the Contractor or a provider or other person concerning any financial
relationship with the Contractor. The

 

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disclosure statements must be signed by each person listed and notarized. DCH
must be notified in writing of a substantial change in the facts set forth in
the statement not more than 30 days from the date of the change.

 

Information required to be disclosed in this section shall also be available to
the Department of Attorney General, Health Care Fraud Division.

 

  2. Administrative Personnel

 

The Contractor will have sufficient administrative staff and organizational
components to comply with all program standards. The Contractor shall ensure
that all staff has appropriate training, education, experience, licensure as
appropriate, liability coverage, and orientation to fulfill the requirements of
the positions. Resumes for key personnel must be available upon request from
DCH. Resumes must indicate the type and amount of experience each person has
relative to the position.

 

The Contractor must promptly provide written notification to DCH of any
vacancies of key positions and must make every effort to fill vacancies in all
key positions with qualified persons as quickly as possible. The Contractor
shall inform DCH in writing within seven (7) days of staffing changes in the
following key positions:

 

  • Administrator (Chief Executive Officer)

 

  • Medical Director

 

  • Chief Financial Officer

 

  • Management Information System Director

 

The Contractor shall provide the following positions (either through direct
employment or contract):

 

  (a) Executive Management

 

A full time administrator with clear authority over general administration and
implementation of requirements set forth in the Contract including
responsibility to oversee the budget and accounting systems implemented by the
Contractor. The administrator shall be responsible to the governing body for the
daily conduct and operations of the Contractor’s plan.

 

  (b) Medical Director

 

The medical director shall be a Michigan-licensed physician (MD or DO) and shall
be actively involved in all major clinical program components of the
Contractor’s plan including review of medical care provided, medical
professional aspects of provider contracts, and other areas of responsibility as
may be designated by the Contractor. The medical director shall devote
sufficient time to the Contractor’s plan to ensure timely medical decisions,
including after hours consultation as needed. The medical director shall be
responsible for managing the Contractor’s Quality Assessment and Performance
Improvement Program. The medical director shall ensure compliance with state and
local reporting laws on communicable diseases, child abuse, and neglect.

 

  (c) Quality Improvement/Utilization Director

 

A full time quality improvement/utilization director who is either the
Contractor’s medical director, or a Michigan licensed physician, or Michigan
licensed registered nurse, or another licensed clinician as approved by DCH
based on the plan’s ability to demonstrate that the clinician possesses the
training and

 

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education to perform the duties of the quality improvement/utilization director
outlined in the contract.

 

  (d) Chief Financial Officer

 

Full-time chief financial officer to oversee the budget and accounting systems
implemented by the Contractor.

 

  (e) Support/Administrative Staff

 

Adequate clerical and support staff to ensure appropriate functioning of the
Contractor’s operation.

 

  (f) Member Services Director

 

Staff to coordinate communications with Enrollees and to act as Enrollee
advocates. There shall be sufficient member service staff to enable Enrollees to
receive prompt resolution of their problems or inquiries.

 

  (g) Provider Services Director

 

Staff to coordinate communications between the Contractor and its subcontractors
and other providers. There shall be sufficient provider services staff to enable
providers to receive prompt resolution of their problems or inquiries.

 

  (h) Grievance/Complaint Coordinator

 

Staff to coordinate, manage, and adjudicate member and provider grievances.

 

  (i) Management Information System (MIS) Director

 

Full-time MIS director to oversee the data management system, and to ensure that
all reporting and claims payments are timely and accurate.

 

  (j) Compliance Officer

 

Full-time compliance officer to oversee that a mandatory compliance plan is in
place and all reporting of fraud and abuse guidelines are being followed as
outlined in the Balanced Budget Act (BBA).

 

  3. Administrative Requirements

 

The Contractor agrees to have the following policies, processes, and plans in
place.

 

  • Written policies, procedures and an operational plan for management
information systems;

 

  • A process to review and authorize all network provider contracts;

 

  • A process to credential and monitor credentials of all healthcare personnel;

 

  • A process to identify and address instances of fraud and abuse;

 

  • A process to review and authorize contracts established for reinsurance and
third party liability if applicable;

 

  • Policies that comply with all federal and state business requirements;

 

  • The Contractor must comply with all Contract reporting requirements; and

 

  •

Designated liaisons – these must include a management information system (MIS)
liaison and a general management liaison. All communication between the
Contractor and DCH must occur through the designated liaisons unless otherwise
specified by DCH. The general management liaison will also be

 

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designated as the authorized Contractor expediter pursuant to Contract Section
III-B.

 

All policies, procedures, and clinical guidelines that the Contractor follows
must be in writing and available on request to DCH and/or CMS. All medical
records, reporting formats, information systems, liability policies, provider
network information and other detail specific to performing the contracted
services must be available on request to DCH and/or CMS.

 

  4. Management Information Systems

 

The Contractor must maintain a health information system that collects,
analyzes, integrates, and reports data as required by DCH. The information
system must have the capability for:

 

  • Collecting data on enrollee and provider characteristics and on services
provided to enrollees as specified by the State through an encounter data
system;

 

  • Supporting provider payments and data reporting between the Contractor and
DCH;

 

  • Controlling, processing, and paying providers for services rendered to
Contractor Enrollees;

 

  • Collecting service-specific procedures and diagnosis data, collecting price
specific procedures or encounters (depending on the agreement between the
provider and the Contractor), and maintaining detailed records of remittances to
providers;

 

  • Supporting all Contractor operations, including, but not limited to, the
following:

 

  • Member enrollment, disenrollment, and capitation payments

 

  • Utilization

 

  • Provider enrollment

 

  • Third Party liability activity

 

  • Claims payment

 

  • Grievance and appeal tracking

 

  • Tracking and recall for immunizations, well-child visits/EPSDT, and other
services as required by DCH

 

  • Encounter reporting

 

  • Quality reporting

 

  • Member access and satisfaction

 

The Contractor must ensure that data received from providers is accurate and
complete by:

 

  • Verifying the accuracy and timeliness of the data;

 

  • Screening the data for completeness, logic, and consistency;

 

  • Collecting service information in standardized formats;

 

  • Identification and tracking of fraud and abuse.

 

The Contractor is responsible for annual IRS form 1099 reporting of provider
earnings and must make all collected data available to the State and, upon
request, to CMS.

 

  5. Governing Body

 

Each Contractor will have a governing body that has a minimum of 1/3 of its
membership consisting of adult Enrollees who are not compensated officers,
employees, stockholders who own more than 5% of the shares of the Contractor’s
plan, or other individuals responsible for the conduct of, or financially
interested in, the Contractor’s affairs. The Contractor must have written
policies and procedures

 

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detailing how Enrollee board members will be elected, the length of the term,
filling of vacancies, notice to Enrollees and subscribers, etc. The governing
body will ensure adoption and implementation of written policies governing the
operation of the Contractor’s plan. The Enrollee board members must have the
same responsibilities as other board members in the development of policies
governing the operation of the Contractor’s plan. The administrator or executive
officer that oversees the day-to-day conduct and operations of the Contractor
will be responsible to the governing body. The governing body must meet at least
quarterly, and must keep a permanent record of all proceedings that is available
to DCH and/or CMS on request.

 

  6. Provider Network in the CHCP

 

  (a) General

 

The Contractor is solely responsible for arranging and administering Covered
Services to Enrollees. Covered Services shall be medically necessary and
administered, or arranged for, by a designated PCP. The Contractor must
demonstrate that it can maintain a delivery system of sufficient size and
resources to offer quality care that accommodates the needs of the enrolled
Beneficiaries within each enrollment area. The delivery system (in and out of
network) must include adequate numbers of providers with the training,
experience, and specialization to furnish the covered services listed in
Sections II-H and II-I of this contract to all Enrollees.

 

Enrollees shall be provided with an opportunity to select their PCP. If the
Enrollee does not choose a PCP at the time of enrollment, it is the Contractor’s
responsibility to assign a PCP within one month of the effective date of
enrollment. If the Contractor cannot honor the Enrollee’s choice of the PCP, the
Contractor must contact the Enrollee to allow the Enrollee to either make a
choice of an alternative PCP or to disenroll. The Contractor must notify all
Enrollees assigned to a PCP whose provider contract will be terminated and
assist them in choosing a new PCP prior to the termination of the provider
contract.

 

The Contractor’s provider network must meet the following requirements:

 

  • Provides available, accessible and adequate numbers of facilities,
locations, and personnel for the provision of Covered Services with adequate
numbers of provider locations with provisions for physical access for Enrollees
with physical disabilities;

 

  • Has sufficient capacity to handle the maximum number of Enrollees specified
under this Contract;

 

  • Guarantees that emergency services are available seven days a week, 24-hours
per day;

 

  • Provides reasonable access to specialists based on the availability and
distribution of such specialists. If the Contractor’s provider network does not
have a provider available for a second opinion within the network, the Enrollee
must be allowed to obtain a second opinion from an out-of-network provider with
prior authorization from the Contractor at no cost to the Enrollee;

 

  • Provides adequate access to ancillary services such as pharmacy services,
durable medical equipment services, home health services, and Maternal and
Infant Support Services;

 

  • Utilizes arrangements for laboratory services only through those
laboratories with CLIA certificates;

 

  • Contains only ancillary providers and facilities appropriately licensed or
certified if required under 1978 PA 368, as amended;

 

  • Responds to the cultural, racial and linguistic needs (including
interpretive services as necessary) of the Medicaid population;

 

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  • Selected PCPs are accessible taking into account travel time, availability
of public transportation and other factors that may determine accessibility;

 

  • Primary care and hospital services are available to Enrollees within 30
minutes or 30 miles travel. Exceptions to this standard may be granted if the
Contractor documents that no other network or non-network provider is accessible
within the 30 minutes or 30 miles travel time. For pharmacy services, the
State’s expectations are that the Contractor will ensure access within 30
minutes travel time and that services will be available during evenings and on
weekends;

 

  • Contracted PCPs provide or arrange for coverage of services 24 hours a day,
7 days a week;

 

  • PCPs must be available to see patients a minimum of 20 hours per practice
location per week.

