EXHIBIT 10.1

 

STATE OF CALIFORNIA • HEALTH AND HUMAN SERVICES AGENCY

   GRAY DAVIS, Governor

 

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

 

DEPARTMENT OF HEALTH SERVICES

714/744 P STREET

P.O. BOX 942732

SACRAMENTO, CA 94234-7320

    

[STAMP]                        

CONTRACTOR NOTICE/INSTRUCTIONS

 

CONTRACTOR: Molina Healthcare of California

 

CONTRACT NUMBER: 95-23637 A11

    

 

Inquiries about this notice must reference the contract number above and be
directed to the Department of Health Services’ (DHS) Contract Management Unit
(CMU) at (916): 650-0100

 

To complete the processing of your contract, follow all instructions checked x
below:

 

¨ Affix an original signature to each enclosed contract copy/face sheet. Retain
one full contract copy. Return, to CMU’s address below, any remaining contract
copies/face sheets, along with any additional items being requested, as
indicated by a check mark x.

 

x Enclosed for your records is your fully executed contract copy. Include DHS’s
contract number on all invoices and future correspondence related to this
contract.

 

¨ The enclosed contract has been fully approved by the State. Upon affixing your
signature, the contract will be fully executed. Retain a full contract copy.
Sign/turn, to CMU’s address below, any remaining contract copies/face sheets for
final distribution.

 

¨ The enclosed agreement has been signed by DHS. When fully executed, return one
originally signed copy and any extra copies to CMU’s address below. Include
DHS’s contract number on future correspondence related to this contract.

 

¨ Complete, sign, and return the enclosed Vendor Data Record form.

 

¨ Return two copies of Board Motion/Resolution.

 

¨ Other:

 

Return all items requested above to CMU at the following address:

 

DHS Contract Management Unit

1501 Capitol Avenue, Suite 71.2101

MS 1403

P.O. Box 99741

Sacramento, CA 95899-7413

 

Please do not alter the enclosed contract. Until the contract is fully executed
and distributed, no costs are reimbursable.

 

For program matters, invoice issues, or to request contract alterations,
contact:

 

DHS Policy & Contracts

Attn: Christina Rodriguez-Moreno (916) 449-5094

1501 Capitol Ave, P.O. Box 942732, MS 4407

Sacramento, CA 95814

 

Enclosures

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

STATE OF CALIFORNIA

STANDARD AGREEMENT AMENDMENT

___________DHS Rev 6/03)

 

x       CHECK HERE IF ADDITIONAL PAGES ARE ADDED 229 PAGES

   AGREEMENT NUMBER
95-23637    AMENDMENT NUMBER
11    

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

     REGISTRATION NUMBER: 4260100314078

 

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

1.

  

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

   

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

    

STATE AGENCY’S NAME

 

California Department of Health Services

   (Also referred to as CDHS, DHS, or the State)    

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

    

CONTRACTOR’S NAME

 

Molina Healthcare of California, dba: Molina

   (Also referred to as Contractor)

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

2.

  

The term of this Agreement is         4/02/96         through         3/31/04

    

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

3.

  

The maximum amount         $____

of this Agreement is:

    

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

4.

  

The parties mutually agree to this amendment as follows. All actions noted below
are by this reference made a part of the Agreement and incorporated herein:

 

  I. Amendment effective date: August 1, 2003

 

  II. Purpose of amendment: The purpose of this amendment is to revise the
existing contract format into the current Department of General Services
recommended format, modify the substance of the contract to conform to the
Federal Balanced Budget Act regulations effective August 13, 2003, and as a
result, have this amendment replace all prior versions of the existing contract
and any amendments thereto which predate this amendment.

 

All other terms and conditions shall remain the same.

 

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

 

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

CONTRACTOR   

CALIFORNIA

Department of General Services

Use Only

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

   

CONTRACTOR’S NAME (If other than an individual, state whether a corporation,
partnership, etc.)

Molina Healthcare of California, dba: Molina

  

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

   

BY (Authorized Signature)

/s/ Trisha Dinsmore-Jennings

  

DATE SIGNED (Do not type)

10/13/03

    

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

   

PRINTED NAME AND TITLE OF PERSON SIGNING

Trisha Dinsmore-Jennings, President/C.O.O

    

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

     

ADDRESS

One Golden Shore Drive Long Beach, CA 90802

    

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

      STATE OF CALIFORNIA     

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

     

AGENCY NAME

California Department of Health Services

    

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

   

BY (Authorized Signature)

/s/ Terri L. Anderson

  

DATE SIGNED (Do not type)

10-16-03

    

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

   

PRINTED NAME AND TITLE OF PERSON SIGNING

Edward Stahlberg, Chief, Program Support Branch

  

Terri L. Anderson. Chief

Contract & Business Services Section

  

x Exempt per: W & I Code 14087.4

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

   

ADDRESS

1501 Capitol Avenue, Room 71.2101, MS 1403, P.O. Box 942732 Sacramento, CA
94234-7320

    

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

 

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

Molina Healthcare of California, dba: Molina

95-23637 A-11

 

Exhibit A

Scope of Work

 

1. Contractor agrees to provide to the Department of Health Services (DHS) the
services described herein:

 

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

 

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

 

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

 

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

 

Department of Health Services    Contractor

Medi-Cal Managed Care Division

Attention: Chief, Plan Management Branch

 

Telephone: (916) 449-5100, (916) 449-5101

Fax: (916) 449-5090, (916) 449-5091

  

Name of Contractor’s Representative:

Trisha Dinsmore-Jennings,

President & CEO

Telephone: (562) 435-3666, ext. 7019

Fax: (562) 951-1500

Direct all inquiries to:     

Department of Health Services

   Contractor

Medi-Cal Managed Care Division

Attention: Contracting Officer

 

1501 Capitol Avenue, Suite 71.4001

P.O. Box Number 942732,

Mail Stop 4407 Sacramento, CA 94814-7320

  

 

Attention: Maria Calderon,

Contract Manager

One Golden Shore

Long Beach, CA 90802

Telephone: (916) 449-5000

Fax: (916) 449-5005

  

Telephone: (562) 435-3666, ext. 7519

Fax: (562) 951-1500

 

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

 

5. The following Attachments 1 through 17 are incorporated herein and made a
part hereof by this reference:

 

Attachment 1- Organization and Administration of the Plan

 

Page 1 of 2

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A

Scope of Work

 

Attachment 2 - Financial Information

Attachment 3 - Management Information System

Attachment 4 - Quality Improvement System

Attachment 5 - Utilization Management

Attachment 6 - Provider Network

Attachment 7 - Provider Relations

Attachment 8 - Provider Compensation Arrangements

Attachment 9 - Access and Availability

Attachment 10 - Scope of Services

Attachment 11 - Case Management and Coordination of Care

Attachment 12 - Local Health Department Coordination

Attachment 13 - Member Services

Attachment 14 - Member Grievance System

Attachment 15 - Marketing

Attachment 16 - Enrollments and Disenrollments

Attachment 17 - Reporting Requirements

 

Page 2 of 2

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 1

 

ORGANIZATION AND ADMINISTRATION OF THE PLAN

 

1. Legal Capacity

 

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

 

2. Key Personnel (Disclosure Form)

 

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

 

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

 

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

 

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

 

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

 

3. Conflict Of Interest – Current And Former State Employees

 

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

 

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

 

Page 1 of 4

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 1

 

4. Contract Performance

 

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

 

  A. The organization has an accountable governing body.

 

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

 

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

 

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

 

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

 

5. Medical Decisions

 

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

 

6. Medical Director

 

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

 

  A. Ensuring that medical decisions are:

 

  1) Rendered by qualified medical personnel.

 

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

 

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

 

Page 2 of 4

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 1

 

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

 

  D. Developing and implementing medical policy.

 

  E. Resolving grievances related to medical quality of care.

 

  F. Direct involvement in the implementation of Quality Improvement activities.

 

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

 

7. Medical Director Changes

 

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

 

8. Administrative Duties/Responsibilities

 

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

 

  A. Designated persons, qualified by training or experience, to be responsible
for the Medical Record service.

 

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

 

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

 

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

 

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

 

Page 3 of 4

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 1

 

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

 

9. Member Representation

 

Contractor shall ensure that Medi-Cal Members are represented and participate in
establishing public policy within the plan’s Public Policy Advisory Committee.

 

Page 4 of 4

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

Molina Healthcare of California, dba: Molina

95-23637 A-11

 

Exhibit A, Attachment 2

 

FINANCIAL INFORMATION

 

1. Financial Viability/Standards Compliance

 

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

 

  A. Tangible Net Equity (TNE).

 

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

 

  B. Administrative Costs.

 

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

 

  C. Standards of Organization and Financial Soundness.

 

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

 

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

 

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

 

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

 

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

 

2. Financial Audit Reports

 

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

 

Page 1 of 3

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 2

 

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

 

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

 

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

 

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

 

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

 

  a) Jurat.

 

  b) Report 1A and 1B: Balance Sheet.

 

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

 

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

 

  e) Report 4: Enrollment and Utilization Table.

 

  f) Schedule F: Unpaid Claims Analysis.

 

Page 2 of 3

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 2

 

  g) Appropriate footnote disclosures in accordance with GAAP.

 

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

 

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

 

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

 

3. Monthly Financial Statements

 

Contractor may be required to file monthly Financial Statements at DHS’ request.
If the Contractor is required to file monthly Financial Statements with the
DMHC, Contractor shall file monthly Financial Statements with DHS.

 

4. Compliance with Audit Requirements

 

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

 

5. Submittal of Financial Information

 

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

 

Page 3 of 3

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

Molina Healthcare of California, dba: Molina

95-23637 A-11

 

Exhibit A, Attachment 3

 

MANAGEMENT INFORMATION SYSTEM

 

1. MIS Capability

 

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

 

  1) All Medi-Cal eligibility data,

 

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

 

  3) Provider claims status and payment data,

 

  4) Health care services delivery encounter data,

 

  5) Provider network information, and

 

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

 

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

 

2. Encounter Data Submittal

 

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

 

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

 

Page 1 of 2

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 3

 

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

 

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

 

3. MIS/Data Correspondence

 

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

 

4. Health Insurance Portability and Accountability Act of 1996 (HIPAA)

 

Contractor shall comply with Exhibit G, Health Insurance Portability and
Accountability Act of 1996 (HIPAA) requirements and all federal and State
regulations promulgated from this Act, as they become effective.

 

Page 2 of 2

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

Molina Healthcare of California, dba: Molina

95-23637 A-11

 

Exhibit A, Attachment 4

 

QUALITY IMPROVEMENT SYSTEM

 

1. General Requirement

 

Contractor shall implement an effective Quality Improvement System (QIS) in
accordance with the standards in Title 28, CCR, Section 1300.70. Contractor
shall monitor, evaluate, and take effective action to address any needed
improvements in the quality of care delivered by all providers rendering
services on its behalf, in any setting. Contractor shall be accountable for the
quality of all Covered Services regardless of the number of contracting and
subcontracting layers between Contractor and the provider.

 

2. Accountability

 

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

 

3. Governing Body

 

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

 

  1) Approves the overall QIS and the annual report of the QIS.

 

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

 

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

 

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

 

4. Quality Improvement Committee

 

Contractor shall implement and maintain a Quality Improvement Committee
designated by, and accountable to the governing body and shall be facilitated by
the medical director or a physician designee. Contractor must ensure that
subcontractors, who are representative of the composition of the contracted
provider network, shall actively participate on the committee.

 

Page 1 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 4

 

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

 

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

 

5. Provider Participation

 

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

 

6. Delegation of Quality Improvement Activities

 

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

 

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

 

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

 

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

 

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

 

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

 

  1)

Evaluates subcontractor’s ability to perform the delegated activities including
an initial review to assure that the subcontractor has the

 

Page 2 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 4

 

administrative capacity, task experience, and budgetary resources to fulfill its
responsibilities.

 

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

 

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

 

7. Written Description

 

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

 

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

 

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

 

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

 

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

 

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

 

  F. The processes and procedures that will ensure that all medically necessary
health care services are available and accessible to all Members regardless of
race, color, national origin, gender or disability, and that all services are
provided in a culturally and linguistically appropriate manner.

 

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

 

Page 3 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 4

 

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

 

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

 

8. Quality Improvement Annual Report

 

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

 

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

 

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

 

9. External Quality Review Requirements

 

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

 

  A. External Accountability Set (EAS) Performance Measures

 

The External Accountability Set (EAS) consists of a set of Health Plan Employer
Data and Information Set (HEDIS®) measures developed by the National Committee
for Quality Assurance (NCQA) and DHS developed performance measures selected by
DHS for evaluation of health plan performance.

 

  1)

On an annual basis, Contractor shall submit to an on-site EAS Compliance Audit
(also referred to as the Health Plan Employer Data and Information Set (HEDIS®)
Compliance Audit™) to assess the Contractor’s information and reporting systems,
as well as the

 

Page 4 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 4

 

 

Contractor’s methodologies for calculating performance measure rates. Contractor
shall use the DHS-selected contractor for performance of the EAS/HEDIS
Compliance Audit and calculation of DHS-developed performance measures that
constitute the EAS. Compliance Audits will be performed by an EQRO as contracted
and paid for by the State.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Page 5 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 4

 

  B. Under/Over-Utilization Monitoring

 

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

 

  C. Quality Improvement Projects (QIPs)

 

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

 

  1) Among the four QIPs:

 

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

 

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

 

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

 

Contractors may include only one county in a collaborative regardless of whether
the health plan’s contract covers multiple counties. However, if multiple
counties are to be included, Contractor shall demonstrate that the measurement
strategies are adequate to assess the impact of the intervention within each
county. DHS must approve the Contractor’s proposal before the Contractor
proceeds with their intended approach for multiple county measurement.

 

Page 6 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 4

 

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

 

  2) Among the above listed four QIPs:

 

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

 

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

 

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

 

  D. Consumer Satisfaction Survey

 

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

 

10. Site Review

 

  A. General Requirement

 

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

 

  B. Pre-Operational Site Reviews

 

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

 

  C. Credentialing Site Review

 

A site review is required as part of the credentialing process when both the
facility and the provider are added to the Contractor’s provider

 

Page 7 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 4

 

network. If a provider is added to Contractor’s provider network, and the
provider site has a current passing site review survey score, a site survey need
not be repeated for provider credentialing or recredentialing.

 

  D. Corrective Actions

 

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

 

  E. Data Submission

 

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

 

  F. Continuing Oversight

 

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

 

11. Disease Surveillance

 

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

 

12. Credentialing and Recredentialing

 

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

 

  A. Standards

 

All providers of Covered Services must be qualified in accordance with current
applicable legal, professional, and technical standards and appropriately
licensed, certified or registered. All providers must have

 

Page 8 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 4

 

good standing in the Medicare and Medicaid/Medi-Cal programs. Providers that
have been terminated from either Medicare or Medicaid/Medi-Cal cannot
participate in Contractor’s provider network.

 

  B. Delegated Credentialing

 

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

 

  C. Credentialing Provider Organization Certification

 

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

 

  D. Disciplinary Actions

 

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

 

  E. Medi-Cal and Medicare Provider Status

 

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

 

  F. Health Plan Accreditation

 

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

 

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

 

Page 9 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 4

 

  G. Credentialing of Other Non-Physician Medical Practitioners

 

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

 

13. Medical Records

 

  A. General Requirement

 

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

 

  B. Medical Records

 

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

 

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

 

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

 

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

 

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

 

  C. On-Site Medical Records

 

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

 

  D. Member Medical Record

 

Contractor shall ensure that a complete medical record is maintained for each
Member in accordance with Title 22, CCR, Section 53861, that

 

Page 10 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 4

 

reflects all aspects of patient care, including ancillary services, and at a
minimum includes:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  10) Health education behavioral assessment and referrals to health education
services. For patients 12 years or older, a notation concerning use of
cigarettes, alcohol, and substance abuse, health education, or counseling and
anticipatory guidance.

 

Page 11 of 11

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

Molina Healthcare of California, dba: Molina

95-23637 A-11

 

Exhibit A, Attachment 5

 

UTILIZATION MANAGEMENT

 

1. Utilization Management (UM) Program

 

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

 

  A. Qualified staff responsible for the UM program.

 

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

 

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

 

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

 

  E. An established specialty referral system to track and monitor referrals
requiring prior authorization through the Contractor. The system shall include
authorized, denied, deferred, or modified referrals, and the timeliness of the
referrals.

 

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

 

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

 

2. Pre-Authorizations and Review Procedures

 

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

 

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

 

Page 1 of 4

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 5

 

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

 

  C. Reasons for decisions are clearly documented.

 

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

 

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

 

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

 

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

 

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

 

3. Timeframes for Medical Authorization

 

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

 

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

 

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

 

  D. Concurrent Review of authorization for treatment regimen already in place:
72 hours or consistent with urgency of the Member’s medical condition in
accordance with Health & Safety Code Section 1367.01, or any future amendments
thereto.

 

Page 2 of 4

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 5

 

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

 

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

 

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

 

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

 

  I. Hospice care: 24-hour response.

 

4. Review of Utilization Data

 

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

 

Page 3 of 4

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 5

 

5. Delegating UM Activities

 

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

 

Page 4 of 4

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

Molina Healthcare of California, dba: Molina

95-23637 A-11

 

Exhibit A, Attachment 6

 

PROVIDER NETWORK

 

1. Network Capacity

 

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

 

2. Network Composition

 

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

 

3. Provider to Member Ratios

 

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

 

  1) Primary Care Physicians 1:2,000

 

  2) Total Physicians 1:1,200

 

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

 

4. Physician Supervisor to Non-Physician Medical Practitioner Ratios

 

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

 

  A. Nurse Practitioners 1:4

 

  B. Physician Assistants 1:2

 

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

 

Page 1 of 8

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 6

 

5. Emergency Services

 

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

 

6. Specialists

 

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

 

7. Federally Qualified Health Center (FQHC) Services

 

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

 

8. Time and Distance Standard

 

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

 

9. Plan Physician Availability

 

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

 

Page 2 of 8

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 6

 

10. Provider Network Report

 

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

 

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

 

  1) Geographic access for the Members;

 

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

 

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

 

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

 

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

 

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

 

  B. Contractor shall submit the report thirty (30) days following the end of
the reporting quarter.

 

11. This item intentionally left blank.

 

12. Ethnic and Cultural Composition

 

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

 

13. Subcontracts

 

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

 

  A. Laws and Regulations

 

All Subcontracts shall be in writing and in accordance with the requirements of
the Knox-Keene Health Care Services Plan Act of 1975, Health and Safety Code
Section 1340 et seq.; Title 28, CCR, Section 1300

 

Page 3 of 8

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 6

 

et seq.; W&I Code Section 14200 et seq.; Title 22, CCR, Section 53800 et seq.;
and applicable federal and State laws and regulations.

 

  B. Subcontract Requirements

 

Each Subcontract shall contain:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Page 4 of 8

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 6

 

  d) For a term of at least five years from the close of DHS’ fiscal year for
the last year in which the Subcontract was in effect.

 

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

 

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

 

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

 

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

 

  b) Retain such books and records for a term of at least five years from the
close of DHS’ fiscal year for the last year in which the sub-subcontract is in
effect.

 

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

 

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

 

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

 

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

 

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

 

Page 5 of 8

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 6

 

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

 

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

 

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

 

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

 

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

 

  C. Departmental Approval - Non-Federally Qualified HMOs

 

Except as provided in Exhibit A, Attachment 8, Provider Compensation
Arrangements, provision 7 regarding Federally Qualified Health Centers and Rural
Health Clinics, a provider or management Subcontract entered into by Contractor
which is not a federally qualified HMO shall become effective upon approval by
DHS in writing, or by operation of law where DHS has acknowledged receipt of the
proposed Subcontract, and has failed to approve or disapprove the proposed
Subcontract within sixty (60) days of receipt. Within five (5) State working
days of receipt, DHS shall acknowledge in writing the receipt of any material
sent to DHS by Contractor for approval.

 

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

 

  D. Departmental Approval - Federally Qualified HMOs

 

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

 

  1) Exempt from prior approval by DHS.

 

Page 6 of 8

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 6

 

  2) Submitted to DHS upon request.

 

  E. Public Records

 

Subcontracts entered into by the Contractor and all information received in
accordance with this subsection will be public records on file with DHS, except
as specifically exempted in statute. The names of the officers and owners of the
subcontractor, stockholders owning more than ten (10) percent of the stock
issued by the subcontractor and major creditors holding more than five (5)
percent of the debt of the subcontractor will be attached to the Subcontract at
the time the Subcontract is presented to DHS.

 

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

 

Subcontracts with FQHCs shall also meet Subcontract requirements of provision 13
above and reimbursement requirements in Exhibit A, Attachment 8, provision 7. In
Subcontracts with FQHCs and RHCs where a negotiated reimbursement rate is agreed
to as total payment, a provision that such rate constitutes total payment shall
be included in the Subcontract.

 

15. Traditional and Safety-Net Providers Participation

 

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

 

16. Nondiscrimination In Provider Contracts

 

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

 

Page 7 of 8

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 6

 

practitioners in the same specialty; or preclude Contractor from establishing
measures that are designed to maintain quality of services and control costs and
is consistent with Contractor’s responsibilities to Members.

 

Page 8 of 8

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

Molina Healthcare of California, dba: Molina

95-23637 A-11

 

Exhibit A, Attachment 7

 

PROVIDER RELATIONS

 

1. Exclusivity

 

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

 

2. Provider Grievances

 

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

 

3. This item intentionally left blank.

 

4. Provider Manual

 

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

 

5. Provider Training

 

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

 

Page 1 of 2

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

Molina Healthcare of California, dba: Molina

95-23637 A-11

 

Exhibit A, Attachment 7

 

6. Submittal of Inpatient Days Information

 

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

 

7. Emergency Department Protocols

 

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

 

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

 

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

 

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

 

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

 

8. Prohibited Punitive Action Against the Provider

 

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

 

Page 2 of 2

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

Molina Healthcare of California, dba: Molina

95-23637 A-11

 

Exhibit A, Attachment 8

 

PROVIDER COMPENSATION ARRANGEMENTS

 

1. Provider Compensation

 

Contractor may compensate providers as Contractor and provider negotiate and
agree, except, capitation rates cannot be stated as a percent of Medi-Cal
revenue. This provision will not be construed to prohibit subcontracts in which
compensation or other consideration is determined on a capitation basis.

 

2. This item intentionally left blank.

 

3. Physician Incentive Plan Requirements

 

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

 

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

 

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

 

4. This item intentionally left blank.

 

5. Claims Processing

 

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

 

  A. Contractor shall comply with Health and Safety Code Sections 1371 through
1371.36. Contractor shall be subject to any remedies, including interest
payments provided for in these sections, if it fails to meet the standards
specified in these sections.

 

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

 

  C.

Contractor shall maintain sufficient claims processing/tracking/payment systems
capability to: comply with applicable State and federal law, regulations and
Contract requirements, determine the status of received

 

Page 1 of 6

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 8

 

 

claims, and calculate the estimate for incurred and unreported claims, as
specified by Title 28, CCR, Sections 1300.77.1 and 1300.77.2.

 

  D. Contractor shall submit claims payment summary reports to DHS on a
quarterly basis. Quarterly summary reports shall provide for claim payment
reporting requirement data in a form and manner specified by DHS.

 

  1) Percent of uncontested claims that are paid or denied within 30 working
days of receipt.

 

  2) Percent of uncontested claims that are paid or denied within 45 working
days of receipt.

 

Working days are State calendar (State Appointment Calendar, Standard 101)
working days.

 

6. Prohibited Claims

 

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

 

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

 

  A. FQHCs Availability and Reimbursement Requirement

 

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

 

Page 2 of 6

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 8

 

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

 

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

 

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

 

  C. Indian Health Service Facilities

 

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

 

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

 

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

 

Page 3 of 6

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 8

 

9. Non-Contracting Family Planning Providers’ Reimbursement

 

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

 

10. Sexually Transmitted Disease (STD)

 

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

 

11. HIV Testing and Counseling

 

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

 

12. Immunizations

 

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

 

13. Non-Contracting Emergency Service Providers

 

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

 

  A.

Contractor shall pay for Emergency Services received by a Member from
non-contracting providers. Payments to non-contracting providers shall be for
the treatment of the Emergency Medical Condition including Medically

 

Page 4 of 6

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 8

 

 

Necessary services rendered to a Member until the Member’s condition has
stabilized sufficiently to permit discharge, or referral and transfer in
accordance with instructions from Contractor. Emergency Services shall not be
subject to Prior Authorization by Contractor.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  D.

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

 

Page 5 of 6

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 8

 

 

following rates applicable at the time the services were rendered by the
provider:

 

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

 

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

 

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

 

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

 

Page 6 of 6

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

Molina Healthcare of California, dba: Molina

95-23637 A-11

 

Exhibit A, Attachment 9

 

ACCESS AND AVAILABILITY

 

1. General Requirement

 

Contractor shall ensure that each Member has a Primary Care Provider who is
available at the service site for sufficient time to ensure access for the
assigned Member upon reasonable request by the Member or when medically
required.

 

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

 

2. Existing Patient-Physician Relationships

 

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

 

3. Access Requirements

 

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

 

  A. Appointments

 

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

 

  B. Routine Specialty Referral

 

Contractor shall ensure that a Member needing a routine specialty referral
receives an appointment within 30 days of request.

 

Page 1 of 9

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 9

 

  C. First Prenatal Visit

 

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

 

  D. Waiting Times

 

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

 

  E. Telephone Procedures

 

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

 

  F. Urgent Care

 

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

 

  G. After Hours Calls

 

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

 

  H. Unusual Specialty Services

 

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

 

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

 

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

 

Page 2 of 9

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 9

 

5. Standing Referrals

 

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

 

6. Emergency Care

 

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

 

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

 

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

 

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

 

7. Nurse Midwife and Nurse Practitioner Services

 

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

 

8. Access to Services with Special Arrangements

 

  A. Family Planning

 

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

 

Page 3 of 9

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 9

 

  1) Informed Consent

 

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

 

  2) Out-Of-Network Family Planning Services

 

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

 

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

 

  b) Limited history and physical examination.

 

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

 

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

 

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

 

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

 

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

 

  h) Tubal ligation.

 

  i) Vasectomies.

 

  j) Pregnancy testing and counseling.

 

Page 4 of 9

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 9

 

  B. Sexually Transmitted Diseases (STDs)

 

Contractor shall provide access to STD services without Prior Authorization to
all Members both within and outside its provider network. Members may access
out-of-plan STD services through local health department (LHD) clinics, family
planning clinics, or through other community STD service providers. Members may
access LHD clinics and family planning clinics for diagnosis and treatment of a
STD episode. For community providers other than LHD and family planning
providers, out-of-plan services are limited to one office visit per disease
episode for the purposes of: (1) diagnosis and treatment of vaginal discharge
and urethral discharge, (2) those STDs that are amenable to immediate diagnosis
and treatment, and this includes syphilis, gonorrhea, chlamydia, herpes simplex,
chancroid, Trichomoniasis, human papilloma virus, non-gonococcal urethritis,
lymphogranuloma venereum and granuloma inguinale and (3) evaluation and
treatment of pelvic inflammatory disease. Contractor shall provide follow-up
care.

 

  C. HIV Testing and Counseling

 

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

 

  D. Minor Consent Services

 

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

 

  1) Sexual assault, including rape.

 

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

 

  3) Pregnancy.

 

  4) Family planning.

 

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

 

  6)

Outpatient mental health care for children twelve (12) years of age or older who
are mature enough to participate intelligently and

 

Page 5 of 9

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 9

 

 

where either (1) there is a danger of serious physical or mental harm to the
minor or others, or (2) the children are the alleged victims of incest or child
abuse.

 

  E. Immunizations

 

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

 

9. This item intentionally left blank.

 

10. Access for Disabled Members

 

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

 

11. Civil Rights Act of 1964

 

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

 

12. Cultural and Linguistic Program

 

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

 

  A. Written Description

 

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

 

Page 6 of 9

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 9

 

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

 

  2) Goals and objectives.

 

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

 

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

 

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

 

  B. Linguistic Capability of Employees

 

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

 

  C. Group Needs Assessment

 

Contractor shall conduct a group needs assessment of its Members to determine
health education needs, cultural and linguistic needs of Members that speak a
primary language other than English, and the particular needs of cultural groups
within the Service Area. The assessment must include an assessment of both the
health and the general literacy level of the population. Contractor shall
prepare and submit a report of the findings of the group needs assessment that
summarizes the items listed below.

 

  1) The methodologies and findings of the group needs assessment.

 

  2) Identify the linguistic needs of monolingual; non-English and limited
English speaking groups, as well as the cultural needs of all plan Members.

 

  3) The services proposed to address the needs identified; and, key activities,
a timeline for implementation, and the individuals responsible for key areas of
the implementation plan.

 

Page 7 of 9

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 9

 

Contractor shall complete the group needs assessment within six (6) months after
commencement of operations under this Contract and submit the report within
twelve (12) months after commencement of operations under this Contract.
Contractor shall conduct a new group needs assessment every five years.

 

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

 

  E. Cultural Competency Training

 

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

 

  F. Program Implementation and Evaluation

 

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

 

13. Linguistic Services

 

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

 

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

 

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

 

  2)

Fully translated written informing materials, including but not limited to the
Member Services Guide, enrollee information, welcome

 

Page 8 of 9

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 9

 

 

packets, marketing information, and form letters including notice of action
letters and grievance acknowledgement and resolution letters. Contractor shall
provide translated written informing materials to all monolingual or LEP Members
that speak the identified threshold or concentration standard languages. The
threshold or concentration languages are identified by DHS within the
Contractor’s service area, and by the Contractor in its group needs assessment.

 

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

 

  4) Telecommunications Device for the Deaf (TDD).

 

  C. Contractor shall provide written translation services to the following
population groups within its service area as determined by DHS:

 

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

 

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

 

  D. Key points of contact include:

 

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

 

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

 

14. Community Advisory Committee

 

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

 

Page 9 of 9

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

Molina Healthcare of California, dba: Molina

95-23637 A-11

 

Exhibit A, Attachment 10

 

SCOPE OF SERVICES

 

1. Covered Services

 

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

 

2. Medically Necessary Services

 

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

 

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

 

3. Initial Health Assessment (IHA)

 

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

 

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

 

  B. Contractor shall ensure that the IHA includes a health education behavioral
assessment using an age appropriate DHS approved assessment tool. Contractor is
responsible for assuring that arrangements are made for follow-up services that
reflect the findings or risk factors discovered during the IHA and health
education behavioral assessment.

 

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

 

Page 1 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 10

 

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

 

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

 

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

 

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

 

  A. Provision of IHAs for Members under Age 21

 

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

 

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

 

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

 

  B. Children’s Preventive Services

 

  1)

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

 

Page 2 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 10

 

 

by the CHDP program and the age specific health education behavioral assessment
as necessary.

 

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

 

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

 

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

 

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

 

  C. Immunizations

 

Contractor shall ensure that all children are fully immunized during or
immediately following (within 30 days) a health care visit. Contractor shall
cover and ensure the timely provision of vaccines in accordance with the most
recent childhood immunization schedule and recommendations published by the
Advisory Committee on Immunization Practices (ACIP). Documentation shall be
entered in the Members Medical Record which shall indicate the receipt of
vaccines or proof of voluntary refusal of vaccines in the form of a signed
statement by the Member (if an

 

Page 3 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 10

 

emancipated minor) or the Parent(s) or guardian of the Member. If the
responsible party refuses to sign this statement, the refusal shall be noted in
the Member’s Medical Record.

 

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

 

For Members under the age of twenty-one (21) years, Contractor shall provide or
arrange and pay for EPSDT supplemental services, including case management and
supplemental nursing services, as defined in Title 22, CCR, Section 51184,
except when EPSDT supplemental services are provide as CCS services pursuant to
Exhibit A, Attachment 11, provision 8, regarding CCS Services, or as mental
health services pursuant to provision 7 below, regarding Mental Health Services.
Contractor shall determine the medical necessity of EPSDT supplemental services
using the criteria established in Title 22, CCR, Sections 51340 and 51340.1.

 

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

 

5. Services for Adults

 

  A. IHAs for Adults (Age 21 and older)

 

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

 

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

 

  1) blood pressure,

 

  2) height and weight,

 

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

 

  4) clinical breast examination for women over 40,

 

  5) mammogram for women age 50 and over,

 

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

 

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

 

Page 4 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 10

 

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

 

  9) health education behavioral risk assessment.

 

  B. Adult Preventive Services

 

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

 

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

 

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

 

  C. Immunizations

 

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

 

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

 

Page 5 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 10

 

6. Pregnant Women

 

  A. Prenatal Care

 

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

 

  B. Risk Assessment

 

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

 

  C. Referral to Specialists

 

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

 

7. Services for All Members

 

  A. Health Education

 

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

 

  2)

Contractor shall ensure administrative oversight of the health education system
by a qualified full-time health educator. This

 

Page 6 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 10

 

 

individual shall possess a master’s degree in public or community health with
specialization in health education.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  8)

Contractor shall maintain health education policies and procedures, and
standards and guidelines; conduct appropriate levels of program evaluation; and,
monitor performance of providers that are

 

Page 7 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 10

 

 

contracted to deliver health education services to ensure effectiveness.

 

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

 

  B. Hospice Care

 

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

 

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

 

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

 

  C. Vision Care - Lenses

 

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

 

  D. Mental Health Services

 

  1) Contractor shall cover outpatient mental health services that are within
the scope of practice of Primary Care Physicians.

 

Page 8 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 10

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  f)

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

 

Page 9 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 10

 

 

responsible for room and board charges for psychiatric inpatient hospital stays
by Members.

 

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

 

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

 

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

 

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

 

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

 

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

 

Page 10 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 10

 

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

 

  E. Tuberculosis (TB)

 

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

 

Contractor shall coordinate with Local Health Departments in the provision of
Direct Observed Therapy as required in Exhibit A, Attachment 11, provision 15,
regarding Coordination of Care, Direct Observed Therapy for Treatment of
Tuberculosis and Exhibit 12, Local Health Department Coordination.

