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Back to Form 8-K [form_8-k.htm]
Exhibit 10.2
 

STATE OF ILLINOIS

DEPARTMENT OF HEALTHCARE AND FAMILY SERVICES
 

 
CONTRACT FOR FURNISHING HEALTH SERVICES
 
BY A
 
MANAGED CARE ORGANIZATION

August 1, 2006

Illinois Department of Healthcare and Family Services
Division of Medical Programs
Bureau of Contract Management
201 South Grand Avenue East
Springfield, Illinois 62763-0001

Barry S. Maram
Director

Anne Marie Murphy
Medicaid Director
 

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TABLE OF CONTENTS
 
 
ARTICLE I
DEFINITIONS............................................................................1
 
ARTICLE II TERMS AND CONDITIONS.................................................
9
 
2.1
Specification.........................................................................................
9
 
2.2 Rules of
Construction.........................................................................
9
 
2.3 Performance of Services and
Duties................................................ 10
 
2.4 Language
Requirements....................................................................
10
 
(a) Key Oral
Contacts...........................................................................
10
 
(b) Written
Material...............................................................................
10
 
(c) Oral
Interpretation............................................................................
11
 
2.5 List of Individuals in Administrative
Capacity................................ 11
 
2.6 Certificate of
Authority........................................................................
11
 
2.7 Obligation to Comply with other Laws
............................................. 11
 
2.8 Provision of Covered Services Through Affiliated Providers........ 11
 
ARTICLE III
ELIGIBILITY..............................................................................
12
 
3.1 Determination of
Eligibility...................................................................
12
 
3.2 Enrollment
Generally..............................................................................
12
 
3.3 Enrollment
Limits.....................................................................................
12
 
3.4 Expansion to Other Contracting
Areas................................................ 13
 
3.5 Discontinuation of Services in One or More Contracting Area....... 13
 
ARTICLE IV ENROLLMENT, COVERAGE AND TERMINATION
OF
COVERAGE..................................................................................................
14
 
4.1 Enrollment
Process..................................................................................
14
 
4.2 Initial
Coverage.........................................................................................
16
 
4.3 Period of
Enrollment.................................................................................
16
 
4.4 Termination of
Coverage.........................................................................
16
 
4.5 Preexisting Conditions and
Treatment................................................... 18
 
4.6 Continuity of
Care.....................................................................................
18
 
4.7 Change of Site and Primary Care Provider or Women's
Health Care
Provider........................................................................................
19
 
i
 

TABLE OF CONTENTS
 
 
ARTICLE V DUTIES OF
CONTRACTOR.......................................................... 20
 
5.1
Services.........................................................................................................
20
 
(a) Amount, Duration and Scope of
Coverage......................................... 20
 
(b) Enumerated Covered
Services.............................................................. 20
 
(c) Behavioral Health
Services.................................................................... 22
 
(d) Services to Prevent Illness and Promote
Health................................ 23
 
(e) Exclusions from Covered
Services....................................................... 23
 
(f) Limitations on Covered
Services.......................................................... 24
 
(g) Right of
Conscience...............................................................................
25
 
(h) Emergency
Services...............................................................................
25
 
(i) Post-Stabilization
Services..................................................................... 26
 
(j) Additional Services or
Benefits.............................................................. 26
 
(k) Telephone Access
..................................................................................
26
 
5.2 Network
Adequacy......................................................................................
27
 
5.3
Marketing......................................................................................................
27
 
5.4 Inappropriate Marketing
Activities............................................................31
 
5.5 Obligation to Provide
Information.............................................................. 32
 
5.6 Quality Assurance, Utilization Review and Peer Review
........................ 34
 
5.7 Physician Incentive Plan
Regulations......................................................... 35
 
5.8 Prohibited Affiliations
...................................................................................
35
 
5.9
Records.............................................................................................................
35
 
(a) Maintenance of Business
Records........................................................... 35
 
(b) Availability of Business
Records............................................................. 36
 
(c) Patient Records
...........................................................................................
36
 
5.10 Computer System
Requirements..................................................................
37
 
5.11 Regular Information Reporting
Requirements............................................ 38
 
5.12 Health
Education.............................................................................................
45
 
5.13 Required Minimum Standards of
Care.......................................................... 46
 
(a) EPSDT Services to Enrollees Under Twenty-One (21) Years ................ 46
 
ii
 

TABLE OF CONTENTS
(continued)
 
(b) Preventive Medicine Schedule (Services to Enrollees Twenty-
One (21) Years of Age and
Over)................................................................... 48
 
(c) Maternity
Care............................................................................................
49
 
(d) Complex and Serious Medical Conditions
............................................ 51
 
(e) Access Standards
....................................................................................
51
 
(f) Coordination with Other Service
Providers........................................... 52
 
5.14 Authorization of Services
......................................................................... 53
 
5.15 Case
Management......................................................................................
53
 
5.16 Children with Special Health Care Needs
............................................... 54
 
5.17 Choice of
Physicians..................................................................................
54
 
5.18 Timely Payments to
Providers.................................................................... 55
 
5.19 Grievance Procedure and Appeal Procedure
........................................... 56
 
5.20 Enrollee Satisfaction
Survey....................................................................... 58
 
5.21 Provider Agreements and
Subcontracts................................................... 58
 
5.22 Site Registration and Primary Care Provider/Women's Health Care
Provider Approval and
Credentialing................................................................ 60
 
5.23 Advance
Directives.......................................................................................61
 
5.24 Fees to Enrollees Prohibited
....................................................................... 61
 
5.25 Fraud and Abuse Procedures
..................................................................... 61
 
5.26 Misrepresentation
Procedures.....................................................................
62
 
5.27 Enrollee-Provider
Communications.............................................................. 62
 
5.28 HIPAA
Compliance.........................................................................................
63
 
ARTICLE VI DUTIES OF THE
DEPARTMENT..................................................... 64
 
6.1
Enrollment...........................................................................................................
64
 
6.2
Payment...............................................................................................................
64
 
6.3 Department Review of Marketing Materials
................................................. 64
 
6.4 HIPAA
Compliance............................................................................................
64
 
ARTICLE VII PAYMENT AND
FUNDING............................................................... 65
 
7.1 Capitation
Payment..............................................................................................65
 
7.2 Hospital Delivery Case Rate
Payment.............................................................. 65
 
iii
 

TABLE OF CONTENTS
(continued)
 
 
7.3 Actuarially Sound Rate
Representation.......................................................... 65
 
7.4 New Covered
Services.......................................................................................
65
 
7.5 Adjustments.........................................................................................................
65
 
7.6 Copayments..........................................................................................................
65
 
7.7 Availability of Funds
..........................................................................................
66
 
7.8 Quality Performance
Payment............................................................................
66
 
7.9 Denial of Payment Sanction by
CMS................................................................ 68
 
7.10 Hold Harmless
....................................................................................................
68
 
7.11 Payment in
Full....................................................................................................
68
 
7.12 820 Payment
File..................................................................................................
68
 
7.13 Medical Loss Ratio
Guarantee............................................................................
68
 
ARTICLE VIII TERM RENEWAL AND TERMINATION
........................................ 70
 
8.1 Term.........................................................................................................................
70
 
8.2 Continuing Duties in the Event of
Termination................................................ 70
 
8.3 Termination With and Without
Cause............................................................... 70
 
8.4 Temporary
Management......................................................................................
70
 
8.5 Termination for Breach of HIPAA Compliance
Obligations.......................... 70
 
8.6 Automatic
Termination..........................................................................................71
 
8.7 Reimbursement in the Event of
Termination..................................................... 71
 
ARTICLE IX GENERAL
TERMS...................................................................................
72
 
9.1 Records Retention, Audits, and
Reviews........................................................... 72
 
9.2 Nondiscrimination..................................................................................................
73
 
9.3 Confidentiality of
Information..............................................................................
73
 
9.4 Notices.....................................................................................................................
74
 
9.5 Required
Disclosures..............................................................................................
74
 
(a) Conflict of
Interest...............................................................................................
74
 
(b) Disclosure of
Interest..........................................................................................
75
 
9.6 CMS Prior
Approval................................................................................................
76
 
iv

TABLE OF CONTENTS
(continued)
 
 
9.7 Assignment
..........................................................................................................76
 
9.8 Similar
Services.....................................................................................................
76
 
9.9
Amendments..........................................................................................................
76
 
9.10
Sanctions..............................................................................................................
76
 
(a) Failure to Report or
Submit...............................................................................
77
 
(b) Failure to Submit Encounter
Data.................................................................... 77
 
(c) Failure to Meet Minimum Standards of
Care.................................................. 77
 
(d) Failure to Submit Quality and Performance
Measures................................. 77
 
(e) Failure to Participate in the Performance Improvement
Project................... 77
 
(f) Failure to Demonstrate Improvement in Areas of Deficiencies
................... 78
 
(g) Imposition of Prohibited
Charges.................................................................... 78
 
(h) Misrepresentation or Falsification of
Information........................................ 78
 
(i) Failure to Comply with the Physician Incentive Plan Requirements ..........
78
 
(j) Failure to Meet Access and Provider Ratio
Standards................................. 78
 
(k) Failure to Provide Covered
Services.............................................................. 78
 
(1) Discrimination Related to Pre-Existing Conditions and/or Medical
History......................................................................................................................
79
 
(m) Pattern of Marketing
Failures.........................................................................
79
 
(n) Other
Failures....................................................................................................
79
 
9.11 Sale or
Transfer...................................................................................................
79
 
9.12 Coordination of Benefits for
Enrollees............................................................ 79
 
9.13
Subrogation.........................................................................................................
80
 
9.14 Agreement to Obey All
Laws...........................................................................
80
 
9.15
Severability..........................................................................................................
80
 
9.16 Contractor's Disputes With Other
Providers................................................. 80
 
9.17 Choice of
Law......................................................................................................
80
 
9.18 Debarment
Certification.....................................................................................
81
 
9.19 Child Support, State Income Tax and Student Loan Requirements ............
81
 
9.20 Payment of Dues and
Fees................................................................................
81
 
9.21 Federal Taxpayer
Identification........................................................................
81
 

TABLE OF CONTENTS
(continued)
 
9.22 Dmg Free
Workplace.........................................................................................
81
 
9.23 Lobbying.............................................................................................................
81
 
9.24 Early
Retirement..................................................................................................
82
 
9.25 Sexual
Harassment..............................................................................................
82
 
9.26 Independent
Contractor.....................................................................................
82
 
9.27 Solicitation of
Employees...................................................................................
82
 
9.28 Nonsolicitation....................................................................................................
83
 
9.29 Ownership of Work
Product..............................................................................
83
 
9.30 Bribery
Certification............................................................................................
83
 
9.31 Nonparticipation in International
Boycott....................................................... 83
 
9.32 Computational
Error............................................................................................
84
 
9.33 Survival of
Obligations.......................................................................................
84
 
9.34 Clean Air Act and Clean Water Act
Certification........................................... 84
 
9.35 Non-Waiver..........................................................................................................
84
 
9.36 Notice of Change in
Circumstances..................................................................
84
 
9.37 Public Release of Information
........................................................................... 84
 
9.38 Payment in Absence of Federal Financial
Participation................................. 84
 
9.39 Employment
Reporting........................................................................................
85
 
9.40 Certification of
Participation................................................................................
85
 
9.41 Indemnification......................................................................................................
85
 
9.42 Gifts..........................................................................................................................
85
 
9.43 Business Enterprise for Minorities, Females and Persons with Disabilities..
86
 
9.44 Non-Delinquency
Certification.............................................................................
86
 
9.45 Litigation..................................................................................................................
86
 
9.46 Insolvency...............................................................................................................
86
 
Attachment I - Rate Sheets
Attachment II - Drug Free Workplace Agreement
Attachment III - HIPAA Compliance Obligations
Attachment IV - Business Enterprise Program Contracting Goal
 
Exhibit A: Quality Assurance
Exhibit B: Utilization Review/Peer Review
Exhibit C: Summary of Required Reports and Submissions
Exhibit D: Data Telecommunication Configuration Requirements
 
 

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STATE OF ILLINOIS DEPARTMENT OF HEALTHCARE AND FAMILY SERVICES
 
CONTRACT FOR FURNISHING HEALTH SERVICES
 
THIS CONTRACT FOR FURNISHING HEALTH SERVICES ("Contract") made, pursuant to
Section 5-11 of the Illinois Public Aid Code (305 ILCS 5/5-11), is by and
between the Illinois Department of Healthcare and Family Services
("Department"), acting by and through its Director, and Harmony Health Plan of
Illinois, Inc. ("Contractor"), who certifies that it is a managed care
organization and whose principal office is located at 200 West Adams Street,
Chicago, IL 60606.
 
RECITALS
 
WHEREAS, the Contractor is a health maintenance organization operating pursuant
to a Certificate of Authority issued by the Illinois Department of Financial and
Professional Regulation and wishes to provide Covered Services to Potential
Enrollees (as defined herein);
 
WHEREAS, the Department, pursuant to the laws of the State of Illinois, provides
for medical assistance under the HFS Medical Program to Participants wherein
Potential Enrollees may enroll with the Contractor to receive Covered Services;
and
 
WHEREAS, the Contractor warrants that it is able to provide and/or arrange to
provide the Covered Services set forth in this Contract to Enrollees under the
terms and conditions set forth herein;
 
NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein, the parties agree as follows:
 
ARTICLE I
 
DEFINITIONS
 
The following terms as used in this Contract and the attachments, exhibits and
amendments hereto shall be construed and interpreted as follows, unless the
context otherwise expressly requires a different construction and
interpretation:
 
820 Payment File means the HIPAA transaction that the Contractor electronically
retrieves from the Department which identifies each Enrollee for whom payment
was made.
 
834 Audit File means the electronic HIPAA transaction that the Contractor
retrieves monthly from the Department that reflects the Enrollees for the
following calendar month.
 
834 Daily File means the electronic HIPAA transaction that the Contractor
retrieves from the Department each day that reflects changes in enrollment
subsequent to the previous 834 Audit File.
 
1

 
Abuse means a manner of operation that results in excessive or unreasonable
costs to the Federal and/or State health care programs.
 
Action means a (i) denial or limitation of authorization of a requested service;
(ii) reduction, suspension, or termination of a previously authorized service;
(iii) denial of payment for a service; (iv) failure to provide services in a
timely manner; (v) failure to respond to an appeal in a timely manner; and (vi)
solely with respect to a MCO that is the only Contractor serving a rural area,
the denial of an Enrollee's request to obtain services outside of the
Contracting Area.
 
Administrative Rules means the rules promulgated by the Department governing the
HFS Medical Program.
 
Affiliated means associated with another party for the purpose of providing
health care services under a Contractor's Plan pursuant to a written contract.
 
Appeal means a request for review of a decision made by the Contractor with
respect to an Action.
 