 

Provider files will be used to give Beneficiaries information on available
Contractors and to ensure that the provider networks identified for Contractors
are adequate in terms of number, location, and hours of operation. The
Contractor will ensure:

 

  • That it will provide to DCH’s Enrollment Services contractor provider files
which contain a complete description of the provider network available to
Enrollees;

 

  • That provider files will be submitted in the format specified by DCH;

 

  • That provider files will be updated as necessary to reflect the existing
provider network;

 

  • That provider files will be submitted to DCH’s Enrollment Services
contractor in a timely manner;

 

  • That it will provide to DCH’s Enrollment Services contractor a description
of the Contractor’s service network, including but not limited to: the specialty
and hospital network available, arrangements for provision of medically
necessary non-contracted specialty care; any family planning services network
available, any affiliations with Federally Qualified Health Centers, Rural
Health Clinics, and Adolescent Health Centers; arrangements for access to
obstetrical and gynecological services; availability of case management or care
coordination services; and arrangements for provision of ancillary services. The
description will be updated as necessary;

 

  • That the services network will be submitted to DCH’s Enrollment Services
contractor in a timely manner in the format requested

 

  (b) Mainstreaming

 

DCH considers mainstreaming of Enrollees into the broader health delivery system
to be important. The Contractor must have guidelines and a process in place to
ensure that Enrollees are provided Covered Services without regard to race,
color, creed, sex, religion, age, national origin, ancestry, marital status,
sexual preference, or physical or mental handicap. In addition, the Contractor
must ensure that:

 

  • Enrollees will not be denied a Covered Service or availability of a facility
or provider identified in this Contract.

 

  • Network providers will not intentionally segregate Enrollees in any way from
other persons receiving health care services.

 

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  (c) Coordination of Care with Public and Community Providers and Organizations

 

Contractors must work closely with local public and private community-based
organizations and providers to address prevalent health care conditions and
issues. Such agencies and organizations include local health departments, local
FIA offices, family planning agencies, Substance Abuse Coordinating Agencies,
community and migrant health centers, school based and adolescent health
centers, and local or regional consortiums centered on various health
conditions. Local coordination and collaboration with these entities will make a
wider range of essential health care and support services available to the
Contractor’s Enrollees. Each county has a different array of these providers,
and agencies or organizations. Contractors are encouraged to coordinate with
these entities through participation of their provider networks in Michigan’s
county-based community health assessment and improvement process and
multipurpose human services collaborative bodies.

 

A local coordination matrix is provided in the Appendix of this Contract. The
Contractor is encouraged to use this document as a guide for establishing
coordination and collaboration practices and protocols with local public health
agencies. To ensure that the services provided by these agencies are available
to all Contractors, an individual Contractor shall not require an exclusive
contract as a condition of participation with the Contractor.

 

It is also beneficial for Contractors to collaborate with non-profit
organizations that have maintained a historical base in the community. These
entities are seen by many Enrollees as “safe harbors” due to their familiarity
with the cultural standards and practices within the community. For example,
adolescent health centers are specifically designed to be accessible and
acceptable, and are viewed as a “safe harbor” where adolescents will seek rather
than avoid or delay needed services.

 

  (d) Coordination of Care with Local Behavioral Health and Developmental
Disability Providers

 

Some Enrollees in each Contractor’s plan may also be eligible for services
provided by Behavioral Health Services and Services for Persons with
Developmental Disabilities managed care programs. Contractors are not
responsible for the direct delivery of specified behavioral health and
developmental disability services. The Contractor will establish and maintain
local agreements with behavioral health and developmental disability agencies or
organizations contracting with the State.

 

Contractors must ensure that local agreements address the following issues:

 

  • Emergency services

 

  • Pharmacy and laboratory service coordination

 

  • Medical coordination

 

  • Data and reporting requirements

 

  • Quality assurance coordination

 

  • Grievance and complaint resolution

 

  • Dispute resolution

 

Examples of local agreements are included in the Appendix of this Contract.

 

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  (e) Network Changes

 

Contractors will notify DCH within seven (7) days of any changes to the
composition of the provider network that affects the Contractor’s ability to
make available all Covered Services in a timely manner. Contractors will have
procedures to address changes in its network that negatively affect access to
care. Changes in provider network composition that DCH determines to negatively
affect Enrollees’ access to Covered Services may be grounds for sanctions or
Contract termination.

 

If the Contractor expands the PCP network within a county and can serve more
Enrollees the Contractor may submit a request to DCH to increase capacity. The
request must include details of the changes that would support the increased
capacity. Contractor must use the format specified by DCH to describe network
capacity.

 

  (f) Provider Contracts

 

In addition to HMO licensure requirements, Contractor provider contracts will
meet the following criteria:

 

  • Prohibit the provider from seeking payment from the Enrollee for any Covered
Services provided to the Enrollee within the terms of the Contract and require
the provider to look solely to the Contractor for compensation for services
rendered. No cost sharing or deductibles can be collected from Enrollees.
Co-payments are only permitted with DCH approval.

 

  • Require the provider to cooperate with the Contractor’s quality improvement
and utilization review activities.

 

  • Include provisions for the immediate transfer of Enrollees to another
Contractor PCP if their health or safety is in jeopardy.

 

  • Cannot prohibit a provider from discussing treatment options with Enrollees
that may not reflect the Contractor’s position or may not be covered by the
Contractor.

 

  • Cannot prohibit a provider from advocating on behalf of the Enrollee in any
grievance or utilization review process, or individual authorization process to
obtain necessary health care services.

 

  • Require providers to meet Medicaid accessibility standards as established in
Medicaid policy.

 

  • Provides for continuity of treatment in the event a provider’s participation
terminates during the course of a member’s treatment by that provider.

 

  • Prohibit the provider from denying services to an individual who is eligible
for the services due to the individual’s inability to pay the co-payment.

 

In accordance with Section 1932 (b)(7) of the Social Security Act as implemented
by Section 4704(a) of the Balanced Budget Act, Contractors may not discriminate
with respect to participation, reimbursement, or indemnification as to any
provider who is acting within the scope of provider’s license or certification
under applicable State law, solely on the basis of such license or
certification. This provision should not be construed as an “any willing
provider” law, as it does not prohibit Contractors from limiting provider
participation to the extent necessary to meet the needs of the Enrollees. This
provision also does not interfere with measures established by Contractors that
are designed to maintain quality and control costs consistent with the
responsibility of the organization.

 

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  (g) Disclosure of Physician Incentive Plan

 

Contractors will annually disclose to DCH the information on their provider
incentive plans listed in 42 CFR 422.208 and 422.210, as required in 42 CFR
438.6(h), in order to determine whether the incentive plans meet the
requirements of 42 CFR 422.208-422.210 when there exists compensation
arrangements under the Contract where payment for designated health services
furnished to an individual on the basis of a physician referral would otherwise
be denied under Section 1903 (s) of the Social Security Act. The Contractor will
provide the information on its physician incentive plans listed in 42 CFR
422.208 and 422.210 to any Enrollee.

 

  (h) Provider Credentialing

 

The Contractor will have written credentialing and re-credentialing (at least
every three years) policies and procedures for ensuring quality of care and
ensuring that all providers rendering services to their Enrollees are licensed
by the State and are qualified to perform their services throughout the life of
the Contract. The Contractor must ensure that network providers residing and
providing services in bordering states meet all applicable licensure and
certification requirements within their state. The Contractor also must have
written policies and procedures for monitoring its providers and for sanctioning
providers who are out of compliance with the Contractor’s medical management
standards. If the plan declines to include providers in the plan’s network, the
plan must give the affected providers written notice of the reason for the
decision.

 

  (i) PCP Standards

 

The Contractor must offer its Enrollees freedom of choice in selecting a PCP.
The Contractor will have written policies and procedures describing how
Enrollees choose and are assigned to a PCP, and how they may change their PCP.
The PCP is responsible for supervising, coordinating, and providing all primary
care to each assigned Enrollee. In addition, the PCP is responsible for
initiating referrals for specialty care, maintaining continuity of each
Enrollee’s health care, and maintaining the Enrollee’s medical record, which
includes documentation of all services provided by the PCP as well as any
specialty or referral services.

 

The Contractor will permit enrollees to choose a clinic as a PCP provided that
the provider files submitted to the Enrollment Services Contractor is completed
consistent with DCH requirements.