 

  F. Pharmaceutical Services and Provision of Prescribed Drugs

 

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

 

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

 

Page 11 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 10

 

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

 

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

 

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

 

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

 

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

 

Page 12 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 10 - A

 

EXCLUDED PSYCHOTHERAPEUTIC DRUGS

 

Generic Name

 

Amantadine HCL

Benztropine Mesylate

Biperiden HCL

Biperiden Lactate

Chlorpromazine HCL

Chlorprothixene

Clozapine

Fluphanazine Decanoate

Fluphanazine Enanthate

Fluphanazine HCL

Haloperidol

Haloperidol Deconoate

Haloperidol Lactate

Isocarboxazid

Lithium Carbonate

Lithium Citrate

Loxapine HCL

Loxapine Succinate

Mesoridazine Besylate

Molindone HCL

Olanzapine

Perphenazine

Phenelzine Sulfate

Pimozide

Procyclidine HCL

Promazine HCL

Quetiapine

Risperidone

Thioridazine HCL

Thiothixene

Thiothixene HCL

Tranylcypromine Sulfate

Trifluoperazine HCL

Triflupromazine HCL

Trihexphenidyl HCL

Ziprasidone Mesylate

 

Page 13 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 10 – B

 

EXCLUDED DRUGS FOR THE TREATMENT OF HUMAN IMMUNODEFICIENCY

VIRUS (HIV) AND ACQUIRED IMMUNODEFICIENCY SYNDROME (AIDS)

 

Generic Name

 

Abacavir Sulfate

Abacavir Sulfate/Lamivudine/Zidovudine

Amprenavir

Atazanavir Sulfate

Emtricitabine

Enfuvirtide

Indinavir Sulfate

Efavirenz

Lamivudine

Saquinavir

Lopinavir/Ritonavir

Ritonavir

Delavirdine Mesylate

Saquinavir Mesylate

Tenofovir Disoproxil Fumarate

Nelfinavir Mesylate

Nevirapine

Stavudine

Zidovudine/Lamivudine

 

Page 14 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 11

 

CASE MANAGEMENT AND COORDINATION OF CARE

 

1. Comprehensive Case Management and Coordination of Care Services

 

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

 

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

 

2. Targeted Case Management Services

 

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

 

If a Member is receiving TCM services as defined in Title 22, CCR, Section
51185(h) and as specified in Title 22, CCR, Section 51351, Contractor shall be
responsible for coordinating the Member’s health care with the TCM provider and
for determining the medical necessity of diagnostic and treatment services
recommended by the TCM provider that are Covered Services under the Contract.

 

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

 

3. Disease Management Program

 

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

 

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

 

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

 

Page 1 of 12

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 11

 

5. Specialty Mental Health

 

  A. Specialty Mental Health Services

 

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

 

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

 

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

 

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

 

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

 

  B. Local Mental Health Plan Coordination

 

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

 

6. Alcohol and Substance Abuse Treatment Services

 

Alcohol and substance abuse treatment services available under the Drug Medi-Cal
program as defined in Title 22, CCR, Section 51341.1, and outpatient heroin

 

Page 2 of 12

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 11

 

detoxification services defined in Title 22, CCR, Section 51328 are excluded
from this Contract.

 

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

 

7. Services for Children with Special Health Care Needs

 

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

 

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

 

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

 

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

 

  C. Methods for ensuring that each CSHCN receives a comprehensive assessment of
health and related needs, and development of a written treatment plan based on
that assessment;

 

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

 

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

 

Page 3 of 12

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 11

 

8. California Children Services (CCS)

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Page 4 of 12

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 11

 

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

 

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

 

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

 

9. Services for Persons with Developmental Disabilities

 

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

 

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

 

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

 

Page 5 of 12

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 11

 

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

 

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

 

10. Early Intervention Services

 

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

 

11. Local Education Agency Services

 

Local Education Agency (LEA) assessment services are services specified in Title
22, CCR Section 51360(b) and provided to students who qualify based on Title 22,
CCR, Section 51190.1. LEA services provided pursuant to an Individual Education
Plan as set forth in Education Code, Section 56340 et seq. or Individual Family
Service Plan as set forth in Government Code, Section 95020, are not covered
under this Contract.

 

12. School Linked CHDP Services

 

  A. Coordination of Care

 

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

 

Page 6 of 12

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 11

 

  B. Cooperative Arrangements

 

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

 

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

 

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

 

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

 

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

 

  C. Subcontracts

 

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

 

Page 7 of 12

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 11

 

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

 

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

 

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

 

14. Dental

 

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

 

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

 

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

 

Page 8 of 12

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 11

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Contractor, as part of its initial health assessment of Members, or, as part of
the initial evaluation of newly pregnant women, shall refer and document the
referral of pregnant, breastfeeding, or postpartum women or

 

Page 9 of 12

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 11

 

a parent/guardian of a child under the age of five to the WIC program as
mandated by Title 42, CFR 431.635(c).

 

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

 

17. Excluded Services Requiring Member Disenrollment

 

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

 

  A. Long Term Care (LTC)

 

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

 

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

 

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

 

An approved disenrollment request will become effective the first day of the
second month following the month of the Member’s admission to the

 

Page 10 of 12

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 11

 

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

 

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

 

  B. Major Organ Transplants

 

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

 

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

 

Upon the disenrollment effective date, Contractor shall ensure continuity of
care by transferring all of the Member’s medical documentation to the transplant
Physician. The effective date of the disenrollment will be retroactive to the
beginning of the month in which the Member was

 

Page 11 of 12

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 11

 

approved as a major organ transplant candidate. The request for reimbursement
for services in the month during which the transplant is approved are to be sent
by the provider directly to the Medi-Cal FFS fiscal intermediary. The capitation
payment for the Member will be recovered from the Contractor by DHS.

 

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

 

  C. Waiver Programs

 

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

 

18. Immunization Registry Reporting

 

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

 

Page 12 of 12

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 12

 

LOCAL HEALTH DEPARTMENT COORDINATION

 

1. Subcontracts

 

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

 

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

 

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

 

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

 

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

 

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

 

2. Subcontracts or Memoranda of Understanding

 

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

 

  A. California Children Services (CCS)

 

  B. Maternal and Child Health (MCH)

 

Page 1 of 3

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 12

 

  C. Child Health and Disability Prevention (CHDP) Program

 

  D. Tuberculosis Direct Observed Therapy

 

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

 

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

 

3. Local Mental Health Plan Coordination

 

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

 

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

 

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

 

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

 

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

 

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

 

  a) Pharmaceutical services and prescription drugs;

 

  b) Laboratory, radiological and radioisotope services;

 

  c) Emergency room facility charges and professional services;

 

  d) Emergency and non-emergency medical transportation;

 

  e) Home health services;

 

Page 2 of 3

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 12

 

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

 

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

 

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

 

4. MOU Monthly Reports

 

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

 

Page 3 of 3

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 13

 

MEMBER SERVICES

 

1. Members Rights And Responsibilities

 

  A. Member Rights and Responsibilities

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  f) to receive oral interpretation services for their language.

 

  g) to formulate advance directives.

 

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

 

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

 

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

 

  k) to disenroll upon request.

 

  l) to access minor consent services.

 

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

 

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

 

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

 

Page 1 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 13

 

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

 

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

 

  B. Members’ Right to Confidentiality

 

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

 

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

 

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

 

  C. Members’ Rights to Advance Directives

 

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

 

2. Member Services Staff

 

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

 

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

 

3. Call Center Reports

 

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

 

Page 2 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 13

 

4. Written Member Information

 

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

 

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

 

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

 

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

 

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

 

Upon request from a visually impaired Member, written Member materials in either
Braille or a format utilizing a size fourteen (14) type font shall be provided.

 

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

 

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

 

Page 3 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 13

 

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

 

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

 

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

 

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

 

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

 

The hours and days when each of these Facilities is open, the services and
benefits available, and the telephone number to call after normal business
hours.

 

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

 

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

 

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

 

  8)

The availability and procedures for obtaining after hours services (24-hour
basis) and care, including the appropriate provider

 

Page 4 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 13

 

 

locations and telephone numbers. This shall include an explanation of the
Members’ right to interpretive services, at no cost, to assist in receiving
after hours services.

 

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

 

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

 

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

 

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

 

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

 

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

 

  15)

Information on the Member’s right to the Medi-Cal fair hearing process and
information on the circumstances under which an expedited fair hearing is
possible and information regarding assistance in completing the request,
regardless of whether or not a grievance has been submitted or if the grievance
has been

 

Page 5 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 13

 

 

resolved, pursuant to Title 22, CCR, Section 53452, when a health care service
requested by the Member or provider has been denied, deferred or modified.
Information on State Fair Hearing shall also include information on the
timelines which govern a Member’s right to a State Fair Hearing, pursuant to
Welfare & Institutions Code §10951 and the State Department of Social Services’
Public Inquiry and Response Unit toll-free telephone number (1-800-952-5253) to
request a state hearing.

 

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

 

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

 

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

 

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

 

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

 

  20)

Information on the availability of, and procedures for obtaining, Certified
Nurse Midwife and Certified Nurse Practitioner services,

 

Page 6 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 13

 

 

pursuant to Exhibit A, Attachment 9, provision 7, on Nurse Midwife and Nurse
Practitioner Services.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  28)

A notice regarding the positive benefits of organ donations and how a Member can
become an organ or tissue donor. Pursuant to California Health and Safety Code,
Section 7158.2, this notice must

 

Page 7 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 13

 

 

be provided upon enrollment and annually thereafter in the evidence of coverage
(Member Services Guide), health plan newsletter or any other direct
communication with Members.

 

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

 

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

 

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

 

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

 

  E. Member Identification Card

 

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

 

Page 8 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 13

 

5. Notification of Changes in Access to Covered Services

 

Contractor shall ensure Medi-Cal Members are notified in writing of any changes
in the availability or location of Covered Services, or any other changes in
information listed in 42 CFR 438.10(f(6))-(h), at least thirty (30) days prior
to the effective date of such changes. In cases of unforeseeable circumstances,
notice shall be given within fourteen (14) days prior to the change unless DHS
determines that post-change notification is appropriate. In this latter
instance, notice to Members shall be provided within fourteen (14) days
subsequent to the change. The notification must also be presented to and
approved in writing by DHS prior to its’ release.

 

6. Primary Care Provider Selection

 

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

 

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

 

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

 

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

 

7. Primary Care Provider Assignment

 

  A.

If the Member does not select a Primary Care Provider within thirty (30) days of
the effective date of enrollment, Contractor shall assign that Member to a
Primary Care Provider and notify the Member and the assigned Primary Care
Provider no later than forty (40) days after the

 

Page 9 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 13

 

 

Member’s Enrollment. Contractor shall ensure that adverse selection does not
occur during the assignment process of Members to providers.

 

  B. Contractor shall notify the Primary Care Provider that a Member has
selected or been assigned to the provider within seven (7) days from when
selection or assignment is completed by the Member or the Contractor,
respectively.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  C.

Contractor shall provide required notification to beneficiaries and their
authorized representatives in accordance with the time frames set forth in Title
22, CCR, Sections 51014.1 and 53894. Such notice shall be deposited with the
United States Postal Service in time for pick-up no later than the third working
day after the decision is made, not to exceed 14 calendar days from receipt of
the original request. If the decision is deferred because an extension is
requested or justified as explained in

 

Page 10 of 11

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 13

 

 

Exhibit A, Attachment 5, provision 3, Contractor shall notify the Member in
writing of the deferral of the decision no later than 14 calendar days from the
receipt of the original request. If the final decision is to deny or modify the
request, Contractor shall provide written notification of the decision to
Members no later than 28 calendar days from the receipt of the original request.

 

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

 

Page 11 of 11

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

Molina Healthcare of California, dba: Molina

95-23637 A-11

 

Exhibit A, Attachment 14

 

MEMBER GRIEVANCE SYSTEM

 

1. Member Grievance System

 

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

 

2. Grievance System Oversight

 

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

 

  A. Procedure to ensure timely resolution and feedback to complainant. Provide
oral notice of the resolution of an expedited review.

 

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

 

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

 

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

 

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

 

  F. Procedures to ensure that Members are given a reasonable opportunity to
present, in writing or in person before the individual(s) resolving the
grievance, evidence, facts and law in support of their grievance. In the case of
a grievance subject to expedited review, Contactor shall inform the Member of
the limited time available to present evidence. Contractor shall also comply
with 42 CFR 438.406(b)(3) concerning a Member’s request to review records in
connection with a grievance.

 

Page 1 of 2

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 14

 

3. Quarterly Grievance Log and Report

 

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

 

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

 

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

 

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

 

  C. Contractor shall submit the quarterly grievance report for Medi-Cal Members
the following quarters: April – June, July –September, October – December,
January – March. The report is due 30 calendar days from the date of the end of
the reporting quarter.

 

4. Responsibilities in Expedited State Fair Hearings

 

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

 

Page 2 of 2

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 15

 

MARKETING

 

1. Training and Certification of Marketing Representatives

 

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

 

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

 

  B. Training Program

 

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

 

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

 

  2) Scope of Services

 

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

 

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

 

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

 

  6) An explanation of how to fill out an enrollment form.

 

Page 1 of 5

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 15

 

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

 

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

 

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

 

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

 

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

 

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

 

2. DHS Approval

 

  A. Contractor shall not conduct Marketing activities presented in provision 3,
paragraph A, subparagraph 2), item d) below, without written approval of its
Marketing plan, or changes to its Marketing plan, from DHS. In cases where the
Contractor wishes to attend a location or conduct an activity not included in
provision 3, paragraph A, subparagraph 2), items c) and d) below, Contractor
shall submit a request to include the activity and obtain written, prior
approval from DHS, pursuant to provision 4. Marketing Event Notification below.

 

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

 

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

 

Page 2 of 5

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 15

 

3. Marketing Plan

 

If Contractor conducts Marketing, Contractor shall develop a Marketing plan as
specified below. Contractor shall implement and maintain the Marketing plan only
after approval from DHS. Contractor shall ensure that the Marketing plan, all
procedures and materials are accurate and do not mislead, confuse or defraud.

 

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

 

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

 

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

 

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

 

  b) Organizational Chart and Narrative Description

 

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

 

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

 

  c) Marketing Locations

 

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

 

Page 3 of 5

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 15

 

  d) Marketing Activities

 

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

 

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

 

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

 

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

 

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

 

  e) Marketing Materials

 

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

 

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

 

Page 4 of 5

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 15

 

  f) Marketing Distribution Methods

 

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

 

  g) Monitoring and Reporting Activities

 

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

 

  h) Miscellaneous

 

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

 

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

 

4. Marketing Event Notification

 

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

 

Page 5 of 5

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 16

 

ENROLLMENTS AND DISENROLLMENTS

 

1. Enrollment Program

 

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

 

2. Enrollment

 

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

 

  A. Enrollment - General

 

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

 

  B. Coverage

 

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

 

  C. Exception to Enrollment

 

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

 

Page 1 of 4

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 16

 

  D. Enrollment Restriction

 

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

 

3. Disenrollment

 

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

 

  A. Disenrollment of a Member is mandatory when:

 

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

 

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

 

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

 

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

 

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

 

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

 

Such Disenrollment shall become effective on the first day of the second month
following receipt by DHS of all documentation necessary, as determined by DHS,
to process the Disenrollment, provided Disenrollment was requested at least
thirty (30) days prior to that date, except for Disenrollments pursuant to
Exhibit A, Attachment 11, provision 17,

 

Page 2 of 4

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 16

 

regarding Major Organ Transplants, for which Disenrollment shall be effective
the beginning of the month in which the transplant is approved.

 

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

 

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

 

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

 

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

 

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

 

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

 

  C.

A Member’s failure to follow prescribed treatment (including failure to keep
established medical appointments) shall not, in and of itself, be good cause for
the approval by DHS of a Contractor-initiated Disenrollment request unless
Contractor can demonstrate to DHS that, as a result of the

 

Page 3 of 4

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 16

 

 

failure, Contractor is exposed to a substantially greater and unforeseeable risk
than that otherwise contemplated under the Contract and rate-setting
assumptions.

 

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

 

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

 

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

 

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

 

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

 

Page 4 of 4

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 17

 

REPORTING REQUIREMENTS

 

Contract Section

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

  

Requirement

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

   Frequency

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

Exhibit A - SCOPE OF WORK Attachment 1 ORGANIZATION AND ADMINISTRATION OF THE
PLAN 2. A. Key Personnel (Disclosure Form)    Key Personnel (Disclosure Form)   
Annually Attachment 2 FINANCIAL INFORMATION

2. Financial Audit Reports

B. 1

   Annual “Orange Blank” Report    Annually

2. Financial Audit Reports

B. 2

   Fiscal Quarterly Financial Reports    Quarterly 3. Monthly Financial
Statements    Monthly Financial Statements (If deemed necessary)    Monthly
Attachment 3 MANAGEMENT INFORMATION SYSTEM

2. Encounter Date Submittal

3rd paragraph

   Encounter Data Submittal    Monthly Attachment 4 QUALITY IMPROVEMENT SYSTEM
(QIS)

4. Quality Improvement Committee

3rd paragraph

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

9. External Quality Review Requirements

A. External Accountability Set (EAS)

Performance Measures

2nd paragraph

   EAS Performance Measurement Rates    Annually

10. Site Review

E. Data Submission

   Site Review Data    Semi-Annually Attachment 6 PROVIDER NETWORK 10. Provider
Network Report    Provider Network Report    Quarterly 11. Plan Subcontractors
   Plan Subcontractors Report    Quarterly Attachment 8 PROVIDER COMPENSATION
ARRANGEMENTS

Claims Processing

D.

   Claims Payment Summary Report    Quarterly Attachment 9 ACCESS AND
AVAILABILITY

12. Cultural and Linguistic Program

C. Group Needs Assessment

3.

   Group Needs Assessment    Every 5 years Attachment 10 SCOPE OF SERVICES

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

Years of Age

B. Children’s Preventive Services

5

  

Confidential Screening/ Billing

Report form,PM 160-PHP

   Monthly

 

Page 1 of 2

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit A, Attachment 17

 

Contract Section

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

  

Requirement

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

   Frequency

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

7. Services for All Members

F. Pharmaceutical Services and Provision of Prescribed Drugs

2.

   Report of Changes to the Formulary    Annually Attachment 12 LOCAL HEALTH
DEPARTMENT COORDINATION 4. MOU Monthly Report    Local Health Department - MOU’s
Local Mental Health - MOU’s (If deemed necessary)    Monthly Attachment 13
MEMBER SERVICES 3. Call Center Report    Call Center Report    Quarterly

4. Written Member Information

B.

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

3. Marketing Plan

A.

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

12. Payment of Aids Beneficiary Rates

A. Compensation at the AIDS Beneficiary Rate (ABR)

1. C.

   AIDS Beneficiaries Rate (ABR) Invoice    Monthly Exhibit E – Additional
Provisions           Attachment 2 GENERAL TERMS AND CONDITIONS     

23. Cost Avoidance and Post-Payment Recovery of Other Health Coverage Sources
(OHCS)

F. Reporting Requirements

1)

   Post-Payment Recoveries Reports    Monthly

 

Page 2 of 2

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit B

Budget Detail and Payment Provisions

 

Table of Contents

 

1.      Budget Contingency Clause

2.      Amounts Payable

3.      Contractor Risk in Providing Services

4.      Capitation Rates

5.      Capitation Rates Constitute Payment in full

6.      Determination of Rates

7.      Redetermination of Rates-Obligation Changes

8.      Reinsurance

9.      Catastrophic Coverage Limitation

10.    Financial Performance Guarantee

11.    Recovery of Capitation Payments

12.    Payment of Aids Beneficiary Rate

 

Page 1 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit B

Budget Detail and Payment Provisions

 

1. Budget Contingency Clause

 

  A. It is mutually agreed that if the Budget Act of the current year and/or any
subsequent years covered under this Agreement does not appropriate sufficient
funds for the program, this Agreement shall be of no further force and effect.
In this event, the State shall have no liability to pay any funds whatsoever to
Contractor or to furnish any other considerations under this Agreement and
Contractor shall not be obligated to perform any provisions of this Agreement.

 

  B. If funding for any fiscal year is reduced or deleted by the Budget Act for
purposes of this program, the State shall have the option to either cancel this
Agreement with no liability occurring to the State, or offer an agreement
amendment to Contractor to reflect the reduced amount.

 

2. Amounts Payable

 

The maximum amounts payable under this agreement shall not exceed:

 

A.

 

$                      for the 1995-96 Fiscal Year ending June 30, 1996.

B.

 

$                      for the 1996-97 Fiscal Year ending June 30, 1997.

C.

 

$                      for the 1997-98 Fiscal Year ending June 30, 1998.

D.

 

$                      for the 1998-99 Fiscal Year ending June 30, 1999.

E.

 

$                      for the 1999-00 Fiscal Year ending June 30, 2000.

F.

 

$                      for the 2000-01 Fiscal Year ending June 30, 2001.

G.

 

$                      for the 2001-02 Fiscal Year ending June 30, 2002.

H.

 

$                      for the 2002-03 Fiscal Year ending June 30, 2003.

I.

 

$                      for the 2003-04 Fiscal Year ending June 30, 2004.

 

The maximum amount payable for this Contract will not exceed $
                    

 

3. Contractor Risk In Providing Services

 

Contractor will assume the total risk of providing the Covered Services on the
basis of the periodic capitation payment for each Member, except as otherwise
allowed in this Contract. Any monies not expended by the Contractor after having
fulfilled obligations under this Contract will be retained by the Contractor.

 

4. Capitation Rates

 

  A.

DHS shall remit to Contractor a capitation payment each month for each Medi-Cal
Member that appears on the approved list of Members supplied to Contractor by
DHS. The capitation rate shall be the amount specified below. The payment period
for health care services shall commence on

 

Page 2 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit B

Budget Detail and Payment Provisions

 

 

the first day of operations, as determined by DHS. Capitation payments shall be
made in accordance with the following schedule of capitation payment rates:

 

For the period 10/01/01 – 9/30/02

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

   Riverside

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

Groups

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

  

Aid Codes

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

   Rate

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

Family    01, 0A, 02, 08, 30, 32, 33, 34, 35, 38, 39, 40, 42, 47, 54, 59, 72,
3A, 3C, 3E, 3G, 3H, 3L, 3M, 3N, 3P, 3R, 3U, 3W, 4F, 4G, 4M, 5X, 7X, 8P     
Disabled    20, 24, 26, 28, 36, 60, 64, 66, 68, 6A, 6C, 6E, 6H, 6J, 6N, 6P, 6R,
6V, 2E, 0M, 0N,0P, 0R, 0T, 0U      Aged    10,14,16, 18, 1E, 1H      Child   
03, 04, 45, 82, 4A, 4C, 4K, 5K, 7A, 7J, 8R    —   Adult    86     
AIDS Beneficiary           For the period 10/01/01 – 9/30/02

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

   San Bernardino

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

Groups

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

  

Aid Codes

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

   Rate

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

Family    01, 0A, 02, 08, 30, 32, 33, 34, 35, 38, 39, 40, 42, 47, 54, 59, 72,
3A, 3C, 3E, 3G, 3H, 3L, 3M, 3N, 3P, 3R, 3U, 3W, 4F, 4G, 4M, 5X, 7X, 8P    —  
Disabled    20, 24, 26, 28, 36, 60, 64, 66, 68, 6A, 6C, 6E, 6H, 6J, 6N, 6P, 6R,
6V, 2E, 0M, 0N, 0P,0R, 0T, 0U      Aged    10, 14, 16, 18, 1E, 1H      Child   
03, 04, 45, 82, 4A, 4C, 4K, 5K, 7A, 7J, 8R      Adult    86     
AIDS Beneficiary          

 

Page 3 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit B

Budget Detail and Payment Provisions

 

For the period 10/01/02 – 7/31/03

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

   Riverside

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

Groups

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

  

Aid Codes

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

   Rate

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

Family    01, 0A, 02, 08, 30, 32, 33, 34, 35, 38, 39, 40, 42, 47, 54, 59, 72,
3A, 3C, 3E, 3G, 3H, 3L, 3M, 3N, 3P, 3R, 3U, 3W, 4F, 4G, 4M, 5X, 7X, 8P     
Disabled    20, 24, 26, 28, 36, 60, 64, 66, 68, 6A, 6C, 6E, 6H, 6J, 6N, 6P, 6R,
6V, 2E, 0M, 0N, 0P, 0R, 0T, 0U      Aged    10, 14, 16,18, 1E, 1H      Child   
03, 04, 45, 82, 4A, 4C, 4K, 5K, 7A, 7J, 8R      Adult    86     
AIDS Beneficiary           For the period 10/01/02 – 7/31/03

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

   San Bernardino

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

Groups

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

  

Aid Codes

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

   Rate

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

Family    01, 0A, 02, 08, 30, 32, 33, 34, 35, 38, 39, 40, 42, 47, 54, 59, 72,
3A, 3C, 3E, 3G, 3H, 3L, 3M, 3N, 3P, 3R, 3U, 3W, 4F, 4G, 4M, 5X, 7X, 8P     
Disabled    20, 24, 26, 28, 36, 60, 64, 66, 68, 6A, 6C, 6E, 6H, 6J, 6N, 6P, 6R,
6V, 2E, 0M, 0N, 0P, 0R, 0T, 0U      Aged    10, 14, 16, 18, 1E, 1H      Child   
03, 04, 45, 82, 4A, 4C, 4K, 5K, 7A, 7J, 8R      Adult    86     
AIDS Beneficiary          

 

Page 4 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit B

Budget Detail and Payment Provisions

 

For the period 8/1/03 – 9/30/03

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

   Riverside

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

Groups

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

  

Aid Codes

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

   Rate

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

Family    01, 0A, 02, 08, 30, 32, 33, 34, 35, 38, 39, 40, 42, 47, 54, 59, 72,
3A, 3C, 3E, 3G, 3H, 3L, 3M, 3N, 3P, 3R, 3U, 3W, 4F, 4G, 4M, 5X, 7X, 8P     
Disabled    20, 24, 26, 28, 36, 60, 64, 66, 68, 6A, 6C, 6E, 6H, 6J, 6N, 6P, 6R,
6V, 2E, 0M, 0N, 0P, 0R, 0T, 0U      Aged    10, 14, 16, 18, 1E, 1H      Child   
03, 04, 45, 82, 4A, 4C, 4K, 5K, 7A, 7J, 8R      Adult    86     
AIDS Beneficiary           For the period 8/1/03 – 9/30/03

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

   San Bernardino

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

Groups

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

  

Aid Codes

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

   Rate

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

Family    01, 0A, 02, 08, 30, 32, 33, 34, 35, 38, 39, 40, 42, 47, 54, 59, 72,
3A, 3C, 3E, 3G, 3H, 3L, 3M, 3N, 3P, 3R, 3U, 3W, 4F, 4G, 4M, 5X, 7X, 8P     
Disabled    20, 24, 26, 28, 36, 60, 64, 66, 68, 6A, 6C, 6E, 6H, 6J, 6N, 6P, 6R,
6V, 2E, 0M, 0N, 0P, 0R, 0T, 0U      Aged    10, 14, 16, 18, 1E, 1H      Child   
03, 04, 45, 82, 4A, 4C, 4K, 5K, 7A, 7J, 8R      Adult    86     
AIDS Beneficiary          

 

  B.

If DHS creates a new aid code that is split or derived from an existing aid code
covered under this Contract, and the aid code has a neutral revenue effect for
the Contractor, then the split aid code will automatically be included in the
same aid code rate group as the original aid code covered

 

Page 5 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit B

Budget Detail and Payment Provisions

 

 

under this Contract. Contractor agrees to continue providing covered services to
the Members at the monthly capitation rate specified for the original aid code.
DHS shall confirm all aid code splits, and the rates of payment for such new aid
codes, in writing to Contractor as soon as practicable after such aid code
splits occur.

 

  C. Effective February 1, 2002, an Eligible Beneficiary may continue to be a
Member after any redetermination of Medi-Cal eligibility that results in a
finding that the individual is eligible for and enrolls under the Breast and
Cervical Cancer Treatment Program in order to assure continuity of care. The
Breast and Cervical Cancer Treatment Program aid codes are as follows: 0M, 0N,
0P, 0R, 0T, 0U.

 

Effective February 1, 2002, the BCCTP Aid Group will be added to the Contract
and paid at an interim rate equai to the capitation rate negotiated for the
Disabled Aid Group. This rate of payment shall continue as an interim payment
pursuant to provision 6. Determination of Rates until such time as the Contract
is amended to include final capitation rates negotiated specifically for the
BCCTP Aid Group. If the final capitation rates proposed by the State are higher
or lower than the capitation rate for the Disabled Aid Group, then the
capitation rate for the Disabled Aid Group shall be used in determining any
adjustments to interim payments pursuant to provision 6. Determination of Rates.
Upon approval of the amendment providing for the rate change, the State will
make adjustments for the months in which the interim payments were made pursuant
to the provisions of provision 6. Determination of Rates.

 

  D. The basis for the determination of the capitation payment rates is outlined
in Exhibit B, Attachment 1 (consisting of 24 pages).

 

5. Capitation Rates Constitute Payment In Full

 

Capitation rates for each rate period, as calculated by DHS, are prospective
rates and constitute payment in full, subject to any stop loss reinsurance
provisions, on behalf of a Member for all Covered Services required by such
Member and for all Administrative Costs incurred by the Contractor in providing
or arranging for such services. DHS is not responsible for making payments for
recoupment of losses.

 

6. Determination Of Rates

 

  A.

DHS shall determine the capitation rates for the initial period December 1,
1995, or the Contract effective date of operations, through September 30, 1997.
Subsequent to September 30, 1997 and through the duration of the Contract, DHS
shall make an annual redetermination of rates in accordance with Title 22, CCR,
Section 53869 for each rate year defined

 

Page 6 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit B

Budget Detail and Payment Provisions

 

 

as the 12-month period from October 1, through September 30. DHS reserves the
right to establish or negotiate rates on an actuarial basis or move to a
negotiated rate for each rate year. All payments and rate adjustments are
subject to appropriations of funds by the Legislature and the Department of
Finance approval. Further, all payments are subject to the availability of
Federal congressional appropriation of funds.

 

  B. If DHS establishes rates on an actuarial basis, it shall determine whether
the rates shall be increased, decreased, or remain the same. If it is determined
by DHS that Contractor’s capitation rates shall be increased or decreased,
increase or decrease shall be effectuated through a change order to this
Contract in accordance with the provisions of Exhibit E, Attachment 2, provision
4, regarding Change Requirements, subject to the following provisions:

 

  1) The change order shall be effective as of October 1 of each year covered by
this Contract.

 

  2) In the event there is any delay in a determination to increase or decrease
capitation rates, so that a change order may not be processed in time to permit
payment of new rates commencing October 1, the payment to Contractor shall
continue at the rates then in effect. Those continued payments shall constitute
interim payment only. Upon final approval of the change order providing for the
rate change, DHS shall make retroactive adjustments for those months for which
interim payment was made.

 

  3) By accepting payment of new annual rates prior to full approval by all
control agencies of the change order to this Contract implementing such new
rates, Contractor stipulates to a confession of judgment for any amounts
received in excess of the final approved rate. If the final approved rate
differs from the rates agreed upon by Contractor and DHS:

 

  a) Any underpayment by the State shall be paid to Contractor within 30 days
after final approval of the new rates.

 

  b) Any overpayment to Contractor shall be recaptured by the State’s
withholding the amount due from Contractor’s next capitation check. If the
amount to be withheld from that capitation check exceeds 25 percent of the
capitation payment for that month, amounts up to 25 percent shall be withheld
from successive capitation payments until the overpayment is fully recovered by
the State.

 

Page 7 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit B

Budget Detail and Payment Provisions

 

  4) If mutual agreement between DHS and Contractor cannot be attained on
capitation rates for rate years subsequent to September 30, 1997 resulting from
a rate change pursuant to this provision 6 or provision 7 below, Contractor
shall retain the right to terminate the Contract, but no earlier than September
30, 1998. Notification of intent to terminate a Contract shall be in writing and
provided to DHS at least nine months prior to the effective date of termination,
subject to any earlier termination date negotiated in accordance with Exhibit E,
Attachment 2, provision 14, regarding Termination - Contractor. DHS shall pay
the capitation rates last offered for that rate period until the Contract is
terminated.

 

  5) DHS shall make every effort to notify and consult with Contractor regarding
proposed redetermination of rates pursuant to this section or provision 7, below
at the earliest possible time prior to implementation of the new rate.

 

7. Redetermination Of Rates - Obligation Changes

 

The capitation rates may be adjusted during the rate year to provide for a
change in obligations that results in an increase or decrease of more than one
percent of cost (as defined in Title 22, CCR, Section 53869) to the Contractor.
Any adjustments shall be effectuated through a change order to the Contract
subject to the following provisions:

 

  A. The change order shall be effective as of the first day of the month in
which the change in obligations is effective, as determined by DHS.

 

  B. In the event DHS is unable to process the change order in time to permit
payment of the adjusted rates as of the month in which the change in obligations
is effective, payment to Contractor shall continue at the rates then in effect.
Continued payment shall constitute interim payment only. Upon final approval of
the change order providing for the change in obligations, DHS shall make
adjustments for those months for which interim payment was made.

 

  C. DHS and Contractor may negotiate an earlier termination date, pursuant to
Exhibit E, Attachment 2, provision 14, regarding Termination - Contractor, if a
change in contractual obligations is created by a State or Federal change in the
Medi-Cal program, or a lawsuit, that substantially alters the financial
assumptions and conditions under which Contractor entered into this Contract,
such that Contractor can demonstrate to the satisfaction of DHS that it cannot
remain financially solvent until the termination date that would otherwise be
established under this provision.

 

Page 8 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit B

Budget Detail and Payment Provisions

 

8. Reinsurance

 

  A. Contractor may obtain reinsurance (stop loss coverage) through DHS or other
insurers to ensure maintenance of adequate capital by Contractor for the cost of
providing Covered Services under this Contract. Reinsurance will not limit the
Contractor’s liability below $5,000 per Member for any 12-month period as
specified by DHS. The Contractor may obtain reinsurance for both of the factors
described in Title 22, CCR, Section 53252 (a)(2)(A) & (B).

 

  B. If Contractor selects State reinsurance, Contractor will submit a
reinsurance claim form along with copies of the actual claims upon exceeding the
reinsurance threshold. As part of the processing, actual claims are priced to
appropriate Medi-Cal rates and the appropriate amount in excess of the
reinsurance threshold is remitted to the Contractor by DHS.

 

  1) Claims submitted will not be paid by DHS unless received by DHS not later
than the last day of the sixth month following the end of the 12-month contract
period in which they were incurred.

 

  2) The time specified for submission of claims may be extended for a period
not to exceed one year upon a finding of “good cause” by the Director in the
following circumstances:

 

  a) Where the claim involves health coverage, other than Medi-Cal, and the
delay is necessary to permit the Contractor to obtain payment, partial payment,
or proof of non-liability of that other health coverage.

 

  b) Where the claim submission was delayed due to eligibility certification or
determination by the State or county.

 

  c) Where there was substantial interference with claim submission due to
damage to, or destruction of, the Contractor’s (or subcontractor’s) business
office or records by a natural disaster, including fire, flood or earthquake, or
other similar circumstances.

 

  d) Where delay in claims submission was due to other circumstances that are
clearly beyond the control of the Contractor. Circumstances that will not be
considered beyond the control of the Contractor include, but are not limited to:

 

Page 9 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit B

Budget Detail and Payment Provisions

 

  i. Negligence or delay of the Contractor or Contractor’s employees, agents,
and subcontractors.

 

  ii. Misunderstanding of or unfamiliarity with Medi-Cal regulations, or the
terms of this Contract.

 

  iii. Illness, absence or other incapacity of a Contractor’s employee, agent,
or subcontractor responsible for preparation and submission of claims.

 

  iv. Delays caused by the United States Postal Service or any private delivery
service.

 

9. Catastrophic Coverage Limitation

 

DHS may limit the Contractor’s liability to provide or arrange and pay for care
for illness of, or injury to Members, which results from or is greatly
aggravated by, a catastrophic occurrence or disaster. Contractor will return a
prorated amount of the capitation payment following the DHS Director’s
invocation of the catastrophic coverage limitation. The amount returned will be
determined by dividing the total capitation payment by the number of days in the
month. The amount will be returned to DHS for each day in the month after the
Director has invoked the catastrophic coverage limitation clause.