Authorized Person means a representative of the Office of Inspector General for
the Department, the Illinois Mcdicaid Fraud Control Unit, the United States
Department of Health and Human Services, a representative of other State and
federal agencies with monitoring authority related to the HFS Medical Program,
and a representative of any EQRO under contract with the Department.
 
CAHPS means Consumer Assessment of Health Plans Survey.
 
CMS means the Centers for Medicare & Medicaid Services under the United States
Department of Health and Human Services.
 
Capitation means the reimbursement arrangement in which a fixed rate of payment
per Enrollec per month is made to the Contractor for the performance of all of
the Contractor's duties and obligations pursuant to this Contract, except those
services reimbursed through the Hospital Delivery Case Rate.
 
Case means individuals who have been grouped together and assigned a common
identification number by the Department or the Department of Human Services of
which at least one individual in that grouping has been determined by the
Department to be a Potential Enrollee. An individual is added to a Case when the
Client Information System maintained by the Illinois Department of Human
Services reflects the individual is in the Case.
 
Children with Special Health Care Needs (CSHCN) means children who have serious
medical or chronic conditions, or who are identified with special health care
needs.
 
Contract means this document, inclusive of all attachments, exhibits, schedules
and any subsequent amendments hereto.
 
Contracting Area means the area(s) from which the Contractor may enroll
Potential Enrollees as set forth in Attachment I.
 

 
2

Covered Services means those benefits and services described in Article V,
Section 5.1.
 
EPSDT means the Early and Periodic, Screening, Diagnostic and Treatment services
provided to children under Title XIX of the Social Security Act (42 U.S.C. §
1396, et seq.). The preventive component of this program is referred to as the
"Healthy Kids" program.
 
EQRO means an "External Quality Review Organization" that has a contract with
the Department to perform federally required external oversight and monitoring
of the quality assurance component of managed care. External oversight and
monitoring of quality assurance shall include, but is not limited to, onsite
review, attendance at quality assurance meetings, as directed by the Department;
validation of performance measures; validation of performance improvement
projects; ongoing monitoring of quality outcomes and timeliness of, and access
to, the Covered Services.
 
Early Intervention means the program described at 325 ILCS 20/1 et scq., which
authorizes the provision of services to infants and toddlers, birth through two
years of age, who have a disability due to developmental delay or a physical or
mental condition that has a high probability of resulting in developmental delay
or being at risk of having substantial developmental delays due to a combination
of serious factors.
 
Effective Date shall be August 1, 2006.
 
Emergency Medical Condition means a medical condition manifesting itself by
acute symptoms of sufficient severity (including, but not limited to, 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 (i) placing the health of the individual (or, with
respect to a pregnant woman, the health of the woman or her unborn child) in
serious jeopardy, (ii) serious impairment to bodily functions, or (iii) serious
dysfunction of any bodily organ or part.
 
Emergency Services means those inpatient and outpatient health care services
that are Covered Services, including transportation, needed to evaluate or
stabilize an Emergency Medical Condition, which are furnished by a Provider
qualified to furnish emergency services.
 
Encounter means an individual service or procedure provided to an Enrollee that
would result in a claim if the service or procedure were to be reimbursed
fee-for-service under the HFS Medical Program.
 
Encounter Data means the compilation of data elements, as specified by the
Department in written notice to the Contractor, identifying an Encounter that
includes information similar to that required in a claim for fee-for-service
payment under the HFS Medical Program.
 
Enrollee means any Potential Enrollee whose coverage under the Plan has begun
and remains in effect pursuant to this Contract.

3

Family Case Management Provider means any agency contracting with the Illinois
Department of Human Services or its successor agency to provide Family Case
Management Services.
 
Family Case Management Services means the program described at 77 111. Adm. Code
630.220.
 
Federally Qualified HMO means an HMO that CMS has determined to be a qualified
HMO under Section 1310(d) of the Public Health Service Act.
 
Federally Qualified Health Center or FQHC means a health center that meets the
requirements of 89 111. Adm. Code 140.46 l(d).
 
Fraud means knowing and willful deception, or a reckless disregard of the facts,
with the intent to receive an unauthorized benefit.
 
Grievance means an Enrollees expression of dissatisfaction, including
complaints, about any matter other than a matter that is properly the subject of
an Appeal.
 
Head of Case means the individual in whose name the Case is registered and to
whom the HFS medical card is mailed.
 
HEDIS means the Health Plan Employer Data and Information Set.
 
HFS Medical Program means the Illinois Medical Assistance Program administered
under Article V of the Illinois Public Aid Code (305 ILCS 5/5-1 et seq.) or its
successor program and Titles XIX (42 USC 1396 et scq.) and XXI (42 USC 1397aa ct
seq.) of the Social Security Act and Section 12-4.35 of the Illinois Public Aid
Code (305 ILCS 5/12-435); the State Children's Health Insurance Program
administered under 215 ILCS 106 and Title XXI of the Social Security Act (42 USC
1397 aa et seq.).
 
Hospital Delivery Case Rate means a fixed payment made to the Contractor for
Physician and hospital services associated with an Enrollee's delivery of a
newborn in a hospital. The Hospital Delivery Case Rate will apply to deliveries
of stillborn infants if the procedure groups into the appropriate diagnosis
related grouping (DRG) code identified in this Contract.
 
Ineligible Person means a Person which: (i) under either Section 1128 or Section
1128A of the Social Security Act, is or has been terminated, barred, suspended
or otherwise excluded from participation in or has voluntarily withdrawn from
participating in, as the result of a settlement agreement, any program under
federal law including any program under Titles XVIII, XIX, XX or XXI of the
Social Security Act; (ii) has not been reinstated in the Medical Assistance
Program or Federal health care programs after a period of exclusion, suspension,
debarment, or ineligibility; or (iii) has been convicted of a criminal offense
related to the provision of health care items or services in the last ten (10)
years.
 
MCO means a "managed care organization" that is: (i) a Federally Qualified HMO
which meets the advance directives requirements ofsubpart I of part 489 of 42
C.F.R. and set
 
4

forth in Article V, Section 5.23 or (ii) any public or private entity that meets
the advance directives requirements of subpart I of part 489 of 42 C.F.R. and
set forth in Article V, Section 5.23 and is determined to meet the following
conditions: (A) is organized primarily for the purpose of providing health care
services, (B) makes the services it provides to its Medicaid Enrollees as
accessible (in terms of timeliness, amount, duration and scope) as those
services are to other Medicaid participants within the area served by the entity
and (C) meets the solvency standards of regulations promulgated under 42 C.F.R.
Part 438.
 
Marketing means any activities, procedures, materials, information or incentives
used to encourage or promote the enrollment of Potential Enrollees with the
Contractor.
 
Marketing Materials means materials that are produced in any medium, by or on
behalf of a MCO, are used by the MCO to communicate with Potential Enrollees or
Enrollees, and can reasonably be interpreted as intended to influence them to
enroll with that particular MCO.
 
Medically Necessary means that a service, supply or medicine is appropriate and
meets the standards of good medical practice in the medical community for the
diagnosis or treatment of a covered illness or injury, the prevention of future
disease, to assist in the Enrollee's ability to attain, maintain, or regain
functional capacity, or to achieve age-appropriate growth, as determined by the
Provider in accordance with the Contractor's guidelines, policies and/or
procedures.
 
Misconduct means any activity by an employee of the Contractor which is
violative of any provisions related to Marketing.
 
Misrepresentation means a statement an employee of the Contractor's Marketing
staff knows to be false or misleading, or does not believe to be true and
accurate, and makes with an intent to deceive or be unfair to a Potential
Enrollec or Enrollee.
 
National Provider Identification Number (NP1) means the national standard
identifier for healthcare providers for use in the healthcare industry.
 
NCQA means the National Committee for Quality Assurance.
 
Office of Inspector General or OIG means the Office of Inspector General for the
Illinois Department of Healthcare and Family Services as set forth in 305 ILCS
5/12-13.1.
 
Participant means any individual receiving benefits under the HFS Medical
Program.
 
Person means any individual, corporation, proprietorship, firm, partnership,
limited liability company, limited partnership, trust, association, governmental
authority or other entity, whether acting in an individual, fiduciary or other
capacity.
 
Person With an Ownership or Controlling Interest means a Person that: has a
direct or indirect, singly or in combination, ownership interest equal to five
percent (5%) or more in the Contractor; owns an interest of five percent (5%) or
more in any mortgage, deed of trust, note or other obligations secured by the
Contractor if that interest equals at least five percent (5%) of the value of
the property or assets of the Contractor; is an officer or director of a
Contractor that is

 
5

organized as a corporation, is a member of the Contractor that is organized as a
limited liability company or is a partner in the Contractor that is organized as
a partnership.
 
Physician means a person licensed to practice medicine in all its branches under
the Medical Practice Act of 1987.
 
Plan means the Contractor's program for providing Covered Services pursuant to
this Contract.
 
Post-Stabilization Services means medically necessary non-emergency services
furnished to an Enrollcc after the Enrollee is Stabilized, in order to maintain
such Stabilization, following an Emergency Medical Condition.
 
Potential Enrollee means a Participant, except one who:
 
• is receiving Medical Assistance under Aid to the Aged, Blind and Disabled; as
provided by Title XIX of the Social Security Act (42 U.S.C. §1383c) and 305 ILCS
5/3-1 etseq.;
 
• is under age 21 and receiving Supplemental Security Income;
 
• is eligible only through the Refugee Assistance programs under Title XIX of
the Social Security Act (42 U.S.C. 1396 ct seq.):
 
• is age 19 or older and eligible only through the State Family and Children
Assistance or Transitional Assistance Programs (305 ILCS 5/6-11);
 
• is receiving services from the Department of Children and Family Services;
 
• is residing in a long term care facility including State of Illinois operated
facilities or is residing in a Supported Living Facility;
 
• has Medicare coverage under Title XVIII of the Social Security Act (42 U.S.C.
1395 et se^);
 
• has significant medical coverage through a third party;
 
• is eligible only through the Medicaid Presumptive Eligibility for Pregnant
Women program under Title XIX of the Social Security Act (42 U.S.C. 1396r-l) or
through the Children's Presumptive Eligibility program;
 
• is eligible for Medical Assistance only through meeting a spend-down
obligation;
 
• is eligible only through the Illinois Healthy Women program;
 
• is eligible only through the Illinois Cares Rx program;
 
6

• is eligible only through the All Kids Rebate program;
 
• is receiving services under a Section 1915(c) Home and Community-Based Waiver;
 
• is registered with the Department as an American Indian or Alaska Native;
 
• is a non-citizen receiving only emergency Medical Assistance; or
 
• is identified with an "R" in the eighth position of a Case identification
number.
 
Primary Care Provider means a Physician, specializing by certification or
training in obstetrics, gynccology, general practice, pediatrics, internal
medicine or family practice who agrees to be responsible for directing, tracking
and monitoring the health care needs of, and authorizing and coordinating care
for, Enrollees.
 
Prospective Enrollee means a Potential Enrollee who has begun the process of
enrollment with the Contractor but whose coverage under the Plan has not yet
begun.
 
Provider means a Person who is approved by the Department to furnish medical,
educational or rehabilitative services to Participants under the HFS Medical
Program. Contractor is not a Provider.
 
Rural Health Clinic or RHC means a Provider that has been designated by the
Public
Health Service, the U.S. Department of Health and Human Services, or the
Governor of the State of Illinois, and approved by the Public Health Service, in
accordance with the Rural Health Clinics Act (sec Public Law 95-210) as a RHC.
 
Service Authorization Request means a request by an Enrollee for the provision
of a medical service.
 
Site means any contracted Provider (IPA, PHO, FQHC, individual physician,
physician groups, etc.) through which the Contractor arranges the provision of
primary care to Enrollees.
 
Stabilization or Stabilized means, with respect to an Emergency Medical
Condition, and as determined by an attending emergency room Physician or other
treating Provider within reasonable medical probability, that no material
deterioration of the condition is likely to result upon discharge or transfer to
another facility.
 
State means the State of Illinois.
 
Tertiary Care means medical care requiring a setting outside of the routine,
community standard, which care shall be provided within a regional medical
center by highly specialized Providers (specialists and subspecialists) who
require complex technological, diagnostic, treatment and support facilities to
provide such care.
 
7
 

Title X Family Planning Provider means an agency that receives grants from the
Illinois Department of Human Services to provide comprehensive family planning
services pursuant to Title X of the Public Health Services Act, 42 U.S.C. 300
and 77 111. Adm. Code 635.
 
Women's Health Care Provider means a Physician, specializing by certification or
training in obstetrics, gynecology or family practice.

 
8
 

 
ARTICLE II
TERMS AND CONDITIONS
 
2.1 Specification. This Contract is for the delivery of Covered Services to
Enrollees and the administrative responsibilities attendant thereto. The terms
and conditions of this Contract, along with the applicable Administrative Rules
and the Departmental materials described in this Article II, Section 2.3 below,
shall constitute the entire and present agreement between the parties. This
Contract, including all attachments, exhibits and amendments constitutes a total
integration of all rights, benefits and obligations of both parties for the
performance of all duties and obligations hereunder including, but not limited
to, the provision of, and payment for Covered Services under this Contract. This
Contract is contingent upon receipt of approval from CMS.
 
There are no extrinsic conditions or collateral agreements or undertakings of
any kind with respect to matters addressed in this Contract. It is the express
intention of both the Department and the Contractor that any and all prior or
contemporaneous agreements, promises, negotiations or representations, cither
oral or written, except as provided herein are to have no force, effect or legal
consequences of any kind, nor shall any such agreements, promises, negotiations
or representations, either oral or written, have any bearing upon this Contract
or the duties or obligations hereunder. This Contract and any amendment hereto
shall be deemed the full and final expression of the parties' agreement.
 
2.2 Rules of Construction.
 
(a) Unless the context otherwise requires:
 
(1) Provisions apply to successive events and transactions;
 
(2) "Or" is not exclusive;
 
(3) Unless otherwise specified, references to statutes, regulations, and rules
include subsequent amendments and successors thereto;
 
(4) The various headings of this Contract are provided for convenience only and
shall not affect the meaning or interpretation of this Contract or any provision
hereof;
 
(5) If any payment or delivery hereunder between the Contractor and the
Department shall be due on any day that is not a business day, such payment or
delivery shall be made on the next succeeding business day;
 
(6) Words in the plural that should be singular by context shall be so read, and
words in the singular shall be read as plural where the context dictates;
 
(7) Days shall mean calendar days unless otherwise designated by the context;
and
 
(8) References to masculine or feminine pronouns shall be interchangeable where
the context requires.
 
 
9
 
 
(b) References in the Contract to Potential Enrollee, Prospective Enrollee and
Enrollee shall include the parent, caretaker relative or guardian where such
Potential Enrollee, Prospective Enrollee or Enrollee is a minor child or an
adult for whom a guardian has been named; provided, however, that the Contractor
is not obligated to cover services for any individual who is not enrolled as an
Enrollee with the Contractor.
 