 

The Contractor will allow a specialist to perform as a PCP when the Enrollee’s
medical condition warrants management by a physician specialist. This may be
necessary for those Enrollees with conditions such as diabetes, end-stage renal
disease or other chronic disease or disability. The need for management by a
physician specialist should be determined on a case-by-case basis in
consultation with the Enrollee. If the Enrollee disagrees with the Contractor’s
decision, the Enrollee should be informed of his or her right to file a
grievance with the Contractor and/or to file an appeal with DCH.

 

The Contractor will ensure that there is a reliable method and system for
providing 24 hour access to urgent care and emergency services 7 days a week.
All PCPs within the network must have information on the system and must
reinforce with their Enrollees the appropriate use of health care services.
Routine physician and office visits must be available during regular and
scheduled office hours. Provisions must be available for obtaining urgent care

 

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24 hours a day. Urgent care may be provided directly by the PCP or directed by
the Contractor through other arrangements. Emergency Services must always be
available.

 

Direct contact with a qualified clinical staff person must be available through
a toll-free telephone number at all times.

 

At a minimum, the Contractor shall have or provide one full-time PCP per 2,000
members. This ratio shall be used to determine maximum Enrollment Capacity for
the Contractor in an approved service area.

 

The Contractor will assign a PCP who is within 30 minutes or 30 miles travel
time to the Enrollee’s home, unless the Enrollee chooses otherwise. Exceptions
to this standard may be granted if the Contractor documents that no other
network or non-network provider is accessible within the 30 minute or 30 mile
travel time. The Contractor will take the availability of handicap accessible
public transportation into consideration when making PCP assignments.

 

PCPs must be available to see Enrollees a minimum of 20 hours per practice
location per week. This provision may be waived by DCH in response to a request
supported by appropriate documentation. Specialists are not required to meet
this standard for minimum hours per practice location per week. In the event
that a specialist is assigned to act as a PCP, the Enrollee must be informed of
the specialist’s business hours. In circumstances where teaching hospitals use
residents as providers in a clinic and a supervising physician is designated as
the PCP by the Contractor, the supervising physician must be available at least
20 hours per practice location per week.

 

The Contractor will ensure that some providers offer evening and weekend hours
of operation in addition to scheduled daytime hours. The Contractor will provide
notice to Enrollees of the hours and locations of service for their assigned
PCP.

 

The Contractor will monitor waiting times to get appointments with providers, as
well as the length of time actually spent waiting to see the provider. This data
must be reported to DCH upon request. The Contractor will have established
criteria for monitoring appointment scheduling for routine and urgent care and
for monitoring waiting times in provider offices. These criteria must be
submitted to DCH upon request.

 

The Contractor will ensure that a maternity care provider is designated for an
enrolled pregnant woman for the duration of her pregnancy and postpartum care. A
maternity care provider is a provider meeting the Contractor’s credentialing
requirements and whose scope of practice includes maternity care. An individual
provider must be named as the maternity care provider to assure continuity of
care. An OB/GYN clinic or practice cannot be designated as a PCP or maternity
care provider. Designation of individual providers within a clinic or practice
is appropriate as long as that individual, within the clinic or practice, agrees
to accept responsibility for the Enrollees care for the duration of the
pregnancy and post-partum care.

 

For maternity care, the Contractor will be able to provide initial prenatal care
appointments for enrolled pregnant women according to standards developed by the
CAC and the QIC.

 

II-N PAYMENT TO PROVIDERS

 

The Contractor will make timely payments to all providers for Covered Services
rendered to Enrollees. With the exception of newborns, the Contractor will not
be responsible for any payments owed to providers for services rendered prior to
a Beneficiary’s enrollment with the Contractor’s plan. Except for newborns,
payment for

 

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services provided during a period of retroactive eligibility will be the
responsibility of DCH.

 

  1. Electronic Billing Capacity

 

The Contractor must meet the following timeframes for electronic billing
capacity and may require its providers to meet the same standard as a condition
for payment:

 

  (a) Be capable of accepting electronic billing for UB 92 (inpatient and
outpatient claims) in the Medicare version 050 electronic format.

 

  (b) Be capable of accepting professional claims electronically using the
National Electronic Data Interchange Transaction Set Health Care Claim:
Professional 837 (ASC X12N 837, version 3051) format no later than August 1,
2001. DCH will publish guidelines describing the electronic format requirements.

 

The promulgation of Medicaid policy and provider manuals will specify the coding
and procedures that will be acceptable. Therefore, a provider should be able to
bill a health plan using the same format and coding instructions as that
required for the Medicaid Fee for Service programs. Health plans may not require
providers to complete additional fields on the electronic forms that are not
specified under the Medicaid Fee for Service policy and provider manuals.

 

The distinction in billing between health plans and the Medicaid Fee for Service
program will be limited to requests of additional documentation and
identification of services requiring prior authorization. Health plans may
require additional documentation, such as medical records, to justify the level
of care provided. In addition, health plans may require prior authorization for
services for which the Medicaid Fee for Service program does not require prior
authorization.

 

DCH has published and will update the web-site addresses or e-mail address of
plans. This information will make it more convenient for providers; (including
out of network providers) to be aware of and contact respective health plans
regarding the documentation, prior authorization issues, and provider appeal
processes. The DCH web-site location is: www.michigan.gov\mdch

 

  2. Prompt Payment

 

Contractors must meet the prompt payment requirements as stated in 2000 PA 187.

 

  3. Payment Resolution Process

 

The Contractor will have an effective provider appeal process to promptly
resolve provider billing disputes. The Contractor will cooperate with providers
who have exhausted the Contractor’s appeal process by entering into arbitration
or other alternative dispute resolution process.

 

  4. Arbitration

 

When a provider requests arbitration, the Contractor is required to participate
in a binding arbitration process.

 

DCH will provide a list of neutral arbitrators that can be made available to
resolve billing disputes. These arbitrators will be organizations with the
appropriate expertise to analyze medical claims and supporting documentation
available from medical record reviews and determine whether a claim is complete,
appropriately coded, and should or should not be paid. A model agreement will be
developed by DCH that both parties to the dispute will be required to sign. This
agreement will specify the name of the arbitrator, the dispute resolution
process, a timeframe for the arbitrator’s decision, and the method of payment
for the arbitrator’s fee. The party found to be at fault will be assessed the
cost of the arbitrator. If both parties are at fault, the cost of the
arbitration will be apportioned.

 

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  5. Post-payment Review

 

The Contractor may utilize a post-payment review methodology to assure claims
have been paid appropriately.

 

  6. Total Payment

 

The Contractor or its providers may not require any co-payments, patient-pay
amounts, or other cost-sharing arrangements unless authorized by DCH. The
Contractor’s providers may not bill Enrollees for the difference between the
provider’s charge and the Contractor’s payment for Covered Services. The
Contractor’s providers will not seek nor accept additional or supplemental
payment from the Enrollee, his/her family, or representative, in addition to the
amount paid by the Contractor even when the Enrollee has signed an agreement to
do so. These provisions also apply to out-of-network providers.

 

  7. Case Rate Payments for Emergency Services

 

The Contractor, in the absence of a contract with emergency providers, must
provide reimbursement at Medicaid rates for professional and facility services
provided in the emergency room of a hospital as required in Section II-I-1and
Section II-1-2 of this Contract.

 

  8. Enrollee Liability for Payment

 

The Enrollee may not be held liable for any of the following provisions
consistent with 42 CFR Part 438.106 and 42 CFR 438.116:

 

  • The Contractors debts, in case of insolvency;

 

  • Covered services under this Contract provided to the Enrollee for which the
State did not pay the Contractor;

 

  • Covered services provided to the Enrollee for which the State or the
Contractor does not pay the provider due to contractual, referral or other
arrangement; or

 

  • Payments for covered services furnished under a contract, referral, or other
arrangement, to the extent that those payments are in excess of the amount that
the Enrollee would owe if the Contractor provided the services directly.

 

II-O PROVIDER SERVICES (Network and Out-of-Network)

 

The Contractor will:

 

  • Provide contract and education services for the provider network, ensure
proper maintenance of medical records, maintain proper staffing to respond to
provider inquiries, and be able to process provider grievances, complaints, and
an appeal system to resolve provider billing disputes;

 

  • Maintain a written plan detailing methods of provider recruitment and
education regarding Contractor policies and procedures;

 

  • Maintain a regular means of communicating and providing information on
changes in policies and procedures to its providers. This may include guidelines
for answering written correspondence to providers, offering provider-dedicated
phone lines, or a regular provider newsletter;

 

  • Provide a staff of sufficient size to respond timely to provider inquiries,
questions, and concerns regarding Covered Services.

 

  • Provide a copy of the Contractor’s prior authorization policies to the
provider when the provider joins the Contractor’s provider network. The
Contractor must notify providers of any changes to prior authorization policies
as changes are made.

 

  • Make its provider policies, procedures and appeal processes available over
its website. Updates to the policies and procedures will be available on the
website as well as through other media used by the Contractor.

 

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II-P QUALITY ASSESSMENT AND PERFORMANCE IMPROVEMENT PROGRAM STANDARDS

 

  1. Quality Assessment and Performance Improvement Program Standards

 

The Contractor will have an ongoing Quality Assessment and Performance
Improvement Program for the services furnished to its enrollees that meets the
requirements of 42 CFR 438.240. The Contractor’s medical director shall be
responsible for managing the Quality Assessment and Performance Improvement
Program. The Contractor must maintain a QIC for purposes of reviewing the
Quality Assessment and Performance Improvement Program, its results and
activities, and recommending changes on an ongoing basis. The QIC must be
comprised of Contractor staff, including but not limited to the quality
improvement director and other key management staff, as well as health
professionals providing care to Enrollees.