 

10. Financial Performance Guarantee

 

Contractor shall provide satisfactory evidence of, and maintain Financial
Performance Guarantee in, an amount equal to at least one month’s capitation
payment, in a manner specified by DHS. At the Contractor’s request, and with DHS
approval, Contractor may establish a phase-in schedule to accumulate the
required Financial Performance Guarantee. Contractor may elect to satisfy the
Financial Performance Guarantee requirement by receiving payment on a post
payment basis. The Financial Performance Guarantee shall remain in effect for a
period not exceeding 90 days following termination or expiration of this
Contract unless DHS has a financial claim against Contractor. Further rights and
obligations of the Contractor and the Department, in regards to the Financial
Performance Guarantee, shall be as specified in Title 22, CCR, Section 53865.

 

11. Recovery Of Capitation Payments

 

DHS shall have the right to recover from Contractor amounts paid to Contractor
in the following circumstances as specified:

 

  A.

If DHS determines that a Member has either been improperly enrolled due to
ineligibility of the Member to enroll in Contractor’s plan, residence

 

Page 10 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit B

Budget Detail and Payment Provisions

 

 

outside of Contractor’s Service Area, or pursuant to Title 22, Section 53891
(a)(2), or should have been disenrolled with an effective date in a prior month,
DHS may recover or, upon request by Contractor, DHS shall recover the capitation
payments made to Contractor for the Member and absolve Contractor from all
financial and other risk for the provision of services to the Member under the
terms of the Contract for the month(s) in question. In such event, Contractor
may seek to recover any payments made to providers for Covered Services rendered
for the month(s) in question. Contractor shall inform providers that claims for
services provided to Members during the month(s) in question shall be paid by
DHS’ fiscal intermediary, if the Member is determined eligible for the Medi-Cal
program.

 

Upon request by Contractor, DHS may allow Contractor to retain the capitation
payments made for Members that are eligible to enroll in Contractor’s plan, but
should have been retroactively disenrolled pursuant to Exhibit A, Attachment 11,
provision 17, regarding Excluded Services Requiring Member Disenrollment, or
under other circumstances as approved by DHS. If Contractor retains the
capitation payments, Contractor shall provide or arrange and pay for all
Medically Necessary Covered Services for the Member, until the Member is
disenrolled on a nonretroactive basis pursuant to Exhibit A, Attachment 16,
provision 3, regarding Disenrollment.

 

  B. As a result of Contractor’s failure to perform contractual responsibilities
to comply with mandatory federal Medicaid requirements, the Federal Department
of Health and Human Services (DHHS) may disallow Federal Financial Participation
(FFP) for payments made by DHS to Contractor. DHS may recover the amounts
disallowed by DHHS by an offset to the capitation payments made to Contractor.
If recovery of the full amount at one time imposes a financial hardship on
Contractor, DHS at its discretion may grant a Contractor’s request to repay the
recoverable amounts in monthly installments over a period of consecutive months
not to exceed six months.

 

  C. If DHS determines that any other erroneous or improper payment not
mentioned above has been made to Contractor, DHS may recover the amounts
determined by an offset to the capitation payments made to Contractor. If
recovery of the full amount at one time imposes a financial hardship on
Contractor, DHS, at its discretion, may grant a Contractor’s request to repay
the recoverable amounts in monthly installments over a period of consecutive
months not to exceed six months. At least 30 days prior to seeking any such
recovery, DHS shall notify Contractor to explain the improper or erroneous
nature of the payment and to describe the recovery process.

 

Page 11 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit B

Budget Detail and Payment Provisions

 

12. Payment Of AIDS Beneficiary Rate

 

  A. Compensation at the AIDS Beneficiary Rate (ABR)

 

Subject to Contractor’s compliance with the requirements contained in
subparagraph 1. below, Contractor shall be eligible to receive compensation at
the ABR for AIDS Beneficiaries. Compensation to Contractor at the ABR for each
AIDS Beneficiary shall consist of payment at the ABR less the capitation rate
initially paid for the AIDS beneficiary.

 

  1) Compensation at the ABR shall be subject to the conditions listed below.
Contractor’s failure to comply with any of the conditions listed below for any
request for compensation at the ABR on behalf of an individual AIDS Beneficiary
for a specific month of Enrollment shall result in DHS’ denial of Contractor’s
claim for compensation at the ABR for that individual AIDS Beneficiary for that
specific month of Enrollment. Contractor may submit a corrected claim, within
the timeframes specified in paragraph d below, that complies with all the
conditions listed below and DHS shall reimburse Contractor at the ABR.

 

  a) The ABR shall be in lieu of any other compensation for an AIDS Beneficiary
in any month.

 

  b) For AIDS Beneficiaries, Contractor shall be eligible to receive
compensation at the ABR commencing in the month in which a Diagnosis of AIDS is
made and recorded, dated and signed by the treating physician in the AIDS
Beneficiary’s Medical Record.

 

  c) Contractor shall submit an invoice to DHS by the 25th day of each month for
claims for compensation at the ABR for AIDS Beneficiaries. The invoice shall
include the following:

 

  i. A list of all AIDS Beneficiaries identified by Medi-Cal numbers only for
whom the Contractor is claiming compensation at the ABR. Member names shall not
be used.

 

  ii. The month(s) and year(s) for which compensation at the ABR is being
claimed for each AIDS Beneficiary listed, sorted by month and year of service.

 

Page 12 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit B

Budget Detail and Payment Provisions

 

  iii. The capitation rate initially paid for the AIDS Beneficiary for each
month being claimed by the Contractor, the ABR being claimed, and the difference
between the ABR and the capitation rate initially paid for the AIDS Beneficiary.

 

  iv. The total amount being claimed on the invoice.

 

  d) Invoices, containing originally submitted claims or corrected claims, for
compensation at the ABR for any month of eligibility during the rate year
beginning October 1, 1997, and ending September 30, 1998, or any rate year
thereafter beginning October 1 and ending September 30, must be submitted by
Contractor to DHS no later than six months following the end of the subject rate
year.

 

  e) Invoices shall include the Agreement Number and shall be submitted to:

 

Department of Health Services

Medi-Cal Managed Care Division

Attn: Fiscal Analysis Unit

Mailing Address: See Exhibit A, Scope of Work

 

In addition, invoices shall:

 

  i. Be prepared on company letterhead.

 

  ii. Bear the Contractor’s name as shown on the agreement.

 

  iii. Be signed by an authorized official, employee or agent.

 

  2) Contractor shall confirm Medi-Cal eligibility of AIDS Beneficiaries prior
to submission of the monthly invoice to DHS. DHS may verify the Medi-Cal
eligibility of each Member for whom the ABR is claimed and adjust the invoiced
amounts to reflect any capitation payments that have been previously made to
Contractor for each Member prior to submission of the invoice required under
paragraph 1.c above.

 

  3) If DHS determines that a Member for whom compensation has been paid at the
ABR did not meet the definition of an AIDS Beneficiary, in a month for which the
ABR was paid, DHS shall recover any amount improperly paid, by an offset to
Contractor’s capitation payment, in accordance with provision 11. Recovery of
Capitation Payments, paragraph C. DHS shall give Contractor 30 days prior
written notice of any such offset.

 

Page 13 of 14

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

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit B

Budget Detail and Payment Provisions

 

  B. Prompt Payment Clause

 

Payment will be made in accordance with, and within the time specified in,
Chapter 4.5 (commencing with Section 927), Part 3, Division 3.6, of Title 2 of
the Government Code.

 

  C. Timely Submission of Final Invoice

 

  1) A final undisputed ABR invoice shall be submitted for payment no more than
ninety (90) calendar days following the expiration or termination date of this
agreement, unless a later or alternate deadline is agreed to in writing by the
program contract manager. Said ABR invoice should be clearly marked “Final
Invoice - ABR”, thus indicating that all payment obligations of the State under
this agreement have ceased and that no further payments are due or outstanding.

 

  2) The State may, at its discretion, choose not to honor any delinquent final
ABR invoice if the Contractor fails to obtain prior written State approval of an
alternate final ABR invoice submission deadline. Written State approval shall be
sought from the program contract manager prior to the expiration or termination
date of this agreement.

 

  3) The Contractor is hereby advised of its obligation to submit, with the
final ABR invoice, a “Contractor’s Release (Exhibit F)” acknowledging submission
of the final ABR invoice to the State and certifying the approximate percentage
amount, if any, of recycled products used in performance of this agreement.

 

Page 14 of 14

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

Plan Name:   Molina Medical Center   Plan #:         355   Date: 22-Sep-03
County:   Riverside   Plan Type:  Commercial Plan     Aid Code Grouping:  
Family         The Rate Period is October 1, 2002 to September 30, 2003  
Capitation Payments at the End of the Month Coverages (C = Covered by Plan, N =
NOT Covered by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N          

 

     Physician

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

   Pharmacy

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

  

Hospital

Inpatient

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

   Hospital
Outpatient

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

  

Long Term

Care

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

   Other

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

   Total

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

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 1 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

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

Plan Name:   Molina Medical Center   Plan #:         355   Date: 22-Sep-03
County:   Riverside   Plan Type:  Commercial Plan     Aid Code Grouping:  
Disabled         The Rate Period is October 1, 2002 to September 30, 2003  
Capitation Payments at the End of the Month Coverages (C = Covered by Plan, N =
NOT Covered by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N          

 

     Physician

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

   Pharmacy

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

  

Hospital

Inpatient

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

   Hospital
Outpatient

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

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 2 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         355   Date: 22-Sep-03
County:   Riverside   Plan Type:  Commercial Plan     Aid Code Grouping:   Aged
        The Rate Period is October 1, 2002 to September 30, 2003   Capitation
Payments at the End of the Month Coverages (C = Covered by Plan, N = NOT Covered
by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N          

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 3 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         355   Date: 22-Sep-03
County:   Riverside   Plan Type:  Commercial Plan     Aid Code Grouping:   Child
        The Rate Period is October 1, 2002 to September 30, 2003   Capitation
Payments at the End of the Month Coverages (C = Covered by Plan, N = NOT Covered
by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N          

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 4 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         355   Date: 22-Sep-03
County:   Riverside   Plan Type:  Commercial Plan     Aid Code Grouping:   Adult
        The Rate Period is October 1, 2002 to September 30, 2003   Capitation
Payments at the End of the Month Coverages (C = Covered by Plan, N = NOT Covered
by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N          

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 5 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         355   Date: 22-Sep-03
County:   Riverside   Plan Type:  Commercial Plan     Aid Code Grouping:   AIDS
        The Rate Period is October 1, 2002 to September 30, 2003   Capitation
Payments at the End of the Month Coverages (C = Covered by Plan, N = NOT Covered
by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N          

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 6 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         356   Date: 22-Sep-03
County:   San Bernardino   Plan Type:  Commercial Plan     Aid Code Grouping:  
Family         The Rate Period is October 1, 2002 to September 30, 2003  
Capitation Payments at the End of the Month Coverages (C = Covered by Plan, N =
NOT Covered by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N          

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 7 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         356   Date: 22-Sep-03
County:   San Bernardino   Plan Type:  Commercial Plan     Aid Code Grouping:  
Disabled         The Rate Period is October 1, 2002 to September 30, 2003  
Capitation Payments at the End of the Month Coverages (C = Covered by Plan, N =
NOT Covered by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N          

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 8 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         356   Date: 22-Sep-03
County:   San Bernardino   Plan Type:  Commercial Plan     Aid Code Grouping:  
Aged         The Rate Period is October 1, 2002 to September 30, 2003  
Capitation Payments at the End of the Month Coverages (C = Covered by Plan, N =
NOT Covered by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N          

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 9 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         356   Date: 22-Sep-03
County:   San Bernardino   Plan Type:  Commercial Plan     Aid Code Grouping:  
Child         The Rate Period is October 1, 2002 to September 30, 2003  
Capitation Payments at the End of the Month Coverages (C = Covered by Plan, N =
NOT Covered by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N          

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 10 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         356   Date: 22-Sep-03
County:   San Bernardino   Plan Type:  Commercial Plan     Aid Code Grouping:  
Adult         The Rate Period is October 1, 2002 to September 30, 2003  
Capitation Payments at the End of the Month Coverages (C = Covered by Plan, N =
NOT Covered by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N          

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 11 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         356   Date: 22-Sep-03
County:   San Bernardino   Plan Type:  Commercial Plan     Aid Code Grouping:  
AIDS         The Rate Period is October 1, 2002 to September 30, 2003  
Capitation Payments at the End of the Month Coverages (C = Covered by Plan, N =
NOT Covered by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N          

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 12 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         355   Date: 22-Sep-03
County:   Riverside   Plan Type:  Commercial Plan     Aid Code Grouping:  
Family         The Rate Period is August 1, 2003 to September 30, 2003  
Capitation Payments at the End of the Month Coverages (C = Covered by Plan, N =
NOT Covered by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N    Abortions    N

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Total Capitation Rate

                                  

Adjustment for Abortions

                                  

Net Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 13 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         355   Date: 22-Sep-03
County:   Riverside   Plan Type:  Commercial Plan     Aid Code Grouping:  
Disabled         The Rate Period is August 1, 2003 to September 30, 2003  
Capitation Payments at the End of the Month Coverages (C = Covered by Plan, N =
NOT Covered by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N    Abortions    N

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Total Capitation Rate

                                  

Adjustment for Abortions

                                  

Net Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 14 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         355   Date: 22-Sep-03
County:   Riverside   Plan Type:  Commercial Plan     Aid Code Grouping:   Aged
        The Rate Period is August 1, 2003 to September 30, 2003   Capitation
Payments at the End of the Month Coverages (C = Covered by Plan, N = NOT Covered
by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N    Abortions    N

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Total Capitation Rate

                                  

Adjustment for Abortions

                                  

Net Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 15 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         355   Date: 22-Sep-03
County:   Riverside   Plan Type:  Commercial Plan     Aid Code Grouping:   Child
        The Rate Period is August 1, 2003 to September 30, 2003   Capitation
Payments at the End of the Month Coverages (C = Covered by Plan, N = NOT Covered
by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N    Abortions    N

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Total Capitation Rate

                                  

Adjustment for Abortions

                                  

Net Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 16 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         355   Date: 22-Sep-03
County:   Riverside   Plan Type:  Commercial Plan     Aid Code Grouping:   Adult
        The Rate Period is August 1, 2003 to September 30, 2003   Capitation
Payments at the End of the Month Coverages (C = Covered by Plan, N = NOT Covered
by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N    Abortions    N

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Total Capitation Rate

                                  

Adjustment for Abortions

                                  

Net Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 17 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         355   Date: 22-Sep-03
County:   Riverside   Plan Type:  Commercial Plan     Aid Code Grouping:   AIDS
        The Rate Period is August 1, 2003 to September 30, 2003   Capitation
Payments at the End of the Month Coverages (C = Covered by Plan, N = NOT Covered
by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N    Abortions    N

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Total Capitation Rate

                                  

Adjustment for Abortions

                                  

Net Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 18 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         356   Date: 22-Sep-03
County:   San Bernardino   Plan Type:  Commercial Plan     Aid Code Grouping:  
Family         The Rate Period is August 1, 2003 to September 30, 2003  
Capitation Payments at the End of the Month Coverages (C = Covered by Plan, N =
NOT Covered by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N    Abortions    N

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Total Capitation Rate

                                  

Adjustment for Abortions

                                  

Net Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 19 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         356   Date: 22-Sep-03
County:   San Bernardino   Plan Type:  Commercial Plan     Aid Code Grouping:  
Disabled         The Rate Period is August 1, 2003 to September 30, 2003  
Capitation Payments at the End of the Month Coverages (C = Covered by Plan, N =
NOT Covered by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N    Abortions    N

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Total Capitation Rate

                                  

Adjustment for Abortions

                                  

Net Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 20 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         356   Date: 22-Sep-03
County:   San Bernardino   Plan Type:  Commercial Plan     Aid Code Grouping:  
Aged         The Rate Period is August 1, 2003 to September 30, 2003  
Capitation Payments at the End of the Month Coverages (C = Covered by Plan, N =
NOT Covered by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N    Abortions    N

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Total Capitation Rate

                                  

Adjustment for Abortions

                                  

Net Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 21 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         356   Date: 22-Sep-03
County:   San Bernardino   Plan Type:  Commercial Plan     Aid Code Grouping:  
Child         The Rate Period is August 1, 2003 to September 30, 2003  
Capitation Payments at the End of the Month Coverages (C = Covered by Plan, N =
NOT Covered by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N    Abortions    N

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Total Capitation Rate

                                  

Adjustment for Abortions

                                  

Net Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 22 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         356   Date: 22-Sep-03
County:   San Bernardino   Plan Type:  Commercial Plan     Aid Code Grouping:  
Adult         The Rate Period is August 1, 2003 to September 30, 2003  
Capitation Payments at the End of the Month Coverages (C = Covered by Plan, N =
NOT Covered by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N    Abortions    N

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Total Capitation Rate

                                  

Adjustment for Abortions

                                  

Net Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 23 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

--------------------------------------------------------------------------------

Plan Name:   Molina Medical Center   Plan #:         356   Date: 22-Sep-03
County:   San Bernardino   Plan Type:  Commercial Plan     Aid Code Grouping:  
AIDS         The Rate Period is August 1, 2003 to September 30, 2003  
Capitation Payments at the End of the Month Coverages (C = Covered by Plan, N =
NOT Covered by Plan)        

 

CCS Indicated Claims    N    Newborn Hearing Screening    N GHPP    N    MH -
Hospital Inpatient    N Hemodialysis    C    MH - Outpatient Services    N Major
Organ Transplant    N    MH - Psychotropic Drugs    N Chiropractor    N   
Psychiatrist    N Acupuncturist    N    LTC Month of Entry Plus 1    C Lenses
for Eyeware    N    LTC After Month of Entry Plus 1    N Local Education
Authority    N    Targeted Case Management    N Alphafeto Protein Testing    N
   Short-Doyle Mental Health    N Direct Observed Therapy    N    Multipurpose
Senior Support Program    N Heroin Detoxification    N    Services at State or
Federal Hospitals    N AIDS Waiver    N    Out of State Services    C Special
AIDS Drugs    N    Childhood Lead Screening    C In Home Waiver    N    CHDP
Services    C Model NF Waiver    N    Home/Community Based Services    N Adult
Day Health Care    N    Abortions    N

 

     Physician

--------------------------------------------------------------------------------

   Pharmacy

--------------------------------------------------------------------------------

  

Hospital

Inpatient

--------------------------------------------------------------------------------

   Hospital
Outpatient

--------------------------------------------------------------------------------

  

Long Term

Care

--------------------------------------------------------------------------------

   Other

--------------------------------------------------------------------------------

   Total

--------------------------------------------------------------------------------

Rate Calculation

                                  

1.      Average Cost Per Unit

                                  

2.      Units per Eligible/year

                                  

Cost per Elig. per Mo.

                                  

3.      Adjustments

                                  

a. Age/Sex

                                  

b. Area

                                  

c. Coverages

                                  

d. Interest

                                  

Adjusted Base Cost

                                  

4.      Legislative Adjustments

                                  

5.      Trend Adjustments

                                  

Projected Cost per Eligible

                                  

6.      Adjustment to Pool

                                  

Total Capitation Rate

                                  

Adjustment for Abortions

                                  

Net Capitation Rate

                                  

 

Molina Health Care of California

dba Molina

95-23637 A-11

Exhibit B, Attachment 1

Page 24 of 24

 

Prepared by Department of Health Services, Rate Development Branch

 

 

--------------------------------------------------------------------------------

GTC 103

 

EXHIBIT C

 

GENERAL TERMS AND CONDITIONS

 

1. APPROVAL: This Agreement is of no force or effect until signed by both
parties and approved by the Department of General Services, if required.
Contractor may not commence performance until such approval has been obtained.

 

2. AMENDMENT: No amendment or variation of the terms of this Agreement shall be
valid unless made in writing, signed by the parties and approved as required. No
oral understanding or Agreement not incorporated in the Agreement is binding on
any of the parties.

 

3. ASSIGNMENT: This Agreement is not assignable by the Contractor, either in
whole or in part, without the consent of the State in the form of a formal
written amendment.

 

4. AUDIT: Contractor agrees that the awarding department, the Department of
General Services, the Bureau of State Audits, or their designated representative
shall have the right to review and to copy any records and supporting
documentation pertaining to the performance of this Agreement. Contractor agrees
to maintain such records for possible audit for a minimum of three (3) years
after final payment, unless a longer period of records retention is stipulated.
Contractor agrees to allow the auditor(s) access to such records during normal
business hours and to allow interviews of any employees who might reasonably
have information related to such records. Further, Contractor agrees to include
a similar right of the State to audit records and interview staff in any
subcontract related to performance of this Agreement. (GC 8546.7, PCC 10115 et
seq., CCR Title 2, Section 1896).

 

5. INDEMNIFICATION: Contractor agrees to indemnify, defend and save harmless the
State, its officers, agents and employees from any and all claims and losses
accruing or resulting to any and all contractors, subcontractors, suppliers,
laborers, and any other person, firm or corporation furnishing or supplying work
services, materials, or supplies in connection with the performance of this
Agreement, and from any and all claims and losses accruing or resulting to any
person, firm or corporation who may be injured or damaged by Contractor in the
performance of this Agreement.

 

6. DISPUTES: Contractor shall continue with the responsibilities under this
Agreement during any dispute.

 

7. TERMINATION FOR CAUSE: The State may terminate this Agreement and be relieved
of any payments should the Contractor fail to perform the requirements of this
Agreement at the time and in the manner herein provided. In the event of such
termination the State may proceed with the work in any manner deemed proper by
the State. All costs to the State shall be deducted from any sum due the
Contractor under this Agreement and the balance, if any, shall be paid to the
Contractor upon demand.

 

--------------------------------------------------------------------------------

8. INDEPENDENT CONTRACTOR: Contractor, and the agents and employees of
Contractor, in the performance of this Agreement, shall act in an independent
capacity and not as officers or employees or agents of the State.

 

9. RECYCLING CERTIFICATION: The Contractor shall certify in writing under
penalty of perjury, the minimum, if not exact, percentage of recycled content,
both post consumer waste and secondary waste as defined in the Public Contract
Code, Sections 12161 and 12200, in materials, goods, or supplies offered or
products used in the performance of this Agreement, regardless of whether the
product meets the required recycled product percentage as defined in the Public
Contract Code, Sections 12161 and 12200. Contractor may certify that the product
contains zero recycled content. (PCC 10233, 10308.5, 10354)

 

10. NON-DISCRIMINATION CLAUSE: During the performance of this Agreement,
Contractor and its subcontractors shall not unlawfully discriminate, harass, or
allow harassment against any employee or applicant for employment because of
sex, race, color, ancestry, religious creed, national origin, physical
disability (including HIV and AIDS), mental disability, medical condition
(cancer), age (over 40), marital status, and denial of family care leave.
Contractor and subcontractors shall insure that the evaluation and treatment of
their employees and applicants for employment are free from such discrimination
and harassment. Contractor and subcontractors shall comply with the provisions
of the Fair Employment and Housing Act (Government Code Section 12990 (a-f) et
seq.) and the applicable regulations promulgated thereunder (California Code of
Regulations, Title 2, Section 7285 et seq.). The applicable regulations of the
Fair Employment and Housing Commission implementing Government Code Section
12990 (a-f), set forth in Chapter 5 of Division 4 of Title 2 of the California
Code of Regulations, are incorporated into this Agreement by reference and made
a part hereof as if set forth in full. Contractor and its subcontractors shall
give written notice of their obligations under this clause to labor
organizations with which they have a collective bargaining or other Agreement.

 

Contractor shall include the nondiscrimination and compliance provisions of this
clause in all subcontracts to perform work under the Agreement.

 

11. CERTIFICATION CLAUSES: The CONTRACTOR CERTIFICATION CLAUSES contained in the
document CCC 103 are hereby incorporated by reference and made a part of this
Agreement by this reference as if attached hereto.

 

12. TIMELINESS: Time is of the essence in this Agreement.

 

13. COMPENSATION: The consideration to be paid Contractor, as provided herein,
shall be in compensation for all of Contractor’s expenses incurred in the
performance hereof, including travel, per diem, and taxes, unless otherwise
expressly so provided.

 

14. GOVERNING LAW: This contract is governed by and shall be interpreted in
accordance with the laws of the State of California.

 

--------------------------------------------------------------------------------

15. ANTITRUST CLAIMS: The Contractor by signing this agreement hereby certifies
that if these services or goods are obtained by means of a competitive bid, the
Contractor shall comply with the requirements of the Government Codes Sections
set out below.

 

a. The Government Code Chapter on Antitrust claims contains the following
definitions:

 

1). “Public purchase” means a purchase by means of competitive bids of goods,
services, or materials by the State or any of its political subdivisions or
public agencies on whose behalf the Attorney General may bring an action
pursuant to subdivision (c) of Section 16750 of the Business and Professions
Code.

 

2). “Public purchasing body” means the State or the subdivision or agency making
a public purchase. Government Code Section 4550.

 

b. In submitting a bid to a public purchasing body, the bidder offers and agrees
that if the bid is accepted, it will assign to the purchasing body all rights,
title, and interest in and to all causes of action it may have under Section 4
of the Clayton Act (15 U.S.C. Sec. 15) or under the Cartwright Act (Chapter 2
(commencing with Section 16700) of Part 2 of Division 7 of the Business and
Professions Code), arising from purchases of goods, materials, or services by
the bidder for sale to the purchasing body pursuant to the bid. Such assignment
shall be made and become effective at the time the purchasing body tenders final
payment to the bidder. Government Code Section 4552.

 

c. If an awarding body or public purchasing body receives, either through
judgment or settlement, a monetary recovery for a cause of action assigned under
this chapter, the assignor shall be entitled to receive reimbursement for actual
legal costs incurred and may, upon demand, recover from the public body any
portion of the recovery, including treble damages, attributable to overcharges
that were paid by the assignor but were not paid by the public body as part of
the bid price, less the expenses incurred in obtaining that portion of the
recovery. Government Code Section 4553.

 

d. Upon demand in writing by the assignor, the assignee shall, within one year
from such demand, reassign the cause of action assigned under this part if the
assignor has been or may have been injured by the violation of law for which the
cause of action arose and (a) the assignee has not been injured thereby, or (b)
the assignee declines to file a court action for the cause of action. See
Government Code Section 4554.

 

16. CHILD SUPPORT COMPLIANCE ACT: “For any Agreement in excess of $100,000, the
contractor acknowledges in accordance with, that:

 

a). The contractor recognizes the importance of child and family support
obligations and shall fully comply with all applicable state and federal laws
relating to child and family support enforcement, including, but not limited to,
disclosure of information and compliance with earnings assignment orders, as
provided in Chapter 8 (commencing with section 5200) of Part 5 of Division 9 of
the Family Code; and

 

b) The contractor, to the best of its knowledge is fully complying with the
earnings assignment orders of all employees and is providing the names of all
new employees to the New Hire Registry maintained by the California Employment
Development Department.”

 

--------------------------------------------------------------------------------

17. UNENFORCEABLE PROVISION: In the event that any provision of this Agreement
is unenforceable or held to be unenforceable, then the parties agree that all
other provisions of this Agreement have force and effect and shall not be
effected thereby.

 

18. UNION ACTIVITIES For all contracts, except fixed price contracts of $50,000
or less, the Contractor acknowledges that:

 

By signing this agreement Contractor hereby acknowledges the applicability of
Government Code Section 16645 through Section 16649 to this agreement and agrees
to the following:

 

a) Contractor will not assist, promote or deter union organizing by employees
performing work on a state service contract, including a public works contract.

 

b) No state funds received under this agreement will be used to assist, promote
or deter union organizing.

 

c) Contractor will not, for any business conducted under this agreement, use any
state property to hold meetings with employees or supervisors, if the purpose of
such meetings is to assist, promote or deter union organizing, unless the state
property is equally available to the general public for holding meetings.

 

d) If Contractor incurs costs, or makes expenditures to assist, promote or deter
union organizing, Contractor will maintain records sufficient to show that no
reimbursement from state funds has been sought for these costs, and that
Contractor shall provide those records to the Attorney General upon request.

 

--------------------------------------------------------------------------------

California Department of Health Services    Exhibit D(F)

 

Special Terms and Conditions

 

(For federally funded service contracts and grant awards)

 

The use of headings or titles throughout this exhibit is for convenience only
and shall not be used to interpret or to govern the meaning of any specific term
or condition. The terms “contract”, “Contractor” and “Subcontractor” shall also
mean “grant”, “Grantee” and “Subgrantee” respectively.

 

Index of Special Terms and Conditions

 

1.    Federal Equal Employment Opportunity Requirements    18.    Novation
Requirements 2.    Travel and Per Diem Reimbursement    19.    Debarment and
Suspension Certification 3.    Procurement Rules    20.    Smoke-Free Workplace
Certification 4.    Equipment Ownership / Inventory / Disposition    21.   
Covenant Against Contingent Fees 5.    Subcontract Requirements    22.   
Payment Withholds 6.    Income Restrictions    23.    Performance Evaluation 7.
   Audit and Record Retention    24.    Officials Not to Benefit 8.    Site
Inspection    25.    Year 2000 Compliance 9.    Federal Contract Funds    26.   
Prohibited Use of State Funds for Software 10.    Intellectual Property Rights
   27.    University of California Mutual Indemnification 11.    Air or Water
Pollution Requirements    28.    Use of Small, Minority Owned and Women’s
Businesses 12.    Prior Approval of Training Seminars, Workshops or Conferences
   29.    Alien Ineligibility Certification 13.    Confidentiality of
Information    30.    Union Organizing 14.    Documents, Publications, and
Written Reports    31.    Contract Uniformity (Fringe Benefit Allowability) 15.
   Dispute Resolution Process    32.    Lobbying Restrictions and Disclosure
Certification 16.    Financial and Compliance Audit Requirements           17.
   Human Subjects Use Requirements          

 

Page 1 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

1. Federal Equal Opportunity Requirements

 

(Applicable to all federally funded agreements.)

 

  a. The Contractor will not discriminate against any employee or applicant for
employment because of race, color, religion, sex, national origin, physical or
mental handicap, disability, age or status as a disabled veteran or veteran of
the Vietnam era. The Contractor will take affirmative action to ensure that
qualified applicants are employed, and that employees are treated during
employment, without regard to their race, color, religion, sex, national origin,
physical or mental handicap, disability, age or status as a disabled veteran or
veteran of the Vietnam era. Such action shall include, but not be limited to the
following: employment, upgrading, demotion or transfer; recruitment or
recruitment advertising; layoff or termination; rates of pay or other forms of
compensation; and career development opportunities and selection for training,
including apprenticeship. The Contractor agrees to post in conspicuous places,
available to employees and applicants for employment, notices to be provided by
the Federal Government or DHS, setting forth the provisions of the Equal
Opportunity clause, Section 503 of the Rehabilitation Act of 1973 and the
affirmative action clause required by the Vietnam Era Veterans’ Readjustment
Assistance Act of 1974 (38 U.S.C. 4212). Such notices shall state the
Contractor’s obligation under the law to take affirmative action to employ and
advance in employment qualified applicants without discrimination based on their
race, color, religion, sex, national origin physical or mental handicap,
disability, age or status as a disabled veteran or veteran of the Vietnam era
and the rights of applicants and employees.

 

  b. The Contractor will, in all solicitations or advancements for employees
placed by or on behalf of the Contractor, state that all qualified applicants
will receive consideration for employment without regard to race, color,
religion, sex, national origin physical or mental handicap, disability, age or
status as a disabled veteran or veteran of the Vietnam era.

 

  c. The Contractor will send to each labor union or representative of workers
with which it has a collective bargaining agreement or other contract or
understanding a notice, to be provided by the Federal Government or the State,
advising the labor union or workers’ representative of the Contractor’s
commitments under the provisions herein and shall post copies of the notice in
conspicuous places available to employees and applicants for employment.

 

  d. The Contractor will comply with all provisions of and furnish all
information and reports required by Section 503 of the Rehabilitation Act of
1973, as amended, the Vietnam Era Veterans’ Readjustment Assistance Act of 1974
(38 U.S.C. 4212) and of the Federal Executive Order No. 11246 as amended, and of
the rules, regulations, and relevant orders of the Secretary of Labor.

 

  e. The Contractor will furnish all information and reports required by Federal
Executive Order No. 11246 as amended, and the Rehabilitation Act of 1973, and by
the rules, regulations, and orders of the Secretary of Labor, or pursuant
thereto, and will permit access to its books, records, and accounts by the State
and its designated representatives and the Secretary of Labor for purposes of
investigation to ascertain compliance with such rules, regulations, and orders.

 

  f. In the event of the Contractor’s noncompliance with the requirements of the
provisions herein or with any federal rules, regulations, or orders which are
referenced herein, this agreement may be cancelled, terminated, or suspended in
whole or in part and the Contractor may be declared ineligible for further
federal and state contracts in accordance with procedures authorized in Federal
Executive Order No. 11246 as amended and such other sanctions may be imposed and
remedies invoked as provided in Federal Executive Order No. 11246 as amended, or
by rule, regulation, or order of the Secretary of Labor, or as otherwise
provided by law.

 

  g.

The Contractor will include the provisions of Paragraphs a through g in every
subcontract or purchase order unless exempted by rules, regulations, or orders
of the Secretary of Labor issued pursuant to Federal Executive Order No. 11246
as amended, or Section 503 of the Rehabilitation Act of 1973 or (38 U.S.C. 4212)
of the Vietnam Era Veteran’s Readjustment Assistance Act, so that such
provisions will be binding upon each subcontractor or vendor. The Contractor
will take such action with respect to any subcontract or purchase order as the
Director of the Office of Federal Contract Compliance Programs or DHS may direct
as a means of enforcing such

 

Page 2 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

 

provisions including sanctions for noncompliance provided, however, that in the
event the Contractor becomes involved in, or is threatened with litigation by a
subcontractor or vendor as a result of such direction by DHS, the Contractor may
request in writing to DHS, who, in turn, may request the United States to enter
into such litigation to protect the interests of the State and of the United
States.

 

2. Travel and Per Diem Reimbursement

 

(Applicable if travel and/or per diem expenses are reimbursed with contract
funds.)

 

Reimbursement for travel and per diem expenses from DHS under this agreement
shall, unless otherwise specified in this agreement, be at the rates currently
in effect, as established by the California Department of Personnel
Administration (DPA), for nonrepresented state employees. If the DPA rates
change during the term of the agreement, the new rates shall apply upon their
effective date and no amendment to this agreement shall be necessary. Exceptions
to DPA rates may be approved by DHS upon the submission of a statement by the
Contractor indicating that such rates are not available to the Contractor. No
travel outside the State of California shall be reimbursed without prior written
authorization from DHS.

 

3. Procurement Rules

 

(Applicable to all agreements in which equipment, miscellaneous property,
commodities and/or supplies are furnished by DHS or expenses for said items are
reimbursed with state or federal funds.)

 

  a. Equipment definitions

 

Wherever the term equipment and/or miscellaneous property is used, the following
definitions shall apply:

 

  (1) Major equipment: A tangible or intangible item having a base unit cost of
$5,000 or more with a life expectancy of one (1) year or more and is either
furnished by DHS or the cost is reimbursed through this agreement. Software and
videos are examples of intangible items that meet this definition.