2.3 Performance of Services and Duties. The Contractor shall perform all
services and other duties as set forth in this Contract in accordance with, and
subject to, the Administrative Rules and Departmental materials, including, but
not limited to, Departmental policies, Department Provider Notices, Provider
Handbooks and any other rules and regulations that may be issued or promulgated
from time to time during the term of this Contract. The Department shall provide
copies of such materials to the Contractor upon the Contractor's written
request, if such are in existence upon the Effective Date, or upon issuance or
promulgation if issued or promulgated after the Effective Date. Changes in such
materials after the Effective Date shall be binding on the parties hereto but
shall not be considered amendments to the Contract. To the extent the Department
proposes a change in policy that may have a material impact on the Contractor's
ability to perform under this Contract, the proposed change will be subject to
good faith negotiations between both parties before it shall be binding pursuant
to this Article II, Section 2.3.
 
2.4 Language Repuirements.
 
(a) Key Oral Contacts. The Contractor shall conduct Key Oral Contacts (as
described below) with Potential Enrollees, Prospective Enrollces or Enrollecs in
a language the Potential Enrollces, Prospective Enrollces and Enrollecs
understand. Where the language is other than English, the Contractor shall offer
and, if accepted by the Potential Enrollee, Prospective Enrollee or Enrollee,
shall supply interpretive services. Such services may not be rendered by any
individual who is under the age of eighteen (18). "Key Oral Contacts" include,
but are not limited to: Marketing contacts; enrollment communications;
explanations of benefits; Site, Primary Care and Women's Health Care Provider
selection activity; educational information; telephone calls to the toll-free
hotline(s) described in Article V, Section 5.1(k); and face-to-face encounters
with Providers rendering care.
 
(b) Written Material. Marketing Materials, Enrollee Handbooks, Basic
Information, and any information or notices required to be distributed to
Potential Enrollees, Prospective Enrollees or Enrollees by the Department or
regulations promulgated from time to time under 42 C.F.R. Part 438
(collectively, "Written Materials") shall be easily understood by individuals
who have a sixth grade reading level. Such Written Materials shall be available
in alternative formats that take into account the special needs (e.g., vision
impairment) of Potential Enrollees, Prospective Enrollees or Enrollees. The
Contractor shall have in place a mechanism to help Potential Enrollees,
Prospective Enrollees and Enrollees understand the requirements and benefits of
the Plan. Where there is a prevalent single-language minority within the low
income households in the relevant Department of Human Services local office area
(which for purposes of this Contract shall exist when five percent (5%) or more
such families speak a language other than English, as determined by the
Department according to published Census Bureau data), the
 

 
10
 

Contractor's written materials provided to Potential Enrollees, Prospective
Em-ollees or Enrollees must be available in that language as well as English.
Translations of written material are subject to prior approval by the Department
and must be accompanied by a certification that the translation is accurate and
complete.
 
(c) Oral Interpretation. The Contractor must make oral interpretation services
available free of charge in all languages to all Potential Enrollees,
Prospective Enrollees or Enrollees who need assistance understanding Key Oral
Contacts or Written Materials. The Contractor must include in all Key Oral
Contacts and Written Materials notification that such oral interpretation
services are available, and provide a telephone number that can be used to
obtain such services.
 
2.5 List of Individuals in an Administrative Capacity. Upon execution of this
Contract, the Contractor shall provide the Department with a list of individuals
who have responsibility for monitoring and ensuring the performance of each of
the duties and obligations under this Contract. This list shall be updated
throughout the term of this Contract as necessary and as changes occur, and
written notice of such changes shall be given to the Department within ten (10)
business days of such changes occurring.
 
2.6 Certificate of Authority. The Contractor must obtain and maintain during the
term of the Contract a valid Certificate of Authority as a health maintenance
organization under 215 ILCS 125/1-1. etseq..
 
2.7 Obligation to Comply with other Laws. No obligation imposed herein on the
Contractor shall relieve the Contractor of any other obligation imposed by law
or regulation, including, but not limited to, those imposed by The Managed Care
Reform and Patient Rights Act (215 ILCS 134/1 et seq.), the federal Balanced
Budget Act of 1997 (Public Law 105-33) and regulations promulgated by the
Illinois Department of Financial and Professional Regulation, the Illinois
Department of Public Health or CMS. The Department shall report all information
it receives indicating a violation of a law or regulation to the appropriate
agency.
 
(a) If the Contractor believes that it is impossible to comply with a provision
of this Contract because of a contradictory provision of applicable State or
federal law, the Contractor shall immediately notify the Department. The
Department then will make a determination of whether a contract amendment is
necessary. The fact that either the Contract or an applicable law imposes a more
stringent standard than the other does not, in and of itself, render it
impossible to comply with both.
 
2.8 Provision of Covered Services Through Affiliated Providers. Where the
Contractor does not employ Physicians or other Providers to provide direct
health care services, every provision in this Contract by which the Contractor
is obligated to provide Covered Services of any type to Enrollees, including but
not limited to provisions stating that the Contractor will "provide Covered
Services," "provide quality care," or provide a specific type of health care
service, such as the enumerated Covered Services in Article V, Section 5.1
(i.e., health screenings, prenatal care or behavioral health assessments) shall
be interpreted to mean that the Contractor arranges for the provision of those
Covered Services through its network of Affiliated Providers.
 
11
 

ARTICLE III
ELIGIBILITY
 
3.1 Determination of Eligibility. The State has the exclusive right to determine
an individual's eligibility for the HFS Medical Program and eligibility to
become an Enrollee. Such determination shall be final and is not subject to
review or appeal by the Contractor. Nothing in this Article III, Section 3.1
prevents the Contractor from providing the Department with information the
Contractor believes indicates that an Enrollee's eligibility has changed.
 
3.2 Enrollment Generally. Any Potential Enrollee who resides, at the time of
enrollment, in the Contracting Area shall be eligible to become an Enrollee.
Enrollment shall be voluntary. Except as provided herein, enrollment shall be
open during the entire period of this Contract until the enrollment limit of the
Contractor, as set forth in Attachment I, is reached. The Contractor must
continue to accept enrollment until such enrollment limit is reached. Such
enrollment shall be without restriction and in the order in which Potential
Enrollees apply. The Contractor shall not discriminate against Potential
Enrollees on the basis of such individuals' health status or need for health
services. Similarly, Contractor will not discriminate against Potential
Enrollees on the basis of race, color, or national origin, and will not use any
policy or practice that has the effect of discriminating on the basis of race,
color, or national origin. The Contractor shall accept each Enrollee whose name
appears on the 834 Audit File.
 
3.3 Enrollment Limits.
 
a) The Department will limit the number of Enrollees enrolled with the
Contractor by Contracting Area to a level that will not exceed its physical and
professional capacity. In its determination of capacity, the Department will
only consider Providers that are approved by the Department. When the capacity
is reached, no further applications for enrollment will be accepted by the
Department unless termination or disenrollment of Enrollees create room for
additions. The capacity limits for the Contractor are specified in Attachment I.
 
b) The Department will perform a review of the enrollment limit(s) set forth in
Attachment I upon the occurrence of any of the following conditions:
 
1) the Contractor requests a review and the Department agrees to such review; or
 
2) the Department determines that the Contractor's operating or financial
performance reasonably indicates a lack of Provider or administrative capacity.
 
c) This review shall examine the Contractor's Provider and administrative
capacity in each Contracting Area. The Department's standards for the review
shall be reasonable and timely and be consistent with the terms of this
Contract. The Department shall use its best efforts to complete the review
before the Contractor reaches the enrollment limit(s) set forth in Attachment I.
Should the Department determine that the Contractor does not have the necessary
Provider and administrative capacity to service any additional enrollments, the
Department may freeze enrollment until such time that the Plan's Provider and
administrative capacity have increased to the Department's satisfaction.
 
12

d) Nothing in this Contract shall be deemed to be a guarantee of any Potential
Enrollee's enrollment in the Contractor's Plan.
 
3.4 Expansion to Other Contracting Areas. The Contractor may, during the term of
this Contract and any renewal thereof, request of the Department the opportunity
to offer Covered Services to Potential Enrollees in areas other than the
Contracting Area(s) specified in Attachment I. The Contractor must make this
request in writing to the Department. The Department will provide an application
and instructions for completion within ten (10) business days after receipt of
written request. Upon receipt of a completed application from the Contractor,
the Department shall review the information in a timely manner and may, at any
time, request additional information of the Contractor. It is in the sole
discretion of the Department, upon review of the Contractor's application for
expansion and assessing the needs of the Potential Enrollee population and other
factors as determined by the Department, to grant the Contractor's request for
expansion. Should the Department agree in writing to the expansion request, the
Department's approval letter including an amended Attachment I shall be
incorporated in and become a part of the Contract.
 
3.5 Discontinuation of Services in One or More Contracting Area. The
Contractor may, during the term of this Contract and any renewal thereof,
request of the Department the opportunity to discontinue offering Covered
Services to Enrollees in one or more Contracting Area specified in Attachment I.
The Contractor must make this request in writing to the Department. The
Department will advise the Contractor of all information that must be submitted
to the Department. Upon receipt of such information from the Contractor, the
Department shall review the information in a timely manner and may, at any time,
request additional information of the Contractor. It is in the sole discretion
of the Department to grant the Contractor's request to discontinue offering
Covered Services in one or more Contracting Areas. Should the Department agree
to the request to discontinue offering Covered Services, the Department and the
Contractor shall agree to execute an amendment to Attachment I of the Contract
to reflect the appropriate Contracting Area(s) in which the Contractor will
provide Covered Services.
 
 
13
 

ARTICLE IV
ENROLLMENT, COVERAGE AND TERMINATION OF COVERAGE
 
4.1 Enrollment Process.
 
(a) The Department, acting directly or through its agent, shall be responsible
for the enrollment of Potential Enrollees.
 
(1) When the Contractor enrolls a Potential Enrollee, the Contractor shall
initiate the processing of the enrollment by completing a Managed Care
Enrollment Form in accordance with Department instructions and signed by the
individual who is recognized as the Head of Case by the Department. This form
will be supplied to the Contractor by the Department. The Contractor may enroll
a Potential Enrollee without a completed and signed Managed Care Enrollment Form
prior to September 30, 2006 if the Potential Enrollee was enrolled with an MCO
that ended its contract with the Department on July 31, 2006. The Contractor
shall submit a weekly report to the Department of all enrollments submitted
without a signed form. The Contractor shall be required to submit all enrollment
information electronically to the Department or its designee and retain the
original forms for at least six (6) years. The Contractor shall submit
enrollments via the 834 Daily File.
 
(2) Only a Head of Case may enroll another Potential Enrollee. A Head of Case
may enroll all other Potential Enrollees in his Case. An adult Potential
Enrollee, who is not a Head of Case, may enroll himself only.
 
(3) A member of the Contractor's management staff may correct a Managed Care
Enrollment Form only in accordance with Department instructions. The corrections
must be initialed by the Contractor's manager or his designated staff person.
 
(b) It is the intent of the Department to contract with a Client Enrollment
Broker (CEB) during the term of this contract. The CEB enrollment process shall
serve to enhance and facilitate Potential Enrollees' choice of health coverage
program options, and shall not act to give preference to one option over others.
Department shall collaborate with Contractor on the design of the CEB enrollment
and disenrollment processes and subsequent changes that affect Contractor's
outreach, marketing, enrollment and disenrollment functions. The Department
shall monitor the CEB process and consult with the Contractor to identify any
unintended obstacles that hinder Potential Enrollees from selecting an MCO and
work in good faith with the CEB to remove those obstacles. When the CEB is ready
to implement its enrollment process, the process set forth in subsection (a)
will be replaced by the CEB process.
 
(c) The Contractor shall conduct enrollment activities that include the
information distribution requirements of Article V, Section 5.5 hereof and are
designed and implemented so as to maximize Eligible Enrollees' understanding of
the following:
 
(1) that all Covered Services must be received from or through the Plan with the
exception of family planning and other Medical Assistance services as described
 
 
14

in Article V, Section 5.1(e) with provisions made to clarify when such services
may also be obtained elsewhere;
 
(2) that once enrolled, the Enrollees will receive a card from the Department;
and
 
(3) that the Contractor must inform Potential Enrollees of any Covered Services
that will not be offered by the Contractor due to the Contractor's exercise of a
right of conscience.
 
(d) Upon the Contractor's request, the Department may refuse enrollment for at
least a six-month period to those former Enrollees previously terminated from
coverage by the Contractor for "good cause," as specified in Article IV, Section
4.4(a)(l).
 
(e) When an Enrollee, who is a Head of Case, gives birth and the newborn is
added to the Case before the newborn is forty-five (45) days old, the newborn
shall be automatically enrolled with the Contractor. Coverage shall be
retroactive to the date of birth.
 
(f) Potential Enrollees age 46 days through age 1 who are added to a Case in
which the mother is the Head of Case and an Enrollee will be enrolled with the
Contractor automatically. Coverage shall be prospective as described in Article
IV, Section 4.2 of this Contract.
 
(g) Potential Enrollees through age eighteen (18) who are added to a Case in
which all members of the Case are enrolled with the Contractor will be enrolled
with the Contractor automatically. Coverage shall be prospective as described in
Article IV, Section 4.2 of this Contract.
 
(h) No later than ten (10) business days following receipt of the 834 Audit
File, the Contractor must send new Enrollees an identification card bearing the
name of the Contractor's Plan; the effective date of coverage; the twenty-four
hour telephone number to confirm eligibility for benefits and authorization for
services and the name and phone number of the Primary Care Provider and, if
applicable, the Women's Health Care Provider. The Contractor shall make
reasonable efforts to send the identification cards no later than five (5)
business days following receipt of the 834 Audit File. Samples of the
identification cards described herein shall be submitted for Department approval
by the Contractor prior to use by the Contractor and as revised. The Contractor
shall not be required to submit for prior approval format changes, provided
there is no change in the information conveyed.
 
(1) If the Contractor requires a female Enrollee who wishes to use a Women's
Health Care Provider to designate a specific Women's Health Care Provider and if
a female Enrollee does so designate a Women's Health Care Provider, the name and
phone number of that Women's Health Care Provider must appear on the
identification card.
 
(i) Within three (3) business days following receipt of the 834 Daily File, the
Contractor must update all electronic systems maintained by the Contractor to
reflect the information contained in the 834 Daily File.
 
 
15
 

4.2 Initial Coverage. Coverage shall begin as designated by the Department on
the first day of a calendar month no later than three (3) calendar months from
the date the enrollment is accepted by the Department's database. Enrollment
other than automatic enrollment can occur only upon the Prospective Enrollee's
selection of a Site and the communication of that Site by the Contractor to the
Department.
 