 

The Contractor’s Quality Assessment and Performance Improvement Program will be
capable of identifying opportunities to improve the provision of health care
services and the outcomes of such care for Enrollees. The Contractor’s Quality
Assessment and Performance Improvement Program must also incorporate and address
findings of site reviews by DCH, external independent reviews, and statewide
focused studies and the recommendations of the CAC. In addition, the
Contractor’s Quality Assessment and Performance Improvement Program must develop
or adopt performance improvement goals, objectives, and activities or
interventions as required by the DCH to improve service delivery or health
outcomes for Enrollees.

 

The Contractor will have a written plan for the Quality Assessment and
Performance Improvement Program which includes a statement of the Contractor’s
performance goals and objectives, lines of authority and accountability
including data responsibilities, evaluation tools, and performance improvement
activities.

 

The written plan must also describe how the Contractor will:

 

  • Analyze both the processes and outcomes of care using currently accepted
standards from recognized medical authorities, including focused review of
individual cases, as appropriate.

 

  • Determine underlying reasons for variations in the provision of care to
Enrollees.

 

  • Establish clinical and non-clinical priority areas and indicators for
assessment and performance improvement.

 

  • Use measures to analyze the delivery of services and quality of care, over
and under utilization of services, disease management strategies, and outcomes
of care. The Contractor is expected to collect and use data from multiple
sources such as medical records, encounter data, HEDIS®, claims processing,
grievances, utilization review and member satisfaction instruments in this
activity.

 

  • Compare Quality Assessment and Performance Improvement Program findings with
past performance and with established program goals and available external
standards.

 

  • Measure the performance of Contractor providers and conduct peer review
activities such as: identification of practices that do not meet Contractor
standards; recommendation of appropriate action to correct deficiencies; and
monitoring of corrective action by providers.

 

  • Measure provider performance at least twice annually and provide performance
feedback to providers, including detailed discussion of clinical standards and
expectations of the Contractor.

 

  •

Develop and/or adopt clinically appropriate practice parameters and
protocols/guidelines. Submit these parameters and protocols/guidelines to

 

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providers with sufficient explanation and information to enable the providers to
meet the established standards.

 

  • The Contractor must ensure that where applicable, utilization management,
enrollee education, coverage of services, and other areas as appropriate are
consistent with the Contractor’s practice guidelines.

 

  • Evaluate access to care for Enrollees according to the established standards
and those developed by DCH and Contractor’s QIC and implement a process for
ensuring that network providers meet and maintain the standards. The evaluation
should include an analysis of the accessibility of services to Enrollees with
disabilities.

 

  • Perform a member satisfaction survey annually, in collaboration with DCH or
independently, and distribute results to providers, Enrollees, and DCH.

 

  • Implement improvement strategies related to program findings and evaluate
progress periodically but at least annually.

 

  • Maintain Contractor’s written Quality Assessment and Performance Improvement
Program that will be available to DCH upon request.

 

  2. Annual Effectiveness Review

 

The Contractor will annually conduct an effectiveness review of its Quality
Assessment and Performance Improvement Program. The effectiveness review must
include analysis of whether there have been improvements in the quality of
health care and services for Enrollees as a result of quality assessment and
improvement activities and interventions carried out by the Contractor. The
analysis should take into consideration trends in service delivery and health
outcomes over time and include monitoring of progress on performance goals and
objectives. Information on the effectiveness of the Contractor’s Quality
Assessment and Performance Improvement Program must be provided annually to
network providers and to Enrollees upon request. Information on the
effectiveness of the Contractor’s Quality Assessment and Performance Improvement
Program must be provided to DCH annually during the site visit and upon request.

 

  3. Annual Performance Improvement Projects

 

In addition to the internal Quality Assessment and Performance Improvement
Program, the Contractor will conduct performance improvement projects that focus
on clinical and non-clinical area. The Contractor must meet minimum performance
objectives. The Contractor may be required to participate in statewide
performance improvement projects.

 

The DCH will collaborate with Stakeholders and Contractors to determine priority
areas for statewide performance improvement projects. The priority areas may
vary from one year to the next and will reflect the needs of the population;
such as care of children, pregnant women, and persons with special health care
needs, as defined by DCH. The Contractor will assess performance for the
priority area(s) identified by DCH and/or other Stakeholders.

 

  4. Performance Monitoring Standards

 

DCH will establish and attach annual performance monitoring standards to the
Contract (Attachment D). The Contractor will incorporate any statewide
performance improvement objectives, established as a result of a statewide
performance improvement project or monitoring, into the written plan for its
Quality Assessment and Performance Improvement Program. DCH will use the results
of performance assessments as part of the formula for automatic enrollment
assignments.

 

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  5. External Quality Review

 

The State will arrange for an annual, external independent review of the quality
and outcomes, timeliness of, and access to Covered Services provided by the
Contractor. The Contractor will address the findings of the external review
through its Quality Assessment and Performance Improvement Program. The
Contractor must develop and implement performance improvement goals, objectives,
and activities in response to the external review findings as part of the
Contractor’s Quality Assessment and Performance Improvement Program. A
description of the performance improvement goals, objectives and activities
developed and implemented in response to the external review findings will be
included in the Contractor’s quality assessment and performance improvement
program and provided to DCH upon request. DCH may also require separate
submission of an improvement plan specific to the findings of the external
review.

 

  6. Consumer Survey

 

Contractors must conduct a survey of their enrollee population using the
Consumer Assessment of Health Plan Survey (CAHPS) instrument either by
partnering with the DCH through cost sharing or by directly contracting with an
NCQA certified CAHPS vendor and submitting the data according to the
specifications and timelines established by the DCH.

 

II-Q UTILIZATION MANAGEMENT

 

The major components of the Contractor’s utilization management program must
encompass, at a minimum, the following:

 

  • Written policies with review decision criteria and procedures that conform
to managed health care industry standards and processes.

 

  • A formal utilization review committee directed by the Contractor’s medical
director to oversee the utilization review process.

 

  • Sufficient resources to regularly review the effectiveness of the
utilization review process, and to make changes to the process as needed.

 

  • An annual review and reporting of utilization review activities and
outcomes/interventions from the review.

 

  • The utilization management activities of the Contractor must be integrated
with the Contractor’s quality assessment and performance improvement program.

 

The Contractor must establish and use a written prior approval policy and
procedure for utilization management purposes. The Contractor may not use such
policies and procedures to avoid providing medically necessary services within
the coverages established under the Contract. The policy must ensure that the
review criteria for authorization decisions are applied consistently and require
that the reviewer consult with the requesting provider when appropriate. The
policy must also require that utilization management decisions be made by a
health care professional who has appropriate clinical expertise regarding the
service under review.

 

The Contractor’s authorization policy must establish timeframes for standard and
expedited authorization decisions. These timeframes may not exceed 14 days for
standard authorization decisions and 3 working days for expedited authorization
decisions. These timeframes may be extended up to 14 additional calendar days if
requested by the provider or Enrollee and the Contractor justifies the need for
additional information and explains how the extension is in the Enrollee’s
interest. The Enrollee must be notified of the plan’s intent to extend the
timeframe. The Contractor must ensure that compensation to individuals or
subcontractor that conduct utilization management activities is not structured
so as to provide incentives for the individual or subcontractor to deny, limit,
or discontinue medically necessary services to any Enrollee.

 

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II-R THIRD PARTY RESOURCE REQUIREMENTS

 

The Contractor will collect any payments available from other health insurers
including Medicare and private health insurance for services provided to its
members in accordance with Section 1902(a)(25) of the Social Security Act and 42
CFR 433 Subpart D. The Contractor will be responsible for identifying and
collecting third party liability information and may retain third party
collections. If third party resources are available, the Contractor is not
required to pay the provider first and then recover money from the third party.
The Contractor should follow Medicaid Policy regarding third party liability.

 

Third party liability (TPL) refers to any other health insurance plan or carrier
(e.g., individual, group, employer-related, self-insured or self-funded plan or
commercial carrier, automobile insurance and worker’s compensation) or program
(e.g., Medicare) that has liability for all or part of a member’s health care
coverage. Contractors are payers of last resort and will be required to identify
and seek recovery from all other liable third parties in order to make
themselves whole. The Contractor may retain all such collections. The Contractor
must report third party collections in its encounter data submission and in
aggregate as required by DCH.

 

DCH will provide the Contractor with a listing of known third party resources
for its Enrollees. The listing will be produced monthly and will contain
information made available to the State at the time of eligibility determination
and /or redetermination.

 

When an Enrollee is also enrolled in Medicare, Medicare will be the primary
payer ahead of any Contractor. The Contractor must make the Enrollee whole by
paying or otherwise covering all Medicare cost sharing amounts incurred by the
Enrollee such as coinsurance and deductibles.

 

II-S MARKETING

 

With the approval of DCH, Contractors are allowed to promote their services to
the general population in the community, provided that such promotion and
distribution of materials is directed at the population of the entire approved
service area.