 

  (2) Minor equipment: A tangible item having a base unit cost of less than
$5,000 with a life expectancy of one (1) year or more that is listed on the DHS
Asset Management Unit’s Minor Equipment List and is either furnished by DHS or
the cost is reimbursed through this agreement. Contractors may obtain a copy of
the Minor Equipment List by making a request through the DHS program contract
manager.

 

  (3) Miscellaneous property: A specific tangible item with a life expectancy of
one (1) year or more that is either furnished by DHS or the cost is reimbursed
through this agreement. Examples include, but are not limited to: furniture
(excluding modular furniture), cabinets, typewriters, desktop calculators,
portable dictators, non-digital cameras, etc.

 

  b. Government and public entities (including state colleges/universities and
auxiliary organizations), whether acting as a contractor and/or subcontractor,
may secure all commodities, supplies, equipment and services related to such
purchases that are required in performance of this agreement. Said procurements
are subject to Paragraphs d through h of Provision 3. Paragraph c of Provision 3
shall also apply, if equipment purchases are delegated to subcontractors that
are nonprofit organizations or commercial businesses.

 

  c. Nonprofit organizations and commercial businesses, whether acting as a
contractor and/or subcontractor, may secure commodities, supplies, equipment and
services related to such purchases for performance under this agreement.

 

  (1) Equipment purchases shall not exceed $50,000 annually.

 

To secure equipment above the annual maximum limit of $50,000, the Contractor
shall make arrangements through the appropriate DHS program contract manager, to
have all remaining

 

Page 3 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

equipment purchased through DHS’ Purchasing Unit. The cost of equipment
purchased by or through DHS shall be deducted from the funds available in this
agreement. Contractor shall submit to the DHS program contract manager a list of
equipment specifications for those items that the State must procure. The State
may pay the vendor directly for such arranged equipment purchases and title to
the equipment will remain with DHS. The equipment will be delivered to the
Contractor’s address, as stated on the face of the agreement, unless the
Contractor notifies the DHS program contract manager, in writing, of an
alternate delivery address.

 

  (2) All equipment purchases are subject to Paragraphs d through h of Provision
3. Paragraph b of Provision 3 shall also apply, if equipment purchases are
delegated to subcontractors that are either a government or public entity.

 

  (3) Nonprofit organizations and commercial businesses, shall use a procurement
system that meets the following standards:

 

  (a) Maintain a code or standard of conduct that shall govern the performance
of its officers, employees, or agents engaged in awarding procurement contracts.
No employee, officer, or agent shall participate in the selection, award, or
administration of a procurement contract in which, to his or her knowledge, he
or she has a financial interest.

 

  (b) Procurements shall be conducted in a manner that provides, to the maximum
extent practical, open, and free competition.

 

  (c) Procurements shall be conducted in a manner that provides for all of the
following:

 

  [1] Avoid purchasing unnecessary or duplicate items.

 

  [2] Equipment solicitations shall be based upon a clear and accurate
description of the technical requirements of the goods to be procured.

 

  [3] Take positive steps to utilize small and veteran owned businesses.

 

  d. Unless waived or otherwise stipulated in writing by DHS, prior written
authorization from the appropriate DHS program contract manager will be required
before the Contractor will be reimbursed for any purchase of $5,000 or more for
commodities, supplies, equipment, and services related to such purchases. The
Contractor must provide in its request for authorization all particulars
necessary, as specified by DHS, for evaluating the necessity or desirability of
incurring such costs. The term “purchase” excludes the purchase of services from
a subcontractor and public utility services at rates established for uniform
applicability to the general public.

 

  e. In special circumstances, determined by DHS (e.g., when DHS has a need to
monitor certain purchases, etc.), DHS may require prior written authorization
and/or the submission of paid vendor receipts for any purchase, regardless of
dollar amount. DHS reserves the right to either deny claims for reimbursement or
to request repayment for any Contractor and/or subcontractor purchase that DHS
determines to be unnecessary in carrying out performance under this agreement.

 

  f. The Contractor and/or subcontractor must maintain a copy or narrative
description of the procurement system, guidelines, rules, or regulations that
will be used to make purchases under this agreement. The State reserves the
right to request a copy of these documents and to inspect the purchasing
practices of the Contractor and/or subcontractor at any time.

 

  g. For all purchases, the Contractor and/or subcontractor must maintain copies
of all paid vendor invoices, documents, bids and other information used in
vendor selection, for inspection or audit. Justifications supporting the absence
of bidding (i.e., sole source purchases) shall also be maintained on file by the
Contractor and/or subcontractor for inspection or audit.

 

Page 4 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

  h. DHS may, with cause (e.g., with reasonable suspicion of unnecessary
purchases or use of inappropriate purchase practices, etc.), withhold, cancel,
modify, or retract the delegated purchase authority granted under Paragraphs b
and/or c of Provision 3 by giving the Contractor no less than 30 calendar days
written notice.

 

4. Equipment Ownership / Inventory / Disposition

 

(Applicable to agreements in which equipment and/or miscellaneous property is
furnished by DHS and/or when said items are purchased or reimbursed with state
or federal funds.)

 

  a. Wherever the term equipment and/or miscellaneous property is used in
Provision 4, the definitions in Provision 3, Paragraph a shall apply.

 

All equipment and/or miscellaneous property that are purchased/reimbursed with
agreement funds or furnished by DHS under the terms of this agreement and not
fully consumed in performance of this agreement shall be considered state
equipment and the property of DHS.

 

  (1) DHS requires the reporting, tagging and annual inventorying of all
equipment and/or miscellaneous property that is furnished by DHS or
purchased/reimbursed with funds provided through this agreement.

 

Upon receipt of equipment and/or miscellaneous property, the Contractor shall
report the receipt to the DHS program contract manager. To report the receipt of
said items and to receive property tags, Contractor shall use a form or format
designated by DHS’ Asset Management Unit. If the appropriate form (i.e.,
Contractor Equipment Purchased with DHS Funds) does not accompany this
agreement, Contractor shall request a copy from the DHS program contract
manager.

 

  (2) If the Contractor enters into an agreement with a term of more than twelve
months, the Contractor shall submit an annual inventory of state equipment
and/or miscellaneous property to the DHS program contract manager using a form
or format designated by DHS’ Asset Management Unit. If an inventory report form
(i.e., Inventory/Disposition of DHS-Funded Equipment) does not accompany this
agreement, Contractor shall request a copy from the DHS program contract
manager. Contractor shall:

 

  (a) Include in the inventory report, equipment and/or miscellaneous property
in the Contractor’s possession and/or in the possession of a subcontractor
(including independent consultants).

 

  (b) Submit the inventory report to DHS according to the instructions appearing
on the inventory form or issued by the DHS program contract manager.

 

  (c) Contact the DHS program contract manager to learn how to remove, trade-in,
sell; transfer or survey off, from the inventory report, expired equipment
and/or miscellaneous property that is no longer wanted, usable or has passed its
life expectancy. Instructions will be supplied by DHS’ Asset Management Unit.

 

  b. Title to state equipment and/or miscellaneous property shall not be
affected by its incorporation or attachment to any property not owned by the
State.

 

  c. Unless otherwise stipulated, DHS shall be under no obligation to pay the
cost of restoration, or rehabilitation of the Contractor’s and/or
Subcontractor’s facility which may be affected by the removal of any state
equipment and/or miscellaneous property.

 

  d. The Contractor and/or Subcontractor shall maintain and administer a sound
business program for ensuring the proper use, maintenance, repair, protection,
insurance and preservation of state equipment and/or miscellaneous property.

 

  (1)

In administering this provision, DHS may require the Contractor and/or
Subcontractor to repair or replace, to DHS’ satisfaction, any damaged, lost or
stolen state equipment and/or

 

Page 5 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

 

miscellaneous property. Contractor and/or Subcontractor shall immediately file a
theft report with the appropriate police agency or the California Highway Patrol
and Contractor shall promptly submit one copy of the theft report to the DHS
program contract manager.

 

  e. Unless otherwise stipulated by the program funding this agreement,
equipment and/or miscellaneous property purchased/reimbursed with agreement
funds or furnished by DHS under the terms of this agreement, shall only be used
for performance of this agreement or another DHS agreement.

 

  f. Within sixty (60) calendar days prior to the termination or end of this
agreement, the Contractor shall provide a final inventory report of equipment
and/or miscellaneous property to the DHS program contract manager and shall, at
that time, query DHS as to the requirements, including the manner and method, of
returning state equipment and/or miscellaneous property to DHS. Final
disposition of equipment and/or miscellaneous property shall be at DHS expense
and according to DHS instructions. Equipment and/or miscellaneous property
disposition instructions shall be issued by DHS immediately after receipt of the
final inventory report. At the termination or conclusion of this agreement, DHS
may at its discretion, authorize the continued use of state equipment and/or
miscellaneous property for performance of work under a different DHS agreement.

 

  g. Motor Vehicles

 

(Applicable only if motor vehicles are purchased/reimbursed with agreement funds
or furnished by DHS under this agreement.)

 

  (1) If motor vehicles are purchased/reimbursed with agreement funds or
furnished by DHS under the terms of this agreement, within thirty (30) calendar
days prior to the termination or end of this agreement, the Contractor and/or
Subcontractor shall return such vehicles to DHS and shall deliver all necessary
documents of title or registration to enable the proper transfer of a marketable
title to DHS.

 

  (2) If motor vehicles are purchased/reimbursed with agreement funds or
furnished by DHS under the terms of this agreement, the State of California
shall be the legal owner of said motor vehicles and the Contractor shall be the
registered owner. The Contractor and/or a subcontractor may only use said
vehicles for performance and under the terms of this agreement.

 

  (3) The Contractor and/or Subcontractor agree that all operators of motor
vehicles, purchased/reimbursed with agreement funds or furnished by DHS under
the terms of this agreement, shall hold a valid State of California driver’s
license. In the event that ten or more passengers are to be transported in any
one vehicle, the operator shall also hold a State of California Class B driver’s
license.

 

  (4) If any motor vehicle is purchased/reimbursed with agreement funds or
furnished by DHS under the terms of this agreement, the Contractor and/or
Subcontractor, as applicable, shall provide, maintain, and certify that, at a
minimum, the following type and amount of automobile liability insurance is in
effect during the term of this agreement or any period of contract extension
during which any vehicle remains in the Contractor’s and/or Subcontractor’s
possession:

 

Automobile Liability Insurance

 

  (a) The Contractor, by signing this agreement, hereby certifies that it
possesses or will obtain automobile liability insurance in the amount of
$1,000,000 per occurrence for bodily injury and property damage combined. Said
insurance must be obtained and made effective upon the delivery date of any
motor vehicle, purchased/reimbursed with agreement funds or furnished by DHS
under the terms of this agreement, to the Contractor and/or Subcontractor.

 

Page 6 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

  (b) The Contractor and/or Subcontractor shall, as soon as practical, furnish a
copy of the certificate of insurance to the DHS program contract manager.

 

  (c) The Contractor and/or Subcontractor agree that bodily injury and property
damage liability insurance, as required herein, shall remain in effect at all
times during the term of this agreement or until such time as the motor vehicle
is returned to DHS.

 

  (d) The Contractor and/or Subcontractor agree to provide, at least thirty (30)
days prior to the expiration date of said insurance coverage, a copy of a new
certificate of insurance evidencing continued coverage, as indicated herein, for
not less than the remainder of the term of this agreement, the term of any
extension or continuation thereof, or for a period of not less than one (1)
year.

 

  (e) The Contractor and/or Subcontractor, if not a self-insured government
and/or public entity, must provide evidence, that any required certificates of
insurance contain the following provisions:

 

  [1] The insurer will not cancel the insured’s coverage without giving thirty
(30) calendar days prior written notice to the State (California Department of
Health Services).

 

  [2] The State of California, its officers, agents, employees, and servants are
included as additional insureds, but only with respect to work performed for the
State under this agreement and any extension or continuation of this agreement.

 

  [3] The insurance carrier shall notify the State of California Department of
Health Services, in writing, of the Contractor’s failure to pay premiums; its
cancellation of such policies; or any other substantial change, including, but
not limited to, the status, coverage, or scope of the required insurance. Such
notices shall contain a reference to the agreement number for which the
insurance was obtained.

 

  (f) The Contractor and/or Subcontractor is hereby advised that copies of
certificates of insurance may be subject to review and approval by the
Department of General Services (DGS), Office of Risk and Insurance Management.
The Contractor shall be notified by DHS, in writing, if this provision is
applicable to this agreement. If DGS approval of the certificate of insurance is
required, the Contractor agrees that no work or services shall be performed
prior to obtaining said approval.

 

  (g) In the event the Contractor and/or Subcontractor fails to keep insurance
coverage, as required herein, in effect at all times during vehicle possession,
DHS may, in addition to any other remedies it may have, terminate this agreement
upon the occurrence of such event.

 

5. Subcontract Requirements

 

(Applicable to agreements under which services are to be performed by
subcontractors including independent consultants.)

 

  a. Prior written authorization will be required before the Contractor enters
into or is reimbursed for any subcontract for services costing $5,000 or more.
Except as indicated in Paragraph a(3) herein, when securing subcontracts for
services exceeding $5,000, the Contractor shall obtain at least three bids or
justify a sole source award.

 

  (1) The Contractor must provide in its request for authorization, all
particulars necessary for evaluating the necessity or desirability of incurring
such cost.

 

  (2) The State may identify the information needed to fulfill this requirement.

 

Page 7 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

  (3) Subcontracts performed by the following entities or for the service types
listed below are exempt from the bidding and sole source justification
requirements:

 

  (a) A local governmental entity or the federal government,

 

  (b) A State college or university from any State,

 

  (c) A Joint Powers Authority,

 

  (d) An auxiliary organization of a California State University or a California
community college,

 

  (e) A foundation organized to support the Board of Governors of the California
Community Colleges,

 

  (f) An auxiliary organization of the Student Aid Commission established under
Education Code § 69522,

 

  (g) Entities of any type that will provide subvention aid or direct services
to the public,

 

  (h) Entities and/or service types identified as exempt from advertising in
State Administrative Manual Section 1233 subsection 3. View this publication at
the following Internet address: http://sam.dgs.ca.gov.

 

  (4) Unless otherwise mandated by the funding agency (i.e., federal
government), DHS may only pay the Contractor’s overhead charges or indirect
costs on the first $25,000 of each subcontract.

 

  b. DHS reserves the right to approve or disapprove the selection of
subcontractors and with advance written notice, require the substitution of
subcontractors and require the Contractor to terminate subcontracts entered into
in support of this agreement.

 

  (1) Upon receipt of a written notice from DHS requiring the substitution
and/or termination of a subcontract, the Contractor shall take steps to ensure
the completion of any work in progress and select a replacement, if applicable,
within 30 calendar days, unless a longer period is agreed to by DHS.

 

  c. Actual subcontracts (i.e., written agreement between the Contractor and a
subcontractor) of $5,000 or more are subject to the prior review and written
approval of DHS. DHS may, at its discretion, elect to waive this right. All such
waivers shall be confirmed in writing by DHS.

 

  d. Contractor shall maintain a copy of each subcontract entered into in
support of this agreement and shall, upon request by DHS, make said copies
available for approval, inspection, or audit.

 

  e. Sole responsibility rests with the Contractor to ensure that
subcontractors, used in performance of this agreement, are paid in a timely
manner. The timeliness of said payments may be affected by the timeliness of
payments issued by DHS to the Contractor.

 

  f. The Contractor is responsible for all performance requirements under this
agreement even though performance may be carried out through a subcontract.

 

  g. The Contractor shall ensure that all subcontracts for services include
provision(s) requiring compliance with applicable terms and conditions specified
in this agreement.

 

  h. The Contractor agrees to include the following clause, relevant to record
retention, in all subcontracts for services:

 

“(Subcontractor Name) agrees to maintain and preserve, until three years after
termination of (Agreement Number) and final payment from DHS, to permit DHS or
any duly authorized representative, to have access to, examine or audit any
pertinent books, documents, papers and records related to this subcontract and
to allow interviews of any employees who might reasonably have information
related to such records.”

 

  i. Unless otherwise stipulated in writing by DHS, the Contractor shall be the
subcontractor’s sole point of contact for all matters related to performance and
payment under this agreement.

 

Page 8 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

  j. Contractor shall, as applicable, advise all subcontractors of their
obligations pursuant to the following numbered provisions of this Exhibit: 1, 2,
3, 4, 5, 6, 7, 8, 10, 11, 12, 13, 14, 17, 19, 20, 24, and 32.

 

6. Income Restrictions

 

Unless otherwise stipulated in this agreement, the Contractor agrees that any
refunds, rebates, credits, or other amounts (including any interest thereon)
accruing to or received by the Contractor under this agreement shall be paid by
the Contractor to DHS, to the extent that they are properly allocable to costs
for which the Contractor has been reimbursed by DHS under this agreement.

 

7. Audit and Record Retention

 

(Applicable to agreements in excess of $10,000.)

 

  a. The Contractor and/or Subcontractor shall maintain books, records,
documents, and other evidence, accounting procedures and practices, sufficient
to properly reflect all direct and indirect costs of whatever nature claimed to
have been incurred in the performance of this agreement, including any matching
costs and expenses. The foregoing constitutes “records” for the purpose of this
provision.

 

  b. The Contractor’s and/or subcontractor’s facility or office or such part
thereof as may be engaged in the performance of this agreement and his/her
records shall be subject at all reasonable times to inspection, audit, and
reproduction.

 

  c. Contractor agrees that DHS, the Department of General Services, the Bureau
of State Audits, or their designated representatives including the Comptroller
General of the United States shall have the right to review and to copy any
records and supporting documentation pertaining to the performance of this
agreement. Contractor agrees to allow the auditor(s) access to such records
during normal business hours and to allow interviews of any employees who might
reasonably have information related to such records. Further, the Contractor
agrees to include a similar right of the State to audit records and interview
staff in any subcontract related to performance of this agreement. (GC 8546.7,
CCR Title 2, Section 1896).

 

  d. The Contractor and/or Subcontractor shall preserve and make available
his/her records (1) for a period of three years from the date of final payment
under this agreement, and (2) for such longer period, if any, as is required by
applicable statute, by any other provision of this agreement, or by
subparagraphs (1) or (2) below.

 

  (1) If this agreement is completely or partially terminated, the records
relating to the work terminated shall be preserved and made available for a
period of three years from the date of any resulting final settlement.

 

  (2) If any litigation, claim, negotiation, audit, or other action involving
the records has been started before the expiration of the three-year period, the
records shall be retained until completion of the action and resolution of all
issues which arise from it, or until the end of the regular three-year period,
whichever is later.

 

  e. The Contractor and/or Subcontractor shall comply with the above
requirements and be aware of the penalties for violations of fraud and for
obstruction of investigation as set forth in Public Contract Code § 10115.10, if
applicable.

 

  f. The Contractor and/or Subcontractor may, at its discretion, following
receipt of final payment under this agreement, reduce its accounts, books and
records related to this agreement to microfilm, computer disk, CD ROM, or other
data storage medium. Upon request by an authorized representative to inspect,
audit or obtain copies of said records, the Contractor and/or Subcontractor must
supply or make available applicable devices, hardware, and/or software necessary
to view, copy and/or print said records. Applicable devices may include, but are
not limited to, microfilm readers and microfilm printers, etc.

 

Page 9 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

8. Site Inspection

 

The State, through any authorized representatives, has the right at all
reasonable times to inspect or otherwise evaluate the work performed or being
performed hereunder including subcontract supported activities and the premises
in which it is being performed. If any inspection or evaluation is made of the
premises of the Contractor or Subcontractor, the Contractor shall provide and
shall require Subcontractors to provide all reasonable facilities and assistance
for the safety and convenience of the authorized representatives in the
performance of their duties. All inspections and evaluations shall be performed
in such a manner as will not unduly delay the work.

 

9. Federal Contract Funds

 

(Applicable only to that portion of an agreement funded in part or whole with
federal funds.)

 

  a. It is mutually understood between the parties that this agreement may have
been written before ascertaining the availability of congressional appropriation
of funds, for the mutual benefit of both parties, in order to avoid program and
fiscal delays which would occur if the agreement were executed after that
determination was made.

 

  b. This agreement is valid and enforceable only if sufficient funds are made
available to the State by the United States Government for the fiscal years
covered by the term of this agreement. In addition, this agreement is subject to
any additional restrictions, limitations, or conditions enacted by the Congress
or any statute enacted by the Congress which may affect the provisions, terms or
funding of this agreement in any manner.

 

  c. It is mutually agreed that if the Congress does not appropriate sufficient
funds for the program, this agreement shall be amended to reflect any reduction
in funds.

 

  d. DHS has the option to void or cancel the agreement with 30-days advance
written notice or to amend the agreement to reflect any reduction in funds.

 

10. Intellectual Property Rights

 

  a. Ownership

 

  (1) Except where DHS has agreed in a signed writing to accept a license, DHS
shall be and remain, without additional compensation, the sole owner of any and
all rights, title and interest in all Intellectual Property, from the moment of
creation, whether or not jointly conceived, that are made, conceived, derived
from, or reduced to practice by Contractor or DHS and which result directly or
indirectly from this agreement.

 

  (2) For the purposes of this agreement, Intellectual Property means recognized
protectable rights and interest such as: patents, (whether or not issued)
copyrights, trademarks, service marks, applications for any of the foregoing,
inventions, trade secrets, trade dress, logos, insignia, color combinations,
slogans, moral rights, right of publicity, author’s rights, contract and
licensing rights, works, mask works, industrial design rights, rights of
priority, know how, design flows, methodologies, devices, business processes,
developments, innovations, good will and all other legal rights protecting
intangible proprietary information as may exist now and/or here after come into
existence, and all renewals and extensions, regardless of whether those rights
arise under the laws of the United States, or any other state, country or
jurisdiction.

 

  (a)

For the purposes of the definition of Intellectual Property, “works” means all
literary works, writings and printed matter including the medium by which they
are recorded or reproduced, photographs, art work, pictorial and graphic
representations and works of a similar nature, film, motion pictures, digital
images, animation cells, and other audiovisual works including positives and
negatives thereof, sound recordings, tapes, educational materials, interactive
videos and any other materials or products created, produced, conceptualized and
fixed in a tangible medium of expression. It includes preliminary and final
products and any materials and information developed for the purposes of
producing

 

Page 10 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

 

those final products. Works does not include articles submitted to peer review
or reference journals or independent research projects.

 

  (3) In the performance of this agreement, Contractor will exercise and utilize
certain of its Intellectual Property in existence prior to the effective date of
this agreement. In addition, under this agreement, Contractor may access and
utilize certain of DHS’ Intellectual Property in existence prior to the
effective date of this agreement. Except as otherwise set forth herein,
Contractor shall not use any of DHS’ Intellectual Property now existing or
hereafter existing for any purposes without the prior written permission of DHS.
Except as otherwise set forth herein, neither the Contractor nor DHS shall give
any ownership interest in or rights to its Intellectual Property to the other
Party. If during the term of this agreement, Contractor accesses any third-party
Intellectual Property that is licensed to DHS, Contractor agrees to abide by all
license and confidentiality restrictions applicable to DHS in the third-party’s
license agreement.

 

  (4) Contractor agrees to cooperate with DHS in establishing or maintaining
DHS’ exclusive rights in the Intellectual Property, and in assuring DHS’ sole
rights against third parties with respect to the Intellectual Property. If the
Contractor enters into any agreements or subcontracts with other parties in
order to perform this agreement, Contractor shall require the terms of the
agreement(s) to include all Intellectual Property provisions. Such terms must
include, but are not limited to, the subcontractor assigning and agreeing to
assign to DHS all rights, title and interest in Intellectual Property made,
conceived, derived from, or reduced to practice by the subcontractor, Contractor
or DHS and which result directly or indirectly from this agreement or any
subcontract.

 

  (5) Contractor further agrees to assist and cooperate with DHS in all
reasonable respects, and execute all documents and, subject to reasonable
availability, give testimony and take all further acts reasonably necessary to
acquire, transfer, maintain, and enforce DHS’ Intellectual Property rights and
interests.

 

  b. Retained Rights / License Rights

 

  (1) Except for Intellectual Property made, conceived, derived from, or reduced
to practice by Contractor or DHS and which result directly or indirectly from
this agreement, Contractor shall retain title to all of its Intellectual
Property to the extent such Intellectual Property is in existence prior to the
effective date of this agreement. Contractor hereby grants to DHS, without
additional compensation, a permanent, non-exclusive, royalty free, paid-up,
worldwide, irrevocable, perpetual, non-terminable license to use, reproduce,
manufacture, sell, offer to sell, import, export, modify, publicly and privately
display/perform, distribute, and dispose Contractor’s Intellectual Property with
the right to sublicense through multiple layers, for any purpose whatsoever, to
the extent it is incorporated in the Intellectual Property resulting from this
agreement, unless Contractor assigns all rights, title and interest in the
Intellectual Property as set forth herein.

 

  (2) Nothing in this provision shall restrict, limit, or otherwise prevent
Contractor from using any ideas, concepts, know-how, methodology or techniques
related to its performance under this agreement, provided that Contractor’s use
does not infringe the patent, copyright, trademark rights, license or other
Intellectual Property rights of DHS or third party, or result in a breach or
default of any provisions of this Exhibit or result in a breach of any
provisions of law relating to confidentiality.

 

  c. Copyright

 

  (1)

Contractor agrees that for purposes of copyright law, all works [as defined in
Section a, subparagraph (2)(a) of this provision] of authorship made by or on
behalf of Contractor in connection with Contractor’s performance of this
agreement shall be deemed “works made for hire”. Contractor further agrees that
the work of each person utilized by Contractor in connection with the
performance of this agreement will be a “work made for hire,” whether that
person is an employee of Contractor or that person has entered into an agreement
with Contractor to perform the work. Contractor shall enter into a written
agreement with any such

 

Page 11 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

 

person that: (i) all work performed for Contractor shall be deemed a “work made
for hire” under the Copyright Act and (ii) that person shall assign all right,
title, and interest to DHS to any work product made, conceived, derived from, or
reduced to practice by Contractor or DHS and which result directly or indirectly
from this agreement.

 

  (2) All materials, including, but not limited to, visual works or text,
reproduced or distributed pursuant to this agreement that include Intellectual
Property made, conceived, derived from, or reduced to practice by Contractor or
DHS and which result directly or indirectly from this agreement, shall include
DHS’ notice of copyright, which shall read in 3mm or larger typeface: “© 2001,
State of California, Department of Health Services. This material may not be
reproduced or disseminated without prior written permission from the Department
of Health Services.” This notice should be placed prominently on the materials
and set apart from other matter on the page where it appears. Audio productions
shall contain a similar audio notice of copyright.

 

  d. Patent Rights

 

With respect to inventions made by Contractor in the performance of this
agreement, which did not result from research and development specifically
included in the agreement’s scope of work, Contractor hereby grants to DHS a
license as described under Section b of this provision for devices or material
incorporating, or made through the use of such inventions. If such inventions
result from research and development work specifically included within the
agreement’s scope of work, then Contractor agrees to assign to DHS, without
additional compensation, all its right, title and interest in and to such
inventions and to assist DHS in securing United States and foreign patents with
respect thereto.

 

  e. Third-Party Intellectual Property

 

Except as provided herein, Contractor agrees that its performance of this
agreement shall not be dependent upon or include any Intellectual Property of
Contractor or third party without first: (i) obtaining DHS’ prior written
approval; and (ii) granting to or obtaining for DHS, without additional
compensation, a license, as described in Section b of this provision, for any of
Contractor’s or third-party’s Intellectual Property in existence prior to the
effective date of this agreement. If such a license upon the these terms is
unattainable, and DHS determines that the Intellectual Property ¦ should be
included in or is required for Contractor’s performance of this agreement,
Contractor shall obtain a license under terms acceptable to DHS.

 

  f. Warranties

 

  (1) Contractor represents and warrants that:

 

  (a) It is free to enter into and fully perform this agreement.

 

  (b) It has secured and will secure all rights and licenses necessary for its
performance of this agreement.

 

  (c) Neither Contractor’s performance of this agreement, nor the exercise by
either Party of the rights granted in this agreement, nor any use, reproduction,
manufacture, sale, offer to sell, import, export, modification, public and
private display/performance, distribution, and disposition of the Intellectual
Property made, conceived, derived from, or reduced to practice by Contractor or
DHS and which result directly or indirectly from this agreement will infringe
upon or violate any Intellectual Property right, non-disclosure obligation, or
other proprietary right or interest of any third-party or entity now existing
under the laws of, or hereafter existing or issued by, any state, the United
States, or any foreign country. There is currently no actual or threatened claim
by any such third party based on an alleged violation of any such right by
Contractor.

 

  (d) Neither Contractor’s performance nor any part of its performance will
violate the right of privacy of, or constitute a libel or slander against any
person or entity.

 

Page 12 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

  (e) It has secured and will secure all rights and licenses necessary for
Intellectual Property including, but not limited to, consents, waivers or
releases from all authors of music or performances used, and talent (radio,
television and motion picture talent), owners of any interest in and to real
estate, sites, locations, property or props that may be used or shown.

 

  (f) It has not granted and shall not grant to any person or entity any right
that would or might derogate, encumber, or interfere with any of the rights
granted to DHS in this agreement.

 

  (g) It has appropriate systems and controls in place to ensure that state
funds will not be used in the performance of this agreement for the acquisition,
operation or maintenance of computer software in violation of copyright laws.

 

  (h) It has no knowledge of any outstanding claims, licenses or other charges,
liens, or encumbrances of any kind or nature whatsoever that could affect in any
way Contractor’s performance of this agreement.

 

  (2) DHS MAKES NO WARRANTY THAT THE INTELLECTUAL PROPERTY RESULTING FROM THIS
AGREEMENT DOES NOT INFRINGE UPON ANY PATENT, TRADEMARK, COPYRIGHT OR THE LIKE,
NOW EXISTING OR SUBSEQUENTLY ISSUED.

 

  g. Intellectual Property Indemnity

 

  (1) Contractor shall indemnify, defend and hold harmless DHS and its licensees
and assignees, and its officers, directors, employees, agents, representatives,
successors, and users of its products, (“Indemnitees”) from and against all
claims, actions, damages, losses, liabilities (or actions or proceedings with
respect to any thereof), whether or not rightful, arising from any and all
actions or claims by any third party or expenses related thereto (including, but
not limited to, all legal expenses, court costs, and attorney’s fees incurred in
investigating, preparing, serving as a witness in, or defending against, any
such claim, action, or proceeding, commenced or threatened) to which any of the
Indemnitees may be subject, whether or not Contractor is a party to any pending
or threatened litigation, which arise out of or are related to (i) the
incorrectness or breach of any of the representations, warranties, covenants or
agreements of Contractor pertaining to Intellectual Property; or (ii) any
Intellectual Property infringement, or any other type of actual or alleged
infringement claim, arising out of DHS’ use, reproduction, manufacture, sale,
offer to sell, distribution, import, export, modification, public and private
performance/display, license, and disposition of the Intellectual Property made,
conceived, derived from, or reduced to practice by Contractor or DHS and which
result directly or indirectly from this agreement. This indemnity obligation
shall apply irrespective of whether the infringement claim is based on a patent,
trademark or copyright registration that issued after the effective date of this
agreement. DHS reserves the right to participate in and/or control, at
Contractor’s expense, any such infringement action brought against DHS.

 

  (2) Should any Intellectual Property licensed by the Contractor to DHS under
this agreement become the subject of an Intellectual Property infringement
claim, Contractor will exercise its authority reasonably and in good faith to
preserve DHS’ right to use the licensed Intellectual Property in accordance with
this agreement at no expense to DHS. DHS shall have the right to monitor and
appear through its own counsel (at Contractor’s expense) in any such claim or
action. In the defense or settlement of the claim, Contractor may obtain the
right for DHS to continue using the licensed Intellectual Property; or, replace
or modify the licensed Intellectual Property so that the replaced or modified
Intellectual Property becomes non-infringing provided that such replacement or
modification is functionally equivalent to the original licensed Intellectual
Property. If such remedies are not reasonably available, DHS shall be entitled
to a refund of all monies paid under this agreement, without restriction or
limitation of any other rights and remedies available at law or in equity.

 

  (3)

Contractor agrees that damages alone would be inadequate to compensate DHS for
breach of any term of this Intellectual Property Exhibit by Contractor.
Contractor acknowledges DHS would suffer irreparable harm in the event of such
breach and agrees DHS shall be entitled to

 

Page 13 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

 

obtain equitable relief, including without limitation an injunction, from a
court of competent jurisdiction, without restriction or limitation of any other
rights and remedies available at law or in equity.

 

  h. Federal Funding

 

In any agreement funded in whole or in part by the federal government, DHS may
acquire and maintain the Intellectual Property rights, title, and ownership,
which results directly or indirectly from the agreement; except as provided in
37 Code of Federal Regulations part 401.14; however, the federal government
shall have a non-exclusive, nontransferable, irrevocable, paid-up license
throughout the world to use, duplicate, or dispose of such Intellectual Property
throughout the world in any manner for governmental purposes and to have and
permit others to do so.

 

  i. Survival

 

The provisions set forth herein shall survive any termination or expiration of
this agreement or any project schedule.

 

11. Air or Water Pollution Requirements

 

Any federally funded agreement and/or subcontract in excess of $100,000 must
comply with the following provisions unless said agreement is exempt under 40
CFR 15.5.

 

  a. Government contractors agree to comply with all applicable standards,
orders, or requirements issued under section 306 of the Clean Air Act [42 U.S.C.
1857(h)], section 508 of the Clean Water Act (33 U.S.C. 1368), Executive Order
11738, and Environmental Protection Agency regulations (40 CFR part 15).

 

  b. Institutions of higher education, hospitals, nonprofit organizations and
commercial businesses agree to comply with all applicable standards, orders, or
requirements issued under the Clean Air Act (42 U.S.C. 7401 et seq.), as
amended, and the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.),
as amended.

 

12. Prior Approval of Training Seminars, Workshops or Conferences

 

Contractor shall obtain prior DHS approval of the location, costs, dates,
agenda, instructors, instructional materials, and attendees at any reimbursable
training seminar, workshop, or conference conducted pursuant to this contract
and of any reimbursable publicity or educational materials to be made available
for distribution. The Contractor shall acknowledge the support of the State
whenever publicizing the work under this agreement in any media. This provision
does not apply to necessary staff meetings or training sessions held for the
staff of the Contractor or Subcontractor to conduct routine business matters.

 

13. Confidentiality of Information

 

  a. The Contractor and its employees, agents, or subcontractors shall protect
from unauthorized disclosure names and other identifying information concerning
persons either receiving services pursuant to this agreement or persons whose
names or identifying information become available or are disclosed to the
Contractor, its employees, agents, or subcontractors as a result of services
performed under this agreement, except for statistical information not
identifying any such person.

 

  b. The Contractor and its employees, agents, or subcontractors shall not use
such identifying information for any purpose other than carrying out the
Contractor’s obligations under this agreement.

 

  c. The Contractor and its employees, agents, or subcontractors shall promptly
transmit to the DHS program contract manager all requests for disclosure of such
identifying information not emanating from the client or person.