(a) The Contractor shall provide coordination of care assistance to Prospective
Enrollees to access a Primary Care Provider or Women's Health Care Provider
before the Contractor's coverage becomes effective, if requested to do so by
Prospective Enrollees or if the Contractor has knowledge of the need for such
assistance. Any payment for those services rendered to Prospective Enrollees
described herein shall be made directly by the Department to such Providers
under the provisions of the HFS Medical Program.
 
4.3 Period of Enrollment. Every Enrollee shall remain enrolled until the
Enrollee's coverage is ended pursuant to Article IV, Section 4.4.
 
4.4 Termination of Coverage.
 
(a) An Enrollee's coverage shall be terminated, subject to Department approval,
upon the occurrence of any of the following conditions:
 
(1) dismissal from the Plan by the Contractor for "good cause" shown may only
occur upon receipt by the Contractor of written approval of such termination by
the Department. The Contractor shall give the Enrollee at least 10 days notice
before termination of coverage for "good cause"; except the notice period is
shortened to 5 days if probable Enrollee fraud has been verified. For purposes
of this paragraph, "good cause" may include, but is not limited to fraud or
other misrepresentation by an Enrollee, threats or physical acts constituting
battery to the Contractor, the Contractor's personnel or the Contractor's
participating Providers and staff, chronic abuse of emergency rooms, theft of
property from the Contractor's Affiliated Sites, an Enrollee's sustained
noncompliance with the Plan physician's treatment recommendations (excluding
preventive care recommendations) after repeated and aggressive outreach attempts
are made by the Plan or other acts of an Enrollee presented and documented to
the Department by the Contractor which the Department determines constitute
"good cause";
 
(2) when the Department determines that the Enrollee no longer qualifies as a
Potential Enrollee. For Enrollees under age 21 who are terminated due to the
receipt ofSSI, such termination shall be retroactive to the date ofSSI coverage;
 
(3) upon the Enrollee's death. Termination of coverage shall take effect at
11:59 p.m. on the last day of the month in which the Enrollee dies. Such
termination may be retroactive to this date;
 
(4) when an Enrollee elects to terminate coverage by so informing the Contractor
or the Department. Enrollees may elect to disenroll at any time. The Contractor
shall comply with any Department policies then in effect to promote and allow
interaction between the Contractor and the Enrollee seeking disenrollment prior
to the disenrollment. The Contractor shall, within three (3) business days of
the request,
 
 
16

send to the Enrollee the Managed Care Disenrollment Form, DPA Form 2575B, and
shall not delay the provision or processing of this form for the purpose of
arranging informational interviews with the Em-ollees, or for any other purpose.
The Contractor shall submit the disenrollment to the Department via the 834
Daily File within three (3) business days of Contractor's receipt of a complete
disenrollment form. The Department shall make available an error file each day
which the Contractor must review in order to know if the disenrollment was
rejected. If the disenrollment was rejected by the Department, the Contractor
must submit a corrected disenrollment transaction within two (2) business days;
 
(5) when an Enrollee no longer resides in the Contractor's Contracting Area,
unless waiver of this subparagraph is approved in writing by the Department and
assented to by the Contractor and Enrollee. If an Enrollee is to be disenrolled
at the request of a Contractor, the Contractor first must provide documentation
satisfactory to the Department that the Enrollee no longer resides in the
Contractor's Contracting Area. Termination of coverage shall take effect at
11:59 p.m. on the last day of the month prior to the month in which the
Department determines that the Enrollee no longer resides in the Contractor's
Contracting Area. This date may be retroactive if the Department can determine
the month in which the Enrollee moved from the Contractor's Contracting Area;
 
(6) when the Department determines, pursuant to Article IX, that an Enrollee has
other significant insurance coverage. The Contractor shall be notified by the
Department of such disenrollment on the 834 Daily File.
 
(b) In conjunction with a request by the Contractor to disenroll an Enrollee,
the Contractor shall furnish to the Department all information requested
regarding the basis for disenrollment and all information regarding the
utilization of services by that Enrollee.
 
(c) The Contractor shall not seek to terminate enrollment because of an adverse
change in the Enrollec's health status or because of the Enrollce's (i)
utilization of Covered Services, (ii) diminished mental capacity, (iii)
uncooperative/disruptive behavior resulting from such Enrollee's special needs
(except to the extent such Enrollec's continued enrollment in the Plan seriously
impairs the Contractor's ability to furnish Covered Services to the Enrollee or
other Enrollees) or (iv) action in connection with exercising his/her Appeal or
Grievance rights. Such attempts to seek to terminate enrollment will be
considered in violation of the terms of this Contract.
 
(d) The termination of this Contract terminates coverage for all persons who
become Enrollees under it. Termination of coverage under this provision will
take effect at 11:59 p.m. on the last day of the last month for which the
Contractor receives payment, unless otherwise agreed to, in writing, by the
parties to this Contract.
 
(e) Except as otherwise provided in this Article IV, Section 4.6, termination of
Enrollee coverage shall take effect no later than 11:59 p.m. on the last day of
the month following the month the disenrollment is processed by the Department.
 
17

 

(f) Any Enrollee whose coverage has been terminated by the Department solely
because such Enrollee no longer qualifies as a Potential Enrollee, who
subsequently qualifies as a Potential Enrollee within a two (2) month period
following the date of termination, shall be automatically re-enrolled with the
Contractor.
 
(g) Upon implementation of the mandatory Primary Care Case Management program,
the disenrollment process will be replaced by the Client Enrollment Broker
process.
 
4.5 Preexisting Conditions and Treatment. The Contractor shall assume, upon the
effective date of coverage, full responsibility for any medical conditions that
may have been preexisting prior to enrollment in the Contractor's Plan and for
any existing treatment plans under which an Enrollee is currently receiving
medical care provided that the Enrollee's current in-Plan physician determines
that such treatment plan is medically necessary for the health and well-being of
the Enrollee.
 
4.6 Continuity of Care.
 
a) If an Enrollee is receiving medical care or treatment as an inpatient in an
acute care hospital on the effective date of enrollment, the Contractor shall
assume responsibility for the management of such care and shall be liable for
all claims for Covered Services from that date. For hospital stays that would
otherwise be reimbursed under the HFS Medical Program by DRGs, the Contractor's
liability for the hospital stay is retroactive to the admission date. For
hospital stays that would otherwise be reimbursed under the HFS Medical Program
on a per diem basis, the Contractor's liability shall begin on the effective
date of enrollment.
 
b) If an Enrollee is receiving medical care or treatment as an inpatient in an
acute care hospital at the time coverage under this Contract is terminated, the
Contractor shall arrange for the continuity of care or treatment for the current
episode of illness until such medical care or treatment has been fully
transferred to a treating provider who has agreed to assume responsibility for
such medical care or treatment for the remainder of that hospital episode and
subsequent follow up care. The Contractor must maintain documentation of such
transfer of responsibility of medical care or treatment. For hospital stays that
would otherwise be reimbursed under the HFS Medical Program by DRGs, the
Contractor shall not be liable for payment for any inpatient medical care or
treatment provided to an Enrollee where discharge date is after the effective
date of disenrollment. For hospital stays that would otherwise be reimbursed
under the HFS Medical Program on a per diem basis, the Contractor shall be
liable for payment for any medical care or treatment provided to an Enrollee
until the effective date of disenrollment.
 
c) If Contractor becomes insolvent or is subject to insolvency proceedings as
set forth in 215 ILCS 125/1-1 et seq.. the Contractor shall be liable for all
claims for Covered
Services for the duration of the period for which payment has been made to the
Contractor by the Department and shall remain responsible for the management of
care provided to all Enrollees until the Contract is terminated (in the latter
case the terms of subsection (a) of this Section 4.6 shall control).
 
d) The Contractor must provide for transition of services in accordance with
Section 25 of the Managed Care and Patients Rights Act (215 IECS 134/25).
 
 
18
 

4.7 Change of Site and Primary Care Provider or Women's Health Care Provider.
The Contractor shall permit an Enrollee to change Site, Primary Care Provider
and Women's Health Care Provider upon request. The Contractor shall process such
changes within thirty (30) days of receipt of an Enrollee's request.
 
(a) Within three (3) business days of processing such change, the Contractor
shall submit a Site transfer record to the Department via the 834 Daily File.
Such record shall contain the following data fields: Case name and
identification number; Enrollee name and identification number; current Site
number on the Department's database; and new Site number. The Department shall
make available an error file each day which the Contractor must review in order
to know if the Site transfer was rejected by the Department. If the Site
transfer was rejected by the Department, the Contractor must submit a corrected
Site transfer transaction within two (2) business days. The Department will
provide the Contractor with no less than one hundred twenty (120) days advance
notification prior to imposing a requirement that the Contractor electronically
communicate old and new Primary Care Provider numbers and old and new Women's
Health Care Provider numbers with this record.
 
19
 

ARTICLE V
 
DUTIES OF CONTRACTOR
 
5.1 Services.
 
(a) Amount, Duration and Scope of Coverage. The Contractor shall comply with the
terms of 42 C.F.R. §438.206(b) and provide or arrange to have provided to all
Enrollees all services described in 89 111. Adm. Code, Part 140 as amended from
time to time and not specifically excluded therein or in this Article V, Section
5.1 in accordance with the terms of this Contract. Covered Services shall be
provided in the amount, duration and scope as set forth in 89 111. Adm. Code,
Part 140 and this Contract, and shall be sufficient to achieve the purposes for
which such Covered Services are furnished. This duty shall commence at the time
of initial coverage as to each Enrollee. The Contractor shall, at all times,
cover the appropriate level of service (i.e., triage, urgent) for all Emergency
Services provided in an emergency room setting. The Contractor shall notify the
Department in writing within five (5) days following a change in the
Contractor's network of Affiliated Providers that renders the Contractor unable
to provide one (1) or more Covered Servicc(s) in any Contracting Area. The
Contractor shall not refer Enrollees to publicly supported health care entities
to receive Covered Services, for which the Contractor receives payment from the
Department, unless such entities are Affiliated with the Contractor's Plan. Such
publicly supported health care entities include, but are not limited to, Chicago
Department of Public Health and its clinics, Cook County Bureau of Health
Services, and local health departments. The Contractor shall provide a mechanism
for an Enrollee to obtain a second opinion from a qualified Provider, whether
Affiliated or non-Affiliated, at no cost to the Enrollee.
 
(b) Enumerated Covered Services. The Contractor shall have a sufficient number
of Affiliated Providers (including Tertiary Care hospital(s) and, where
appropriate, advanced practice nurses) in place to provide all of the following
services and benefits (which shall be specifically included as Covered Services
under this Contract) to Enrollees at all times during the term of this Contract,
whenever Medically Necessary, except to the extent services are identified as
excluded services pursuant to subsection (e) of this Section 5.1:
 
• Assistive/augmentative communication devices;
 
• Audiology services, physical therapy, occupational therapy and speech therapy;
 
• Behavioral health services, including subacute alcohol and substance abuse
services and mental health services, in accordance with subsection (c) hereof;
 
• Blood, blood components and the administration thereof;
 
• Certified hospice services;
 
• Chiropractic services;
 
• Clinic services (as described in 89 111. Adm. Code, Part 140.460);
 
20

• Diagnosis and treatment of medical conditions of the eye;
 
• Durable and nondurable medical equipment and supplies;
 
• Emergency Services;
 
• Family planning services;
 
• Home health care services;
 
• Inpatient hospital services (including dental hospitalization in case of
trauma or when related to a medical condition or acute medical detoxification);
 
• Inpatient psychiatric care;
 
• Laboratory and x-ray services; *
 
• Medical procedures performed by a dentist;
 
• Nurse midwives services;
 
• Nursing facility services for the first ninety (90) days;**
 
• Orthotic/prosthetic devices, including prosthetic devices or reconstructive
surgery incident to a mastectomy;
 
• Outpatient hospital services (excluding outpatient behavioral health
services);
 
• Physicians' services, including psychiatric care;
 
• Podiatnc services;
 
• Pharmaceutical products provided by an entity other than a pharmacy;
 
• Routine care in conjunction with certain investigational cancer treatments, as
provided in Public Act 91-0406;
 
*The drawing of blood for lead screening shall take place within the
Contractor's Affiliated facilities or elsewhere at the Contractor's expense. All
laboratory tests for children being screened for lead must be sent for analysis
to the Illinois Department of Public Health's laboratory.
 
**Contractors will be responsible for covering up to a maximum of ninety (90)
days nursing facility care (or equivalent care provided at home because a
skilled nursing facility is not available) annually per Enrollee. Periods in
excess of ninety (90) days annually will be paid by the Department according to
its prevailing reimbursement system.
 
 
21
 

• EPSDT Services;
 
• Services to Prevent Illness and Promote Health in accordance with subsection
(d) hereof;
 
• Transplants covered under 89 111. Adm. Code 148.82 (using transplant providers
certified by the Department, if the procedure is performed in the State); and
 
• Transportation to secure Covered Services.
 
(c) Behavioral Health Services.
 
(1) The Contractor will provide the following behavioral health services, which
are Covered Services:
 
• Inpatient psychiatric or substance abuse services that are provided in general
hospital medical units;
 
• Inpatient psychiatric services provided in a hospital that is a psychiatric
hospital or a distinct psychiatric unit, as defined in 89 111. Adm. Code
148.40(a)(l);
 
• Inpatient acute alcoholism and substance abuse treatment (detoxification);
 
• Hospital-based organized clinic services referred to as outpatient treatment
psychiatric services for Type A and Type B Psychiatric Clinic Services, as
defined in 89 111. Adm. Code 148.140(b)(l)(E); and
 
• Behavioral health services provided by FQHCs, RHCs, and Physicians, including
psychiatrists; and
 
• Laboratory services provided on an outpatient basis for behavioral health,
even if ordered by a behavioral health provider in connection with the provision
of treatment that is excluded from Covered Services.
 
(2) If an Enrollee presents himself to the Contractor for behavioral health
services, or is referred through a third party, the Contractor will complete a
behavioral health assessment.
 
• If the assessment indicates that all services needed are within the scope of
Covered Services, the Contractor will arrange for the provision of all such
Covered Services.
 
22
 

• If the assessment indicates that outpatient services are needed beyond the
scope of Covered Services, the Contractor will explain to the Enrollee the
services needed and the importance of obtaining them and provide the Enrollee
with a list of Community Behavioral Health Providers (CBHP). The Contractor will
assist the Enrollee in contacting a CBHP chosen by the Enrollee, unless the
Enrollee objects.
 
• If a Enrollee obtains needed comprehensive services through a CBHP, the
Contractor will be responsible for payment for laboratory services in connection
with the comprehensive services provided by the CBHP. The Contractor shall not
be liable for other Covered Services provided by the CBHP. The Contractor may
require that laboratory services are provided by Providers that are Affiliated
with Contractor.
 