 

However, direct marketing to individual Beneficiaries is prohibited. The
Contractor may not provide inducements through which compensation, reward, or
supplementary benefits or services are offered to Beneficiaries to enroll or to
remain enrolled with the Contractor. DCH will review and approve any form of
marketing. The following are examples of allowed and prohibited marketing
locations and practices:

 

  1. Allowed Marketing Locations/Practices directed at the general population:

 

  • Newspaper articles

 

  • Newspaper advertisements

 

  • Magazine advertisements

 

  • Signs

 

  • Billboards

 

  • Pamphlets

 

  • Brochures

 

  • Radio advertisements

 

  • Television advertisements

 

  • Noncapitated plan sponsored events

 

  • Public transportation (i.e. buses, taxicabs)

 

  • Mailings to the general population

 

  • Individual Contractor “Health Fair” for Enrollee Members

 

  • Malls or Commercial retail establishments

 

  • Community Centers

 

  • Churches

 

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  2. Prohibited Marketing Locations/Practices that target individual
Beneficiaries:

 

  • Local FIA offices

 

  • Provider offices

 

  • Hospitals

 

  • Check cashing establishments

 

  • Door-to-door marketing

 

  • Telemarketing

 

  • Clinics

 

  • Direct mail targeting individual Medicaid Beneficiaries

 

  • WIC clinics.

 

  3. Marketing Materials

 

The Contractor is required to develop informational materials such as pamphlets
and brochures that can be used to assist Beneficiaries in choosing a Contractor.
Marketing materials shall contain provider and physician choices offered by the
Contractor, and their locations and specialties.

 

All written and oral marketing materials must be prior approved by DCH. Upon
receipt by DCH on a complete file for allowed marketing practices and locations,
the DCH will provide a decision to the Contractor within 30 business days or the
Contractor’s request will be deemed approved.

 

Marketing materials must be available in languages appropriate to the
Beneficiaries being served within the county. All material must be culturally
appropriate and available in alternative formats in accordance with the American
with Disabilities Act.

 

DCH may impose monetary or restricted enrollment penalties should the Contractor
or any of its subcontractors or providers be found to use marketing materials
which have not been approved in writing by DCH or engage in prohibited marketing
practices. DCH reserves the right to suspend all enrollment of new Enrollees
into the Contractor’s plan. Such suspensions may be imposed for a period of
sixty (60) days from notification of the violation by DCH to the Contractor.

 

Materials must be written at no higher than 6th grade level as determined by any
one of the following indices:

 

  • Flesch – Kincaid

 

  • Fry Readability Index

 

  • PROSE The Readability Analyst (software developed by Educational Activities,
Inc.)

 

  • Gunning FOG Index

 

  • McLaughlin SMOG Index

 

  • Other computer generated readability indices accepted by DCH.

 

II-T MEMBER AND ENROLLEE SERVICES

 

All written and oral materials directed to Enrollees must be prior approved by
DCH. Upon receipt by DCH of a complete file of the proposed communication, the
DCH will provide a decision to the Contractor within 30 business days or the
Contractor’s request will be deemed approved. All Enrollee services must address
the need for culturally appropriate interventions. Reasonable accommodation must
be made for Enrollees with hearing and/or vision impairments.

 

  1. General

 

Contractors will establish and maintain a toll-free 24 hours a day, 7 days a
week telephone number to assist with questions that Enrollees may have about the
Contractor’s providers or Covered Services.

 

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Contractors will issue an eligibility card to all Enrollees that includes the
toll free 24 hours a day, 7 days a week phone number for Enrollees to call and a
unique identifying number for the Enrollee. The card must also identify the
member’s PCP name and phone number. Contractors may meet this requirement in one
of the following ways:

 

  • Print the PCP name and phone number on the card. (The Contractor must send a
new card to the Enrollee when the PCP assignment changes.)

 

  • Print the PCP name and phone number on a replaceable sticker to be attached
to the card. (The Contractor must send a anew sticker to the Enrollee when the
PCP assignment changes.)

 

  • Any other method approved by DCH, provided that the PCP name and phone
number is affixed to the card and the information changes when the PCP
assignment changes.

 

The Contractor will demonstrate a commitment to case managing the complex health
care needs of Enrollees. Commitment will be demonstrated by the involvement of
the Enrollee in the development of his or her treatment plan and will take into
account all of an Enrollee’s needs (e.g. home health services, therapies,
durable medical equipment and transportation).

 

Contractors will accept as enrolled all Enrollees appearing on monthly
enrollment reports and infants enrolled by virtue of the mother’s enrollment
status. Contractors may not discriminate against Beneficiaries on the basis of
health needs or health status.

 

The duties of each Contractor include arrangements for medically necessary
services and education of Enrollees with regard to the importance of preventive
care. In this context, Contractors may not encourage an Enrollee to disenroll
because of health care needs or a change in health care status. Further, an
Enrollee’s health care utilization patterns may not serve as the basis for
disenrollment from the Contractor. Subject to the above, Contractors may request
that DCH prospectively disenroll an Enrollee for cause and present all relevant
evidence to assist DCH in reaching its decision. DCH shall consider all relevant
factors in making its decision. DCH’s decision regarding disenrollment shall be
final. Disenrollments “for cause” will be the first day of the next available
month.

 

  2. Enrollee Education

 

  (a) The Contractor will be responsible for developing and maintaining Enrollee
education programs designed to provide the Enrollee with clear, concise, and
accurate information about the Contractor’s services. Materials for Enrollee
education should include:

 

  • Member handbook

 

  • Contractor bulletins or newsletters sent to the Contractor’s Enrollees at
least two times a year that provide updates related to Covered Services, access
to providers and updated policies and procedures.

 

  • Literature regarding health/wellness promotion programs offered by the
Contractor.

 

  (b) Enrollee education should also focus on the appropriate use of health
services. Contractors are encouraged to work with local and community based
organizations to facilitate their provision of Enrollee education services.

 

  3. Member Handbook/Provider Directory

 

Contractors must mail the member ID Card to Enrollees via first class mail
within ten business days of being notified of their enrollment. All other
printed information,

 

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including member handbook, provider directory, and information regarding
accessing services may be mailed separately from the ID card. These materials do
not have to be mailed via first class but must be mailed within ten business
days of being notified of the member’s enrollment.

 

Contractors may select the option of distributing new member packets to each
household, instead of to each individual member in the household, provided that
the mailing includes individual Health Plan membership cards for each member
enrolled in the household. When there are program or service site changes,
notification must be provided to the affected Enrollees at least ten (10)
Business Days before implementation.

 

The Contractor must maintain documentation verifying that the information in the
member handbook is reviewed for accuracy and updated at least once a year. The
provider directory may be published separately. At a minimum the member handbook
must include:

 

  • A table of contents

 

  • Information on how to choose and change PCPs

 

  • What to do when family size changes

 

  • How to make, change, and cancel appointments with a PCP

 

  • A description of all available Contract services and an explanation of any
service limitations or exclusions from coverage

 

  • How to contact the Contractor’s Member Services and a description of its
function

 

  • Information regarding the grievance and appeal process including how to
register a grievance with the Contractor and/or State, how to file a written
appeal, and the deadlines for filing an appeal and an expedited appeal

 

  • Information regarding the State’s fair hearing process and that access to
that process may occur without first going through the Contractor’s
grievance/complaint process

 

  • What to do in case of an emergency and instructions for receiving advice on
getting care in case of any emergency. Enrollees should be instructed to
activate emergency medical services (EMS) by calling 9-1-1 in life threatening
situations

 

  • How to obtain emergency transportation and medically necessary
transportation

 

  • How to obtain medically necessary durable medical equipment (or customized
durable medical equipment)

 

  • How to access hospice services

 

  • Information on the signs of substance abuse problems, available substance
abuse services and accessing substance abuse services

 

  • Information on well-child care, immunizations, and follow-up services for
Enrollees under age 21 (EPSDT)

 

  • Information on vision services, family planning services, and how to access
these services

 

  • Information on the process of referral to specialists and other providers

 

  • Information on the availability and process for accessing Covered Services
that are not the responsibility of the Contractor, but are available to its
Enrollees such as dental care, behavioral health and developmental disability
services

 

  • Information on how to handle out of county and out of state services

 

  • Information to Enrollees that they are entitled to receive FQHC services

 

  • How Enrollees can contribute towards their own health by taking
responsibility, including appropriate and inappropriate behavior

 

  • Information regarding pregnancies which conveys the importance of prenatal
care and continuity of care, to promote optimum care for mother and infant

 

  • Information regarding the Women’s, Infant’s, and Children (WIC) Supplemental
Food and Nutrition Program

 

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  • Information advising Enrollees of their right to request information
regarding physician incentive arrangements including those that cover referral
services that place the physician at significant financial risk (more than 25%),
other types of incentive arrangements, whether stop-loss coverage is provided

 

  • Information regarding when specialists may be designated as their PCP; and

 

  • Information regarding the Enrollee’s right to obtain routine OB/GYN and
Pediatric services from network providers without a referral.

 

  • Information on how to obtain oral interpretation services and written
information in Prevalent Languages, as defined by the Contract.

 

  • Information on how to obtain written materials in alternative formats for
enrollees with special needs.

 

  • Information on Enrollee rights and responsibilities. The Enrollee rights
information must include a statement that conveys that Contractor staff and
affiliated providers will comply with all requirements concerning Enrollee
rights.