 

Page 14 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

  d. The Contractor shall not disclose, except as otherwise specifically
permitted by this agreement or authorized by the client, any such identifying
information to anyone other than DHS without prior written authorization from
the DHS program contract manager.

 

  e. For purposes of this provision, identity shall include, but not be limited
to name, identifying number, symbol, or other identifying particular assigned to
the individual, such as finger or voice print or a photograph.

 

14. Documents, Publications and Written Reports

 

(Applicable to agreements over $5,000 under which publications, written reports
and documents are developed or produced. Government Code Section 7550.)

 

Any document, publication or written report (excluding progress reports,
financial reports and normal contract communications) prepared as a requirement
of this agreement shall contain, in a separate section preceding the main body
of the document, the number and dollar amounts of all contracts and subcontracts
relating to the preparation of such document or report, if the total cost for
work by nonemployees of the State exceeds $5,000.

 

15. Dispute Resolution Process

 

  a. A Contractor grievance exists whenever the Contract believes there is a
dispute arising from DHS’ action in the administration of an agreement. If the
Contractor believes there is a dispute or grievance between the Contractor and
DHS, both parties shall follow the procedure outlined below.

 

  (1) The Contractor should first discuss the problem informally with the DHS
program contract manager. If the problem cannot be resolved at this stage, the
Contractor shall direct its grievance together with any evidence, in writing, to
the program Branch Chief. The grievance shall state the issues in dispute, the
legal authority or other basis for the Contractor’s position and the remedy
sought. The Branch Chief shall make a determination on the problem within ten
(10) working days after receipt of the written communication from the
Contractor. The Branch Chief shall respond in writing to the Contractor
indicating the decision and reasons therefore. Should the Contractor disagree
with the Branch Chief’s decision, the Contractor may appeal to the second level.

 

  (2) The Contractor must prepare a letter indicating the reasons for
disagreement with Branch Chief’s decision. The Contractor shall include with the
letter a copy of the Contractor’s original statement of dispute with any
supporting documents and a copy of the Branch Chief’s response. This letter
shall be sent to the Deputy Director of the division in which the branch is
organized within ten (10) working days from receipt of the Branch Chief’s
decision. The Deputy Director of the division funding this agreement or his/her
designee shall meet with the Contractor to review the issues raised. A written
decision signed by the Deputy Director of the division funding this agreement or
his/her designee shall be returned to the Contractor within twenty (20) working
days of receipt of the Contractor’s letter.

 

  b. If the Contractor wishes to appeal the decision of the Deputy Director of
the division funding this agreement or his/her designee, the Contractor shall
follow the procedures set forth in Division 25.1 (commencing with Section 38050)
of the Health and Safety Code and the regulations adopted thereunder. (Title 1,
Subchapter 2.5, commencing with Section 251, California Code of Regulations.)

 

  c. Disputes arising out of an audit, examination of an agreement or other
action not covered by subdivision (a) of Section 20204, of Chapter 2.1, Title
22, of the California Code of Regulations, and for which no procedures for
appeal are provided in statute, regulation or the agreement, shall be handled in
accordance with the procedures identified in Sections 51016 through 51047, Title
22, California Code of Regulations.

 

  d. Unless otherwise stipulated by DHS, dispute, grievance and/or appeal
correspondence shall be directed to the DHS program contract manager.

 

Page 15 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

16. Financial and Compliance Audit Requirements

 

  a. The definitions used in this provision are contained in Section 38040 of
the Health and Safety Code, which by this reference is made a part hereof.

 

  b. Direct service contract means a contract for services contained in local
assistance or subvention programs or both (see Health and Safety [H&S] Code
section 38020). Direct service contracts shall not include contracts, grants, or
subventions to other governmental agencies or units of government nor contracts
with regional centers or area agencies on aging (H&S Code section 38030).

 

  c. The Contractor, as indicated below, agrees to obtain one of the following
audits:

 

  (1) If the Contractor is a nonprofit organization (as defined in H&S Code
section 38040) and receives $25,000 or more from any State agency under a direct
service contract; the Contractor agrees to obtain an annual single, organization
wide, financial and compliance audit. Said audit shall be conducted according to
Generally Accepted Auditing Standards. This audit does not fulfill the audit
requirements of Paragraph c(3) below. The audit shall be completed by the 15th
day of the fifth month following the end of the Contractor’s fiscal year, and/or

 

  (2) If the Contractor is a nonprofit organization (as defined in H&S Code
section 38040) and receives less than $25,000 per year from any State agency
under a direct service contract, the Contractor agrees to obtain a biennial
single, organization wide financial and compliance audit, unless there is
evidence of fraud or other violation of state law in connection with this
agreement. This audit does not fulfill the audit requirements of Paragraph c(3)
below. The audit shall be completed by the 15th day of the fifth month following
the end of the Contractor’s fiscal year, and/or

 

  (3) If the Contractor is a State or Local Government entity or Nonprofit
organization (as defined by the Federal Office of Management and Budget [OMB]
Circular A-133) and expends $300,000 or more in Federal awards, the Contractor
agrees to obtain an annual single, organization wide, financial and compliance
audit according to the requirements specified in OMB Circular A-133 entitled
“Audits of States, Local Governments, and Non-Profit Organizations”. An audit
conducted pursuant to this provision will fulfill the audit requirements
outlined in Paragraphs c(1) and c(2) above. The audit shall be completed by the
end of the ninth month following the end of the audit period. The requirements
of this provision apply if:

 

  (a) The Contractor is a recipient expending Federal awards received directly
from Federal awarding agencies, or

 

  (b) The Contractor is a subrecipient expending Federal awards received from a
pass-through entity such as the State, County or community based organization.

 

  (4) If the Contractor submits to DHS a report of an audit other than an OMB
A-133 audit, the Contractor must also submit a certification indicating the
Contractor has not expended $300,000 or more in federal funds for the year
covered by the audit report.

 

  d. Two copies of the audit report shall be delivered to the DHS program
funding this agreement. The audit report must identify the Contractor’s legal
name and the number assigned to this agreement. The audit report shall be due
within 30 days after the completion of the audit. Upon receipt of said audit
report, the DHS program contract manager shall forward the audit report to DHS’
Audits and Investigations Unit.

 

  e. The cost of the audits described herein may be included in the funding for
this agreement up to the proportionate amount this agreement represents of the
Contractor’s total revenue. The DHS program funding this agreement must provide
advance written approval of the specific amount allowed for said audit expenses.

 

Page 16 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

  f. The State or its authorized designee, including the Bureau of State Audits,
is responsible for conducting agreement performance audits which are not
financial and compliance audits. Performance audits are defined by Generally
Accepted Government Auditing Standards.

 

  g. Nothing in this agreement limits the State’s responsibility or authority to
enforce State law or regulations, procedures, or reporting requirements arising
thereto.

 

  h. Nothing in this provision limits the authority of the State to make audits
of this agreement, provided however, that if independent audits arranged for by
the Contractor meet Generally Accepted Governmental Auditing Standards, the
State shall rely on those audits and any additional audit work and shall build
upon the work already done.

 

  i. The State may, at its option, direct its own auditors to perform either of
the audits described above. The Contractor will be given advance written
notification, if the State chooses to exercise its option to perform said
audits.

 

  j. The Contractor shall include a clause in any agreement the Contractor
enters into with the audit firm doing the single organization wide audit to
provide access by the State or Federal Government to the working papers of the
independent auditor who prepares the single organization wide audit for the
Contractor.

 

  k. Federal or state auditors shall have “expanded scope auditing” authority to
conduct specific program audits during the same period in which a single
organization wide audit is being performed, but the audit report has not been
issued. The federal or state auditors shall review and have access to the
current audit work being conducted and will not apply any testing or review
procedures which have not been satisfied by previous audit work that has been
completed.

 

The term “expanded scope auditing” is applied and defined in the U.S. General
Accounting Office (GAO) issued Standards for Audit of Government Organizations,
Programs, Activities and Functions, better known as the “yellow book”.

 

17. Human Subjects Use Requirements

 

(Applicable only to federally funded agreements/grants in which performance,
directly or through a subcontract/subaward, includes any tests or examination of
materials derived from the human body.)

 

By signing this agreement, Contractor agrees that if any performance under this
agreement or any subcontract or subagreement includes any tests or examination
of materials derived from the human body for the purpose of providing
information, diagnosis, prevention, treatment or assessment of disease,
impairment, or health of a human being, all locations at which such examinations
are performed shall meet the requirements of 42 U.S.C. Section 263a (CLIA) and
the regulations thereunder.

 

18. Novation Requirements

 

If the Contractor proposes any novation agreement, DHS shall act upon the
proposal within 60 days after receipt of the written proposal. DHS may review
and consider the proposal, consult and negotiate with the Contractor, and accept
or reject all or part of the proposal. Acceptance or rejection of the proposal
may be made orally within the 60-day period and confirmed in writing within five
days of said decision. Upon written acceptance of the proposal, DHS will
initiate an amendment to this agreement to formally implement the approved
proposal.

 

19. Debarment and Suspension Certification

 

(Applicable to all agreements funded in part or whole with federal funds.)

 

  a. By signing this agreement, the Contractor/Grantee agrees to comply with
applicable federal suspension and debarment regulations including, but not
limited to 7 CFR Part 3017, 45 CFR 76, 40 CFR 32 or 34 CFR 85.

 

Page 17 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

  b. By signing this agreement, the Contractor certifies to the best of its
knowledge and belief, that it and its principals:

 

  (1) Are not presently debarred, suspended, proposed for debarment, declared
ineligible, or voluntarily excluded by any federal department or agency;

 

  (2) Have not within a three-year period preceding this
application/proposal/agreement been convicted of or had a civil judgment
rendered against them for commission of fraud or a criminal offense in
connection with obtaining, attempting to obtain, or performing a public
(Federal, State or local) transaction or contract under a public transaction;
violation of Federal or State antitrust statutes or commission of embezzlement,
theft, forgery, bribery, falsification or destruction of records, making false
statements, or receiving stolen property;

 

  (3) Are not presently indicted for or otherwise criminally or civilly charged
by a governmental entity (Federal, State or local) with commission of any of the
offenses enumerated in Paragraph b(2) herein; and

 

  (4) Have not within a three-year period preceding this
application/proposal/agreement had one or more public transactions (Federal,
State or local) terminated for cause or default.

 

  (5) Shall not knowingly enter into any lower tier covered transaction with a
person who is proposed for debarment under federal regulations (i.e., 48 CFR
part 9, subpart 9.4), debarred, suspended, declared ineligible, or voluntarily
excluded from participation in such transaction, unless authorized by the State.

 

  (6) Will include a clause entitled, “Debarment and Suspension Certification”
that essentially sets forth the provisions herein, in all lower tier covered
transactions and in all solicitations for lower tier covered transactions.

 

  c. If the Contractor is unable to certify to any of the statements in this
certification, the Contractor shall submit an explanation to the DHS program
funding this contract.

 

  d. The terms and definitions herein have the meanings set out in the
Definitions and Coverage sections of the rules implementing Federal Executive
Order 12549.

 

  e. If the Contractor knowingly violates this certification, in addition to
other remedies available to the Federal Government, the DHS may terminate this
agreement for cause or default.

 

20. Smoke-Free Workplace Certification

 

(Applicable to federally funded agreements/grants and subcontracts/subawards,
that provide health, day care, early childhood development services, education
or library services to children under 18 directly or through local governments.)

 

  a. Public Law 103-227, also known as the Pro-children Act of 1994 (Act),
requires that smoking not be permitted in any portion of any indoor facility
owned or leased or contracted for by an entity and used routinely or regularly
for the provision of health, day care, early childhood development services,
education or library services to children under the age of 18, if the services
are funded by federal programs either directly or through state or local
governments, by federal grant, contract, loan, or loan guarantee. The law also
applies to children’s services that are provided in indoor facilities that are
constructed, operated, or maintained with such federal funds. The law does not
apply to children’s services provided in private residences; portions of
facilities used for inpatient drug or alcohol treatment; service providers whose
sole source of applicable federal funds is Medicare or Medicaid; or facilities
where WIC coupons are redeemed.

 

  b. Failure to comply with the provisions of the law may result in the
imposition of a civil monetary penalty of up to $1,000 for each violation and/or
the imposition of an administrative compliance order on the responsible party.

 

Page 18 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

  c. By signing this agreement, Contractor or Grantee certifies that it will
comply with the requirements of the Act and will not allow smoking within any
portion of any indoor facility used for the provision of services for children
as defined by the Act. The prohibitions herein are effective December 26, 1994.

 

  d. Contractor or Grantee further agrees that it will insert this certification
into any subawards (subcontracts or subgrants) entered into that provide for
children’s services as described in the Act.

 

21. Covenant Against Contingent Fees

 

(Applicable only to federally funded agreements.)

 

The Contractor warrants that no person or selling agency has been employed or
retained to solicit/secure this agreement upon an agreement of understanding for
a commission, percentage, brokerage, or contingent fee, except bona fide
employees or bona fide established commercial or selling agencies retained by
the Contractor for the purpose of securing business. For breach or violation of
this warranty, DHS shall have the right to annul this agreement without
liability or in its discretion to deduct from the agreement price or
consideration, or otherwise recover, the full amount of such commission,
percentage, and brokerage or contingent fee.

 

22. Payment Withholds

 

(Applicable only if a final report is required by this agreement. Not applicable
to government entities.)

 

Unless waived or otherwise stipulated in this contract, DHS may, at its
discretion, withhold 10 percent (10%) of the face amount of the agreement, 50
percent (50%) of the final invoice, or $3,000 whichever is greater, until DHS
receives a final report that meets the terms, conditions and/or scope of work
requirements of this agreement.

 

23. Performance Evaluation

 

(Not applicable to grant agreements.)

 

DHS may, at its discretion, evaluate the performance of the Contractor at the
conclusion of this agreement. If performance is evaluated, the evaluation shall
not be a public record and shall remain on file with DHS. Negative performance
evaluations may be considered by DHS prior to making future contract awards.

 

24. Officials Not to Benefit

 

No members of or delegate of Congress or the State Legislature shall be admitted
to any share or part of this agreement, or to any benefit that may arise
therefrom. This provision shall not be construed to extend to this agreement if
made with a corporation for its general benefits.

 

25. Year 2000 Compliance

 

(Applicable to agreements in which Information Technology (IT) services are
provided to DHS or if IT equipment is procured.)

 

The Contractor warrants and represents that the goods or services sold, leased,
or licensed to the State of California, its agencies, or its political
subdivisions, pursuant to this agreement are “Year 2000 Compliant.” For the
purposes of this agreement, a good or services is Year 2000 compliant if it will
continue to fully function before, at, and after the Year 2000 without
interruption and, if applicable, with full ability to accurately and
unambiguously process, display, compare, calculate, manipulate, and otherwise
utilize date information. This warranty and representation supersedes all
warranty disclaimers and limitations and all limitations on liability provided
by or through the Contractor.

 

Page 19 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

26. Prohibited Use of State Funds for Software

 

(Applicable to agreements in which computer software is used in performance of
the work.)

 

Contractor certifies that it has appropriate systems and controls in place to
ensure that state funds will not be used in the performance of this agreement
for the acquisition, operation or maintenance of computer software in violation
of copyright laws.

 

27. University of California Mutual Indemnification

 

(Applicable only to agreements entered with the Regents of the University of
California or a University of California campus under its jurisdiction.)

 

  a. The State and the Regents of the University of California shall mutually
defend, indemnify and hold each other and their respective agencies, officers,
employees, and agents harmless from and against any and all liability, loss,
expense, attorneys’ fees, or claims for injury or damages arising out of the
performance of this contract but only in proportion to and to the extent such
liability, loss, expense, attorneys’ fees, or claims for injury or damages are
caused by or result from the negligent or intentional acts or omissions of
either the State or the Regents of the University of California.

 

  b. It should be expressly understood that the obligations hereunder shall be
conditioned upon this contract being one that falls within the purview of
Section 895 of the Government Code.

 

28. Use of Small, Minority Owned and Women’s Businesses

 

(Applicable to that portion of an agreement that is federally funded and entered
into with institutions of higher education, hospitals, nonprofit organizations
or commercial businesses.)

 

Positive efforts shall be made to use small businesses, minority-owned firms and
women’s business enterprises, whenever possible (i.e., procurement of goods
and/or services). Contractors shall take all of the following steps to further
this goal.

 

  (1) Ensure that small businesses, minority-owned firms, and women’s business
enterprises are used to the fullest extent practicable.

 

  (2) Make information on forthcoming purchasing and contracting opportunities
available and arrange time frames for purchases and contracts to encourage and
facilitate participation by small businesses, minority-owned firms, and women’s
business enterprises.

 

  (3) Consider in the contract process whether firms competing for larger
contracts intend to subcontract with small businesses, minority-owned firms, and
women’s business enterprises.

 

  (4) Encourage contracting with consortiums of small businesses, minority-owned
firms and women’s business enterprises when a contract is too large for one of
these firms to handle individually.

 

  (5) Use the services and assistance, as appropriate, of such organizations as
the Federal Small Business Administration and the U.S. Department of Commerce’s
Minority Business Development Agency in the solicitation and utilization of
small businesses, minority-owned firms and women’s business enterprises.

 

29. Alien Ineligibility Certification

 

(Applicable to sole proprietors entering federally funded agreements.)

 

By signing this agreement, the Contractor certifies that he/she is not an alien
that is ineligible for state and local benefits, as defined in Subtitle B of the
Personal Responsibility and Work Opportunity Act. (8 U.S.C. 1601, et seq.)

 

Page 20 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

30. Union Organizing

 

(Applicable only to grant agreements.)

 

Grantee, by signing this agreement, hereby acknowledges the applicability of
Government Code 16645 through 16649 to this agreement. Furthermore, Grantee, by
signing this agreement, hereby certifies that:

 

  a. No state funds disbursed by this grant will be used to assist, promote or
deter union organizing.

 

  b. Grantee shall account for state funds disbursed for a specific expenditure
by this grant, to show those funds were allocated to that expenditure.

 

  c. Grantee shall, where state funds are not designated as described in b
herein, allocate, on a pro-rata basis, all disbursements that support the grant
program.

 

  d. If Grantee makes expenditures to assist, promote or deter union organizing,
Grantee will maintain records sufficient to show that no state funds were used
for those expenditures, and that Grantee shall provide those records to the
Attorney General upon request.

 

31. Contract Uniformity (Fringe Benefit Allowability)

 

(Applicable only to nonprofit organizations.)

 

Pursuant to the provisions of Article 7 (commencing with Section 100525) of
Chapter 3 of Part 1 of Division 101 of the Health and Safety Code, DHS sets
forth the following policies, procedures, and guidelines regarding the
reimbursement of fringe benefits.

 

  a. As used herein fringe benefits shall mean an employment benefit given by
one’s employer to an employee in addition to one’s regular or normal wages or
salary.

 

  b. As used herein, fringe benefits do not include:

 

  (1) Compensation for personal services paid currently or accrued by the
Contractor for services of employees rendered during the term of this agreement,
which is identified as regular or normal salaries and wages, annual leave,
vacation, sick leave, holidays, jury duty and/or military leave/training.

 

  (2) Director’s and executive committee member’s fees.

 

  (3) Incentive awards and/or bonus incentive pay.

 

  (4) Allowances for off-site pay.

 

  (5) Location allowances.

 

  (6) Hardship pay.

 

  (7) Cost-of-living differentials

 

  c. Specific allowable fringe benefits include:

 

  (1) Fringe benefits in the form of employer contributions for the employer’s
portion of payroll taxes (i.e., FICA, SUI, SDI), employee health plans (i.e.,
health, dental and vision), unemployment insurance, worker’s compensation
insurance, and the employer’s share of pension/retirement plans, provided they
are granted in accordance with established written organization policies and
meet all legal and Internal Revenue Service requirements.

 

  d. To be an allowable fringe benefit, the cost must meet the following
criteria:

 

  (1) Be necessary and reasonable for the performance of the agreement.

 

  (2) Be determined in accordance with generally accepted accounting principles.

 

  (3) Be consistent with policies that apply uniformly to all activities of the
Contractor.

 

  e. Contractor agrees that all fringe benefits shall be at actual cost.

 

Page 21 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

  f. Earned/Accrued Compensation

 

  (1) Compensation for vacation, sick leave and holidays is limited to that
amount earned/accrued within the agreement term. Unused vacation, sick leave and
holidays earned from periods prior to the agreement term cannot be claimed as
allowable costs. See Provision f (3)(a) for an example.

 

  (2) For multiple year contracts, vacation and sick leave compensation, which
is earned/accrued but not paid, due to employee(s) not taking time off may be
carried over and claimed within the overall term of the multiple years of the
agreement. Holidays cannot be carried over from one contract year to the next.
See Provision f (3)(b) for an example.

 

  (3) For single year agreements, vacation, sick leave and holiday compensation
that is earned/accrued but not paid, due to employee(s) not taking time off
within the term of the agreement, cannot be claimed as an allowable cost. See
Provision f (3)(c) for an example.

 

  (a) Example No. 1:

 

If an employee, John Doe, earns/accrues three weeks of vacation and twelve days
of sick leave each year, then that is the maximum amount that may be claimed
during a contract period of one year. If John Doe has five weeks of vacation and
eighteen days of sick leave at the beginning of the agreement, the Contractor
during a one-year agreement term may only claim up to three weeks of vacation
and twelve days of sick leave actually used by the employee. Amounts
earned/accrued in periods prior to the beginning of the agreement are not an
allowable cost.

 

  (b) Example No. 2:

 

If during a three-year (multiple year) agreement, John Doe does not use his
three weeks of vacation in year one, or his three weeks in year two, but he does
actually use nine weeks in year three; the Contractor would be allowed to claim
all nine weeks paid for in year three. The total compensation over the
three-year period cannot exceed 156 weeks (3 x 52 weeks).

 

  (c) Example No. 3:

 

If during a single year agreement, John Doe works fifty weeks and used one week
of vacation and one week of sick leave and all fifty-two weeks have been billed
to DHS, the remaining unused two weeks of vacation and seven days of sick leave
may not be claimed as an allowable cost.

 

32. Lobbying Restrictions and Disclosure Certification

 

(Applicable to federally funded contracts in excess of $100,000 per Section 1352
of the 31, U.S.C.)

 

  a. Certification and Disclosure Requirements

 

  (1) Each person (or recipient) who requests or receives a contract,
subcontract, grant, or subgrant, which is subject to Section 1352 of the 31,
U.S.C, and which exceeds $100,000 at any tier, shall file a certification (in
the form set forth in Attachment 1, consisting of one page, entitled
“Certification Regarding Lobbying”) that the recipient has not made, and will
not make, any payment prohibited by Paragraph b of this provision.

 

  (2) Each recipient shall file a disclosure (in the form set forth in
Attachment 2, entitled “Standard Form-LLL ‘disclosure of Lobbying Activities’”)
if such recipient has made or has agreed to make any payment using
nonappropriated funds (to include profits from any covered federal action) in
connection with a contract or grant or any extension or amendment of that
contract or grant, which would be prohibited under Paragraph b of this provision
if paid for with appropriated funds.

 

Page 22 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

  (3) Each recipient shall file a disclosure form at the end of each calendar
quarter in which there occurs any event that requires disclosure or that
materially affect the accuracy of the information contained in any disclosure
form previously filed by such person under Paragraph a(2) herein. An event that
materially affects the accuracy of the information reported includes:

 

  (a) A cumulative increase of $25,000 or more in the amount paid or expected to
be paid for influencing or attempting to influence a covered federal action;

 

  (b) A change in the person(s) or individuals(s) influencing or attempting to
influence a covered federal action; or

 

  (c) A change in the officer(s), employee(s), or member(s) contacted for the
purpose of influencing or attempting to influence a covered federal action.

 

  (4) Each person (or recipient) who requests or receives from a person referred
to in Paragraph a(1) of this provision a contract, subcontract, grant or
subgrant exceeding $100,000 at any tier under a contract or grant shall file a
certification, and a disclosure form, if required, to the next tier above.

 

  (5) All disclosure forms (but not certifications) shall be forwarded from tier
to tier until received by the person referred to in Paragraph a(1) of this
provision. That person shall forward all disclosure forms to DHS program
contract manager.

 

  b. Prohibition

 

Section 1352 of Title 31, U.S.C., provides in part that no appropriated funds
may be expended by the recipient of a federal contract, grant, loan, or
cooperative agreement to pay any person for influencing or attempting to
influence an officer or employee of any agency, a Member of Congress, an officer
or employee of Congress, or an employee of a Member of Congress in connection
with any of the following covered federal actions: the awarding of any federal
contract, the making of any federal grant, the making of any federal loan,
entering into of any cooperative agreement, and the extension, continuation,
renewal, amendment, or modification of any federal contract, grant, loan, or
cooperative agreement.

 

Page 23 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

Attachment 1

 

STATE OF CALIFORNIA

DEPARTMENT OF HEALTH SERVICES

 

CERTIFICATION REGARDING LOBBYING

 

The undersigned certifies, to the best of his or her knowledge and belief, that:

 

(1) No Federal appropriated funds have been paid or will be paid, by or on
behalf of the undersigned, to any person for influencing or attempting to
influence an officer or employee of an agency, a Member of Congress, an officer
or employee of Congress, or an employee of a Member of Congress in connection
with the making, awarding or entering into of this Federal contract, Federal
grant, or cooperative agreement, and the extension, continuation, renewal,
amendment, or modification of this Federal contract, grant, or cooperative
agreement.

 

(2) If any funds other than Federal appropriated funds have been paid or will be
paid to any person for influencing or attempting to influence an officer or
employee of any agency of the United States Government, a Member of Congress, an
officer or employee of Congress, or an employee of a Member of Congress in
connection with this Federal contract, grant, or cooperative agreement, the
undersigned shall complete and submit Standard Form LLL, “Disclosure of Lobbying
Activities” in accordance with its instructions.

 

(3) The undersigned shall require that the language of this certification be
included in the award documents for all subawards at all tiers (including
subcontractors, subgrants, and contracts under grants and cooperative
agreements) of $100,000 or more, and that all subrecipients shall certify and
disclose accordingly.

 

This certification is a material representation of fact upon which reliance was
placed when this transaction was made or entered into. Submission of this
certification is a prerequisite for making or entering into this transaction
imposed by Section 1352, Title 31, U.S.C., any person who fails to file the
required certification shall be subject to a civil penalty of not less than
$10,000 and not more than $100,000 for each such failure.

 

           

--------------------------------------------------------------------------------

     

--------------------------------------------------------------------------------

Name of Contractor       Printed Name of Person Signing for Contractor         
  

--------------------------------------------------------------------------------

     

--------------------------------------------------------------------------------

Contract / Grant Number       Signature of Person Signing for Contractor       
    

--------------------------------------------------------------------------------

     

--------------------------------------------------------------------------------

Date       Title

 

After execution by or on behalf of Contractor, please return to:

 

Department of Health Services

(Name of the DHS program providing the funds)

P.O. Box 942732

714 P Street

Sacramento, CA 94234-7320

 

Page 24 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

Attachment 2

 

Approved by OMB

 

0348-0046

 

CERTIFICATION REGARDING LOBBYING

Complete this form to disclose lobbying activities pursuant to 31 U.S.C. 1352

(See reverse for public burden disclosure)

 

1.      Type of Federal Action:

¨      a.      contract

b.      grant

c.      cooperative agreement

d.      loan

e.      loan guarantee

f.       loan insurance

  

2.      Status of Federal Action:

¨      a.      bid/offer/application

b.      initial award

c.      post-award

  

3.      Report Type:

¨      a.      initial filing

b.      material change

For Material Change Only:

 

Year          quarter                 

date of last report                 

 

4.      Name and Address of Reporting Entity:

 

¨        Prime                         ¨ Subawardee

                              Tier                         , If known:

 

5.      If Reporting Entity in No. 4 is Subawardee, Enter Name and Address of
Prime:

Congressional District, If known:   Congressional District, If known:

6.      Federal Department/Agency:

 

7.      Federal Program Name/Description:

 

CDFA Number, if applicable:                                              

8.      Federal Action Number, if known:

 

9.      Award Amount, if known:

10.    a.      Name and Address of Lobbying Entity

(If individual, last name, first name, MI):

 

b.      Name and Address of Lobbying Entity

(If individual, last name, first name, MI):

(attach Continuation Sheets(s) SF-LLL-A, If necessary)

11.    Amount of Payment (check all that apply):

 

$                              ¨ actual ¨ planned

 

13.    Type of Payment (check all that apply):

 

¨ a. retainer

¨ b. one-time fee

¨ c. commission

¨ d. contingent fee

¨ e. deferred

¨ f. other, specify:                                              

12.    Form of Payment (check all that apply):

 

¨ a. cash

¨ b. in-kind, specify:    Nature                                 
               

 

          Value                                                 

 

14.    Brief Description of Services Performed or to be Performed and Dates(s)
of Service, including Officer(s), Employee(s), or Member(s) Contracted for
Payment indicated in item 11:

 

(Attach Continuation Sheet(s) SF-LLL-A, If necessary)

15.    Continuation Sheet(s) SF-LLL-A Attached: ¨ Yes ¨ No

16.    Information requested through this form is authorized by Title 31,
U.S.C., Section 1352. This disclosure of lobbying activities is a material
representation of fact upon which reliance was placed by the tier above when
this transaction was made or entered into. This disclosure is required pursuant
to Title 31, U.S.C., Section 1352. This information will be reported to the
Congress semiannually and will be available for public inspection. Any person
who fails to file the required disclosure shall be subject to a civil penalty of
not less than $19,000 and not more than $100,000 for each such failure.

 

Signature:                                     
                                                                     

 

Print Name:                                       
                                                               

 

Title:                                     
                                                                              

 

Telephone No.:                                          
Date:                                           

Federal Use Only  

Authorized for Local Reproduction

Standard Form-LLL

 

Page 25 of 26

--------------------------------------------------------------------------------

California Department of Health Services - Special Terms and Conditions  
Exhibit D(F)

 

INSTRUCTIONS FOR COMPLETION OF SF-LLL, DISCLOSURE OF LOBBYING ACTIVITIES

 

This disclosure form shall be completed by the reporting entity, whether
subawardee or prime federal recipients at the initiation or receipt of a covered
federal action, or a material change to a previous filing, pursuant to Title 31,
U.S.C., Section 1352. The filing of a form is required for each payment or
agreement to make payment to any lobbying entity for influencing or attempting
to influence an officer or employee of any agency, a Member of Congress, an
officer or employee of Congress, or an employee of a Member of Congress in
connection with a covered federal action. Use the SF - LLL-A Continuation Sheet
for additional information if the space on the form is inadequate. Complete all
items that apply for both the initial filing and material change report. Refer
to the implementing guidance published by the Office of Management and Budget
for additional information.

 

1. Identify the type of covered federal action for which lobbying activity is
and/or has been secured to influence the outcome of a covered federal action.

 

2. Identify the status of the covered federal action.

 

3. Identify the appropriate classification of this report. If this is a
follow-up report caused by a material change to the information previously
reported, enter the year and quarter in which the change occurred. Enter the
date of the last previously submitted report by this reporting entity for this
covered federal action.

 

4. Enter the full name, address, city, state, and ZIP code of the reporting
entity. Include Congressional District, if known. Check the appropriate
classification of the reporting entity that designates if it is, or expects to
be, a prime or subaward recipient. Identify the tier of the subawardee, e.g.,
the first subawardee of the prime is the 1st tier. Subawards include but are not
limited to subcontracts, subgrants, and contract awards under grants.

 

5. If the organization filing the report in Item 4 checks “Subawardee,” then
enter the full name, address, city, state, and ZIP code of the prime federal
recipient. Include Congressional District, if known.

 

6. Enter the name of the federal agency making the award or loan commitment.
Include at least one organizational level below agency name, if known. For
example, Department of Transportation United States Coast Guard.

 

7. Enter the federal program name or description for the covered federal action
(Item 1). If known, enter the full Catalog of Federal Domestic Assistance (CDFA)
number for grants, cooperative agreements, loans, and loan commitments.

 

8. Enter the most appropriate federal identifying number available for the
federal action identified in Item 1 (e.g., Request for Proposal (RFP) number;
Invitation for Bid (IFB) number; grant announcement number; the contract grant,
or loan award number; the application/proposal control number assigned by the
federal agency). Include prefixes, e.g., “RFP-DE-90401.”

 

9. For a covered federal action where there has been an award or loan commitment
by the federal agency, enter the federal amount of the award/loan commitment for
the prime entity identified in Item 4 or 5.

 

10.    (a)  Enter the full name, address, city, state, and ZIP code of the
lobbying entity engaged by the reporting entity identified in Item 4 to
influence the covered federal action.

 

10.    (b)  Enter the full names of the Individual(s) performing services and
include full address if different from 10.(a). Enter last name, first name, and
middle initial (MI).

 

11. Enter the amount of compensation paid or reasonably expected to be paid by
the reporting entity (Item 4) to the lobbying entity (Item 10). Indicate whether
the payment has been made (actual) or will be made (planned). Check all boxes
that apply. If this is a material change report, enter the cumulative amount of
payment made or planned to be made.

 

12. Check the appropriate box(es). Check all boxes that apply. If payment is
made through an in-kind contribution, specify the nature and value of the
in-kind payment.

 

13. Check the appropriate box(es). Check all boxes that apply. If other, specify
nature.

 

14. Provide a specific and detailed description of the services that the
lobbyist has performed, or will be expected to perform, and the date(s) of any
services rendered. Include all preparatory and related activity, not just time
spent in actual contact with federal officials, identify the federal official(s)
or employee(s) contacted or the officers), employee(s), or Member(s) of Congress
that were contacted.

 

15. Check whether or not a SF-LLL-A Continuation Sheet(s) is attached.

 

16. The certifying official shall sign and date the form, print his/her name,
title, and telephone number.

 

Public reporting burden for this collection of information is estimated to
average 30 minutes per response, including time for reviewing instruction,
searching existing data sources, gathering and maintaining the data needed, and
completing and renewing the collection of information. Send comments regarding
the burden estimate or any other aspect of this collection of information,
including suggestions for reducing this burden to the Office of Management and
Budget, Paperwork Reduction Project, (0348-0046), Washington, DC 20503.

 

Page 26 of 26

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Additional Provisions

 

1. Incorporated Exhibits

 

The following exhibits are attached, incorporated herein, and made a part hereof
by this reference:

 

1) Exhibit A –    Scope of Work    2 pages      Attachment 1 – Organization and
Administration of the Plan    4 pages      Attachment 2 – Financial Information
   3 pages      Attachment 3 – Management Information System    2 pages     
Attachment 4 – Quality Improvement System    11 pages      Attachment 5 –
Utilization Management    4 pages      Attachment 6 – Provider Network    8
pages      Attachment 7 – Provider Relations    2 pages      Attachment 8 –
Provider Compensation Arrangements    6 pages      Attachment 9 – Access and
Availability    9 pages      Attachment 10 – Scope of Services    14 pages     
Attachment 11 – Case Management and Coordination of Care    12 pages     
Attachment 12 – Local Health Department Coordination    3 pages      Attachment
13 – Member Services    11 pages      Attachment 14 – Member Grievance System   
2 pages      Attachment 15 – Marketing    5 pages      Attachment 16 –
Enrollments and Disenrollments    4 pages      Attachment 17 – Reporting
Requirements    2 pages 2) Exhibit B    Budget Detail and Payment Provisions   
14 pages 3) Exhibit C*    General Terms and Conditions    GTC 103
4) Exhibit D(F)   

Special Terms and Conditions

Notwithstanding provisions 2, 3, 4, 5, 6, 7, 10, 11, 12, 14, 15, 16, 22, 25, 27,
29, 30, and 31 which do not apply to this agreement.