(d) Services to Prevent Illness and Promote Health. The Contractor shall make
documented efforts to provide initial health screenings and preventive care to
all Enrollees. The Contractor shall provide, or arrange to provide, the
following Covered Services to all Enrollees, as appropriate, to prevent illness
and promote health:
 
(1) EPSDT services in accordance with 89 111. Adm. Code 140.485 and described in
this Article V, Section 5.13(a);
 
(2) Preventive Medicine Schedule which shall address preventive health care
issues for Enrollees twenty-one (21) years of age or older (Article V, Section
5.13(b));
 
(3) Maternity care for pregnant Enrollees (Article V, Section 5.13(c)); and
 
(4) Family planning services and supplies, including physical examination and
counseling provided during the visit, annual physical examination for family
planning purposes, pregnancy testing, voluntary sterilization, insertion or
injection of contraceptive drugs or devices, and related laboratory and
diagnostic testing (except to the extent an Enrollee has chosen to obtain such
services and supplies from a non-Affiliated Provider, in which case the
Department shall be responsible for providing payment for such services).
 
(e) Exclusions from Covered Services. In addition to those services and benefits
excluded from Covered Services by 89 111. Adm. Code, Part 140, as amended from
time to time, the following services and benefits shall NOT be included as
Covered Services:
 
(1) Dental services;
 
(2) Pharmacy services provided by a pharmacy;
 
(3) Mental health clinic services as provided through a community behavioral
health provider as identified in 89 111. Adm. Code 140.452 and 140.454 and
 
23

further defined in 59 111. Adm. Code, Part 132 "Medicaid Community Mental Health
Services Program."
 
(4) Subacute alcoholism and substance abuse treatment services as provided
through a community behavioral health provider as identified in 89 111. Adm.
Code 148.340(a) and farther defined in 77 111. Adm. Code 2090.
 
(5) Routine examinations to determine visual acuity and the refractive state of
the eye, eyeglasses, other devices to correct vision, and any associated
supplies and equipment. The Contractor shall refer Enrollees needing such
services to Providers participating in the HFS Medical Programs who are able to
provide such services, or to a central referral entity that maintains a list of
such Providers.
 
(6) Nursing facility services, or equivalent care provided at home because a
skilled nursing facility is unavailable, beginning on the ninety-first (91st)
day of service in a calendar year;
 
(7) Services provided in an Intermediate Care Facility for the Mentally
Retarded/Developmcntally Disabled and services provided in a nursing facility to
mentally retarded or developmentally disabled Participants;
 
(8) Early intervention services, including case management, provided pursuant to
the Early Intervention Services System Act (325 ILCS 20 et seq.);
 
(9) Services provided through school-based clinics as such clinics are defined
by the Department;
 
(10) Services provided through local education agencies that are enrolled with
the Department under an approved individual education plan (IEP);
 
(11) Services funded through the Juvenile Rehabilitation Services Medicaid
Matching Fund;
 
(12) Services that are experimental and/or investigational in nature;
 
(13) Services provided by a non-Affiliated Provider and not authorized by the
Contractor, unless this Contract specifically requires that such services be
covered;
 
(14) Services that are provided without first obtaining a required referral or
prior authorization as set forth in the Enrollee handbook;
 
(15) Medical and/or surgical services provided solely for cosmetic purposes; and
 
(16) Diagnostic and/or therapeutic procedures related to infertility/sterility.
 
(f) Limitations on Covered Services. The following services and benefits shall
be limited as Covered Services:
 
24

(1) Termination of pregnancy shall be provided only as allowed by applicable
State and federal law (42 C.F.R. Part 441, Subpart E). In any such case, the
requirements of such laws must be fully complied with and Form HFS 2390 must be
completed and filed in the Enrollee's medical record. Termination of pregnancy
shall not be provided to Enrollees eligible under the State Childrens Health
Insurance Program (215 ILCS 106).
 
(2) Sterilization services may be provided only as allowed by State and federal
law (see 42 C.F.R. Part 441, Subpart F). In any such case, the requirements of
such laws must be fully complied with and a DPA Form 2189 must be completed and
filed in the Enrollee's medical record.
 
(3) If a hysterectomy is provided, a DPA Form 1977 must be completed and filed
in the Enrollee's medical record.
 
(g) Right of Conscience. The parties acknowledge that pursuant to 745 ILCS 70/1
et scq., a Contractor may choose to exercise a right of conscience by not
rendering certain Covered Services. Should the Contractor choose to exercise
this right, the Contractor must promptly notify the Department of its intent to
exercise its right of conscience in writing. Such notification shall contain the
services that the Contractor is unable to render pursuant to the exercise of the
right of conscience. The parties agree that at that time the Department shall
adjust the Capitation payment to the Contractor and amend the contract
accordingly.
 
Should the Contractor choose to exercise this right, the Contractor must notify
Potential Enrollees, Prospective Enrollees and Enrollees that it has chosen to
not render certain Covered Services, as follows:
 
(1) To Potential Enrollees, prior to enrollment;
 
(2) To Prospective Enrollees, during enrollment; and
 
(3) To Enrollees, within ninety (90) days after adopting a policy with respect
to any particular service that previously was a Covered Service.
 
(h) Emergency Services.
 
(1) The Contractor shall cover Emergency Services for all Enrollees whether the
Emergency Services are provided by an Affiliated or non-Affiliated Provider.
 
(2) The Contractor shall not impose any requirements for prior approval of
Emergency Services. If an Enrollee calls the Contractor to request Emergency
Services, such call shall receive an immediate response.
 
(3) The Contractor shall cover Emergency Services for Enrollees who are
temporarily away from their residence and outside the Contracting Area for all
Emergency Services to which they would be entitled within the Contracting Area.
 
(4) The Contractor shall have no obligation to cover medical services provided
on an emergency basis that are not Covered Services under this Contract.
 
25
 

(5) Elective care or care required as a result of circumstances that could
reasonably have been foreseen prior to the Enrollee's departure from the
Contracting Area are not covered. Unexpected hospitahzation due to complications
of pregnancy shall be covered. Routine delivery at term outside the Contracting
Area, however, shall not be covered if the Enrollee is outside the Contracting
Area against medical advice unless the Enrollee is outside of the Contracting
Area due to circumstances beyond her control. The Contractor must educate the
Enrollee of the medical and financial implications of leaving the Contracting
Area and the importance of staying near the treating Provider throughout the
last month of pregnancy.
 
(6) The Contractor shall provide ongoing education to Enrollees regarding the
appropriate use of Emergency Services.
 
(7) The Contractor shall not condition coverage for Emergency Services on the
treating Provider notifying the Contractor of the Enrollee's screening and
treatment within ten (10) calendar days of presentation for Emergency Services.
 
(8) The determination of whether or not an Enrollee is sufficiently Stabilized
for discharge or transfer to another facility shall be binding on the
Contractor.
 
(i) Post-Stabilization Services. The Contractor shall cover Post-Stabilization
Services provided by an Affiliated or non-Affiliated Provider in any the
following situations: (a) the Contractor authorized such services; (b) such
services were administered to maintain the Enrollee's stabilized condition
within one (1) hour of a request to the Contractor for authorization of further
Post-Stabilization Services; or (c) the Contractor does not respond to a request
to authorize further Post-Stabilization Services within one (1) hour, the
Contractor could not be contacted, or the Contractor and the treating Provider
cannot reach an agreement concerning the Enrollee's care and an Affiliated
Provider is unavailable for a consultation, in which case the treating Provider
must be permitted to continue the care of the Enrollee until an Affiliated
Provider is reached and either concurs with the treating Provider's plan of care
or assumes responsibility for the Enrollee's care.
 
(]') Additional Services or Benefits. The Contractor shall obtain prior approval
from the Department before offering any additional service or benefit not
required under this Contract to Enrollees. The Contractor shall notify Enrollees
and Prospective Enrollees before discontinuing an additional service or benefit.
The notice must be approved in advance by the Department. The Contractor shall
continue any ongoing course of treatment for an Enrollee then receiving such
service or benefit. All additional services or benefits approved by the
Department under a previous contract must be resubmitted to the Department for
approval within thirty (30) days of the Effective Date. Contractor may continue
to use all additional services and benefits approved under a previous contract
until the Department completes its review and notifies the Contractor that an
added service or benefit is no longer approved.
 
(k) Telephone Access. The Contractor shall establish a toll-free twenty-four
(24) hour telephone number to confirm eligibility for benefits and seek prior
approval for treatment where required under the Plan, and shall assure
twenty-four (24) hour access, via telephone(s), to medical professionals, either
to the Plan directly or to the Primary Care Providers, for consultation to
obtain medical care. The Contractor must also make a toll-free
 
26

number available, at a minimum during the business hours of 9:00 a.m. until 5:00
p.m. Central Time on regular business days. This number also will be used to
confirm eligibility for benefits, for approval for non-emergency services and
for Enrollees to call to request Site, Primary Care Provider, or Women's Health
Care Provider changes, to make complaints or grievances, to request
disenrollment and to ask questions. The Contractor may use one toll-free number
for these purposes or may establish two separate numbers.
 
5.2 Network Adequacy. The Contractor must establish, maintain and monitor a
network of Affiliated Providers, including hospitals, that is sufficient to
provide adequate access to all services under the Contract taking into
consideration:
 
(a) The anticipated number of Enrollees;
 
(b) The expected utilization of services, in light of the characteristics and
health care needs of the Contractor's Enrollees
 
(c) The number and types of Providers required to furnish the Covered Services.
 
(d) The number of Affiliated Providers who are not accepting new patients; and
 
(e) The geographic location of Providers and Enrollees, taking into account
distance, travel time, the means of transportation and whether the location
provides physical access for Enrollees with disabilities.
 
It is understood that in some instances Enrollees will require specialty care
not available from an Affiliated Provider and that the Contractor will arrange
that such services by provided by an non-Affiliated Provider.
 
5.3 Marketing. The Contractor shall, initially and as revised, submit to the
Department for the Department's review and prior written approval all of the
following materials: Certificate of Coverage or Document of Coverage; Enrollee
Handbooks; Marketing Materials, including Marketing brochures and fliers;
Marketing plans, including descriptions of proposed Marketing approaches and
Marketing procedures; training materials and training schedules relating to
services under this Contract; and all other materials and procedures utilized by
the Contractor in connection with Marketing and training. Any substantive
revisions to the foregoing materials that will either directly or indirectly
affect interpretation of benefits, the delivery of services or the
administration of benefits are subject to the Department's prior written
approval as set forth in this paragraph.
 
Marketing by mail, mass media advertising and community oriented Marketing
directed at Potential Enrollees will be allowed subject to the Department's
prior approval. The Contractor shall be responsible for all costs of mailing,
including labor costs. The Department reserves the right to determine and set
the sole process of, cost, and payment for Marketing by mail, using names and
addresses of Participants supplied by the Department, including the right to
limit Marketing by mail to a vendor under contract to the Department and the
terms and conditions set forth in that vendor contract. To the extent permitted
by law and approved by the
 
27
 

Department, the Contractor may distribute Marketing materials selectively by
eligibility category, by Contracting Area, by county, by city or by other
geographic area.
 
The Contractor agrees to be bound by the following requirements for Marketing:
 
(a) The Contractor shall not engage in Marketing practices that mislead, confuse
or defraud either Potential Enrollees or the Department;
 
(b) Marketing Materials must be clear and must include, at a minimum, the
information required in Article V, Section 5.4;
 
(c) Marketing Materials shall not include any assertion or statement that the
Contractor is endorsed by CMS or the Department, and neither the Contractor nor
its Marketing personnel shall make such assertions or statements, whether in
writing or orally;
 
(d) Potential Enrollees shall be solicited from a geographic area that does not
exceed the Contracting Area(s);
 
(e) Potential Enrollees may not be discriminated against on the basis of health
status or need for health care services or on any illegal basis;
 
(f) The Contractor's Marketing shall be designed to reach a distribution of
Potential Enrollees across age and sex categories, as such categories are
established for rates as set forth in Attachment I, in the Contracting Area(s).
The Contractor's Marketing shall not be designed to achieve favorable
reimbursement by enrolling a disproportionate percentage of individuals from a
particular age and sex category or family income level;
 
(g) The Contractor shall not actively facilitate disenrollment of Enrollees from
other plans, by providing Managed Care Disenrollment Forms or otherwise,
including transporting Enrollees for the purpose of their disenrollment. The
Contractor may educate Enrollees on the disenrollment process. The Contractor
shall not offer gifts or incentives to Enrollees of other plans that are not
offered to all Potential Enrollees. This Section 5.3(g) will be repealed upon
implementation of the mandatory Primary Care Case Management program;
 
(h) Marketing personnel who engage in Marketing services under this Contract are
considered the agents of the Contractor, whether they are employees, independent
contractors, or independent insurance brokers. The Contractor shall be held
responsible for any Misrepresentation or inappropriate activities by such
Marketing personnel. All Marketing personnel are required to participate in
training sessions that may be developed and presented by the Department, and
which sessions set forth the Department requirements, expectations and
limitations on Marketing practices in which the Contractor's personnel will
engage. The individual salaries, benefits or other compensation paid by the
Contractor to each of its Marketing personnel shall consist of no less than
seventy-five percent (75%) salary and benefits and no more than twenty-five
percent (25%) commission in cash or kind. The salary, benefit and other
compensation schedules for such personnel are subject to audits by the
Department, Office of Inspector General and as set forth in Article IX, Section
9.1. All salary schedules shall be kept by the Contractor to enable the
Department or any Authorized Persons to identify a specific enunciation of each
Marketing personnel's total salary, benefit and other compensation, the
 
28
 

percentage of that salary, benefits or other compensation that was based on
commission and the basis for such commission. The Contractor shall hold the
Department harmless for any and all claims, complaints or causes of action that
shall arise as a result of this contractually imposed salary, benefit and other
compensation structure for Marketing personnel.
 
Compensation of independent insurance brokers who hold a producers license
issued by the State of Illinois Department of Financial and Professional
Regulation is not subject to the limitations on commission described in the
above paragraph. All other provisions of the Contract regarding Marketing shall
apply to the Contractor with respect to the activities of independent insurance
brokers.
 
(i) It shall be the duty and obligation of the Contractor to credential, and
where necessary or appropriate, recrcdential all Marketing personnel, including
trainers and field supervisors. Recredentialing shall be performed at the time
the Department of Financial and Professional Regulation renews the individual's
license or certification. Recredentialing activity that changes the status of
Marketing personnel shall be submitted to the Department as changes occur. No
current or future personnel of the Contractor may engage in Marketing activities
hereunder without first meeting all credcntialing requirements set forth herein
as well as in the regulations, guidelines or policies of the Department. At a
minimum, all Marketing personnel of the Contractor, including independent
insurance brokers, must meet the following credentialing requirements:
 
(1) must have been trained in all provisions of the Contractor's Department
approved training manual for marketers;
 
(2) must hold a valid license or certification as issued by the State of
Illinois, Department of Financial and Professional Regulation, a copy of which
must be submitted to the Department prior to any Marketing personnel's engaging
in Marketing activities hereunder;
 
(3) may not engage in Marketing activities for any other MCO that has a contract
with the Department;
 
(4) may not also be Providers of medical services;
 
(5) may not have been convicted of any felony within the last ten (10) years;
 
(6) may not have been terminated from employment in the previous twelve (12)
months by any MCO for engaging in any prohibited Marketing practices or
Misconduct associated with or related to Marketing activities. The Contractor
shall obtain a written consent from all Marketing personnel for prior employers
to release employment information to the Contractor concerning any prior or
current employment in which Marketing activities were performed by any Marketing
personnel and contact the previous employer(s). The Contractor may use any other
employment practices it deems appropriate to obtain and meet these credentialing
requirements; and
 

(7) must not be an Ineligible Person.
 