 

  • Information concerning advance directives that includes, at a minimum: (1)
information about the Contractor’s advance directives policy, (2) information
regarding the State’s advance directives law, and (3) directions on how to file
a complaint with the State concerning noncompliance with the advance directive
requirements. Any changes in the State law must be updated in this written
information no later than 90 days following the effective date of the change.

 

  • Any other information deemed essential by the Contractor and/or the DCH

 

The handbook must be written at no higher than a sixth grade reading level and
must be available in alternative formats for Enrollees with special needs.
Member handbooks must be available in the Prevalent Language other than English
when more than five percent (5%) of the Contractor’s Enrollees speak a Prevalent
Language, as defined by the Contract. These Contractors must also provide a
mechanism for Enrollees who speak the Prevalent Language to obtain member
materials in the Prevalent Language or to obtain assistance with interpretation.
The Contractor must submit all member handbook material to DCH for approval
prior to distribution to the members. The Contractor must agree to make
modifications in the handbook language so as to comply with the specifications
of this Contract.

 

The Contractor must maintain a provider directory that contains, at a minimum,
the following information:

 

  • PCPs and Specialists listed by county.

 

  • For PCP listings, the following information must be provided: Provider name,
address, telephone number, any hospital affiliation, days and hours of
operation, whether the provider is accepting new patients, and languages spoken.

 

  • For Specialist listings, the following information must be provided:
Provider name, address, telephone number, and any hospital affiliation.

 

  • A list of all hospitals, pharmacies, medical suppliers, and other ancillary
health providers the Enrollees may need to access. The list must contain the
address and phone number of the provider.

 

Ancillary providers that are part of a retail chain may be listed by the name of
the chain without listing each specific site.

 

  4. Protection of Enrollees Against Liability for Payment and Balanced Billing

 

Section 1932(b)(6) of the Social Security Act requires Contractors to protect
Enrollees from certain payment liabilities. Section 1128B(d)(1) of the Social
Security Act authorizes criminal penalties to providers in the case of services
provided to an individual enrolled with a Contractor which are charges at a rate
in excess of the rate permitted under the organization’s Contract.

 

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II-U GRIEVANCE/APPEAL PROCEDURES

 

The Contractor will establish and maintain an internal process for the
resolution of grievances and appeals from Enrollees. Enrollees may file a
grievance or appeal on any aspect of service provided to them by the Contractor
as specified in the definitions of grievance and appeal.

 

  1. Contractor Grievance/Appeal Procedure Requirements

 

The Contractor agrees to have written policies and procedures governing the
resolution of grievances and appeals. These written policies and procedures will
meet the following requirements:

 

  • The Contractor shall administer an internal grievance and appeal procedure
according to the requirements of MCL 500.2213 and MCL 550.1404 and shall
cooperate with the Michigan Office of Financial and Insurance Services in the
implementation of MCL 550.1901-1929, “Patient’s Rights to Independent Review
Act.”

 

  • The Contractor’s internal grievance and appeal procedure must include the
following components:

 

  • The Contractor must give Enrollees reasonable assistance in completing forms
and taking other procedural steps. The Contractor must provide interpreter
services and TTY/TDD toll free numbers.

 

  • The Contractor must acknowledge receipt of each grievance and appeal.

 

  • The Contractor must ensure that the individuals who make decisions on
grievances and appeals are individuals:

 

  (i) Who were not involved in any previous level of review or decision-making;
and

 

  (ii) Are health care professionals who have the appropriate clinical expertise
in treating the Enrollee’s condition or disease, when the grievance or appeal
involves a clinical issue.

 

  2. Notice to Enrollees of Grievance Procedure

 

The Contractor will inform Enrollees about the Contractor’s internal grievance
procedures at the time of initial enrollment and any other time an Enrollee
expresses dissatisfaction with the Contractor. The information will be included
in the member handbook and will explain:

 

  • How to file a grievance with the Contractor

 

  • The internal grievance resolution process

 

  3. Notice to Enrollees of Appeal Procedure

 

The Contractor will inform Enrollees about the Contractor’s appeal procedure at
the time of initial enrollment, each time a service is denied, reduced, or
terminated, and any other time a Contractor makes a decision that is subject to
appeal under the definition of appeal in this Contract. The information will be
included in the member handbook and will explain:

 

  • How to file an appeal with the Contractor

 

  • The internal appeal process

 

  • The member’s right to a fair hearing with the State

 

When the Contractor makes a decision subject to appeal, as defined in this
contract, the Contractor must provide a written adverse action notice to the
Enrollee and the requesting provider, if applicable. Adverse action notices for
the suspension, reduction or termination of services must be made at least 10
days prior to the

 

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change in services. Adverse action notices involving service authorization
decisions that deny or limit services must be made within the time frames
described in Section II-Q of this Contract. The notice must include the
following components:

 

  • The action the Contractor or subcontractor has taken or intends to take;

 

  • The reasons for the action;

 

  • The Enrollee’s or Provider’s right to file an Appeal;

 

  • An explanation of the Contractor’s Appeal Process;

 

  • The Enrollee’s right to request a Medicaid fair hearing;

 

  • The circumstances under which expedited resolution is available and how to
request it; and

 

  • The Enrollee’s right to have benefits continue pending resolution of the
Appeal, how to request that benefits be continued, and the circumstances under
which the Enrollee may be required to pay the costs of these services.

 

  4. State Medicaid Appeal Process

 

The State will maintain a Medicaid fair hearing process to ensure that Enrollees
have the opportunity to appeal decisions directly to the State. The Contractor
must include the Medicaid Fair Hearing Process as part of the written internal
process for resolution of appeals and must describe the Medicaid Fair Hearing
process in the Member Handbook.

 

  5. Expedited Appeal Process

 

The Contractor’s written policies and procedures governing the resolution of
appeals must include provisions for the resolution of expedited appeals as
defined in the Contract. These provisions must include, at a minimum, the
following requirements:

 

  • The Enrollee or provider may file an expedited appeal either orally or in
writing.

 

  • The Enrollee or provider must file a request for an expedited appeal within
10 days of the adverse determination.

 

  • The Contractor will make a decision on the expedited appeal within 3 working
days of receipt of the expedited appeal. This timeframe may be extended up to 10
calendar days if the enrollee requests the extension or if the Contractor can
show that there is need for additional information and can demonstrate that the
delay is in the Enrollee’s interest. If the Contractor utilizes the extension,
the Contractor must give the Enrollee written notice of the reason for the
delay.

 

  • The Contractor will give the Enrollee oral and written notice of the appeal
review decision.

 

  • If the Contractor denies the request for an expedited appeal, the Contractor
will transfer the appeal to the standard 35-day timeframe and give the Enrollee
written notice of the denial within 2 days of the expedited appeal request.

 

  • The Contractor will not take any punitive actions toward a provider who
requests or supports an expedited appeal on behalf of an Enrollee

 

II-V CONTRACTOR On-Site Reviews

 

Contractor on-site reviews by DCH will be an ongoing activity conducted during
the Contract. The Contractor’s on-site review may include the following areas:
administrative, financial, provider, Covered Services, quality assurance,
utilization review, data reporting, claims processing, fraud and abuse, and
documentation. The DCH shall establish findings of pass, incomplete, fail, or
deemed status for each criteria included in the annual site visit and tool used
to assess health plan compliance.

 

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Findings of incomplete or fail shall require the development of a corrective
action plan that will be included each year as Attachment C to this Contract.

 

II-W  CONTRACT REMEDIES AND SANCTIONS

 

The State will utilize a variety of means to assure compliance with Contract
requirements. The State will pursue remedial actions or improvement plans that
the Contractor can implement to resolve outstanding requirements. If remedial
action or improvement plans are not appropriate or are not successful, Contract
sanctions will be implemented.

 

DCH may employ contract remedies and/or sanctions to address any Contractor
noncompliance with the Contract; this includes, but is not limited to,
noncompliance with Contract requirements on the following issues:

 

  • Marketing practices

 

  • Member services

 

  • Provision of medically necessary, covered services

 

  • Enrollment practices, including but not limited to discrimination on the
basis of health status or need for health services

 

  • Provider networks

 

  • Provider payments

 

  • Financial requirements, including but not limited to failure to comply with
physician incentive plan requirements

 

  • Enrollee satisfaction

 

  • Performance standards included at Attachment D to the Contract

 

  • Misrepresentation or false information provided to DCH, CMS, providers,
Enrollees, or potential Enrollees.

 

The use of intermediate sanctions for non-compliance is described in 42 CFR
438.700. Intermediate sanctions employed by DCH may include suspension of
enrollment and/or payment. Intermediate sanctions may also include the
appointment of temporary management, as provided in 42 CFR 438.706, in
cooperation with the Office of Financial and Insurance Services.

 

If intermediate sanctions are not successful or DCH determines that immediate
termination of the Contract is appropriate, as allowed by Section I-O, the State
will terminate the Contract with the Contractor. The Contractor must be afforded
a hearing before termination of a Contract under this section can occur. The
State must notify Enrollees of such a hearing and allow Enrollees to disenroll,
without cause, if they choose.