   26 pages 5) Exhibit E    Additional Provisions    3 pages      Attachment 1 –
Definitions    16 pages      Attachment 2 – Program Terms and Conditions    29
pages      Attachment 3 – Duties of the State    7 pages 6) Exhibit F   
Contractor’s Release    1 page 7) Exhibit G    Health Insurance Portability and
Accountability Act    5 pages

 

Items shown above with an Asterisk (*), are hereby incorporated by reference and
made part of this agreement as if attached hereto. These documents can be viewed
at http://www.dgs.ca.gov/contracts.

 

Page 1 of 3

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Additional Provisions

 

2. Additional Provisions

 

  A. In the event of a conflict between the provisions of Exhibit E and any
other part of this Contract, the provisions of Exhibit E shall prevail.

 

  B. The following Attachments are incorporated herein and made a part hereof by
this reference:

 

Attachment 1: Definitions

 

Attachment 2: Program Terms and Conditions

 

  1) Governing Law

 

  2) Entire Agreement

 

  3) Amendment

 

  4) Change Requirements

 

  5) Delegation Of Authority

 

  6) Authority of the State

 

  7) Fulfillment of Obligations

 

  8) Obtaining DHS Approval

 

  9) Certifications

 

  10) Notices

 

  11) Term

 

  12) Service Area

 

  13) Contract Extension

 

  14) Termination for Cause and Other Terminations

 

  15) Phaseout Requirements

 

  16) Sanctions

 

  17) Liquidated Damages Provisions

 

  18) Disputes

 

  19) Audit

 

  20) Inspection Rights

 

  21) Confidentiality of Information

 

  22) Pilot Projects

 

  23) Cost Avoidance and Post-Payment Recovery of Other Health Coverage Sources
(OHCS)

 

  24) Third-Party Tort Liability

 

  25) Records Related To Recovery For Litigation

 

  26) Fraud and Abuse Reporting

 

  27) Equal Opportunity Employer

 

  28) Discrimination Prohibitions

 

  29) Americans With Disabilities Act Of 1990 Requirements

 

  30) Disabled Veteran Business Enterprises (DVBE)

 

  31) Word Usage

 

Page 2 of 3

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Additional Provisions

 

Attachment 3: Duties of the State

 

  1) Payment For Services

 

  2) Medical Reviews

 

  3) Enrollment Processing

 

  4) Disenrollment Processing

 

  5) Approval Process

 

  6) Program Information

 

  7) Catastrophic Coverage Limitation

 

  8) Risk Limitation

 

  9) Notice Of Termination Of Contract

 

Page 3 of 3

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Definitions

 

Attachment 1

 

As used in this Contract, unless otherwise expressly provided or the context
otherwise requires, the following definitions of terms will govern the
construction of this Contract:

 

1. Administrative Costs means only those costs that arise out of the operation
of the plan excluding direct and overhead costs incurred in the furnishing of
health care services, which would ordinarily be incurred in the provision of
these services whether or not through a plan.

 

2. Affiliate means an organization or person that directly or indirectly through
one or more intermediaries’ controls, or is controlled by, or is under control
with the Contractor and that provides services to, or receives services from,
the Contractor.

 

3. AIDS Beneficiary means a Member for whom a Diagnosis of Human
Immunodeficiency Virus/Acquired Immunodeficiency Syndrome (HIV/AIDS) has been
made by a treating Physician based on the definition most recently published in
the Mortality and Morbidity Report from the Centers for Disease Control and
Prevention.

 

4. Allied Health Personnel means specially trained, licensed, or credentialed
health workers other than Physicians, podiatrists and Nurses.

 

5. Ambulatory Care means the type of health services that are provided on an
outpatient basis.

 

6. Beneficiary Assignment means the act of Department of Health Services (DHS)
or DHS’ enrollment contractor of notifying a beneficiary in writing of the
health plan in which the beneficiary shall be enrolled if the beneficiary fails
to timely choose a health plan. If, at any time, the beneficiary notifies DHS or
DHS’ enrollment contractor of the beneficiary’s health plan choice, such choice
shall override the beneficiary assignment and be effective as provided in
Exhibit A, Attachment 16, provision 2.

 

7. Beneficiary Identification Card (BIC) means a permanent plastic card issued
by the State to Medi-Cal recipients which is used by Contractors and providers
to verify Medi-Cal eligibility and health plan enrollment.

 

8. California Children Services (CCS) means those services authorized by the CCS
program for the diagnosis and treatment of the CCS eligible conditions of a
specific Member.

 

9. California Children Services (CCS) Eligible Conditions means a physically
handicapping condition defined in Title 22, California Code of Regulations
(CCR), Section 41800.

 

Page 1 of 16

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Definitions

 

Attachment 1

 

10. California Children Services (CCS) Program means the public health program
which assures the delivery of specialized diagnostic, treatment, and therapy
services to financially and medically eligible children under the age of 21
years who have CCS eligible conditions.

 

11. Catastrophic Coverage Limitation means the date beyond which Contractor is
not at risk, as determined by the Director, to provide or make reimbursement for
illness of or injury to beneficiaries which results from or is greatly
aggravated by a catastrophic occurrence or disaster, including, but not limited
to, an act of war, declared or undeclared, and which occurs subsequent to
enrollment.

 

12. Claims and Eligibility Real-Time System (CERTS) means the mechanism for
verifying a recipient’s Medi-Cal or County Medical Services Program (CMSP)
eligibility by computer.

 

13. Comprehensive Medical Case Management Services means services provided by a
Primary Care Provider to ensure the coordination of Medically Necessary health
care services, the provision of preventive services in accordance with
established standards and periodicity schedules and the continuity of care for
Medi-Cal enrollees. It includes health risk assessment, treatment planning,
coordination, referral, follow-up, and monitoring of appropriate services and
resources required to meet an individual’s health care needs.

 

14. Confidential Information means specific facts or documents identified as
“confidential” by any law, regulations or contractual language.

 

15. Contract means this written agreement between DHS and the Contractor.

 

16. Contracting Providers means a Physician, Nurse, technician, teacher,
researcher, hospital, home health agency, nursing home, or any other individual
or institution that contracts with Contractor to provide medical services to
Members.

 

17. Corrective Actions means specific identifiable activities or undertakings of
the Contractor which address program deficiencies or problems.

 

18. Cost Avoid means Contractor requires a provider to bill all liable third
parties and receive payment or proof of denial of coverage from such third
parties prior to Contractor paying the provider for the services rendered.

 

Page 2 of 16

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Definitions

 

Attachment 1

 

19. County Department means the County Department of Social Services (DSS), or
other county agency responsible for determining the initial and continued
eligibility for the Medi-Cal program.

 

20. Covered Services means Medical Case Management and those services set forth
in Title 22, CCR, Division 3, Subdivision 1, Chapter 3, beginning with Section
51301, and Title 17, CCR, Chapter 4, Subchapter 13, Article 4, beginning with
Section 6840. Covered Services do not include:

 

  A. Services for major organ transplants as specified in Exhibit A, Attachment
11, provision 17.

 

  B. Long-term care services as specified in Exhibit A, Attachment 11, provision
17.

 

  C. Home and Community Based Services (HCBS) as specified in Exhibit A,
Attachment 11, provision 17 regarding Waiver Programs, and Department of
Developmental Services (DDS) Administered Medicaid Home and Community Based
Services Waiver. HCBS do not include any service that is available as an EPSDT
service, including EPSDT supplemental services, as described in Title 22, CCR,
Sections 51184, 51340 and 51340.1. EPSDT supplemental services are covered under
this Contract, as specified in Exhibit A, Attachment 10 regarding Early and
Periodic Screening, Diagnosis and Treatment (EPSDT) Supplemental Services.

 

  D. California Children Services (CCS) as specified in Exhibit A, Attachment
11, provision 8.

 

  E. Mental health services as specified in Exhibit A, Attachment 10, provision
7.

 

  F. Services provided by psychiatrists; psychologists; licensed clinical social
workers; marriage, family, and child counselors; or other specialty mental
health provider.

 

  G. Alcohol and substance abuse treatment services and outpatient heroin
detoxification as specified in Exhibit A, Attachment 11, provision 6.

 

  H. Fabrication of optical lenses as specified in Exhibit A, Attachment 10,
provision 7.

 

  I. Directly observed therapy for treatment of tuberculosis as specified in
Exhibit A, Attachment 11, provision 15.

 

Page 3 of 16

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Definitions

 

Attachment 1

 

  J. Dental services as specified in Title 22, CCR, Section 51307 and EPSDT
supplemental dental services as described in Title 22, CCR, Section 51340.1 (a).
However, Contractor is responsible for all Covered Services as specified in
Exhibit A, Attachment 11, provision 14 regarding dental services.

 

  K. Acupuncture services as specified in Title 22, CCR, Section 51308.5.

 

  L. Chiropractic services as specified in Title 22, CCR, Section 51308.

 

  M. Prayer or spiritual healing as specified in Title 22, CCR, Section 51312.

 

  N. Local Education Agency (LEA) assessment services as specified in Title 22,
CCR, Section 51360(b) provided to a Member who qualifies for LEA services based
on Title 22, CCR, Section 51190.1.

 

  O. Any LEA services as specified in Title 22, CCR, Section 51360 provided
pursuant to an Individualized Education Plan (IEP) as set forth in Education
Code, Section 56340 et seq. or an Individualized Family Service Plan (IFSP) as
set forth in Government Code Section 95020, or LEA services provided under an
Individualized Health and Support Plan (IHSP), as described in Title 22, CCR,
Section 51360.

 

  P. Laboratory services provided under the State serum alphafetoprotein-testing
program administered by the Genetic Disease Branch of DHS.

 

  Q. Adult Day Health Care.

 

  R. Pediatric Day Health Care.

 

  S. Personal Care Services.

 

  T. State Supported Services.

 

  U. Targeted case management services as specified in Title 22, CCR, Sections
51185 and 51351, and as described in Exhibit A, Attachment 11, provision 2.

 

  V. Childhood lead poisoning case management provided by County health
departments.

 

  W. Psychotherapeutic drugs listed in Exhibit A, Attachment 10-A (consisting of
one page), and psychotherapeutic drugs classified as Anti-Psychotics and
approved by the FDA after July 1,1997.

 

Page 4 of 16

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Definitions

 

Attachment 1

 

  X. Human Immunodeficiency Virus (HIV) and AIDS drugs listed in Exhibit A,
Attachment 10-B (consisting of one page), and HIV/AIDS drugs classified as
Nucleoside Analogs, Protease Inhibitors, Fusion Inhibitors and Non-Nucleoside
Reverse Transcriptase Inhibitors approved by the federal Food and Drug
Administration (FDA) after March 1, 2003.

 

21. Credentialing means the recognition of professional or technical competence.
The process involved may include registration, certification, licensure and
professional association membership.

 

22. Department of Health and Human Services (DHHS) means the federal agency
responsible for management of the Medicaid program.

 

23. Department of Health Services (DHS) means the single State Department
responsible for administration of the federal Medicaid (referred to as Medi-Cal
in California) Program, California Children Services (CCS), Genetically
Handicapped Persons Program (GHPP), Child Health and Disabilities Prevention
(CHDP), and other health related programs.

 

24. Department of Managed Health Care (DMHC) means the State agency responsible
for administering the Knox-Keene Health Care Service Plan Act of 1975.

 

25. Department of Mental Health (DMH) means the State agency, in consultation
with the California Mental Health Directors Association (CMHDA) and California
Mental Health Planning Council, which sets policy and administers for the
delivery of community based public mental health services statewide.

 

26. Diagnosis of AIDS means a clinical diagnosis of AIDS that meets the most
recent communicable disease surveillance case definition of AIDS established by
the federal Centers for Disease Control and Prevention (CDC), United States
Department of Health and Human Services, and published in the Morbidity and
Mortality Weekly Report (MMWR) or its supplements, in effect for the month in
which the clinical diagnosis is made.

 

27. Dietitian/Nutritionist means a person who is registered or eligible for
registration as a Registered Dietitian by the Commission on Dietetic
Registration (Business and Professions Code, Chapter 5.65, Sections 2585 and
2586).

 

28. Director means the Director of the State of California Department of Health
Services.

 

Page 5 of 16

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Definitions

 

Attachment 1

 

29. Disproportionate Share Hospital (DSH) means a health Facility licensed
pursuant to Chapter 2, Division 2, Health and Safety Code, to provide acute
inpatient hospital services, which is eligible to receive payment adjustments
from the State pursuant to W&l Code, Section 14105.98.

 

30. Eligible Beneficiary means any Medi-Cal beneficiary who is residing in the
Contractor’s Service Area with one of the following aid codes:

 

CalWORKs/Public Assistance Family - aid codes 30, 32, 33, 35, 38, 39, 3A, 3C,
3E, 3G, 3H, 3L, 3M, 3N, 3P, 3R, 3U, 3W, 40, 42, 47, 4F, 4G, 4M, 54, 59, 5X, 72,
7X, 8P;

 

Medically Needy Family – aid code 34;

 

Public Assistance Aged – aid codes 1H, 10,16,18;

 

Medically Needy Aged – aid codes 1E, 14;

 

Public Assistance Blind – aid codes 20, 26, 28;

 

Medically Needy Blind – aid codes 2E, 24;

 

Public Assistance Disabled – aid codes 36, 60, 66, 68, 6A, 6C, 6H, 6J, 6N, 6P,
6R, 6V;

 

Medically Needy Disabled – aid code 6E, 64;

 

Medically Indigent Child – 03, 04, 4A, 4C, 4K, 45, 5K, 7A, 7J, 82, 8R;

 

Medically Indigent Adult – aid code 86;

 

Refugees – aid codes 01, 0A, 02, 08; and

 

Breast and Cervical Cancer Treatment Program (BCCTP) – aid codes 0M, 0N, 0P, 0R,
0T, and 0U.

 

Effective February 1, 2002, an Eligible Beneficiary may continue to be a Member
following any redetermination of Medi-Cal eligibility that determines that the
individual is eligible for, and the individual thereafter enrolls in, the BCCTP.

 

The following exclusions apply to all the above:

 

  A. Individuals who have been approved by the Medi-Cal Field Office or the
California Children Services Program for any major organ transplant that is a
Medi-Cal FFS benefit except kidney transplants.

 

  B. Individuals who elect and are accepted to participate in the following
Medi-Cal waiver programs: In-Home Medical Care Waiver, the Nursing Facility
Subacute Waiver, and the Nursing Facility Waiver.

 

  C. Individual determined by the Medi-Cal Field Office to be in need of long
term care and residing in a Skilled Nursing Facility for 30 days past the month
of admission.

 

Page 6 of 16

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Definitions

 

Attachment 1

 

  D. Individuals who have commercial or Medicare HMO coverage, unless the
Medicare HMO is a provider under this Contract and DHS has agreed, as a term of
the HMO’s contract, that these individuals may be enrolled. Individuals with
Medicare fee-for-service coverage are not excluded from enrolling under this
Contract.

 

31. Emergency Medical Condition means a medical condition which is manifested by
acute symptoms of sufficient severity (including severe pain), such that a
prudent lay person, who possesses an average knowledge of health and medicine,
could reasonably expect the absence of immediate medical attention to result in:

 

  A. Placing the health of the individual (or, in the case of a pregnant woman,
the health of the woman or her unborn child) in serious jeopardy,

 

  B. Serious impairment to bodily function, or

 

  C. Serious dysfunction of any bodily organ or part.

 

32. Emergency Services means those health services needed to evaluate or
stabilize an Emergency Medical Condition.

 

33. Encounter means any single medically related service rendered by (a) medical
provider(s) to a Member enrolled in the health plan during the date of service.
It includes, but is not limited to, all services for which the Contractor
incurred any financial liability.

 

34. Enrollment means the process by which an Eligible Beneficiary becomes a
Member of the Contractor’s plan.

 

35. External Accountability Set (EAS) means a set of HEDIS® and DHS-developed
performance measures selected by DHS for evaluation of health plan performance.

 

36. External Quality Review Organization (EQRO) means a Peer Review Organization
(PRO), PRO-like entity, or accrediting body that is an expert in the scientific
review of the quality of health care provided to Medicaid beneficiaries in a
state’s Medicaid managed care plans.

 

37. Facility means any premise that is:

 

  A. Owned, leased, used or operated directly or indirectly by or for the
Contractor or its Affiliates for purposes related to this Contract or

 

Page 7 of 16

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Definitions

 

Attachment 1

 

  B. Maintained by a provider to provide services on behalf of the Contractor.

 

38. Federal Financial Participation means federal expenditures provided to match
proper State expenditures made under approved State Medicaid plans.

 

39. Federally Qualified Health Center (FQHC) means an entity defined in Section
1905 of the Social Security Act (42 United States Code Section 1396d(l)(2)(B)).

 

40. Federally Qualified Health Maintenance Organization (FQHMO) means a prepaid
health delivery plan that has fulfilled the requirements of the HMO Act, along
with its amendments and regulations, and has obtained the Federal Government’s
qualification status under Section 1310(d) of the Public Health Service Act (42
USC §300e).

 

41. Fee-For-Service (FFS) means a method of payment based upon per unit or per
procedure billing for services rendered to an Eligible Beneficiary.

 

42. Fee-For-Service Medi-Cal means the component of the Medi-Cal Program which
Medi-Cal providers are paid directly by the State for services not covered under
this Contract.

 

43. Fee-For-Service Medi-Cal Mental Health Services (FFS/MC) means the services
covered through Fee-For-Service Medi-Cal which includes mental health outpatient
services and acute care inpatient services.

 

44. Financial Performance Guarantee means cash or cash equivalents which are
immediately redeemable upon demand by DHS, in an amount determined by DHS, which
shall not be less than one full month’s capitation.

 

45. Financial Statements means the Financial Statements which include a Balance
Sheet, Income Statement, Statement of Cash Flows, Statement of Equity and
accompanying footnotes prepared in accordance with Generally Accepted Accounting
Principles.

 

46. Fiscal Year (FY) means any 12-month period for which annual accounts are
kept. The State Fiscal Year is July 1 through June 30, the federal Fiscal Year
is October 1 through September 30.

 

47.

Health Maintenance Organization (HMO) means an organization that is not a
federally qualified HMO, but meets the State Plan’s definition of an HMO
including the requirements under Section 1903(m)(2)(A)(i-vii) of the Social
Security Act. An Organization that, through a coordinated system of health care,
provides or assures the delivery of an agreed upon set of comprehensive health

 

Page 8 of 16

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Definitions

 

Attachment 1

 

 

maintenance and treatment services for an enrolled group of persons through a
predetermined periodic fixed prepayment.

 

48. Health Plan Employer Data and Information Set (HEDIS®) means the set of
standardized performance measures sponsored and maintained by the National
Committee for Quality Assurance.

 

49. HEDIS® Compliance Audit means an audit process that uses specific standards
and guidelines for assessing the collection, storage, analysis, and reporting of
HEDIS® measures. This audit process is designed to ensure accurate HEDIS®
reporting.

 

50. Indian Health Service (IHS) Facilities means Facilities operated with funds
from the IHS under the Indian Self-Determination Act and the Indian Health Care
Improvement Act, through which services are provided, directly or by contract,
to the eligible Indian population within a defined geographic area. (See Title
22, Section 55000.)

 

51. Intermediate Care Facility (ICF) means a Facility which is licensed as an
ICF by DHS or a hospital or Skilled Nursing Facility which meets the standards
specified in Title 22, CCR, Section 51212 and has been certified by DHS for
participation in the Medi-Cal program.

 

52. Joint Commission on the Accreditation of Health Care Organizations (JCAHO)
means the organization composed of representatives of the American Hospital
Association, the American Medical Association, the American College of
Physicians, the American College of Surgeons, and the American Dental
Association. JCAHO provides health care accreditation and related services that
support performance improvement in health care organizations.

 

53. Knox-Keene Health Care Service Plan Act of 1975 means the law that regulates
HMOs and is administrated by the DMHC, commencing with Section 1340, Health &
Safety Code.

 

54. Marketing means any activity conducted on behalf of the Contractor where
information regarding the services offered by the Contractor is disseminated in
order to persuade Eligible Beneficiaries to enroll. Marketing also includes any
similar activity to secure the endorsement of any individual or organization on
behalf of the Contractor.

 

55. Marketing Representative means a person who is engaged in marketing
activities on behalf of the Contractor.

 

Page 9 of 16

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Definitions

 

Attachment 1

 

56. Medi-Cal Eligibility Data System (MEDS) means the automated eligibility
information processing system operated by the State which provides on-line
access for recipient information, update of recipient eligibility data and
on-line printing of immediate need beneficiary identification cards.

 

57. Medical Records means written documentary evidence of treatments rendered to
plan Members.

 

58. Medically Necessary or Medical Necessity means reasonable and necessary
services to protect life, to prevent significant illness or significant
disability, or to alleviate severe pain through the diagnosis or treatment of
disease, illness, or injury.

 

When determining the medical necessity of Covered Services for a Medi-Cal
beneficiary under the age of 21, “medical necessity” is expanded to include the
standards set forth in Title 22, CCR, Section 51340 and 51340.1.

 

59. Member means any Eligible Beneficiary who has enrolled in the Contractor’s
plan. For the purposes of this Contract, “Enrollee” shall have the same meaning
as “Member”.

 

60. Member Grievance means an oral or written expression of dissatisfaction,
including any complaint, dispute, request for reconsideration or appeal made by
a Member. DHS considers complaints and appeals the same as a grievance.

 

61. Minimum Performance Level refers to a minimum requirement of performance of
Contractor on each of the External Accountability Set measures.

 

62. Minor Consent Services means those Covered Services of a sensitive nature
which minors do not need parental consent to access, related to:

 

  A. Sexual assault, including rape.

 

  B. Drug or alcohol abuse for children 12 years of age or older.

 

  C. Pregnancy.

 

  D. Family planning.

 

  E. Sexually transmitted diseases (STDs), designated by the Director, in
children 12 years of age or older.

 

  F.

Outpatient mental health care for children 12 years of age or older who are
mature enough to participate intelligently and where either (1) there is

 

Page 10 of 16

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Definitions

 

Attachment 1

 

 

a danger of serious physical or mental harm to the minor or others or (2) the
children are the alleged victims of incest or child abuse.

 

63. National Committee for Quality Assurance (NCQA) is a non-profit organization
committed to evaluating and publicly reporting on the quality of managed care
plans.

 

64. NCQA Licensed Audit Organization is an entity licensed to provide auditors
certified to conduct HEDIS Compliance Audits.

 

65. Newborn Child means a child born to a Member during her membership or the
month prior to her membership.

 

66. Non-Emergency Medical Transportation means inclusion of services outlined in
Title 22, CCR, Sections 51231.1 and 51231.2 rendered by licensed providers.

 

67. Non-Medical Transportation means transportation of Members to medical
services by passenger car, taxicabs, or other forms of public or private
conveyances provided by persons not registered as Medi-Cal providers. Does not
include the transportation of sick, injured, invalid, convalescent, infirm, or
otherwise incapacitated Members by ambulances, litter vans, or wheelchair vans
licensed, operated and equipped in accordance with state and local statutes,
ordinances or regulations.

 

68. Non-Physician Medical Practitioners (Mid-Level Practitioner) means a nurse
practitioner, certified nurse midwife, or physician assistant authorized to
provide Primary Care under Physician supervision.

 

69. Not Reported means: 1) Contractor calculated the measure but the result was
materially biased; 2) Contractor did not calculate the measure even though a
population existed for which the measure could have been calculated; and/or, 3)
Contractor calculated the measure but chose not to report the rate.

 

70. Nurse means a person licensed by the California Board of Nursing as, at
least, a Registered Nurse (RN).

 

71. Other Healthcare Coverage Sources (OHCS) means the responsibility of an
individual or entity, other than Contractor or the Member, for the payment of
the reasonable value of all or part of the healthcare benefits provided to a
Member. Such OHCS may originate under any other State, federal or local medical
care program or under other contractual or legal entitlement, including, but not
limited to, a private group or indemnification program. This responsibility may
result from a health insurance policy or other contractual agreement or legal
obligation, excluding tort liability.

 

Page 11 of 16

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Definitions

 

Attachment 1

 

72. Outpatient Care means treatment provided to a Member who is not confined in
a health care Facility.

 

73. Pediatric Subacute Care means health care services needed by a person under
21 years of age who uses a medical technology that compensates for the loss of
vital bodily function. Medical necessity criteria are described in the
Physician’s Manual of Criteria for Medi-Cal Authorization.

 

74. Physician means a person duly licensed as a Physician by the Medical Board
of California.

 

75. Physician Incentive Plan means any compensation arrangement between
Contractor and a Physician or a Physician group that may not directly or
indirectly have the effect of reducing or limiting services provided to Members
under this Contract.

 

76. Policy Letter means a document which has been dated, numbered and issued by
the Medi-Cal Managed Care Division. It clarifies regulatory or contractual
requirements.

 

77. Post-Payment Recovery means Contractor pays the provider for the services
rendered and then uses all reasonable efforts to recover the cost of the
services from all liable third parties.

 

78. Potential Enrollee means a Medi-Cal recipient who is subject to mandatory
enrollment or may voluntarily elect to enroll in a given managed care program,
but is not yet an enrollee of a specific plan.”

 

79. Preventive Care means health care designed to prevent disease and /or its
consequences.

 

80. Primary Care means a basic level of health care usually rendered in
ambulatory settings by general practitioners, family practitioners, internists,
obstetricians, pediatricians, and mid-level practitioners. This type of care
emphasizes caring for the Member’s general health needs as opposed to
specialists focusing on specific needs.

 

81. Primary Care Physician (PCP) means a Physician responsible for supervising,
coordinating, and providing initial and Primary Care to patients and serves as
the medical home for Members. The medical home is where care is accessible,
continuous, comprehensive, and culturally competent. The PCP is a general
practitioner, internist, pediatrician, family practitioner, or
obstetrician/gynecologist (OB/GYN).

 

Page 12 of 16

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Definitions

 

Attachment 1

 

82. Primary Care Provider means a person responsible for supervising,
coordinating, and providing initial and Primary Care to patients; for initiating
referrals; and, for maintaining the continuity of patient care. A Primary Care
Provider may be a Primary Care Physician or Non-Physician Medical Practitioner.

 

83. Prior Authorization means a formal process requiring a health care provider
to obtain advance approval to provide specific services or procedures.

 

84. Provider Grievance means an oral or written expression of dissatisfaction,
including any complaint, dispute, request for reconsideration or appeal made by
a Provider. DHS considers complaints and appeals the same as a grievance.

 

85. Quality Improvement (Ql) means the result of an effective Quality
Improvement System.

 

86. Quality Improvement Projects (QIPs) means studies selected by Medi-Cal
Managed Care Plans, either independently or in collaboration with DHS and other
participating health plans, to be used for quality improvement purposes. The
studies include four phases and may occur within a twenty-four (24) month time
frame.

 

87. Quality Improvement System (QIS) means the systematic activities to monitor
and evaluate the medical care delivered to Members according to the standards
set forth in regulations and Contract language. Contractor must have processes
in place, which measure the effectiveness of care, identify problems, and
implement improvement on a continuing basis.

 

88. Quality of Care means the degree to which health services for individuals
and populations increase the likelihood of desired health outcomes and are
consistent with current professional knowledge.

 

89. Quality Indicators means measurable variables relating to a specific clinic
or health services delivery area which are reviewed over a period of time to
screen delivered health care and to monitor the process or outcome of care
delivered in that clinical area.

 

90. Rural Health Clinic (RHC) means an entity defined in Title 22, CCR, Section
51115.5.

 

91.

Safety-Net Provider means any provider of comprehensive primary care or acute
hospital inpatient services that provides these services to a significant total
number of Medi-Cal and charity and/or medically indigent patients in relation to

 

Page 13 of 16

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Definitions

 

Attachment 1

 

 

the total number of patients served by the provider. Examples of safety net
providers include Federally Qualified Health Centers; governmentally operated
health systems; community health centers; rural and Indian Health Service
Facilities; disproportionate share hospitals; and, public, university, rural,
and children’s hospitals.

 

92. Service Area means the county or counties that the Contractor is approved to
operate in under the terms of this Contract. A Service Area may have designated
ZIP Codes (under the U.S. Postal Service) within a county that are approved by
DHS to operate under the terms of this Contract.

 

93. Service Location means any location at which a Member obtains any health
care service provided by the Contractor under the terms of this Contract.

 

94. Skilled Nursing Facility (SNF) means, as defined in Title 22, CCR, Section
51121(a), any institution, place, building, or agency which is licensed as a SNF
by DHS or is a distinct part or unit of a hospital, meets the standard specified
in Section 51215 of these regulations (except that the distinct part of a
hospital does not need to be licensed as a SNF) and has been certified by DHS
for participation as a SNF in the Medi-Cal program. Section 51121(b) further
defines the term “Skilled Nursing Facility” as including terms “skilled nursing
home”, “convalescent hospital”, “nursing home”, or “nursing Facility”.

 

95. Specialty Mental Health Provider means a person or entity who is licensed,
certified or otherwise recognized or authorized under State law governing the
healing arts to provide Specialty Mental Health Services and who meets the
standards for participation in the Medi-Cal program.

 

96. Specialty Mental Health Service means:

 

  A. Rehabilitative services, which includes mental health services, medication
support services, day treatment intensive, day rehabilitation, crisis
intervention, crisis stabilization, adult residential treatment services, crisis
residential services, and psychiatric health facility services;

 

  B. Psychiatric inpatient hospital services;

 

  C. Targeted Case Management;

 

  D. Psychiatrist services;

 

  E. Psychologist services; and,

 

  F. EPSDT supplemental specialty mental health services.

 

Page 14 of 16

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Definitions

 

Attachment 1

 

97. State means the State of California.

 

98. State Supported Services means those services that are provided under a
different contract between the Contractor and the Department.

 

99. Subacute Care means, as defined in Title 22, CCR, Section 51124.5, a level
of care needed by a patient who does not require hospital acute care but who
requires more intensive licensed skilled nursing care than is provided to the
majority of patients in a SNF.

 

100. Subcontract means a written agreement entered into by the Contractor with
any of the following:

 

  A. A provider of health care services who agrees to furnish Covered Services
to Members.

 

  B. Any other organization or person(s) who agree(s) to perform any
administrative function or service for the Contractor specifically related to
fulfilling the Contractor’s obligations to DHS under the terms of this Contract.

 

101. Sub-Subcontractor means any party to an agreement with a subcontractor
descending from and subordinate to a Subcontract, which is entered into for the
purpose of providing any goods or services connected with the obligations under
this Contract.

 

102. Supplemental Security Income (SSI) means the program authorized by Title
XVI of the Social Security Act for aged, blind, and disabled persons.

 

103. Targeted Case Management (TCM) means services which assist Medi-Cal Members
within specified target groups to gain access to needed medical, social,
educational and other services. In prescribed circumstances, TCM is available as
a Medi-Cal benefit as a discrete service, as well as through State or local
government entities and their contractors.

 

104. Third Party Tort Liability (TPTL) means the responsibility of an individual
or entity other than Contractor or the Member for the payment of claims for
injuries or trauma sustained by a Member. This responsibility may be
contractual, a legal obligation, or as a result of, or the fault or negligence
of, third parties (e.g., auto accidents or other personal injury casualty claims
or Workers’ Compensation appeals).

 

Page 15 of 16

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Definitions

 

Attachment 1

 

105. Traditional Provider means any physician who has delivered services to
Medi-Cal beneficiaries within the last six months either through FFS Medi-Cal or
a Medi-Cal Managed Care plan. The term includes physician and hospital providers
only, either profit or non-profit entities, publicly or non-publicly owned and
operated.

 

106. Urgent Care means services required to prevent serious deterioration of
health following the onset of an unforeseen condition or injury (i.e., sore
throats, fever, minor lacerations, and some broken bones).

 

107. Utilization Review means the process of evaluating the necessity,
appropriateness, and efficiency of the use of medical services, procedures and
Facilities.

 

108. Vaccines for Children (VFC) Program means the federally funded program that
provides free vaccines for eligible children (including all Medi-Cal eligible
children age 18 or younger) and distributes immunization updates and related
information to participating providers. Providers subcontracting with the
Contractor are eligible to participate in this program.

 

Page 16 of 16

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637 A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

1. Governing Law

 

In addition to Exhibit C, provision 14. Governing Law, Contractor also agrees to
the following:

 

  A. If it is necessary to interpret this Contract, all applicable laws may be
used as aids in interpreting the Contract. However, the parties agree that any
such applicable laws shall not be interpreted to create contractual obligations
upon DHS or Contractor, unless such applicable laws are expressly incorporated
into this Contract in some section other than this provision, Governing Law.
Except for provision 16. Sanctions, and provision 17. Liquidated Damages
Provision, the parties agree that any remedies for DHS’ or Contractor’s
non-compliance with laws not expressly incorporated into this Contract, or any
covenants implied to be part of this Contract, shall not include money damages,
but may include equitable remedies such as injunctive relief or specific
performance. This Contract is the product of mutual negotiation, and if any
ambiguities should arise in the interpretation of this Contract, both parties
shall be deemed authors of this Contract.

 

  B. Any provision of this Contract which is in conflict with current or future
applicable Federal or State laws or regulations is hereby amended to conform to
the provisions of those laws and regulations. Such amendment of the Contract
shall be effective on the effective date of the statutes or regulations
necessitating it, and shall be binding on the parties even though such amendment
may not have been reduced to writing and formally agreed upon and executed by
the parties.

 

Such amendment shall constitute grounds for termination of this Contract in
accordance with the procedures and provisions of provision 14, paragraph C.
Termination - Contractor. The parties shall be bound by the terms of the
amendment until the effective date of the termination.

 

  C. The final Balanced Budget Act of 1997 regulations are published in the
Federal Register/ Volume 67, Number 115/ June 14, 2002, at 42 Code of Federal
Regulations, Parts 400, 430, 431, 434, 435, 438, 440 and 447. Contractor shall
be in compliance with the final Balance Budget Act of 1997 regulations by August
13, 2003.

 

  D.

Medi-Cal Managed Care Division (MMCD) Policy Letters - These documents will be
utilized to notify the Contractor of clarifications made to the Medi-Cal Managed
Care Program. These documents will include instructions to the Contractor
regarding implementation. These

 

Page 1 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

 

documents will also be used to initiate various ongoing changes required of the
Contractor throughout the Contract, the performance of which falls within the
Contract’s agreed upon capitated rate.

 

2. Entire Agreement

 

This written Contract and any amendments shall constitute the entire agreement
between the parties. No oral representations shall be binding on either party
unless such representations are reduced to writing and made an amendment to the
Contract.