29

(j) The Department may at any time, in its own discretion and without
notification to the Contractor, attend any Marketing training session conducted
by the Contractor.
 
(k) The Contractor must immediately notify the Department, in writing, of any
individual who is hired by the Contractor who has previously been employed by an
agent for the Department responsible for the education of Potential Enrollees
about managed care.
 
(1) The Contractor shall immediately notify the Department and the Office of
Inspector General, in writing, of any inappropriate Marketing activities.
 
(m) Before any individual may engage in any Marketing activity under this
Contract, the Contractor shall provide, in a format designated by the
Department, the name and Social Security number and a copy of the Department of
Financial and Professional Regulation license or certification of that
individual to the Department and certify to the Department that the individual
meets the minimum credentialing requirements above. The Department must provide
written approval of such individual before the individual may engage in any
Marketing activity under this Contract.
 
Thereafter, on a monthly basis, the Contractor shall report, in a format
designated by the Department, the name and Social Security numbers of all
Marketing personnel to the Department. It is the obligation of the Contractor to
ensure that the Department has a current list of all Marketing personnel. The
Contractor must immediately notify the Department, in writing, of any Marketing
personnel who terminate employment with the Contractor either voluntarily or
involuntarily. If termination is involuntary, the Contractor must notify the
Department if the reason for termination is related to Misconduct under this
Contract.
 
(n) The Contractor shall not engage in any Marketing activities directed at
enrolling Potential Enrollees while they are admitted to any inpatient
facilities.
 
(o) Marketing in or immediately outside of any Department or Department of Human
Services field office is strictly prohibited.
 
(p) Marketing at Provider offices or facilities is permissible under the
following circumstances:
 
(1) the Contractor must have a written agreement with the Provider, signed by
the Provider or his designee, a copy of which shall be kept on file by the
Contractor and submitted to the Department annually and thereafter upon request.
Such written agreement shall set forth specifically what Marketing may be
conducted at that Provider office or facility, the frequency with which those
Marketing activities may occur and a description of the setting in which the
Marketing activities will occur;
 
(2) no Marketing activities may be conducted in emergency room waiting areas or
in treatment areas at any Provider office or facility; and
 
30
 

(3) at no time shall any Marketing personnel have access to a Participant's
medical records regardless of whether such Marketing activity is conducted at
the Provider office or facility or another location.
 
(q) Direct or indirect door-to-door, telephonic, or other cold call Marketing is
strictly prohibited. Door-to-door Marketing is direct or indirect "cold call" or
unsolicited Marketing activities at an individual's residence. "Cold call"
Marketing means any unsolicited personal contact by MCO personnel with the
Potential Enrollee for the purpose of influencing the individual to enroll with
that MCO and includes unsolicited telephone contact, contact at the individual's
residence and any other type of contact made without the individual's consent.
Consent for telephone contact or contact at the individual's residence must be
in writing and may be obtained at the initiation of contact as long as the
Contractor has obtained the individual's oral consent prior to the visit and has
documented such consent in a written form that identifies the person granting
the consent and the person receiving the consent, as well as the date, time and
place that the oral consent was given. Any contacts at the individual's
residence must be made within thirty (30) days from the date the individual gave
oral consent. Soliciting individuals to provide the names of other Potential
Enrollees is also strictly prohibited. Nothing in this section shall prohibit
the Contractor from distributing unsolicited Marketing materials via the United
States Postal Service or a commercial delivery service where such service is
unrelated to the Contractor.
 
(r) All gifts or incentives approved by the Department under a previous contract
must be resubmitted to the Department for approval within thirty (30) days of
the Effective Date. Contractor may continue to use all gifts and incentives
approved under a previous contract until the Department completes its review and
notifies the Contractor that a gift or incentive is no longer approved.
 
(s) Prior to conducting any Marketing activities, the Contractor must obtain an
authorization to use or disclose an individual's "protected health information"
(as defined in Attachment III to this Contract) for such purposes. To the extent
such Marketing activities involve direct or indirect remuneration to the
Contractor from a third-party, the authorization shall clearly state the
existence of such remuneration. The restrictions of this Article V, Section
5.2(r) shall not apply to Marketing activities that are related to the
following: (i) a description of medical services that are included in the plan
of benefits offered by the Contractor pursuant to this Contract, including
communications concerning the network of Providers, replacement of or
enhancements to the Contractor's plan of benefits, and health-related products
or services that are available only to Enrollee, which add value but are not
part of the plan of benefits; (ii) communications for treatment of the
individual; (iii) communications for case management or care coordination for
the individual or to direct or recommend alternative treatments, therapies,
Providers, or settings of care for an Enrollee; (iv) in-person communications of
any kind between the Contractor and a Potential Enrollee, Prospective Enrollee,
or Enrollee; or (v) the provision of a gift or incentive that complies with
Section 5.4 of this Contract.
 
5.4 Inappropriate Marketing Activities. The Contractor shall not:
 
(a) provide cash to Potential Enrollees, Prospective Enrollees or Enrollees,
except for stipends, in an amount approved by the Department, and reimbursement
of expenses provided to Enrollees for participation on committees or advisory
groups;
 
31
 

(b) provide gifts or incentives to Potential Enrollees or Prospective Enrollees
unless such gifts or incentives: (1) are also provided to the general public;
(2) do not exceed ten dollars ($10) per individual gift or incentive; and (3)
have been pre-approved by the Department;
 
(c) provide non health-related gifts or incentives to Enrollees unless such
gifts or incentives (1) are provided conditionally based on the Enrollee
receiving preventive care; (2) arc not used in Marketing to Potential Enrollees;
(3) arc not in the form of cash or an instrument that may be converted to cash;
and (4) have been pre-approved by the Department;
 
(d) provide health-related gifts or incentives to Enrollees unless such gifts or
incentives (1) are provided conditionally based on the Enrollee receiving
preventive care; (2) are not in the form of cash or an instrument that may be
converted to cash; and (3) have been pre-approved by the Department;
 
(e) seek to influence a Potential Enrollee's enrollment with the Contractor in
conjunction with the sale of any other insurance;
 
(f) induce providers or employees of the Department or the Department of Human
Services to reveal confidential information regarding Participants or otherwise
use such confidential information in a fraudulent manner;
 
(g) threaten, coerce or make untruthful or misleading statements to Potential
Enrollees, Prospective Enrollees or Enrollees regarding the merits of enrollment
in the Contractor's Plan or any other plan; or
 
(h) present an incomplete Managed Care Enrollment Form to a Potential Enrollee
for his signature.

 
5.5 Obligation to Provide Information. The Contractor agrees to have written
policies and to provide Basic Information to the individuals, and to notify such
individuals that translated materials are available and how to obtain them, and
at the times described below:
 
(a) to each Enrollee or Prospective Enrollee within thirty (30) days after it
receives notice of the individual's enrollment and within thirty (30) days
following a significant change;
 
(b) to any Potential Enrollee who requests it; or
 
(c) once a year Contractor must notify its Enrollees of their right to request
and obtain the Basic Information.
 
(d) "Basic Information" as used herein shall mean:
 
(1) types of benefits, and amount, duration and scope of such benefits available
under the Plan. There must be sufficient detail to ensure Enrollees understand
the benefits that they are entitled to receive as Covered Services, including
pharmaceuticals and behavioral health services;
 
32

(2) procedures for obtaining Covered Services, including authorization and
approval requirements, if any;
 
(3) information, as provided by the Department, regarding any benefits to which
an Enrollee may be entitled under the HFS Medical Program that are not provided
under the Plan and specific instructions on where and how to obtain those
benefits, including how transportation is provided and that family planning
services may be obtained from an Affiliated or non-Affiliated Provider;
 
(4) any restrictions on an Enrollee's freedom of choice among Affiliated
Providers;
 
(5) the extent to which after-hours coverage and Emergency Services are
provided, including the following specific information: (a) definitions of
"Emergency Medical Condition," "Emergency Services," and "Post-Stabilization
Services" that reference the definitions set forth herein; (b) the fact that
prior authorization is not required for Emergency Services; (c) the fact that,
subject to the provisions of this Contract, an Enrollee has a right to use any
hospital or other setting to receive Emergency Services; (d) the process and
procedures for obtaining Emergency Services; and (e) the location of Emergency
Services and/or Post-Stabilization Services Providers that are Affiliated
Providers.
 
(6) the procedures for obtaining Post-Stabilization Services in accordance with
the terms set forth Article V, Section 5.1(i);
 
(7) policy on referrals for specialty care and for Covered Services not
furnished by an Enrollee's Primary Care Provider;
 
(8) cost sharing, if any;
 
(9) the rights, protections, and responsibilities of an Enrollee as specified in
42 C.F.R. §438.100, such as those pertaining to enrollment and discnrollment and
those provided under State and Federal law;
 
(10) Grievance and fair hearing procedures and timeframes, provided that such
information must be pre-approvcd before distribution;
 
(11) Appeal rights and procedures and timeframes, provided that such information
must be pre-approved before distribution;
 
(12) names, locations, telephone numbers, and non-English languages spoken by
current Affiliated Providers, including identification of those who are not
accepting new patients; and
 
(13) a copy of the Contractor's Certificate of Coverage or Document of Coverage.
 
(e) The following additional information must be provided by Contractor upon
request to any Enrollee, Prospective Enrollee, and Potential Enrollee:

 
33

(1) MCO and health care facility licensure;
 
(2) practice guidelines maintained by the Contractor in accordance with Article
V, Section 5.6; and
 
(3) information about Affiliated Providers of health care services, including
education, Board certification and reccrtification, if appropriate.
 
(f) The Contractor must make a good faith effort to give written notice of
termination of a Provider, within fifteen (15) days following such termination,
to each Enrollee who received his or her primary care from, or was seen on a
regular basis by, the terminated Provider.
 
5.6 Quality Assurance, Utilization Review and Peer Review.
 
(a) All services provided by or arranged for by the Contractor to be provided
shall be in accordance with prevailing community standards. The Contractor must
have in effect a program consistent with the utilization control requirements of
42 C.F.R. Part 456. This program will include, when so required by the
regulations, written plans of care and certifications of need of care.
 
(b) The Contractor shall adopt practice guidelines that meet the following
criteria:
 
(1) Are based on valid and reliable clinical evidence or a consensus of health
care professionals in a particular field;
 
(2) Consider the needs of the Enrollees;
 
(3) Are adopted in consultation with Affiliated Providers;
 
(4) Are reviewed and updated periodically, as appropriate; and
 
(5) Are disseminated to all affected Affiliated Providers and, upon request, to
Enrollees and Potential Enrollees.
 
(c) The Contractor shall have a Utilization Review Program that includes a
utilization review plan, a utilization review committee, and appropriate
mechanisms covering preauthorization and review requirements.
 
(d) The Contractor shall establish and maintain a Peer Review Program approved
by the Department to review the quality of care being offered by the Contractor,
employees and subcontractors.
 
(e) The Contractor agrees to comply with the quality assurance standards
attached hereto as Exhibit A.
 
(f) The Contractor agrees to comply with the utilization review standards and
peer review standards attached hereto as Exhibit B.
 
34
 

(g) The Contractor agrees to conduct a program of ongoing review that evaluates
the effectiveness of its quality assurance and performance improvement
strategies designed in accordance with the terms of this Article V, Section 5.6,
and to report to the Department the results of such review as provided in
Article V, Section 5.11 herein.
 
(h) The Contractor shall not compensate individuals or entities that conduct
utilization review activities on its behalf in a manner that is structure to
provide incentives for the individuals or entities to deny, limit, or
discontinue Covered Services that are Medically Necessary for any Enrollee.
 
5.7 Physician Incentive Plan Regulations. The Contractor shall comply with the
provisions of 42 C.F.R. 422.208 and 422.210. If, to conform with these
regulations, the Contractor performs Enrollee satisfaction surveys, such surveys
may be combined with those required by the Department pursuant to Article V,
Section 5.20 of this Contract.
 
5.8 Prohibited Affiliations.
 
(a) The Contractor shall assure that all Affiliated Providers, including
out-of-State Providers, are enrolled in the HFS Medical Program, if such
enrollment is required for such Provider by Department rules or policy in order
to submit claims for reimbursement or otherwise participate in the HFS Medical
Program. The Contractor shall assure that any non-Affiliated Provider billing
for services rendered in Illinois is enrolled in the HFS Medical Program prior
to paying claims.
 
(b) The Contractor shall not employ, subcontract with, or affiliate itself with
or otherwise accept any Ineligible Person into its network.
 
(c) The Contractor shall screen all current and prospective employees,
contractors, and sub-contractors, prior to engaging their services under this
Contract by:
(i) requiring them to disclose whether they are Ineligible Persons; (ii)
reviewing the OIG's list of sanctioned persons (available on the World Wide Web
at http://www.arnet.gov/epls) and the HHS/OIG List of Excluded
Individuals/Entities (available on the World Wide Web at
http://www.dhhs.gov/oig). The Contractor shall annually screen all current
employees, contractors and sub-contractors providing services under this
Contract. The Contractor shall screen out-of-State non-Affiliated Providers
billing for Covered Services prior to payment and shall not pay such Providers
who meet the definition of Ineligible Persons.
 
(d) The Contractor shall terminate its relations with any Ineligible Person
immediately upon learning that such Person or Provider meets the definition of
an Ineligible Person and notify the OIG of the termination.
 
5.9 Records.
 
(a) Maintenance of Business Records. The Contractor shall maintain all business
and professional records that are required by the Department in accordance with
generally accepted business and accounting principles. Such records shall
contain all pertinent information about the Enrollee including, but not limited
to, the information required under this
 
35
 

Article V, Section 5.9. Medical records reporting requirements shall be adequate
to ensure acceptable continuity of care to Enrollees.
 
(b) Availability of Business Records. Records shall be made available in
Illinois to the Department and Authorized Persons for inspection, audit, and/or
reproduction as required in Article IX, Section 9.1. These records will be
maintained as required by 45 C.F.R. Part 74. As a part of these requirements,
the Contractor will retain one copy in any format of all records for at least
six (6) years after final payment is made under the Contract. If an audit,
litigation or other action involving the records is started before the end of
the six-year (6 year) period, the records must be retained until all issues
arising out of the action are resolved.
 