 

In addition to the sanctions described above, DCH will also administer and
enforce a monetary penalty of not more than $5000,00 to a Contractor for
repeated failures on any of the findings of DCH site visit report. Collections
under this Contract sanction will be through gross adjustments to the monthly
payments described in Section I-J of this Contract and will be allocated to the
fund established under Section II-AA-e of the Contract for performance bonus.

 

II-X DATA REPORTING

 

To measure the Contractor’s accomplishments in the areas of access to care,
utilization, medical outcomes, Enrollee satisfaction, and to provide sufficient
information to track expenditures and calculate future Capitation Rates the
Contractor must provide the DCH with uniform data and information as specified
by DCH. The Contractor must submit an annual consolidated report using the
instructions and format covered in Contract Appendix F. In addition to the
annual consolidated report, the Contractor must submit monthly and quarterly
reports as specified in this section. Any changes in the reporting requirements
will be communicated to the Contractor at least ninety (90) days before they are
effective unless state or federal law requires otherwise.

 

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Within the first 15 days of each new fiscal year, the Contractor’s CEO must
submit a DCH Data Certification form to DCH. The document must attest to the
accuracy, completeness, and truthfulness of any and all data and documents
submitted to the State as required by the Contract. When the health plan employs
a new CEO, a new DCH Data Certification form must be submitted to DCH within 15
days of the employment date.

 

Submitted encounter data will be subject to edits prior to acceptance into DCH’s
data warehouse. Stored encounter data will be subject to regular and ongoing
quality checks as developed by DCH. The Contractor’s submission of encounter
data must meet timeliness and completeness requirements as specified by DCH. The
contractor must participate in regular data quality assessments conducted as a
component of ongoing on-site activity described in Section II-V.

 

The Contractor must cooperate with DCH in carrying out validation of data
provided by the Contractor by making available medical records and a sample of
its data and data collection protocols. The Contractor must develop and
implement corrective action plans to correct data validity problems as
identified by the DCH.

 

The following information and reports must be submitted to the Department in
addition to the annual consolidated report:

 

  1. HEDIS®

 

The Contractor annually submit Michigan specific HEDIS reports according to the
most current NCQA specifications and timelines, utilizing Michigan specific
samples of Enrollees. The Contractor must contract with a NCQA certified HEDIS
auditing vendor and undergo a full audit of their HEDIS reporting process.

 

  2. Encounter Data Reporting

 

In order to assess quality of care, determine utilization patterns and access to
care for various health care services, affirm Capitation Rate calculations and
estimates, the Contractor will submit encounter data containing detail for each
patient encounter reflecting all services provided by the Contractor. Encounter
records will be submitted monthly via electronic media in the format specified
by DCH. Encounter level records must have a common identifier that will allow
linkage between DCH’s and the Contractor’s Management Information Systems.

 

Submitted encounter data will be subject to edits prior to acceptance into DCH’s
data warehouse. Stored encounter data will be subject to regular and ongoing
quality checks as developed by DCH. The Contractor’s submission of encounter
data must meet timeliness and completeness requirements as specified by DCH. The
Contractor must participate in regular data quality assessments conducted as a
component of ongoing on site activity described in Section II-V.

 

  3. Financial and Claims Reporting Requirements

 

In addition to meeting all HMO financial reporting requirements and providing
copies of the HMO financial reports to DCH, Contractors must provide to DCH
monthly statements that provide information regarding paid claims, aging of
unpaid claims, and denied claims. The DCH may also require monthly financial
statements from Contractors.

 

  4. Quality Assessment and Performance Improvement Program Reporting

 

The Contractor must perform and document annual assessments of their quality
assessment and performance improvement program. This assessment is to

 

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summarize any modifications made in the quality assessment and performance
improvement program, a description of performance improvement activities for the
previous year, an effectiveness review (including progress on performance goals
and objectives), and a work plan for the coming year. The assessment must also
include results of the Contractor’s member satisfaction survey if the Contractor
does not participate with DCH coordinated survey activity. The Contractor may be
required to provide this assessment and other reports or improvement plans
addressing specific contract performance issues identified through site visit
reviews, external independent reviews, focused studies or other monitoring
activities conducted by DCH.

 

  5. Semi-annual Grievance and Appeal Report

 

The Contractor must track the number and type of grievances and appeals. This
information should be summarized by the level at which the grievance or appeal
was resolved.

 

II-Y RELEASE OF REPORT DATA

 

The Contractor must obtain DCH’s written approval prior to publishing or making
formal public presentations of statistical or analytical material based on its
Enrollees.

 

II-Z MEDICAL RECORDS

 

The Contractor must ensure that its providers maintain medical records of all
medical services received by the Enrollee. The medical record must include, at a
minimum, a record of outpatient and emergency care, specialist referrals,
ancillary care, diagnostic test findings including all laboratory and radiology,
prescriptions for medications, inpatient discharge summaries, histories and
physicals, immunization records, other documentation sufficient to fully
disclose the quantity, quality, appropriateness, and timeliness of services
provided.

 

  1. Medical Record Maintenance

 

The Contractor’s medical records must be maintained in a detailed and
comprehensive manner that conforms to good professional medical practice,
permits effective professional medical review and medical audit processes, and
which facilitates an adequate system for follow-up treatment. Medical records
must be signed and dated. All medical records must be retained for at least six
(6) years.

 

The Contractor must have written policies and procedures for the maintenance of
medical records so that those records are documented accurately and in a timely
manner, are readily accessible, and permit prompt and systematic retrieval of
information. The Contractor must have written plans for providing training and
evaluating providers’ compliance with the recognized medical records standards.

 

  2. Medical Record Confidentiality/Access

 

The Contractor must have written policies and procedures to maintain the
confidentiality of all medical records. DCH and/or CMS shall be afforded prompt
access to all Enrollees’ medical records. Neither CMS nor DCH are required to
obtain written approval from an Enrollee before requesting an Enrollee’s medical
record. When an Enrollee changes PCP, the former PCP must forward his or her
medical records or copies of medical records to the new PCP within ten (10)
working days from receipt of a written request.

 

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II-AA SPECIAL PAYMENT PROVISIONS

 

  1. Payment of Rural Access Incentive

 

In addition to the capitation payment agreed to and included in the Contract as
Attachment A, the DCH will provide an additional “add-on” payment for health
plans who have been approved to provide services in any or all of the following
counties:

 

  • Alcona, Alpena, Antrim, Benzie, Charlevoix, Cheboygan, Clare, Crawford,
Emmet, Gladwin, Huron, Kalkaska, Leelanau, Mason, Mecosta, Midland, Missaukee,
Montmorency, Oceana, Osceola, Otsego, Presque Isle, Sanilac, Tuscola, and
Wexford.

 

Payment will be provided each month in the form of an additional $3 dollars/per
member/per month payment for each Beneficiary enrolled with the Contractor. Five
($5) dollars per member per month will be paid to the Contractor if the
Contractor is serving all of the above listed counties. It is expected that the
additional payment will be used to help support the provider and infrastructure
costs for operating a managed care plan in a rural environment. Contractors will
be required to report on the disposition of the payments received through this
additional reimbursement.

 

  2. Contractor Performance Bonus

 

During each Contract year, the DCH will withhold .0025 of the approved
capitation for each Contractor. The amount withheld will be used to establish a
fund for awarding Contractor performance bonus payments. These payments will be
made to those high performing Contractors according to criteria established by
DCH. The criteria will include assessment of performance in quality of care,
beneficiary responsiveness, and administrative functions. The DCH will establish
the criteria and measurement of the criteria at the start of each fiscal year
and provide notice to each Contractor.

 

In establishing the annual performance bonus criteria, the DCH will use the
following reports and assessments for the applicable calendar/fiscal year and
consult with Contractors:

 

  • External Quality Review (EQR);

 

  • Medicaid HEDIS Report;

 

  • Consumer (enrollee member) survey results;

 

  • Beneficiary hotline summary data for the most current 12 month reporting
period;

 

  • Administrative, claims payment, and encounter reporting performance; and

 

  • Current nationally recognized NCQA or JCAHO accreditation status

 

II-BB RESPONSIBILITIES OF THE DEPARTMENT OF COMMUNITY HEALTH

 

DCH will be responsible for administering the CHCP. It will administer Contracts
with Contractors, monitor Contract performance, and perform the following
activities:

 

  • Pay to the Contractor a PMPM Capitation Rate as agreed to in the Contract
for each Enrollee.

 

  • Determine eligibility for the Medicaid program and determine which
Beneficiaries will be enrolled.

 

  • Determine if and when an Enrollee will be disenrolled from the Contractor’s
plan or changed to another Medicaid managed care program.

 

  • Notify the Contractor of changes in enrollment.

 

  • Notify the Contractor of the Enrollee’s name, address, and telephone number
if available. The Contractor will be notified of changes as they are known to
the DCH.

 

  • Issue Medicaid identification cards (mihealth card) to Enrollees.

 

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CONTRACT #071B [GRAPHIC]

 

  • Provide the Contractor with information related to known third party
resources and any subsequent changes and be responsible for reporting paternity
related expenses to FIA.

 

  • Notify the Contractor of changes in Covered Services or conditions of
providing Covered Services.

 

  • Maintain a CAC to collaborate with Contractors on quality improvement.

 

  • Administer a Medicaid fair hearing process consistent with federal
requirements.