 

3. Amendment Process

 

In addition to Exhibit C, provision 2. Amendment, Contractor also agrees to the
following:

 

Should either party, during the life of this Contract, desire a change in this
Contract, that change shall be proposed in writing to the other party. The other
party shall acknowledge receipt of the proposal within 10 days of receipt of the
proposal. The party proposing any such change shall have the right to withdraw
the proposal any time prior to acceptance or rejection by the other party. Any
proposal shall set forth an explanation of the reason and basis for the proposed
change and the text of the desired amendment to this Contract which would
provide for the change. If the proposal is accepted, this Contract shall be
amended to provide for the change mutually agreed to by the parties on the
condition that the amendment is approved by DHHS, and the State Department of
Finance, if necessary.

 

4. Change Requirements

 

  A. General Provisions

 

The parties recognize that during the life of this Contract, the Medi-Cal
Managed Care program will be a dynamic program requiring numerous changes to its
operations and that the scope and complexity of changes will vary widely over
the life of the Contract. The parties agree that the development of a system
which has the capability to implement such changes in an orderly and timely
manner is of considerable importance.

 

  B. Contractor’s Obligation to Implement

 

The Contractor will make changes mandated by DHS. In the case of mandated
changes in regulations, statutes, federal guidelines, or judicial

 

Page 2 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

interpretation, DHS may direct the Contractor to immediately begin
implementation of any change by issuing a change order. If DHS issues a change
order, the Contractor will be obligated to implement the required changes while
discussions relevant to any capitation rate adjustment, if applicable, are
taking place.

 

DHS may, at any time, within the general scope of the Contract, by written
notice, issue change orders to the Contract.

 

  C. Moral or Religious Objections to Providing a Service

 

If the Contractor has a moral or religious objection to providing a service or
referral for a service for which the Contractor is not responsible, during the
term of this agreement, the Contractor shall notify the DHS in writing providing
sufficient detail to establish the moral or religious grounds for the objection.

 

5. Delegation Of Authority

 

DHS intends to implement this Contract through a single administrator, called
the “Contracting Officer”. The Director of DHS will appoint the Contracting
Officer. The Contracting Officer, on behalf of DHS, will make all determinations
and take all actions as are appropriate under this Contract, subject to the
limitations of applicable Federal and State laws and regulations. The
Contracting Officer may delegate his/her authority to act to an authorized
representative through written notice to the Contractor.

 

Contractor will designate a single administrator; hereafter called the
“Contractor’s Representative”. The Contractor’s Representative, on behalf of the
Contractor, will make all determinations and take all actions as are appropriate
to implement this Contract, subject to the limitations of the Contract, Federal
and State laws and regulations. The Contractor’s Representative may delegate
his/her authority to act to an authorized representative through written notice
to the Contracting Officer. The Contractor’s Representative will be empowered to
legally bind the Contractor to all agreements reached with DHS.

 

Contractor shall designate Contractor’s Representative in writing and shall
notify the Contracting Officer in accordance with Exhibit E, Attachment 2,
provision 10. Notices.

 

Page 3 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

6. Authority of the State

 

Sole authority to establish, define, or determine the reasonableness, the
necessity and level and scope of covered benefits under the Medi-Cal Managed
Care program administered in this Contract or coverage for such benefits, or the
eligibility of the beneficiaries or providers to participate in the Medi-Cal
Managed Care Program reside with DHS.

 

Sole authority to establish or interpret policy and its application related to
the above areas will reside with DHS.

 

The Contractor may not make any limitations, exclusions, or changes in benefits
or benefit coverage; any changes in definition or interpretation of benefits; or
any changes in the administration of the Contract related to the scope of
benefits, allowable coverage for those benefits, or eligibility of beneficiaries
or providers to participate in the program, without the express, written
direction or approval of the Contracting Officer.

 

7. Fulfillment of Obligations

 

No covenant, condition, duty, obligation, or undertaking continued or made a
part of this Contract will be waived except by written agreement of the parties
hereto, and forbearance or indulgence in any other form or manner by either
party in any regard whatsoever will not constitute a waiver of the covenant,
condition, duty, obligation, or undertaking to be kept, performed or discharged
by the party to which the same may apply; and, until performance or satisfaction
of all covenants, conditions, duties, obligations, and undertakings is complete,
the other party will have the right to invoke any remedy available under this
Contract, or under law, notwithstanding such forbearance or indulgence.

 

8. Obtaining DHS Approval

 

Contractor shall obtain written approval from DHS, as provided in Exhibit E,
Attachment 3, provision 5 Approval Process, prior to commencement of operation
under this Contract.

 

DHS reserves the right to review and approve any changes to Contractor’s
protocols, policies, and procedures as specified in this Contract.

 

Page 4 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

9. Certifications

 

Contractor shall comply with certification requirements set forth in 42 CFR
438.604 and 42 CFR 438.606.

 

In addition to Exhibit C, provision 11. Certifications, Contractor also agrees
to the following:

 

With respect to any report, invoice, record, papers, documents, books of
account, or other Contract required data submitted, pursuant to the requirements
of this Contract, the Contractor’s Representative or his/her designee will
certify, under penalty of perjury, that the report, invoice, record, papers,
documents, books of account or other Contract required data is current,
accurate, complete and in full compliance with legal and contractual
requirements to the best of that individual’s knowledge and belief, unless the
requirement for such certification is expressly waived by DHS in writing.

 

10. Notices

 

All notices to be given under this Contract will be in writing and will be
deemed to have been given when mailed to DHS or the Contractor:

 

State Department of Health Services

Medi-Cal Managed Care Division

P.O. Box 942732

Sacramento, CA 94234-7320

Attn: Contracting Officer

  

Contractor Name and Address

Attn: Contractor Representative

 

11. Term

 

The Contract will become effective April 2, 1996, and will continue in full
force and effect through March 31, 2004 subject to the provisions of Exhibit B,
provision 1. Budget Contingency Clause and Exhibit D(F), provision 9. Federal
Contract Funds because the State has currently appropriated and available for
encumbrance only funds to cover costs through June 30, 2004.

 

The term of the Contract consists of the following three periods: 1) The
Implementation Period shall extend from April 2, 1996; 2) The Operations Period
shall extend from October 2, 1996 to March 31, 2004, subject to the termination
provisions of provision 14, Termination for Cause and Other Terminations, and
provision 16, Sanctions, and subject to the limitation provisions of Exhibit B,
provision 1, Budget Contingency Clause; and 3) The Phaseout Period shall extend
for six (6) months from the end of the Operations Period, subject to

 

Page 5 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

provision 13. Contract Extension, in which case the Phaseout Period shall apply
to the six (6) month period beginning the first day after the end of the
Operations Period, as extended.

 

The Operations Period will commence subject to DHS acceptance of the
Contractor’s readiness to begin the Operations Period.

 

12. Service Area

 

The Service Area covered under this Contract includes:

 

Riverside and San Bernardino Counties

 

All Contract provisions apply separately to each Service Area. This Contract may
expire for some Service Areas and still remain in effect for others with each
Service Area having its own Implementation, Operations, and Phaseout periods.

 

13. Contract Extension

 

DHS will have the exclusive option to extend the term of the Contract for any
Service Area during the last twelve (12) months of the Contract, as determined
by the original expiration date or by a new expiration date if an extension
option has been exercised. DHS may invoke up to three (3) separate extensions of
up to twelve months each. The Contractor will be given at least nine (9) months
prior written notice of DHS’ decision on whether or not it will exercise this
option to extend the Contract for each Service Area.

 

Contractor will provide written notification to DHS of its intent to accept or
reject the extension within five (5) State working days of the receipt of the
notice from DHS.

 

14. Termination for Cause and Other Terminations

 

In addition to Exhibit C, provision 7. Termination for Cause, Contractor also
agrees to the following:

 

  A. Termination - State or Director

 

DHS may terminate performance of work under this Contract in whole, or in part,
whenever for any reason DHS determines that the termination is in the best
interest of the State.

 

Page 6 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

  1) Notification shall be given at least six (6) months prior to the effective
date of termination, except in cases described below in paragraph B. Termination
for Cause.

 

  2) If DHS awards a new contract for one or more of the Service Areas to
another Contractor during one of the amendment periods as described above in
Provision 13. Contract Extension, DHS shall provide the Contractor written
notification at least six (6) months prior to termination to allow for all
Phaseout Requirements to be completed.

 

  B. Termination for Cause

 

  1) DHS shall terminate this Contract pursuant to the provisions of Welfare and
Institutions Code, Section 14304(a) and Title 22, CCR, Section 53873.

 

  2) DHS shall terminate this Contract in the event that: (1) the Secretary,
DHHS, determines that the Contractor does not meet the requirements for
participation in the Medicaid program, Title XIX of the Social Security Act (42
U.S. Code § 1396), or (2) the Department of Managed Health Care finds that the
Contractor no longer qualifies for licensure under the Knox-Keene Health Care
Service Plan Act (Health and Safety Code § 1340 et seq.) by giving written
notice to the Contractor. The termination will be effectuated consistent with
the provisions of Title 22, CCR, Section 53873. Notification will be given by
DHS at least sixty (60) days prior to the effective date of termination.

 

  3) In cases where the Director determines the health and welfare of Members is
jeopardized by continuation of the Contract, the Contract will be immediately
terminated. Notification will state the effective date of, and the reason for,
the termination.

 

Except for termination pursuant to paragraph B, item 3) above, termination of
the Contract shall be effective on the last day of the month in which the
Secretary, DHHS, or the DMHC makes such determination, provided that DHS
provides Contractor with at least 60 days notice of termination. The termination
of this Contract shall be effective on the last day of the second full month
from the date of the notice of termination. Contractor agrees that 60 days
notice is reasonable. Termination under this section does not relieve Contractor
of its obligations under provision 15. Phaseout Requirements shall be performed
after Contract termination.

 

Page 7 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

  C. Termination - Contractor

 

If mutual agreement between DHS and Contractor cannot be attained on capitation
rates for rate years subsequent to September 30, 1997, Contractor shall retain
the right to terminate the Contract, no earlier than September 30,1998, by
giving at least nine (9) months written notice to DHS to that effect. The
effective date of any termination under this section shall be September 30.

 

Grounds under which Contractor may terminate this Contract are limited to: (1)
Unwillingness to accept the capitation rates determined by DHS, or if DHS
decides to negotiate rates, failure to reach mutual agreement on rates; or (2)
When a change in contractual obligations is created by a State or Federal change
in the Medi-Cal program, or a lawsuit, that substantially alters the financial
assumptions and conditions under which the Contractor entered into this
Contract, such that the Contractor can demonstrate to the satisfaction of DHS
that it cannot remain financially solvent through the term of the Contract.

 

If Contractor invokes ground number 2, Contractor shall submit a detailed
written financial analysis to DHS supporting its conclusions that it cannot
remain financially solvent. At the request of DHS, Contractor shall submit or
otherwise make conveniently available to DHS, all of Contractor’s financial work
papers, financial reports, financial books and other records, bank statements,
computer records, and any other information required by DHS to evaluate
Contractor’s financial analysis.

 

DHS and Contractor may negotiate an earlier termination date if Contractor can
demonstrate to the satisfaction of DHS that it cannot remain financially solvent
until the termination date that would otherwise be established under this
section. Termination under these circumstances shall not relieve Contractor from
performing the Phaseout Requirements described in provision 15.

 

  D. Termination of Obligations

 

All obligations to provide Covered Services under this Contract or Contract
extension will automatically terminate on the date the Operations Period ends.

 

Page 8 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

  E. Notice to Members of Transfer of Care

 

At least sixty (60) days prior to the termination of the Contract, DHS will
notify Members about their medical benefits and available options.

 

15. Phaseout Requirements

 

  A. DHS shall retain the lesser of an amount equal to 10% of the last month’s
Service Area capitation payment or one million dollars ($1,000,000) for each
Service Area unless provided otherwise by the Financial Performance Guarantee,
from the capitation payment of the last month of the Operations Period for each
Service Area until all activities required during the Phaseout Period for each
Service Area are fully completed to the satisfaction of DHS, in its sole
discretion.

 

If all Phaseout activities for each Service Area are completed by the end of the
Phaseout Period, the withhold will be paid to the Contractor. If the Contractor
fails to meet any requirement(s) by the end of the Phaseout Period for each
Service Area, DHS will deduct the costs of the remaining activities from the
withhold amount and continue to withhold payment until all activities are
completed.

 

  B. The objective of the Phaseout Period is to ensure that, at the termination
of this Contract, the orderly transfer of necessary data and history records is
made from the Contractor to DHS or to a successor Contractor.

 

Ninety (90) days prior to termination or expiration of this Contract and through
the Phaseout Period for each Service Area, the Contractor shall assist DHS in
the transition of Members, and in ensuring, to the extent possible, continuity
of Member-Provider relationships. In doing this, the Contractor will make
available to DHS copies of Medical Records, patient files, and any other
pertinent information, including information maintained by any subcontractor,
necessary for efficient case management of Members, as determined by the
Director. In no circumstances will a Medi-Cal Member be billed for this
activity.

 

  C. Phaseout for this Contract will consist of the processing, payment and
monetary reconciliation(s) necessary regarding claims for payment for Covered
Services.

 

Phaseout for the Contract will consist of the completion of all financial and
reporting obligations of the Contractor. The Contractor will remain liable for
the processing and payment of invoices and other claims for payment

 

Page 9 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

for Covered Services and other services provided to Members pursuant to this
Contract prior to the expiration or termination. The Contractor will submit to
DHS all reports required in Exhibit A, Attachment 17, Reports, for the period
from the last submitted report through the expiration or termination date.

 

All data and information provided by the Contractor will be accompanied by
letter, signed by the responsible authority, certifying, under penalty of
perjury, to the accuracy and completeness of the materials supplied.

 

16. Sanctions

 

In addition to complying with sanctions and civil penalties taken pursuant to
Welfare and Institutions Code Section 14304 and Title 22 of the California Code
of Regulations, Section 53872, if required by DHS, Contractor shall ensure
subcontractors cease specified activities which may include, but are not limited
to, referrals, assignment of beneficiaries, and reporting, until DHS determines
that Contractor is again in compliance.

 

  A. In the event DHS finds Contractor non-compliant with any provisions of this
Contract, applicable statutes or regulations, DHS may impose sanctions provided
in Welfare and Institutions Code, Section 14304 and Title 22, CCR, Section 53872
as modified for purposes of this Contract. Title 22, CCR, Section 53872 is so
modified as follows:

 

  1) Subsection (b)(1) is modified by replacing “Article 2” with “Article 6”

 

  2) Subsection (b)(2) is modified by replacing “Article 3” with “Article 7”

 

  B. The requirements of Exhibit A, Attachment 4, regarding QIS are all Contract
provisions which are not specifically governed by Chapter 4.1 (commencing with
Section 53800) of Division 3 of Title 22, CCR. Therefore, sanctions for
violations of the requirements of Exhibit A, Attachment 4, regarding QIS shall
be governed by Subsection 53872(b)(4)

 

  C. For purposes of Sanctions, good cause includes, but is not limited to, the
following:

 

  1) Three repeated and uncorrected findings of serious deficiencies that have
the potential to endanger patient care identified in the medical audits
conducted by DHS.

 

Page 10 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

  2) In the case of Exhibit A, Attachment 4, the Contractor consistently fails
to achieve the minimum performance levels, or receives a “Not Reported”
designation on an External Accountability Set measure, after implementation of
Corrective Actions.

 

  D. Sanctions in the form of denial of payments provided for under the contract
for new enrollees shall be taken, when and for long as, payment for those
enrollees is denied by Centers for Medicare and Medicaid Services (CMS) under 42
CFR § 438.730.

 

17. Liquidated Damages Provisions

 

  A. General

 

It is agreed by the State and Contractor that:

 

  1) If Contractor does not provide or perform the requirements of this Contract
or applicable laws and regulations, damage to the State shall result;

 

  2) Proving such damages shall be costly, difficult, and time-consuming;

 

  3) Should the State choose to impose liquidated damages, Contractor shall pay
the State those damages for not providing or performing the specified
requirements;

 

  4) Additional damages may occur in specified areas by prolonged periods in
which Contractor does not provide or perform requirements;

 

  5) The damage figures listed below represent a good faith effort to quantify
the range of harm that could reasonably be anticipated at the time of the making
of the Contract;

 

  6) DHS may, at its discretion, offset liquidated damages from capitation
payments owed to Contractor;

 

  7)

Imposition of liquidated damages as specified in paragraphs B. Liquidated
Damages for Violation of Contract Terms Regarding the Implementation Period, C.
Liquidated Damages for Violation of Contract Terms or Regulations Regarding the
Operations Period,

 

Page 11 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

 

and D. Annual Medical Reviews, shall follow the administrative processes
described below;

 

  8) DHS shall provide Contractor with written notice specifying the Contractor
requirement(s), contained in the Contract or as required by federal and State
law or regulation, not provided or performed;

 

  9) During the Implementation Period, Contractor shall submit or complete the
outstanding requirement(s) specified in the written notice within five (5) State
working days from the date of the notice, unless, subject to the Contracting
Officer’s written approval, Contractor submits a written request for an
extension. The request must include the following: the requirement(s) requiring
an extension; the reason for the delay; and the proposed date of the submission
of the requirement.

 

  10) During the Implementation Period, if Contractor has not performed or
completed an Implementation Period requirement or secured an extension for the
submission of the outstanding requirement, DHS may impose liquidated damages for
the amount specified in paragraph B. Liquidated Damages for Violation of
Contract Terms Regarding the Implementation Period.

 

  11) During the Operations Period, Contractor shall demonstrate the provision
or performance of Contractor’s requirement(s) specified in the written notice
within a thirty (30) calendar day Corrective Action period from the date of the
notice, unless a request for an extension is submitted to the Contracting
Officer, subject to DHS’ approval, within five (5) days from the end of the
Corrective Action period. If Contractor has not demonstrated the provision or
performance of Contractor’s requirement(s) specified in the written notice
during the Corrective Action period, DHS may impose liquidated damages for each
day the specified Contractor’s requirement is not performed or provided for the
amount specified in paragraph C. Liquidated Damages for Violation of Contract
Terms or Regulations Regarding the Operations Period.

 

  12) During the Operations Period, if Contractor has not performed or provided
Contractor’s requirement(s) specified in the written notice or secured the
written approval for an extension, after thirty (30) days from the first day of
the imposition of liquidated damages, DHS shall notify Contractor in writing of
the increase of the liquidated damages to the amount specified in paragraph C.

 

Page 12 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

Liquidated Damages for Violation of Contract Terms or Regulations Regarding the
Operations Period.

 

Nothing in this provision shall be construed as relieving Contractor from
performing any other Contract duty not listed herein, nor is the State’s right
to enforce or to seek other remedies for failure to perform any other Contract
duty hereby diminished.

 

  B. Liquidated Damages for Violation of Contract Terms Regarding the
Implementation Period

 

DHS may impose liquidated damages of $5,000 per requirement specified in the
written notice for each day of the delay in completion or submission of
Implementation Period requirements beyond the periods defined in the Contract.

 

If DHS determines that a delay or other non-performance was caused in part by
the State, DHS will reduce the liquidated damages proportionately.

 

  C. Liquidated Damages for Violation of Contract Terms or Regulations Regarding
the Operations Period

 

DHS may impose liquidated damages of $1,000 per Contractor requirement not
performed or provided during the Operations Period. If after thirty (30) days or
such longer period as DHS may allow, the Contractor has not demonstrated the
provision or performance of the Contractor requirement specified in the written
notice, DHS may issue a written notice that the liquidated damages will be
increased to $2,000 per day per Contractor requirement until the Contractor
requirement is performed or provided.

 

If DHS determines that delay of the Contractor requirement was caused in part by
the State, DHS will reduce the liquidated damages proportionately.

 

  D. Annual Medical Reviews

 

DHS may impose liquidated damages of not less than $10,000 and not to exceed
$50,000 for each major deficiency determined during the annual medical review.
If, after notice, Contractor does not correct the deficiency to the satisfaction
of DHS within thirty (30) days, or longer if authorized by DHS in writing, DHS
may impose an additional liquidated damages of $5,000 per day per major
uncorrected deficiency as determined by DHS medical review staff.

 

Page 13 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

If DHS determines that non-performance of the requirement was caused in part by
the State, DHS will reduce the liquidated damages proportionately.

 

  E. Conditions for Termination of Liquidated Damages

 

Except as waived by the Contracting Officer, no liquidated damages imposed on
the Contractor will be terminated or suspended until the Contractor issues a
written notice of correction to the Contracting Officer certifying, under
penalty of perjury, the correction of condition(s) for which liquidated damages
were imposed. Liquidated damages will cease on the day of the Contractor’s
certification only if subsequent verification of the correction by DHS
establishes that the correction has been made in the manner and at the time
certified to by the Contractor.

 

The Contracting Officer will determine whether the necessary level of
documentation has been submitted to verify corrections. The Contracting Officer
will be the sole judge of the sufficiency and accuracy of any documentation.
Corrections must be sustained for a reasonable period of at least ninety (90)
days from DHS acceptance; otherwise, liquidated damages may be reimposed without
a succeeding grace period within which to correct. The Contractor’s use of
resources to correct deficiencies will not be allowed to cause other contract
compliance problems.

 

  F. Severability of Individual Liquidated Damages Clauses

 

If any portion of these liquidated damages provisions is determined to be
unenforceable, the other portions will remain in full force and effect.

 

18. Disputes

 

In addition to Exhibit C, provision 6. Disputes, Contractor also agrees to the
following:

 

This Disputes section will be used by the Contractor as the means of seeking
resolution of disputes on contractual issues.

 

Filing a dispute will not preclude DHS from recouping the value of the amount in
dispute from the Contractor or from offsetting this amount from subsequent
capitation payment(s). If the amount to be recouped exceeds 25 percent of the
capitation payment, amounts of up to 25 percent will be withheld from successive
capitation payments until the amount in dispute is fully recouped.

 

Page 14 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

  A. Disputes Resolution by Negotiation

 

DHS and Contractor agree to try to resolve all contractual issues by negotiation
and mutual agreement at the Contracting Officer level without litigation. The
parties recognize that the implementation of this policy depends on
open-mindedness, and the need for both sides to present adequate supporting
information on matters in question.

 

  B. Notification of Dispute

 

Within fifteen (15) days of the date the dispute concerning performance of this
Contract arises or otherwise becomes known to the Contractor, the Contractor
will notify the Contracting Officer in writing of the dispute, describing the
conduct (including actions, inactions, and written or oral communications) which
it is disputing.

 

The Contractor’s notification will state, on the basis of the most accurate
information then available to the Contractor, the following:

 

  1) That it is a dispute pursuant to this section.

 

  2) The date, nature, and circumstances of the conduct which is subject of the
dispute.

 

  3) The names, phone numbers, function, and activity of each Contractor,
Subcontractor, DHS/State official or employee involved in or knowledgeable about
the conduct.

 

  4) The identification of any documents and the substances of any oral
communications involved in the conduct. Copies of all identified documents will
be attached.

 

  5) The reason the Contractor is disputing the conduct.

 

  6) The cost impact to the Contractor directly attributable to the alleged
conduct, if any.

 

  7) The Contractor’s desired remedy.

 

The required documentation, including cost impact data, will be carefully
prepared and submitted with substantiating documentation by the

 

Page 15 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

Contractor. This documentation will serve as the basis for any subsequent
appeal.

 

Following submission of the required notification, with supporting
documentation, the Contractor will comply with the requirements of Title 22,
CCR, Section 53851 (d) and diligently continue performance of this Contract,
including matters identified in the Notification of Dispute, to the maximum
extent possible.

 

  C. Contracting Officer’s or Alternate Dispute Officer’s Decision

 

Pursuant to a request by Contractor, the Contracting Officer may provide for a
dispute to be decided by an alternate dispute officer designated by DHS, who is
not the Contracting Officer and is not directly involved in the Medi-Cal Managed
Care Program. Any disputes concerning performance of this Contract shall be
decided by the Contracting Officer or the alternate dispute officer in a written
decision stating the factual basis for the decision. Within thirty (30) days of
receipt of a Notification of Dispute, the Contracting Officer or the alternate
dispute officer, shall either:

 

  1) Find in favor of Contractor, in which case the Contracting Officer or
alternate dispute officer may:

 

  a) Countermand the earlier conduct which caused Contractor to file a dispute;
or

 

  b) Reaffirm the conduct and, if there is a cost impact sufficient to
constitute a change in obligations pursuant to the payment provisions contained
in Exhibit B, direct DHS to comply with that Exhibit.

 

Or,

 

  2) Deny Contractor’s dispute and, where necessary, direct the manner of future
performance; or

 

  3)

Request additional substantiating documentation in the event the information in
Contractor’s notification is inadequate to permit a decision to be made under 1)
or 2) above, and shall advise Contractor as to what additional information is
required, and establish how that information shall be furnished. Contractor
shall have thirty (30) days to respond to the Contracting Officer’s or alternate
dispute officer’s request for further information. Upon receipt of this
additional requested information, the Contracting

 

Page 16 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

 

Officer or alternate dispute officer shall have thirty (30) days to respond with
a decision. Failure to supply additional information required by the Contracting
Officer or alternate dispute officer within the time period specified above
shall constitute waiver by Contractor of all claims in accordance with item F.
Waiver of Claims.

 

A copy of the decision shall be served on Contractor.

 

  D. Appeal of Contracting Officer’s or Alternate Dispute Officer’s Decision

 

Contractor shall have thirty (30) calendar days following the receipt of the
decision to file an appeal of the decision to the Director. All appeals shall be
governed by Health and Safety Code Section 100171, except for those provisions
of Section 100171(d)(1) relating to accusations, statements of issues, statement
to respondent, and notice of defense. All appeals shall be in writing and shall
be filed with DHS’ Office of Administrative Hearings and Appeals. An appeal
shall be deemed filed on the date it is received by the Office of Administrative
Hearings and Appeals. An appeal shall specifically set forth each issue in
dispute, and include Contractor’s contentions as to those issues. However,
Contractor’s appeal shall be limited to those issues raised in its Notification
of Dispute filed pursuant to paragraph B. Notification of Dispute. Failure to
timely appeal the decision shall constitute a waiver by Contractor of all claims
arising out of that conduct, in accordance with paragraph F. Waiver of Claims.
Contractor shall exhaust all procedures provided for in this provision 18.
Disputes, prior to initiating any other action to enforce this Contract.

 

  E. Contractor Duty to Perform

 

Pending final determination of any dispute hereunder, Contractor shall comply
with the requirements of Title 22, CCR, Section 53851 (d) and proceed diligently
with the performance of this Contract and in accordance with the Contracting
Officer’s or alternate dispute officer’s decision.

 

If pursuant to an appeal under paragraph D. Appeal of Contracting Officer’s or
Alternate Dispute Officer’s Decision, the Contracting Officer’s or alternate
dispute officer’s decision is reversed, the effect of the decision pursuant to
paragraph D. shall be retroactive to the date of the Contracting Officer’s or
alternate dispute officer’s decision, and Contractor shall promptly receive any
benefits of such decision. DHS shall not pay interest on any amounts paid
pursuant to a Contracting Officer’s or alternate dispute officer’s decision or
any appeal of such decision.

 

Page 17 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

  F. Waiver of Claims

 

If Contractor fails to submit a Notification of Dispute, supporting and
substantiating documentation, any additionally required information, or an
appeal of the Contracting Officer’s or alternate dispute officer’s decision, in
the manner and within the time specified in this provision 18. Disputes, that
failure shall constitute a waiver by Contractor of all claims arising out of
that conduct, whether direct or consequential in nature.

 

19. Audit

 

In addition to Exhibit C, provision 4. Audit, Contractor also agrees to the
following:

 

The Contractor will maintain such books and records necessary to disclose how
the Contractor discharged its obligations under this Contract. These books and
records will disclose the quantity of Covered Services provided under this
Contract, the quality of those services, the manner and amount of payment made
for those services, the persons eligible to receive Covered Services, the manner
in which the Contractor administered its daily business, and the cost thereof.

 

  A. Books and Records

 

These books and records will include, but are not limited to, all physical
records originated or prepared pursuant to the performance under this Contract
including working papers; reports submitted to DHS; financial records; all
Medical Records, medical charts and prescription files; and other documentation
pertaining to medical and non-medical services rendered to Members.

 

  B. Records Retention

 

Notwithstanding any other records retention time period set forth in this
Contract, these books and records will be maintained for a minimum of five years
from the end of the Fiscal Year in which the Contract expires or is terminated,
or, in the event the Contractor has been duly notified that DHS, DHHS, DOJ, or
the Comptroller General of the United States, or their duly authorized
representatives, have commenced an audit or investigation of the Contract, until
such time as the matter under audit or investigation has been resolved,
whichever is later.

 

Page 18 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

20. Inspection Rights

 

In addition to Exhibit D (F), provision 8, Site Inspection, Contractor also
agrees to the following:

 

Through the end of the records retention period specified in provision 19,
Audit, paragraph B. Records Retention, Contractor shall allow the DHS,
Department of Health and Human Services, the Comptroller General of the United
States, Department of Justice (DOJ) Bureau of Medi-Cal Fraud, DMHC, and other
authorized State agencies, or their duly authorized representatives, including
DHS’ external quality review organization contractor, to inspect, monitor or
otherwise evaluate the quality, appropriateness, and timeliness of services
performed under this Contract, and to inspect, evaluate, and audit any and all
books, records, and Facilities maintained by Contractor and subcontractors
pertaining to these services at any time during normal business hours.

 

Books and records include, but are not limited to, all physical records
originated or prepared pursuant to the performance under this Contract,
including working papers, reports, financial records, and books of account,
Medical Records, prescription files, laboratory results, Subcontracts,
information systems and procedures, and any other documentation pertaining to
medical and non-medical services rendered to Members. Upon request, through the
end of the records retention period specified in provision 19, Audit, paragraph
B. Records Retention, Contractor shall furnish any record, or copy of it, to DHS
or any other entity listed in this section, at Contractor’s sole expense.

 

  A. Facility Inspections

 

DHS shall conduct unannounced validation reviews on a number of the Contractor’s
Primary Care sites, selected at DHS’ discretion, to verify compliance of these
sites with DHS requirements.

 

  B. Access Requirements and State’s Right To Monitor

 

Authorized State and Federal agencies will have the right to monitor all aspects
of the Contractor’s operation for compliance with the provisions of this
Contract and applicable federal and State laws and regulations. Such monitoring
activities will include, but are not limited to, inspection and auditing of
Contractor, subcontractor, and provider facilities, management systems and
procedures, and books and records as the Director deems appropriate, at anytime
during the Contractor’s or other facility’s normal business hours. The
monitoring activities will be either announced or unannounced.

 

Page 19 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

To assure compliance with the Contract and for any other reasonable purpose, the
State and its authorized representatives and designees will have the right to
premises access, with or without notice to the Contractor. This will include the
MIS operations site or such other place where duties under the Contract are
being performed.

 

Staff designated by authorized State agencies will have access to all security
areas and the Contractor will provide, and will require any and all of its
subcontractors to provide, reasonable facilities, cooperation and assistance to
State representative(s) in the performance of their duties. Access will be
undertaken in such a manner as to not unduly delay the work of the Contractor
and/or the subcontractor(s).

 

21. Confidentiality of Information

 

In addition to Exhibit D (F), provision 13. Confidentiality of Information,
Contractor also agrees to the following duties and responsibilities with respect
to confidentiality of information and data:

 

  A. Notwithstanding any other provision of this Contract, names of persons
receiving public social services are confidential and are to be protected from
unauthorized disclosure in accordance with Title 42, CFR, Section 431.300 et
seq., Section 14100.2, W&l Code, and regulations adopted thereunder. For the
purpose of this Contract, all information, records, data, and data elements
collected and maintained for the operation of the Contract and pertaining to
Members shall be protected by the Contractor from unauthorized disclosure.

 

Contractor may release Medical Records in accordance with applicable law
pertaining to the release of this type of information. Contractor is not
required to report requests for Medical Records made in accordance with
applicable law.

 

  B.

With respect to any identifiable information concerning a Member under this
Contract that is obtained by the Contractor or its subcontractors, the
Contractor: (1) will not use any such information for any purpose other than
carrying out the express terms of this Contract, (2) will promptly transmit to
DHS all requests for disclosure of such information, except requests for Medical
Records in accordance with applicable law, (3) will not disclose except as
otherwise specifically permitted by this Contract, any such information to any
party other than DHS without DHS’ prior written authorization specifying that
the information is releasable under

 

Page 20 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

 

Title 42, CFR, Section 431.300 et seq., Section 14100.2, W&l Code, and
regulations adopted thereunder, and (4) will, at the termination of this
Contract, return all such information to DHS or maintain such information
according to written procedures sent to the Contractor by DHS for this purpose.

 

22. Pilot Projects

 

DHS may establish pilot projects to test alternative managed care models
tailored to suit the needs of populations with special health care needs. The
operation of these pilot projects may result in the disenrollment of Members
that participate. Implementation of a pilot project may affect the Contractor’s
obligations under this Contract. Any changes in the obligations of the
Contractor that are necessary for the operation of a pilot project in the
Contractor’s Service Area will be implemented through a Contract amendment.

 

23. Cost Avoidance and Post-Payment Recovery of Other Health Coverage Sources
(OHCS)

 

  A. Contractor shall Cost Avoid or make a Post-Payment Recovery for the
reasonable value of services paid for by Contractor and rendered to a Member
whenever a Member’s OHCS covers the same services, either fully or partially.
However, in no event shall Contractor Cost Avoid or seek Post-Payment Recovery
for the reasonable value of services from a Third-Party Tort Liability (TPTL)
action or make a claim against the estates of deceased Members.

 

  B. Contractor retains all monies recovered by Contractor.

 

  C. Contractor shall coordinate benefits with other coverage programs or
entitlements, recognizing the OHCS as primary and the Medi-Cal program as the
payor of last resort.

 

  D. Cost Avoidance

 

  1) If Contractor reimburses the provider on a fee-for-service basis,
Contractor shall not pay claims for services provided to a Member whose Medi-Cal
eligibility record indicates third party coverage, designated by a Other Health
Coverage (OHC) code or Medicare coverage, without proof that the provider has
first exhausted all sources of other payments. Contractor shall have written
procedures implementing this requirement.

 

Page 21 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

  2) Proof of third party billing is not required prior to payment for services
provided to Members with OHC codes A, M, X, Y, or Z.

 

  E. Post-Payment Recovery

 

  1) If Contractor reimburses the provider on a fee-for-service basis,
Contractor shall pay the provider’s claim and then seek to recover the cost of
the claim by billing the liable third parties:

 

  a) For services provided to Members with OHC codes A, M, X, Y, or Z;

 

  b) For services defined by DHS as prenatal or preventive pediatric services;
or

 

  c) In child-support enforcement cases, identifiable by Contractor. If
Contractor does not have access to sufficient information to determine whether
or not the OHC coverage is the result of a child enforcement case, Contractor
shall follow the procedures for Cost Avoidance.

 

  2) In instances where Contractor does not reimburse the provider on a
fee-for-service basis, Contractor shall pay for services provided to a Member
whose eligibility record indicates third party coverage, designated by a OHC
code or Medicare coverage, and then shall bill the liable third parties for the
cost of actual services rendered.

 

  3) Contractor shall also bill the liable third parties for the cost of
services provided to Members who are retroactively identified by Contractor or
DHS as having OHC.