(c) Patient Records.
 
(1) Treatment Plans. The Contractor must develop and use treatment plans for
chronic disease follow-up care that are tailored to the individual Enrollee. The
purpose of the plan is to assure appropriate ongoing treatment reflecting the
prevailing community standards of medical care designed to minimize further
deterioration and complications. Treatment plans shall be on file with the
permanent record for each Enrollee with a chronic disease and with sufficient
information to explain the progress of treatment.
 
(2) Permanent Records. Immediately upon notification of an Enrollee's enrollment
with the Contractor, the Contractor shall create and maintain at the Enrollee's
Primary Care Site an Enrollee file containing biographical and enrollment
information relating to the Enrollee, including copies of all materials
pertaining to the Enrollee provided by the Department. A permanent medical
record shall be maintained at the Primary Care Site for every Enrollee and be
available to the Primary Care Provider, Women's Health Care Provider and other
Providers. Copies of the medical record shall be sent to any new Site to which
the Enrollee transfers. The Contractor shall make documented efforts to obtain
such consent. Copies of records shall be released only to Authorized
Individuals. Original medical records shall be released only in accordance with
Federal or State law, court orders, subpoenas, or a valid records release form
executed by an Enrollee. The Contractor shall ensure that Enrollees have timely
access to the records. The Contractor shall protect the confidentiality and
privacy of minors, and abide by all Federal and State laws regarding the
confidentiality and disclosure of medical records, mental health records, and
any other information about Enrollee. The Contractor shall produce such records
for the Department upon request. Medical records must include Provider
identification and Enrollee identification. All entries in the medical record
must be legible and dated, and the following, where applicable, shall be
included:
 
• patient identification;
 
• personal health, social history and family history, with updates as needed;
 
• risk assessment;
 
• obstetrical history (if any) and/or profile;
36

• hospital admissions and discharges;
 
• relevant history of current illness or injury (if any) and physical findings;
 
• diagnostic and therapeutic orders;
 
• clinical observations, including results of treatment;
 
• reports of procedure, tests and results;
 
• diagnostic impressions;
 
• patient disposition and pertinent instructions to patient for follow-up care;
 
• immunization record;
 
• allergy history;
 
• periodic exam record;
 
• weight and height information and, as appropriate, growth chart;
 
• referral information, if any;
 
• health education and anticipatory guidance provided; and
 
• family planning and/or counseling.
 
5.10 Computer System Requirements.
 
(a) The Contractor must establish and maintain a computer system compatible with
the Department's system, and, if required, execute an electronic communication
agreement provided by the Department. All costs associated with the data
exchange software shall be borne by the Contractor.
 
(b) The Contractor shall establish and maintain a communication link with the
Department as specified in Exhibit D.
 
(c) The Contractor must provide staff with proficient knowledge in
telecommunications to ensure communication connectivity is established and
maintained. The Contractor shall be responsible for performing Network Address
Translation ("NAT") to facilitate connectivity and security protecting the
Contractor's network.
 
(d) The Contractor shall work with the Department to implement changes in
technology as they become available to the Department. Any costs associated with
the Contractor's side of processing, connectivity and/or changes to the manner
in which the Contractor processes data for the Department shall be borne solely
by the Contractor. The Contractor will work with the Department to resolve any
issues related to these changes.
 
37
 

(e) The Contractor shall retrieve and process all HIPAA transactions made
available by the Department, including the 997, 824 and TA1 functional
acknowledgments and 820 and 834 and, when implemented, the 835 remittance
advice.
 
(f) The Contractor shall submit to the Department or its designee, in a format
and medium designated by the Department, a monthly electronic file of the
Contractor's Primary Care Providers including, but not limited to the following
information:
 
(1) Provider name. Provider number, office address, and telephone number;
 
(2) Type of specialty (e.g., family practitioner, internist, oncologist, etc.),
subspecialty if applicable, and treatment age ranges;
 
(3) Identification of group practice, if applicable;
 
(4) Geographic service area;
 
(5) Areas of board-certification, if applicable;
 
(6) Language(s) spoken by Provider and/or office staff;
 
(7) Office hours and days of operation;
 
(8) Special services offered to the deaf or hearing impaired (i.e., sign
language, TDD/TTY, etc.);
 
(9) Wheelchair accessibility status (e.g., parking, ramps, elevators, automatic
doors, personal transfer assistance, etc.).
 
(10) PCP indicator;
 
(11) PCP gender and panel status (open or closed); and
 
(12) PCP hospital affiliations, including information about where the PCP has
admitting privileges or admitting arrangements and delivery privileges (as
appropriate).
 
Contractor shall electronically submit changes to the file as changes occur.
 
(g) The Contractor shall submit to the Department or its designee, in a format
and medium designated by the Department, a monthly electronic file of the
Contractor's Affiliated hospital names and Provider number.
 
5.11 Regular Information Reporting Requirements.
 
(a) The Contractor shall submit to the Department regular reports and additional
information as set forth in this Section. The Contractor shall ensure that data
received from Providers and included in reports is accurate and complete by (1)
verifying the accuracy
 
38
 

and timeliness of reported data; (2) screening the data for completeness, logic,
and consistency; and (3) collecting service information in standardized formats
to the extent feasible and appropriate. All data collected by the Contractor
shall be available to the Department and, upon request, to CMS. Such reports and
information shall be submitted in a format and medium designated by the
Department. A schedule of all reports and information submissions and the
frequency required for each under this Contract is provided in Exhibit C. For
purposes of this Article V, Section 5.10, the following terms shall have the
following meanings: "annual" shall be defined by the State fiscal year beginning
July first of each year and ending on but including June thirtieth of the
following year; and "quarter" shall be defined as three consecutive calendar
months of the State's fiscal year. The Department shall advise the Contractor of
the appropriate format for such reports and information submissions in a written
communication.
 
(1) Administrative
 
(A) Disclosure Statements. The Contractor shall submit disclosure statements to
the Department initially, annually, on request and as changes occur.
 
(B) Encounter Data.
 
1. Submission. The Contractor must report, in accordance with Subsections (2)
and (3) of this Article V, Section 5.1 l(a)(l)(B), all services received by
Enrollees including services reimbursed by Contractor through a capitation
arrangement. On a monthly basis, the Contractor shall provide the Department
with HIPAA Compliant transactions, including the 8371 and the 83 7P, in the
format and medium designated by the Department, prepared with claims level
detail as required herein for all non-institutional provider services received
by Enrollees during a given month. For institutional provider services, only
those services paid by or on behalf of the Contractor may be provided to the
Department. This data must be accepted by the Department within one hundred
twenty (120) days of the Contractor's payment or final rejection of the claim
or, for services paid through a capitation arrangement, within 150 days of the
date of service, except as specified in Article VII, Section 7.2. Any claims
processed by the Contractor for services provided in a given report month
subsequent to submission of the monthly Encounter Data Report shall be reported
on the next submission of the monthly Encounter Data Report.
 
2. Testing. Upon receipt of each submitted data file, the Department shall
perform two distinct levels of review:
 
a. The first level of review and edits performed by the Department shall check
the data file format. These edits shall include, but are not limited to the
following: check the data file for completeness of records; correct sort
 
39

order of records; proper field length and composition; and correct file length.
The format of the file, to be accepted by the Department, must be one hundred
percent (100%) correct.
 
b. If the format is correct, the Department shall then perform the second level
of review. This second review shall be for standard claims processing edits.
These edits shall include, but are not limited to the following: correct
Provider numbers; valid recipient numbers; valid procedure and diagnosis codes;
cross checks to assure Provider and recipient numbers match their names; and the
procedures performed are correct for the age and sex of the recipient. The
acceptable error rate of claims processing edits of the encounter data provided
by the Contractor shall be determined by the Department. Once an acceptable
error rate has been achieved, as determined by the Department, the Contractor
shall be instructed that the testing phase is complete and that data should be
sent in production.
 
3. Production. Once the Contractor's testing of data specified in Section
5.11(a)(l)(B)(l) above is completed, the Contractor will be certified for
production. Once certified for production, the data shall continue to be
submitted in accordance with this Section. The data will continue to be reviewed
for correct format and quality. The Contractor shall submit as many files as
possible in a time frame agreed upon by the Department and the Contractor, to
ensure all data is current.
 
4. Records that fail the edits described above in (2) or (3) will be returned to
the Contractor for correction. Corrected data must be returned to the Department
for re-processing.
 
(C) Financial Reports. The Contractor shall provide the Department with copies
of all financial reports the Contractor is required to file with the Department
of Financial and Professional Regulation.
 
(D) Report of Transactions with Parties of Interest. The Contractor shall report
to the Department all "transactions" with a "party of interest" (as such terms
are defined in Section 1903(m)(4)(A) of the Social Security Act and SMM
2087.6(A-B)), as required by Section 1903(m)(4)(A) of the Social Security Act.
 
(E) Encounter Data Certification. In a format determined by the Department, the
Contractor shall certify by the 5th day of each month that all electronic data
submitted during the previous calendar month is accurate, complete and true.
 
40

(2) Enrollee Materials. (In addition to the submission requirements described
below, the Contractor must maintain documentation verifying that the information
conveyed in the following categories of Enrollee materials are reviewed on an
ongoing basis for accuracy and updated at least annually)
 
(A) Certificate or Document of Coverage and Any Changes or Amendments. The
Contractor shall submit these documents to the Department for prior approval
initially and as revised.
 
(B) Enrollee Handbook. The Contractor shall submit the handbook to the
Department for prior approval initially and as revised. The Contractor shall not
be required to submit for prior approval format changes, provided there is no
change in the information conveyed.
 
(C) Identification Card. The Contractor shall submit the identification card to
the Department for prior approval initially and as revised. The Contractor shall
not be required to submit for prior approval format changes, provided there is
no change in the information conveyed.
 
(D) Provider Directory. The Contractor shall submit the Provider Directory
applicable to Enrollees to the Department for review initially, and annually
thereafter.
 
(3) Fraud/Abuse
 
(A) Fraud and Abuse Report. The Contractor shall report all suspected Fraud and
Abuse as required under Article V, Section 5.25 of this Contract.
 
(4) Marketing
 
(A) Marketing Allegation Investigations. On a monthly basis, the Contractor
shall complete and submit the Investigation Results Form summarizing the results
of investigations of allegations of Fraud, Abuse, Misconduct and
Misrepresentation regarding Marketing conducted by the Contractor.
 
(B) Marketing Allegation Notification. On a weekly basis, the Contractor shall
complete and submit the Marketing Allegation Notification Form identifying
current marketing allegations of Fraud, Abuse, Misconduct and Misrepresentation
involving Marketing and originating through the Contractor.
 
(C) Marketing Gifts and Incentives. The Contractor shall submit all Marketing
Materials to the Department for prior approval initially and as revised.
 
(D) Marketing Materials. The Contractor shall submit all Marketing Materials to
the Department for prior approval initially and as revised.
 

 
41
 

The Contractor shall not be required to submit for prior approval format
changes, provided there is no change in the information conveyed.
 
(E) Marketing Plans and Procedures. The Contractor shall submit descriptions of
proposed Marketing concepts, strategies, and procedures for approval initially
and as revised.
 
(F) Marketing Representative Listing. On a monthly basis, on the first day of
the month for that month, the Contractor shall provide the Department with a
list of all Marketing personnel who are active as well as any Marketing
personnel for whom a change of status has occurred since the last report month.
 
(G) Marketing Representative Terminations. The Contractor shall submit names of
Marketing personnel who have terminated employment or association with the
Contractor as such terminations occur, but no later than ten (10) business days
after termination. The submission shall indicate whether the termination was
voluntary or involuntary and, if involuntary, shall state whether the reason for
termination was related to Misconduct, Fraud or Forgery under this Contract.
 
(H) Marketing at Sites:
 
1. Written Statement. To the extent the Contractor conducts marketing activities
at one or more Sites, the Contractor shall submit, on an annual basis and
throughout the year as Sites are included or deleted from the Contractor's
marketing schedule, a written statement or letter from each Site setting forth
in detail the understanding between the parties including, but not limited to,
the following information: what marketing activities may be conducted at the
Site; the frequency with which those marketing activities may occur; and a
description of the setting in which the marketing activities will occur.
 
2. Schedule. To the extent the Contractor conducts marketing activities at one
or more Sites, the Contractor shall submit, on a monthly basis, a schedule that
reflects which of the Contractor's marketing representatives will market at such
Site(s) and the dates and times when such activities will occur.
 
(I) Marketing at Retail Locations Schedule. The Contractor shall submit, on a
monthly basis, a report of all retail establishments where Marketing is
scheduled, which includes the dates and times of the Marketing activities and
the locations of the retail establishments. Contractor shall report
cancellations of scheduled Marketing as changes occur during the month.
Contractor need not report additions to the Marketing schedule during the month.
 
42
 

(J) Marketing Training Materials. The Contractor shall submit Marketing training
materials relating to Marketing activities performed by the Contractor's
marketing representatives under this Contract, including Marketing trainer
scripts and marketing representative presentations scripts, to the Department
for prior approval initially and as revised.
 
(K) Marketer Training Schedule and Agenda. On a quarterly basis, two weeks prior
to the beginning of the report quarter, the Contractor shall provide the
Department with its schedule for training of Marketing personnel. The model
agenda for each type of training must accompany the schedule. The Contractor
shall provide the Department with written notice of any changes to the quarterly
schedule at least seventy-two (72) hours prior to the scheduled training.
 
(5) Provider Network
 
(A) PCP and Affiliated Specialists File. The Contractor shall submit to the
Department or its designee, in a format and medium designated by the Department,
an electronic file of the Contractor's PCPs as detailed in Section 5.9(f).
 
(B) Affiliated Hospital File. The Contractor shall submit to the Department or
its designee, in a format and medium designated by the Department, a monthly
electronic file of the Contractor's Affiliated hospitals' names and Provider
numbers.
 
(C) Provider Network Submissions. The Contractor shall submit to the Department,
in a format and medium designated by the Department, Provider network reports
that shall include, without limitation, the following:
monthly Provider Affiliation with Sites as set forth in the format given to the
Contractor by the Department; monthly updating of all Providers who have either
become a Provider in the Contractor's network or who have left the network since
the last report; New Site Provider Affiliations as new Sites arc added; Site
terminations immediately as they occur; and Enrollcc Site Transfers as they
occur. New Site/PCP information shall be reported in a format and medium as
required by the Department.
 
(6) Quality Assurance/Medical
 
(A) Grievance Procedures. The Contractor shall submit Grievance Procedures to
the Department for prior approval initially and as revised. The Contractor shall
not be required to submit for prior approval format changes, provided there is
no change in the information conveyed.
 
(B) Primary Care Provider Ratio Report. The Contractor shall submit a quarterly
report that provides the number of Enrollees assigned to each Primary Care
Provider and Women's Health Care Provider (by Site) and the Affiliated and
unaffiliatcd hospitals to which the PCP has admitting and/or delivery privileges
in a format provided by the Department.