 

  • Collaborate with the Contractor on quality improvement activities, fraud and
abuse issues, and other activities which impact on the health care provided to
Enrollees.

 

  • Conduct a member satisfaction survey of all Enrollees, compile, and publish
the results.

 

  • Review and approve Contractor marketing and member information materials
before being released to Enrollees.

 

  • Apply Contract remedies as necessary to assure compliance with Contract
requirements.

 

  • Monitor the operation of the Contractor to ensure access to quality care for
Enrollees.

 

  • Provide timely data to Health Plans at least 60 days before the effective
date of fee for service pricing or coding changes or DRG changes.

 

  • Implement mechanisms to identify persons with special health care needs.

 

  • Assess the quality and appropriateness of care and services furnished to all
of Contractor’s Medicaid Enrollees and individuals with special health care
needs utilizing information from required reports, on-site reviews, or other
methods DCH determines appropriate.

 

  • Identify the race, ethnicity, and primary language spoken of each Medicaid
Enrollee. (State must provide this information to the Contractor at the time of
enrollment).

 

  • Regularly monitor and evaluate the Contractor’s compliance with the
standards.

 

  • Protect against fraud and abuse involving Medicaid funds and Enrollees in
cooperation with appropriate state and federal authorities.

 

  • Make all fraud and/or abuse referrals to the office of Attorney General,
Health Care Fraud Division.

 

II-CC PROGRAM INTEGRITY

 

The Contractor must have administrative and management arrangements or
procedures, including a mandatory compliance plan. The Contractors’ arrangements
or procedures must include the following as defined in Section 438.608 of the
Balanced Budget Act:

 

  • Written policies and procedures that describe how the Contractor will
monitor Fraud and Abuse.

 

  • The designation of a compliance officer and a compliance committee who are
accountable to the senior management or Board of Directors and who have
effective lines of communication to the Contractor’s employees.

 

  • Effective training and education for the compliance officer and the
Contractor’s employees.

 

  • Provisions for internal monitoring and auditing.

 

  • Provisions for prompt response to detected offenses and development of
corrective action initiatives.

 

  • Documentation of the Contractor’s enforcement of the Federal and State fraud
and abuse standards.

 

Contractors who have any suspicion or knowledge of fraud and/or abuse within any
of the DCH’s programs must report directly to the DCH by calling (866) 428-0005
or sending a memo or letter to:

 

Program Investigations Section

Capitol Commons Center Building

400 S. Pine Street, 6th floor

Lansing, Michigan 48909

 

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CONTRACT #071B [GRAPHIC]

 

When reporting suspected fraud and/or abuse, the Contractor should provide to
the DCH the following information:

 

  • Nature of the Complaint

 

  • The name of the individuals and/or entity involved in the suspected fraud
and/or abuse, including their address, phone number and Medicaid identification
number, and any other identifying information.

 

The Contractor shall not attempt to investigate or resolve the reported
suspicion, knowledge, or action without informing the DCH and must cooperate
fully in any investigation by the DCH or Office of Attorney General and any
subsequent legal action that may result from such investigation.

 

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CONTRACT #071B [GRAPHIC]

 

SECTION III

 

CONTRACTOR INFORMATION

 

III-A BUSINESS ORGANIZATION

 

PRIMARY CONTRACTOR:

 

SUB-CONTRACTOR:

 

III-B AUTHORIZED CONTRACTOR EXPEDITER:

 

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CONTRACT #071B [GRAPHIC]

 

APPENDIX A

 

MODEL LOCAL AGREEMENT WITH LOCAL HEALTH DEPARTMENTS & MATRIX FOR COORDINATION OF
SERVICES

 

(see file 10010 apndx A thru F.pdf)

 

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CONTRACT #071B [GRAPHIC]

 

APPENDIX B

 

MODEL LOCAL AGREEMENT WITH BEHAVIORAL PROVIDER

 

(see file 10010 apndx A thru F.pdf)

 

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CONTRACT #071B [GRAPHIC]

 

APPENDIX C

 

MODEL LOCAL AGREEMENT WITH DEVELOPMENTAL DISABILITY PROVIDER

 

(see file 10010 apndx A thru F.pdf)

 

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CONTRACT #071B [GRAPHIC]

 

APPENDIX D

 

FORMAT FOR PROFILES OF PRIMARY CARE PROVIDERS, SPECIALISTS, & ANCILLARY PROVIDER

 

(see file 10010 apndx A thru F.pdf)

 

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CONTRACT #071B [GRAPHIC]

 

APPENDIX E

 

KEY CONTRACTOR PERSONNEL AUTHORIZATION FOR RELEASE OF INFORMATION

 

(see file 10010 apndx A thru F.pdf)

 

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CONTRACT #071B [GRAPHIC]

 

APPENDIX F

 

HEALTH PLAN REPORTING FORMAT AND SCHEDULE

 

(see file 10010 apndx A thru F.pdf)

 

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CONTRACT #071B [GRAPHIC]

 

ATTACHMENT A

 

CONTRACTOR’S AWARDED PRICES

 

In compliance with 42 CFR 438.6 (c), the attached rates have been certified as
actuarially sound by the Contractor.

 

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CONTRACT #071B [GRAPHIC]

 

ATTACHMENT B

 

APPROVED SERVICE AREAS

 

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CONTRACT #071B [GRAPHIC]

 

ATTACHMENT C

 

CORRECTIVE ACTION PLANS

(to be developed at a later date)

 

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CONTRACT #071B [GRAPHIC]

 

ATTACHMENT D

 

MEDICAID MANAGED CARE

PERFORMANCE STANDARDS

 

--------------------------------------------------------------------------------

CONTRACT #071B [GRAPHIC]

 

MEDICAID MANAGED CARE

PERFORMANCE STANDARDS

(Contract Year October 1, 2003 – September 30, 2004)

 

ATTACHMENT D – PERFORMANCE MONITORING STANDARDS

 

PURPOSE: The purpose of the performance monitoring standards is to establish an
explicit process for the ongoing monitoring of health plan performance in
important areas of quality, access, customer services, and reporting. Through
this attachment, the State incorporates the performance standards into the
Contract between the State of Michigan and Contracting Medicaid Health Plans.
Attachment D is a summary of the performance monitoring standards. Details on
each performance monitoring standard are contained in the MDCH Performance
Monitoring Standards Specifications.

 

The performance monitoring process is dynamic and reflects statewide issues that
may change on a year- to-year basis. Performance measurement reports are shared
with Health Plans during the year. The reports compare performance of each Plan
over time, to other health plans, and to industry standards, where available.

 

The Performance Monitoring Standards reflect the following performance areas:

 

  • Quality of Care

 

  • Access to Care

 

  • Customer Services

 

  • Encounter Data

 

  • Provider File reporting

 

  • Claims Payment

 

Within each area, specific performance measures are identified including:

 

  • Goal description

 

  • Minimum Standard

 

  • Data Source

 

  • Monitoring Interval, (monthly, quarterly, annually)

 

Failure to meet the minimum performance monitoring standards may result in the
implementation of remedial actions and/or improvement plans as outlined in the
contract section II-W.

 

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CONTRACT #071B [GRAPHIC]

 

PERFORMANCE AREA

--------------------------------------------------------------------------------

  

GOAL DESCRIPTION

--------------------------------------------------------------------------------

  

MINIMUM
STANDARD

--------------------------------------------------------------------------------

  

DATA SOURCE

--------------------------------------------------------------------------------

  

MONITORING

INTERVALS

--------------------------------------------------------------------------------

•        Quality of Care:

 

Childhood Immunization

   Fully immunize children who turn two years old during the calendar year.   
Combination 1 ³ 65%    HEDIS report    Annual

•        Quality of Care:

 

Prenatal care

   Pregnant women receive an initial prenatal care visit in the first trimester
or within 42 days of enrollment    ³ 65%    HEDIS report    Annual

•        Quality of Care:

 

Blood Lead Screening

   Children at the age of 3 years that have had at least one blood lead test
on/before 3rd birthday    ³ 40%    Blood Lead Registry    Quarterly

•        Access to Care:

 

Well child visits First 15

months of Life

   Children in the first 15 months of life receive one or more well child visits
during 12 month period    ³ 90%    Encounter data    Quarterly

•        Access to Care:

 

Well child visits 3-6 years

   Children three, four, five, and six old receive one or more well child visits
during twelve-month period.    ³ 45%    Encounter data    Quarterly

•        Customer Services:

 

Enrollee complaints

   Plans will have minimal enrollee contacts through Medicaid Helpline which are
determined to be a complaint issue    Complaint rate < 5 per 1000 member months
   Beneficiary/ Provider complaint tracking (BPCT)    Quarterly

•        Claims Reporting

   Health Plans are compliant with statutory requirements for payment of clean
claims   

³90% clean claims paid within 30 days;

£ 2% of ending inventory >45 days old

   Claims report submitted by health plan    Monthly

•        Encounter Data Reporting

   Timely and complete encounter data submission by the 15th of the month   
Timely and Complete    MDCH Data Exchange Gateway (DEG)    Monthly

•        Provider File Reporting

   Timely provider file update/submission before the last Tuesday of the month
   Monthly submission    MI Enrolls    Monthly

 

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CONTRACT #071B [GRAPHIC]

 

ATTACHMENT E

 

MODEL HEALTH PLAN/HOSPITAL CONTRACT