 

  4) Contractor shall have written procedures implementing the above
requirements.

 

  F. Reporting Requirements

 

  1)

Contractor shall submit monthly reports to DHS, in a format prescribed by DHS,
displaying claims counts and dollar amounts of costs avoided and the amount of
Post-Payment Recoveries, by aid category, as well as the amount of outstanding
recovery claims (accounts receivable) by age of account. The report shall
display separate claim counts and dollar amounts for Medicare Part A and Part B.
Reports shall be sent to the Department of Health Services,

 

Page 22 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

 

Third Party Liability Branch, Cost Avoidance Unit, P.O. Box 2471, Sacramento, CA
95812-2471.

 

  2) When Contractor identifies OHC unknown to DHS, Contractor shall report this
information to DHS within ten (10) days of discovery in automated format as
prescribed by DHS. This information shall be sent to the Department of Health
Services, Third Party Liability Branch, Health Identification Unit, P.O. Box
2471, Sacramento, CA 95812-2471.

 

  3) Contractor shall demonstrate to DHS that where Contractor does not Cost
Avoid or perform Post-Payment Recovery that the aggregate cost of this activity
exceeds the total revenues Contractor projects it would receive from such
activity.

 

24. Third-Party Tort Liability

 

Contractor shall identify and notify DHS’ Third Party Liability Branch of all
instances or cases in which Contractor believes an action by the Medi-Cal Member
involving casualty insurance or tort or Workers’ Compensation liability of a
third party could result in recovery by the Member of funds to which DHS has
lien rights under Article 3.5 (commencing with Section 14124.70), Part 3,
Division 9, Welfare and Institutions Code. Contractor shall make no claim for
recovery of the value of Covered Services rendered to a Member in such cases or
instances and such case or instance shall be referred to DHS’ Third Party
Liability Branch within ten (10) days of discovery. To assist DHS in exercising
its responsibility for such recoveries, Contractor shall meet the following
requirements:

 

  A. If DHS requests service information and/or copies of paid invoices/claims
for Covered Services to an individual Member, Contractor shall deliver the
requested information within thirty (30) days of the request. Service
information includes subcontractor and out-of-plan provider data. The value of
the Covered Services shall be calculated as the usual, customary and reasonable
charge made to the general public for similar services or the amount paid to
subcontracted providers or out-of-plan providers for similar services.

 

  B. Information to be delivered shall contain the following data items:

 

  1) Member name.

 

  2) Full 14 digit Medi-Cal number.

 

Page 23 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

  3) Social Security Number.

 

  4) Date of birth.

 

  5) Contractor name.

 

  6) Provider name (if different from Contractor).

 

  7) Dates of service.

 

  8) Diagnosis code and description of illness/injury.

 

  9) Procedure code and/or description of services rendered.

 

  10) Amount billed by a subcontractor or out-of-plan provider to Contractor (if
applicable).

 

  11) Amount paid by other health insurance to Contractor or subcontractor (if
applicable).

 

  12) Amounts and dates of claims paid by Contractor to subcontractor or
out-of-plan provider (if applicable).

 

  13) Date of denial and reasons for denial of claims (if applicable).

 

  14) Date of death (if applicable).

 

  C. Contractor shall identify to DHS’ Third Party Liability Branch the name,
address and telephone number of the person responsible for receiving and
complying with requests for mandatory and/or optional at-risk service
information.

 

  D. If Contractor receives any requests from attorneys, insurers, or
beneficiaries for copies of bills, Contractor shall refer the request to Third
Party Liability Branch with the information contained in paragraph B above, and
shall provide the name, address and telephone number of the requesting party.

 

  E. Information submitted to DHS under this section shall be sent to Department
of Health Services, Third Party Liability Branch, Recovery Section, P.O. Box
2471, Sacramento, CA 95812-2471.

 

Page 24 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

25. Records Related To Recovery For Litigation

 

  A. Records

 

Upon request by DHS, Contractor shall timely gather, preserve and provide to
DHS, in the form and manner specified by DHS, any information specified by DHS,
subject to any lawful privileges, in Contractor’s or its subcontractors’
possession, relating to threatened or pending litigation by or against DHS. (If
Contractor asserts that any requested documents are covered by a privilege,
Contractor shall: 1) identify such privileged documents with sufficient
particularity to reasonably identify the document while retaining the privilege;
and 2) state the privilege being claimed that supports withholding production of
the document.) Such request shall include, but is not limited to, a response to
a request for documents submitted by any party in any litigation by or against
DHS. Contractor acknowledges that time may be of the essence in responding to
such request. Contractor shall use all reasonable efforts to immediately notify
DHS of any subpoenas, document production requests, or requests for records,
received by Contractor or its Subcontractors related to this Contract or
subcontracts entered into under this Contract.

 

  B. Payment for Records

 

In addition to the payments provided for in Exhibit B. Payment Provisions, DHS
agrees to pay Contractor for complying with paragraph A, Records, above, as
follows:

 

  1) DHS shall reimburse Contractor amounts paid by Contractor to third parties
for services necessary to comply with paragraph A. Any third party assisting
Contractor with compliance with paragraph A above shall comply with all
applicable confidentiality requirements. Amounts paid by Contractor to any third
party for assisting Contractor in complying with paragraph A, shall not exceed
normal and customary charges for similar services and such charges and
supporting documentation shall be subject to review by DHS.

 

  2)

If Contractor uses existing personnel and resources to comply with paragraph A,
DHS shall reimburse Contractor as specified below. Contractor shall maintain and
provide to DHS time reports supporting the time spent by each employee as a
condition of

 

Page 25 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

 

reimbursement. Reimbursement claims and supporting documentation shall be
subject to review by DHS.

 

  a) Compensation and payroll taxes and benefits, on a prorated basis, for the
employees’ time devoted directly to compiling information pursuant to paragraph
A.

 

  b) Costs for copies of all documentation submitted to DHS pursuant to
paragraph A, subject to a maximum reimbursement of ten (10) cents per copied
page.

 

  3) Contractor shall submit to DHS all information needed by DHS to determine
reimbursement to Contractor under this provision, including, but not limited to,
copies of invoices from third parties and payroll records.

 

26. Fraud and Abuse Reporting

 

Contractor shall meet requirements set forth in 42 CFR 438.608. Contractor shall
report to the Contracting Officer all cases of suspected fraud and/or abuse, as
defined in 42 Code of Federal Regulations, Section 455.2, where there is reason
to believe that an incident of fraud and/or abuse has occurred, by
subcontractors, Members, providers, or employees within ten (10) State working
days of the date when Contractor first becomes aware of or is on notice of such
activity. Contractor shall establish policies and procedures for identifying,
investigating and taking appropriate corrective action against fraud and/or
abuse in the provision of health care services under the Medi-Cal program.
Contractor shall notify DHS prior to conducting any investigations, based upon
Contractor’s finding that there is reason to believe that an incident of fraud
and/or abuse has occurred, and, upon the request of DHS, consult with DHS prior
to conducting such investigations. Without waiving any privileges of Contractor,
Contractor shall report investigation results within ten (10) State working days
of conclusion of any fraud and/or abuse investigation.

 

27. Equal Opportunity Employer

 

Contractor will, in all solicitations or advertisements for employees placed by
or on behalf of the Contractor, state that it is an equal opportunity employer,
and will send to each labor union or representative of workers with which it has
a collective bargaining agreement or other contract or understanding, a notice
to be provided by DHS, advising the labor union or workers’ representative of
the Contractor’s commitment as an equal opportunity employer and will post
copies

 

Page 26 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

of the notice in conspicuous places available to employees and applicants for
employment.

 

28. Discrimination Prohibitions

 

  A. Member Discrimination Prohibition

 

Contractor shall not discriminate against Members or Eligible Beneficiaries
because of race, color, creed, religion, ancestry, marital status, sexual
orientation, national origin, age, sex, or physical or mental handicap in
accordance with Title VI of the Civil Rights Act of 1964, 42 USC Section 2000d,
rules and regulations promulgated pursuant thereto, or as otherwise provided by
law or regulations. For the purpose of this Contract, discriminations on the
grounds of race, color, creed, religion, ancestry, age, sex, national origin,
marital status, sexual orientation, or physical or mental handicap include, but
are not limited to, the following:

 

  1) Denying any Member any Covered Services or availability of a Facility;

 

  2) Providing to a Member any Covered Service which is different, or is
provided in a different manner or at a different time from that provided to
other Members under this Contract except where medically indicated;

 

  3) Subjecting a Member to segregation or separate treatment in any manner
related to the receipt of any Covered Service;

 

  4) Restricting a Member in anyway in the enjoyment of any advantage or
privilege enjoyed by others receiving any Covered Service, treating a Member or
Eligible Beneficiary differently from others in determining whether he or she
satisfies any admission, Enrollment, quota, eligibility, membership, or other
requirement or condition which individuals must meet in order to be provided any
Covered Service;

 

  5) The assignment of times or places for the provision of services on the
basis of the race, color, creed, religion, age, sex, national origin, ancestry,
marital status, sexual orientation, or the physical or mental handicap of the
participants to be served.

 

Contractor shall take affirmative action to ensure that Members are provided
Covered Services without regard to race, color, creed, religion,

 

Page 27 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

sex, national origin, ancestry, marital status, sexual orientation, or physical
or mental handicap, except where medically indicated.

 

For the purposes of this section, physical handicap includes the carrying of a
gene which may, under some circumstances, be associated with disability in that
person’s offspring, but which causes no adverse effects on the carrier. Such
genes will include, but are not limited to, Tay-Sachs trait, sickle cell trait,
thalassemia trait, and X-linked hemophilia.

 

  B. Discrimination Related To Health Status

 

Contractor shall not discriminate among eligible individuals on the basis of
their health status requirements or requirements for health care services during
enrollment, re-enrollment or disenrollment. Contractor will not terminate the
enrollment of an eligible individual based on an adverse change in the Member’s
health.

 

  C. Discrimination Complaints

 

Contractor agrees that copies of all grievances alleging discrimination against
Members or Eligible Beneficiaries because of race, color, creed, sex, religion,
age, national origin, ancestry, marital status, sexual orientation, or physical
or mental handicap will be forwarded to DHS for review and appropriate action.

 

29. Americans With Disabilities Act Of 1990 Requirements

 

Contractor shall comply with all applicable federal requirements in Section 504
of the Rehabilitation Act of 1973 and the Americans with Disabilities Act of
1990 (42 USC, Section 12101 et seq.), Title 45, Code of Federal Regulations
(CFR), Part 84 and Title 28, CFR, Part 36. Title IX of the Education Amendments
of 1972 (regarding education programs and activities), and the Age
Discrimination Act of 1975.

 

30. Disabled Veteran Business Enterprises (DVBE)

 

Contractor shall comply with applicable requirements of California law relating
to Disabled Veteran Business Enterprises (DVBE) commencing at Section 10115 of
the Public Contract Code.

 

Page 28 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Program Terms and Conditions

 

Attachment 2

 

31. Word Usage

 

Unless the context of this Contract clearly requires otherwise, (a) the plural
and singular numbers shall each be deemed to include the other; (b) the
masculine, feminine, and neuter genders shall each be deemed to include the
others; (c) “shall,” “will,” “must,” or “agrees” are mandatory, and “may” is
permissive; (d) “or” is not exclusive; and (e) “includes” and “including” are
not limiting.

 

32. Parties to State Fair Hearing

 

The parties to the State fair hearing include the Contractor as well as the
Member and his or her representative or the representative of a deceased
enrollee’s estate.

 

Page 29 of 29

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Duties of the State

 

Attachment 3

 

1. Payment For Services

 

DHS shall pay the appropriate capitation payments set forth in Exhibit B. Budget
Detail and Payment Provisions, provision 4, to the Contractor for each eligible
Member under this Contract, and ensure that such payments are reasonable and do
not exceed the amount set forth in 42 CFR, Section 447.361. Payments will be
made monthly for the duration of this Contract. Any adjustments for Federally
Qualified Health Centers will be made in accordance with Section 14087.325 of
the Welfare and Institutions Code.

 

2. Medical Reviews

 

DHS shall conduct medical reviews in accordance with the provisions of Section
14456, Welfare and Institutions Code. DHS shall have the discretion to accept
plan performance reports, audits or reviews conducted by other agencies or
accrediting bodies that use standards comparable to those of DHS. These plan
performance reports, audits and reviews may be in lieu of an audit or review
conducted by DHS in order to eliminate duplication of auditing efforts.

 

3. Enrollment Processing by DHS

 

  A. General

 

The parties to this Contract agree that the primary purpose of DHS’ Medi-Cal
managed care system is to improve quality and access to care for Medi-Cal
beneficiaries. The parties acknowledge that the Medi-Cal eligibility process and
the managed care enrollment system are dynamic and complex programs. The parties
also acknowledge that it is impractical to ensure that every beneficiary
eligible for enrollment in the Contractor’s plan will be enrolled in a timely
manner. Furthermore, the parties recognize that for a variety of reasons some
Eligible Beneficiaries will not be enrolled in Contractor’s plan and will
receive Covered Services in the Medi-Cal fee-for-service system. These reasons
include, but are not limited to, the exclusion of some beneficiaries from
participating in Medi-Cal managed care, the time it takes to enroll
beneficiaries, and the lack of a current valid address for some beneficiaries.
The parties desire to work together in a cooperative manner so that Eligible
Beneficiaries who choose to or should be assigned to Contractor’s plan are
enrolled in Contractor’s plan pursuant to the requirements of this entire
provision 3. The parties agree that to accomplish this goal it is necessary to
be reasonably flexible with regard to the enrollment process.

 

Page 1 of 7

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Duties of the State

 

Attachment 3

 

  B. Enrollment Processing Definitions

 

For purposes of this entire provision 3. Enrollment Processing by DHS, the
following definitions shall apply:

 

  1) Fully Converted County means a county in which the following circumstances
exist, except for those Medi-Cal beneficiaries covered by Title 22, CCR, Section
53887:

 

  a) Eligible Beneficiaries who meet the mandatory enrollment criteria contained
in Title 22, CCR, Section 53845(a) may no longer choose to receive Covered
Services on a Fee-for-Service basis; and

 

  b) All new Eligible Beneficiaries who meet the mandatory enrollment criteria
contained in Title 22, CCR, Section 53845(a) must now choose a managed care plan
or they will be assigned to a managed care plan; and

 

  c) All Eligible Beneficiaries listed in the Medi-Cal Eligibility Data System
(MEDS) as meeting the mandatory enrollment criteria contained in Title 22, CCR,
Section 53845(a) on the last date that both a. and b. above occur:

 

  i. Have been notified of the requirement to choose a managed care plan and
informed that if they fail to choose a plan they will be assigned to a managed
care plan; and

 

  ii. Those beneficiaries still eligible for Medi-Cal and enrollment into a
managed care plan at the time their plan enrollment is processed in MEDS have
been enrolled into a managed care plan.

 

  2) Mandatory Plan Beneficiary means:

 

  a) A new Eligible Beneficiary who meets the mandatory enrollment criteria
contained in Title 22, CCR, Section 53845(a), both at the time her/his plan
enrollment is processed by the DHS Enrollment Contractor and by MEDS; or

 

Page 2 of 7

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Duties of the State

 

Attachment 3

 

  b) An Eligible Beneficiary previously receiving Covered Services in a county
without mandatory managed care enrollment who now resides in a county where
mandatory enrollment is in effect and who meets the mandatory enrollment
criteria contained in Title 22, CCR, Section 53845(a); or

 

  c) An Eligible Beneficiary meeting the criteria of Title 22, CCR, Section
53845(b), and who subsequently meets the criteria of Title 22, CCR, Section
53845(a).

 

  3) Mandatory Plan Beneficiary shall not include any Eligible Beneficiary who:

 

  a) is eligible to receive Covered Services on a Fee-for-Service basis because
her/his MEDS eligibility for managed care plan enrollment is interrupted due to
aid code, ZIP code or county code changes; or

 

  b) becomes eligible for enrollment in a managed care plan on a retroactive
basis.

 

  C. DHS Enrollment Obligations

 

  1) DHS shall receive applications for enrollment from its enrollment
contractor and shall verify the current eligibility of applicants for enrollment
in Contractor’s plan under this Contract. If the Contractor has the capacity to
accept new Members, DHS or its enrollment contractor shall enroll or assign
Eligible Beneficiaries in Contractor’s plan when selected by the Eligible
Beneficiary or when the Eligible Beneficiary fails to timely select a plan. Of
those to be enrolled or assigned in Contractor’s plan, DHS will ensure that in a
Fully Converted County a Mandatory Plan Beneficiary will receive an effective
date of plan enrollment that is no later than 90 days from the date that MEDS
lists such an individual as meeting the enrollment criteria contained in Title
22, CCR, Section 53845(a), if all changes to MEDS have been made to allow for
the enrollment of the individual and all changes necessary to this Contract to
accommodate such enrollment, including, but not limited to rate changes and aid
code changes, have been executed. DHS will use due diligence in making any
changes to MEDS and to this Contract. DHS will provide Contractor a list of
Members on a monthly basis.

 

Page 3 of 7

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Duties of the State

 

Attachment 3

 

  2) DHS or its enrollment contractor shall assign Eligible Beneficiaries
meeting the enrollment criteria contained in Title 22, CCR, Section 53845(a) to
plans in accordance with Title 22, CCR, Section 53884.

 

  3) Notwithstanding any other provision in this Contract, subparagraphs 1) and
2) above shall not apply to:

 

  a) Eligible Beneficiaries previously eligible to receive Medi-Cal services
from a Prepaid Health Plan or Primary Care Case Management plan and such plan’s
contract with DHS expires, terminates, or is assigned or transferred to
Contractor;

 

  b) Members who are enrolled into another managed care plan on account of
assignment, assumption, termination, or expiration of this Contract;

 

  c) Eligible Beneficiaries covered by a new mandatory aid code, added to this
Contract;

 

  d) Eligible Beneficiaries meeting the criteria of Title 22, CCR, Section
53845(b), who subsequently meet the criteria of Title 22, CCR, Section 53845(a)
due solely to DHS designating a prior voluntary aid code as a new mandatory aid
code;

 

  e) Eligible Beneficiaries residing in an excluded zip code area within a
County that is not a fully Converted County; or

 

  f) Eligible Beneficiaries without a current valid deliverable address or with
an address designated as a County post office box for homeless beneficiaries.

 

  D. Disputes Concerning DHS Enrollment Obligations

 

  1) Contractor shall notify DHS of DHS’ noncompliance with this provision 3.
Enrollment Processing pursuant to the requirements and procedures contained in
Exhibit E, Attachment 2, provision 18. Disputes.

 

  2)

DHS shall have 120 days from the date of DHS’ receipt of Contractor’s notice
(the “cure period”) to cure any noncompliance with this provision 3. Enrollment
Processing, identified in Contractor’s notice, without incurring any financial
liability to the

 

Page 4 of 7

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Duties of the State

 

Attachment 3

 

 

Contractor. For purposes of this section, DHS shall be deemed to have cured any
noncompliance with this provision 3. Enrollment Processing, identified in
Contractor’s notice if within the cure period any of the following occurs:

 

  a) Mandatory Plan Beneficiaries receive an effective date of plan enrollment
that is within the cure period, or

 

  b) DHS corrects enrollment that failed to comply with this provision 3.
Enrollment Processing, by redirecting enrollment from one Contractor to another
within the cure period in order to comply with this provision 3. Enrollment
Processing, or

 

  c) Within the cure period, DHS changes the distribution of beneficiary
Assignment (subject to the requirements of Title 22, CCR, Section 53845(b)(1)
through (b)(4)), to the maximum extent new beneficiaries are available to be
assigned, to make up the number of incorrectly assigned beneficiaries as soon as
possible.

 

  3) If it is necessary to redirect enrollment or change the distribution of
beneficiary Assignment due to noncompliance with this provision 3. Enrollment
Processing, and such change varies from the requirements of Title 22, CCR,
Section 53884(b)(5) or (b)(6), Contractor agrees it will neither seek legal nor
equitable relief for such variance or the results of such variance if DHS
resumes assignment consistent with Sections 53884(b)(5) or (b)(6) after
correcting a noncompliance with this provision 3. Enrollment Processing.

 

  4) Notwithstanding Exhibit E, Attachment 2, provision 1. Governing Law or any
other provision of this Contract, if DHS fails to cure a noncompliance with this
provision 3. Enrollment Processing, within the cure period, DHS will be
financially liable for such noncompliance as follows:

 

DHS will be financially liable for Contractor’s demonstrated actual reasonable
losses as a result of the noncompliance, beginning with DHS’ first failure to
comply with its enrollment obligation set forth herein. DHS’ financial liability
shall not exceed 15 percent of Contractor’s monthly capitation payment
calculated as if noncompliance with this provision 3. Enrollment Processing did
not

 

Page 5 of 7

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Duties of the State

 

Attachment 3

 

occur, for each month in which DHS has not cured noncompliance pursuant to
paragraph D. subparagraph 2) above, beginning with DHS’ first failure to comply
with its enrollment obligation set forth herein.

 

  5) Notwithstanding paragraph D. subparagraph 4) above, DHS shall not be
financially liable to Contractor for any noncompliance with provision 3.
Enrollment Processing, in an affected county (on a county-by-county basis) if
Contractor’s loss of Mandatory Plan Beneficiaries, in a month in which any
noncompliance occurs, is less than five percent of Contractor’s total Members in
that affected county in the month in which the noncompliance occurs. The parties
acknowledge that the above-referenced five-percent threshold shall apply on a
county-by-county basis, not in the aggregate.

 

4. Disenrollment Processing

 

DHS shall review and process requests for Disenrollment and notify the
Contractor and the Member of its decision.

 

5. DHS Approval Process

 

  A. Within five (5) State working days of receipt, DHS shall acknowledge in
writing the receipt of any material sent to DHS by Contractor pursuant to
Exhibit E, Attachment 2, provision 8. Obtaining DHS Approval.

 

  B. Within sixty (60) days of receipt, DHS shall make all reasonable efforts to
approve in writing the use of such material provided to DHS pursuant to Exhibit
E, Attachment 2, provision 8. Obtaining DHS Approval, provide Contractor with a
written explanation why its use is not approved, or provide a written estimated
date of completion of DHS’ review process. If DHS does not complete its review
of submitted material within sixty (60) days of receipt, or within the estimated
date of completion of DHS review, Contractor may elect to implement or use the
material at Contractor’s sole risk and subject to possible subsequent
disapproval by DHS. This paragraph shall not be construed to imply DHS approval
of any material that has not received written DHS approval. This paragraph shall
not apply to Subcontracts or sub-subcontracts subject to DHS approval in
accordance with Exhibit A, Attachment 6, provision 13. Subcontracts, paragraph
C. regarding Departmental Approval – Non-Federally Qualified HMOs, and paragraph
D. regarding Departmental Approval – Federally Qualified HMOs.

 

Page 6 of 7

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit E

Duties of the State

 

Attachment 3

 

6. Program Information

 

DHS shall provide Contractor with complete and current information with respect
to pertinent policies, procedures, and guidelines affecting the operation of
this Contract, within thirty (30) days of receipt of Contractor’s written
request for information, to the extent that the information is readily
available. If the requested information is not available, DHS shall notify
Contractor within thirty (30) days, in writing, of the reason for the delay and
when Contractor may expect the information.

 

7. Catastrophic Coverage Limitation

 

DHS shall limit the Contractor’s liability to provide or arrange and pay for
care for illness of, or injury to, Members which results from or is greatly
aggravated by, a catastrophic occurrence or disaster.

 

8. Risk Limitation

 

DHS shall agree that there will be not risk limitation and that Contractor will
have full financial liability to provide Medically Necessary Covered Services to
Members.

 

9. Notice Of Termination Of Contract

 

DHS shall notify Members of their health care benefits and options available
upon termination or expiration of this Contract.

 

Page 7 of 7

--------------------------------------------------------------------------------

State of California — Health and Human Services Agency

Department of Health Services

 

Exhibit F

 

Contractor’s Release

 

Instructions to Contractor:

 

With final invoice(s) submit one (1) original and two (2) copies. The original
must bear the original signature of a person authorized to bind the Contractor.
The additional copies may bear photocopied signatures.

 

Submission of Final Invoice

 

Pursuant to contract number                      entered into between the State
of California Department of Health Services (DHS) and the Contractor (identified
below), the Contractor does acknowledge that final payment has been requested
via invoice number(s)                     , in the amount(s) of $
                     and dated                     . If necessary, enter “See
Attached” in the appropriate blocks and attach a list of invoice numbers, dollar
amounts and invoice dates.

 

Release of all Obligations

 

By signing this form, and upon receipt of the amount specified in the invoice
number(s) referenced above, the Contractor does hereby release and discharge the
State, its officers, agents and employees of and from any and all liabilities,
obligations, claims, and demands whatsoever arising from the above referenced
contract.

 

Repayments Due to Audit Exceptions / Record Retention

 

By signing this form, Contractor acknowledges that expenses authorized for
reimbursement does not guarantee final allowability of said expenses. Contractor
agrees that the amount of any sustained audit exceptions resulting from any
subsequent audit made after final payment, will be refunded to the State.

 

All expense and accounting records related to the above referenced contract must
be maintained for audit purposes for no less than three years beyond the date of
final payment, unless a longer term is stated in said contract.

 

Recycled Product Use Certification

 

By signing this form, Contractor certifies under penalty of perjury that a
percentage (0% to 100%) of the materials, goods, supplies or products offered or
used in the performance of the above referenced contract meets or exceeds the
minimum percentage of recycled material, as defined in Public Contract Code
Sections 12161 and 12200.

 

Reminder to Return State Equipment/Property (If Applicable)

(Applies only if equipment was provided by DHS or purchased with or reimbursed
by contract funds)

 

Unless DHS has approved the continued use and possession of State equipment (as
defined in the above referenced contract) for use in connection with another DHS
agreement, Contractor agrees to promptly initiate arrangements to account for
and return said equipment to DHS, at DHS’s expense, if said equipment has not
passed its useful life expectancy as defined in the above referenced contract.

 

Patents / Other Issues

 

By signing this form, Contractor further agrees, in connection with patent
matters and with any claims that are not specifically released as set forth
above, that it will comply with all of the provisions contained in the above
referenced contract, including, but not limited to, those provisions relating to
notification to the State and related to the defense or prosecution of
litigation.

 

Contractors Legal Name (As on Contract):

 

--------------------------------------------------------------------------------

Signature of Contractor or Official Designee:

         

Date:

     

--------------------------------------------------------------------------------

Printed Name/Title of Person Signing:

 

--------------------------------------------------------------------------------

DHS Distribution:

 

Accounting(Original)

 

Program

 

CMU contract file

   

 

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit G

Health Insurance Portability and Accountability Act (HIPAA)

 

1. Recitals

 

  A. “Protected Health Information” or “PHI” means any information, whether oral
or recorded in any form or medium that relates to the past, present, or future
physical or mental condition of an individual, the provision of health care to
an individual, or the past, present, or future payment for the provision of
health care to an individual; and that identifies the individual or with respect
to which there is a reasonable basis to believe the information can be used to
identify the individual. PHI shall have the meaning given to such term under
HIPAA and HIPAA regulations, as the same may be amended from time to time.

 

  B. DHS desires to protect the privacy and provide for the security of PHI
disclosed pursuant to this Contract.

 

IN THE USE OR DISCLOSURE OF INFORMATION PURSUANT TO THIS CONTRACT, THE PARTIES
AGREE AS FOLLOWS:

 

2. Permitted Uses and Disclosures.

 

  A. Permitted Uses and Disclosures. Except as otherwise required by law,
Contractor may use or disclose PHI only to perform functions, activities or
services specified in this Contract provided that such use or disclosure is for
purposes directly connected with the administration of the Medi-Cal program.
Those activities which are for purposes directly connected with the
administration of the Medi-Cal program include, but are not limited to:
establishing eligibility and methods of reimbursement; determining the amount of
medical assistance; providing services for recipients; conducting or assisting
an investigation, prosecution, or civil or criminal proceeding related to the
administration of the Medi-Cal program; and conducting or assisting a
legislative investigation or audit related to the administration of the Medi-Cal
program.

 

  B. Specific Use and Disclosure Provisions. Except as otherwise indicated in
this Contract, Contractor may:

 

  1)

Use and disclose for management and administration. Use and disclose PHI for the
proper management and administration of the Contractor or to carry out the legal
responsibilities of the Contractor, provided that disclosures are required by
law, or the Contractor obtains reasonable assurances from the person to whom the
information is disclosed that it will remain confidential and will be used or
further disclosed only as required by law or for the purpose for which it was
disclosed to the person, and the

 

Page 1 of 5

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637  A-11

 

Exhibit G

Health Insurance Portability and Accountability Act (HIPAA)

 

 

person notifies the Contractor of any instances of which it is aware that the
confidentiality of the information has been breached.

 

  2) Provision of Data Aggregation Services. Use PHI to provide data aggregation
services to DHS. Data aggregation means the combining of PHI created or received
by the Contractor on behalf of DHS with PHI received by the Contractor in its
capacity as the Contractor of another covered entity, to permit data analyses
that relate to the health care operations of DHS.

 

  C. Prohibition of External Disclosures of Lists of Beneficiaries. A Contractor
must provide DHS’s contract manager with a list of external entities, including
persons, organizations, and agencies, other than those within its treatment
network and other than DHS, to which it discloses lists of Medi-Cal beneficiary
names and addresses. This list must be provided within 30 days of the execution
of this Contract and annually thereafter.

 

3. Responsibilities of Contractor.

 

Contractor agrees:

 

  A. Divulging Medi-Cal Status. Not to divulge the Medi-Cal status of a
Contractor’s beneficiaries without DHS’s prior approval except for treatment,
payment and operations.

 

  B. Safeguards. To implement administrative, physical, and technical safeguards
that reasonably and appropriately protect the confidentiality, integrity, and
availability of the PHI, including electronic PHI, that it creates, receives,
maintains or transmits on behalf of DHS; and to prevent use or disclosure of PHI
other than as provided for by this Contract. Contractor shall maintain a
comprehensive written information privacy and security program that includes
administrative, technical and physical safeguards appropriate to the size and
complexity of the Contractor’s operations and the nature and scope of its
activities. Contractor will provide DHS with information concerning such
safeguards as DHS may reasonably request.

 

  C. Reporting of Improper Disclosures. To report to the DHS contract manager
within twenty-four (24) hours during a work week, of discovery by Contractor
that PHI has been used or disclosed other than as provided for by this Contract
or otherwise in violation of the HIPAA regulations or other statutes and
regulations pertaining to privacy and security of PHI.

 

Page 2 of 5

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637   A-11

 

Exhibit G

Health Insurance Portability and Accountability Act (HIPAA)

 

  D. Contractor’s Agents. To ensure that any agents, including subcontractors
but excluding providers of treatment services, to whom Contractor provides PHI
received from or created or received by Contractor on behalf of DHS, agree to
the same restrictions and conditions that apply to Contractor with respect to
such PHI; and to incorporate, when applicable, the relevant provisions of this
Contract into each subcontract or subaward to such agents or subcontractors.

 

  E. Availability of Information to Individuals. To provide access to
individuals (upon reasonable notice and during Contractor’s normal business
hours) to their PHI in a Designated Record Set in accordance with 45 CFR Section
164.524. Designated Record Set means the group of records maintained for DHS
that includes medical and billing records about individuals; enrollment,
payment, claims adjudication, and case or medical management systems maintained
for DHS health plans; or those records used to make decisions about individuals
on behalf of DHS.

 

  F. Internal Practices. To make Contractor’s internal practices, books and
records relating to the use and disclosure of PHI received from DHS, or created
or received by Contractor on behalf of DHS, available to DHS in a time and
manner designated by DHS, for purposes of determining compliance with the
provisions of this Exhibit.

 

  G. Documentation and Accounting of Disclosures. To document and make available
to DHS and to an Individual such disclosures of PHI, and information related to
such disclosures, necessary to respond to a proper request by the subject
Individual for an accounting of disclosures of PHI, in accordance with 45 CFR
164.528.

 

  H. Notification of Breach. During the term of this Contract, to notify DHS
within twenty-four (24) hours during a work week of any suspected or actual
breach of security, intrusion or unauthorized use or disclosure of PHI and/or
any actual or suspected use or disclosure of data in violation of any applicable
Federal and State laws or regulations or this Exhibit. Contractor shall take (i)
prompt corrective action to cure any such deficiencies and (ii) any action
pertaining to such unauthorized disclosure required by applicable Federal and
State laws and regulations. Contractor shall investigate such breach, or
unauthorized use or disclosure of PHI, and provide a written report of the
investigation to the DHS Privacy Officer within fifteen (15) working days of the
discovery of the breach or unauthorized use at:

 

Page 3 of 5

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637   A-11

 

Exhibit G

Health Insurance Portability and Accountability Act (HIPAA)

 

Privacy Officer

c/o Office of Legal Services

California Department of Health Services

P.O. Box 942732

Sacramento, CA 94234-7320

(916) 255-5259

 

  I. Notice of Privacy Practices. To produce a Notice of Privacy Practices (NPP)
in accordance with standards and requirements of HIPAA, the HIPAA regulations,
applicable State and Federal laws and regulations, and Section 2.A. of this
Exhibit. Such NPP’s must include the DHS Privacy Officer contact information
included in part H. above of this Contract as an alternative means for Medi-Cal
beneficiaries to lodge privacy complaints. All NPP’s created or modified after
August 1, 2003 must be submitted to the DHS contract manager for review.

 

4. Miscellaneous Provisions.

 

  A. Amendment. The parties acknowledge that Federal and State laws relating to
electronic data security and privacy are rapidly evolving and that amendment of
this Contract may be required to provide for procedures to ensure compliance
with such developments. The parties specifically agree to take such action as is
necessary to implement the standards and requirements of HIPAA, the HIPAA
regulations and other applicable laws relating to the security or privacy of
PHI. Upon DHS’s request, Contractor agrees to promptly enter into negotiations
with DHS concerning an amendment to this Contract embodying written assurances
consistent with the standards and requirements of HIPAA, the HIPAA regulations
or other applicable laws. DHS may terminate this Contract upon thirty (30) days
written notice in the event (i) Contractor does not promptly enter into
negotiations to amend this Contract when requested by DHS pursuant to this
Section or (ii) Contractor does not enter into an amendment providing assurances
regarding the safeguarding of PHI that DHS in its sole discretion, deems
sufficient to satisfy the standards and requirements of HIPAA, the HIPAA
regulations, and applicable laws.

 

  B.

Assistance in Litigation or Administrative Proceedings. Contractor shall make
itself and its employees, and use all due diligence to make any subcontractors
or agents assisting Contractor in the performance of its obligations under this
Contract, available to DHS at no cost to DHS to testify as witnesses, or
otherwise, in the event of litigation or administrative proceedings being
commenced against DHS, its directors, officers or employees based upon claimed
violation of HIPAA, the HIPAA

 

Page 4 of 5

--------------------------------------------------------------------------------

Molina Healthcare of California, dba: Molina

95-23637   A-11

 

Exhibit G

Health Insurance Portability and Accountability Act (HIPAA)

 

 

regulations or other laws relating to security and privacy, except where
Contractor or its subcontractor, employee or agent is a named adverse party.

 

Page 5 of 5