 
43

(C) Quality Assurance, Utilization Review and Peer Review Annual Report
(QA/UR/PR Annual Report). The Contractor shall submit a QA/UR/PR Annual Report
on a yearly basis, no later than sixty (60) days following the close of the
Contractor's reporting period. This report shall provide a summary review of the
effectiveness of the Contractor's Quality Assurance Plan. The summary review
shall contain the Contractor's processes for quality assurance, utilization
review and peer review. Included with this report shall be a comprehensive
description of the Contractor's network and an annual workplan outlining the
Contractor's intended activities relating to quality assurance, utilization
review, peer review and health education. The report's content, as determined by
the Department is detailed in Exhibit A.
 
(D) QA/UR/PR Committee Meeting Minutes. The Contractor shall submit the minutes
of these meetings to the Department on a quarterly basis.
 
(E) Quality Assurance, Utilization Review, Peer Review and Health Education
Plans. The Contractor shall submit such plans to the Department for prior
approval initially and as revised. The Contractor shall not be required to
submit for prior approval format changes, provided there is no change in the
information conveyed.
 
(F) Summary of Grievances or Appeals and their Resolutions and External
Independent Reviews and Resolutions. This quarterly report shall provide a
summary of the Grievances or Appeals filed by Enrollees and the resolution of
such Grievances or Appeals as well as a summary of all external independent
reviews and the resolution of such reviews in a format provided by the
Department. Such report shall include types of Grievances or Appeals and
external independent reviews by category and totals, the number and levels at
which the Grievances or Appeals were resolved, the types of resolutions and the
number pending resolution by category.
 
(G) Case Management Enrollees. The Contractor shall submit an electronic report
of all Enrollees who are case managed by the Contractor on a monthly basis.
 
(H) Case Management Plan. The Contractor shall submit such plan to the
Department for prior approval initially and as revised. The Contractor shall not
be required to submit for prior approval format changes, provided there is no
change in the information conveyed.
 
(I) CSHCN Enrollees. The Contractor shall submit an electronic report of all
Enrollees who are case managed by the Contractor on a monthly basis.
 
(J) CSHCN Plan. The Contractor shall submit such plan to the Department for
prior approval initially and as revised. The Contractor shall not be required to
submit for prior approval format changes, provided there is no change in the
information conveyed.

 
44

(7) Subcontracts and Provider Agreements
 
(A) Executed Subcontracts and Provider Agreements. The Contractor shall provide
copies of any subcontract and Provider agreement to the Department upon request.
 
(B) Model Subcontracts and Provider Agreements. The Contractor shall provide
copies of model subcontracts and Provider agreements related to Covered
Services, assignment of risk and data reporting functions, including the form of
all proposed schedules or exhibits, intended to be used therewith, and any
substantial deviations from these model subcontracts and Provider agreements to
the Department initially and as revised.
 
(b) Additional Reports. The Contractor shall submit to the Department additional
reports or submissions at the frequency set forth in Exhibit C and all other
reports and information required by the provisions of this Contract.
 
(c) Unless otherwise specified, the Contractor shall submit all reports to the
Department within thirty (30) days from the last day of the reporting period or
as defined in Exhibit C. All reports and submissions listed in this Article V,
Section 5.11 must be submitted to the Department in a Department designated
format and at the intervals set forth in Exhibit C. The Department may require
additional reports throughout the term of this Contract. The Department will
provide adequate notice before requiring production of any new reports or
information, and will consider concerns raised by Contractors about potential
burdens associated with producing the proposed additional reports. The
Department will provide the basis (reason) for any such request. Failure of the
Contractor to follow reporting requirements shall subject the Contractor to the
sanctions in Article IX, Section 9.10.
 
5.12 Health Education. The Contractor shall establish and maintain an ongoing
program of health education as delineated in its written plan and submitted
annually to the Department. The health education program will advise Enrollees
concerning appropriate health care practices and the contributions they can make
to the maintenance of their own health. All health education materials must be
approved by the Contractor's medical director. Providing material during
Marketing and enrollment does not satisfy the requirements of this Article V,
Section 5.12. The Contractor must make documented efforts to educate Primary
Care Providers on the importance of being active participants in the health
education program and to ensure that such Primary Care Providers participate in
the health education program. The health education program shall provide, at a
minimum, the following:
 
(a) Information on how to use the Plan, including information on how to receive
Emergency Services in and out of the Contracting Area.
 
(b) Information on preventive care including the value and need for screening
and preventive maintenance.
 
(c) Information on the need for pre- and interconceptional care to improve birth
outcomes and on the need to seek prenatal care as early as possible.
 
45
 

(d) Counseling and patient education as to the health risks of obesity, smoking,
alcoholism, substance abuse and improper nutrition, and specific information for
persons who have a specific disease.
 
(e) Information on disease states, that may affect the general population.
 
(f) Educational material in the form of printed, audio, visual or personal
communication.
 
(g) Information will be provided in language that the Enrollee understands and
that meets the requirements set forth in Article II, Section 2.4.
 
(h) A single individual appointed by the Contractor to be responsible for the
coordination and implementation of the program.
 
The Contractor further agrees to review the health education program, at regular
intervals, for the purpose of amending same, in order to improve said program.
The Contractor further agrees to supply the Department or its designee with the
information and reports prescribed in its approved health education program or
the status of such program.
 
5.13 Required Minimum Standards of Care. The Contractor shall provide or arrange
to provide to all Enrollccs medical care consistent with prevailing community
standards at locations serving the Contracting Area that assure availability and
accessibility to Enrollecs.
 
The Contractor will provide a system to notify Enrollees on an ongoing basis of
the need for and benefits of health screenings and physical examinations. The
Contractor will provide or arrange to provide such examinations to all of its
Enrollees.
 
The Contractor shall not be in violation of this Contract if a particular
Enrollee or group of Enrollees do not receive one of the services listed in
Section 5.1(d) or in this Section 5.13(a) through (d) if Contractor requires its
Affiliated Providers to offer those services and has documented its efforts to
educate Enrollees about the availability of coverage for such services.
 
(a) EPSDT Services to Enrollees Under Twenty-One (21) Years. All Enrollees under
twenty-one (21) years of age should receive screening examinations including
appropriate childhood immunizations at intervals as specified by the EPSDT
Program as set forth in §§1902(a)(43)and 1905(a)(4)(B) of the Social Security
Act and 89 111. Adm. Code 140.485.
 
(1) Well child visits shall consist of age appropriate component parts including
 
• comprehensive health history;
 
• nutritional assessment;
 
• height and weight and growth charting;
 
• comprehensive unclothed physical examination;
 
46
 

• immunizations;
 
• laboratory procedures, including lead toxicity testing;
 
• periodic objective developmental screening using a recognized, standardized
developmental screening tool, as approved by the Department. Children under age
three who are screened at-risk for, or with developmental delay, shall be
referred to the State's Early Intervention Program for further assessment;
 
• periodic objective screening for social emotional development using a
recognized, standardized tool, as approved by the Department. Social emotional
screening for infants shall include perinatal depression screening of the mother
in the most appropriate clinical setting, e.g., at the pediatric, behavioral
health or OB/GYN visit;
 
• objective vision and hearing screening; and
 
• risk assessment and anticipatory guidance.
 
(2) The Contractor shall employ strategies to ensure that children received
comprehensive child health services, according to the Department's recommended
periodicity schedule or more frequently, as needed, and shall perform provider
training to ensure that best practice guidelines arc followed in relation to
well child services and care for acute and chronic health care needs.
 
(3) Any condition discovered during the screening examination or screening test
requiring further diagnostic study or treatment must be provided if within the
scope of Covered Services. The Contractor shall refer the Enrollec to an
appropriate source of care for any required services that are not Covered
Services. If, as a result of EPSDT services, the Contractor determines an
Enrollec is in need of services that arc not Covered Services but arc services
otherwise provided for under the HFS Medical Program, the Contractor will ensure
that the Enrollee is referred to an appropriate source of care. The Contractor
shall have no obligation to pay for services that are not Covered Services.
 
(4) At a minimum, the Contractor shall provide or arrange to provide all
appropriate screening and vaccinations in accordance with OBRA 1989 guidelines
to eighty percent (80%) of Enrollees younger than twenty-one (21) years of age.
The Contractor shall track and monitor this provision on an ongoing basis and
shall have in place a quality improvement initiative addressing compliance until
such time as this performance goal is achieved and maintained. The Contractor
must implement an ongoing recall system and outreach services, at a minimum
specifically targeting those Enrollees under age twenty-one (21) who are not up
to date with EPSDT well child screening services.
 
47
 

(b) Preventive Medicine Schedule (Services to Enrollccs Twenty-One (21) Years of
Age and Over) The following preventive medicine services and age schedule is the
minimum acceptable range and scope of required services for adults. The
Contractor may substitute an alternate schedule for adult preventive medicine
services as long as such schedule is based upon recognized guidelines such as
those recommended by the current U.S. Preventive Services Task Force's "Guide to
Clinical Preventive Services" and the Contractor submits the schedule to the
Department and receives the Department's written approval for the alternate
schedule prior to implementing it.
 
The Contractor shall ensure that a complete health history and physical
examination is provided to each Enrollcc initially within the first twelve (12)
months of enrollment. Thereafter, for Enrollees between ages Twenty-One (21) and
Sixty-Four (64), the Contractor shall ensure that a complete health history and
physical examination is conducted every 1-3 years, as indicated by Enrollee need
and clinical care guidelines. For Enrollees aged Sixty-Five (65) and older, the
Contractor shall ensure that a complete health history and physical examination
is conducted annually.
 
For purposes of this Section 5.13(b), a "complete health history and physical
examination" shall include, at a minimum, the following health services as
appropriate for the age and gender of each Enrollee:
 
• Appropriate initial and interval history;
 
• Height and weight measurement;
 
• Nutrition assessment and counseling;
 
• Appropriate lifestyle and risk counseling
 
• Health education and anticipatory guidance (including, without limitation,
education on the need to monitor visual acuity for Enrollees ages 65 and older);
 
• Blood pressure;
 
• Hearing evaluation (ages 65 and older);
 
• Annual Papanicolaou (Pap) smear test or cervical smear and pelvic exam for
female Enrollees (after three (3) or more consecutive satisfactory normal annual
examinations, the Pap smear may be performed at the Physician's discretion based
upon the Enrollee's risk assessment, but no less frequently than every three (3)
years);
 
• Clinical breast examination for female Enrollees;
 
• Baseline mammogram for female Enrollees (ages 35-39) and annually for female
Enrollees ages 40 and older (or earlier, as indicated for female Enrollees with
a personal of family history of breast disease);
 

 
48
 

• Rectal occult blood testing (ages 50 and older); sigmoidoscopy or colonoscopy
should be considered every 5-10 years;
 
• Digital rectal examination and a prostate-specific antigen test annually based
upon the Physician's recommendation for male Enrollees as follows:
 

¨  
African-American male Enrollees (ages 40 and older)

 

¨  
Male Enrollees of national origin other than African-American with a family
history of prostate cancer (ages 40 and older)

 

¨  
Asymptomatic male Enrollees of national origin other than African-American (ages
50 and older)

 
• Non-fasting or fasting total blood cholesterol test, at least every 5 years;
 
• Dipstick urinalysis (ages 65 and older);
 
• Thyroid function tests for female Enrollees (ages 65 and older);
 
• Tetanus-diptheria (Td) booster shot every 10 years, unless contraindicated;
 
• Pneumococcal vaccine (ages 65 and older), unless contraindicated; and
 
• Influenza vaccine annually (ages 65 and older), unless contraindicated.
 
Any known condition or condition discovered during the complete health history
and physical examination requiring further Medically Necessary diagnostic study
or treatment must be provided if within the scope of Covered Services.
 
At a minimum, the Contractor shall provide or arrange to provide the initial
history and physical examination to fifty percent (50%) of all Enrollees in
their first twelve (12) months of coverage, to seventy percent (70%) of all
Enrollees in their second twelve (12) months of coverage and eighty percent
(80%) of all Enrollees in their third twelve (12) months of coverage or more.
For purposes of this subsection, "twelve (12) months of coverage" may include up
to forty-five (45) days interrupted coverage. The Contractor shall track and
monitor this provision on an ongoing basis and shall have in place a quality
improvement initiative addressing compliance until such time as this performance
goal is achieved and maintained.
 
(c) Maternity Care. The Contractor shall provide or arrange to provide quality
care for pregnant Enrollees. At a minimum, the Contractor shall provide, or
arrange to provide, and document:
 
(1) A comprehensive prenatal evaluation and care in accordance with the latest
standards published by the American College of Obstetrics and Gynecology or the
American Academy of Family Physicians. The specific areas to be addressed in
regard to the provision of care include, but are not limited to, the following
items: content of the initial assessment, including history, physical, lab tests
and risk assessment including
 
49

HIV counseling and voluntary II1V testing; follow-up laboratory testing;
nutritional assessment and counseling; frequency of visits; content of follow-up
visits; anticipatory guidance and appropriate referral activities.
 
(2) During the first year of this Contract, at least seventy percent (70%) of
all pregnant Enrollees shall receive the minimum level of prenatal visits
adjusted for the date of coverage under the Plan. During the second year of this
Contract, the percentage in the preceding sentence shall increase to at least
eighty percent (80%). For the exclusive purpose of calculating these rates,
women who deliver within sixty (60) days of the first day of coverage under the
Plan shall be excluded. The Contractor shall track and monitor this provision on
an ongoing basis and shall have in place a quality improvement initiative
addressing compliance until such time as this performance goal is achieved and
maintained.
 
(3) The Contractor shall provide risk assessment and depression screening and
treatment for depression as needed during pregnancy and up to one year following
delivery.
 
(4) During the first year of this Contract, the Contractor shall ensure that at
least seventy percent (70%) of all Enrollees who deliver shall receive at least
one post-partum visit. During the second year of this Contract, the percentage
in the preceding sentence shall increase to at least eighty percent (80%). For
the exclusive purpose of calculating these rates, women who deliver within sixty
(60) days of the first day of coverage under the Plan shall be excluded. The
Contractor shall track and monitor this provision on an ongoing basis and shall
have in place a quality improvement initiative addressing compliance until such
time as this performance goal is achieved and maintained.
 
(5) The Contractor shall provide preconceptional and interconceptional health
care services that address pregnancy planning and care of medical conditions.
 
(6) The Contractor shall provide or arrange to provide nutritional assessment
and counseling to all pregnant Enrollees. Individualized diet counseling is to
be provided as indicated.
 
(7) The Contractor shall require its Primary Care Providers and Women's Health
Care Providers to identify maternity cases presenting the potential for
high-risk maternal or neonatal complications and arrange appropriate referral to
physician specialist or transfer to Level III perinatal facilities as required.
The Contractor shall utilize, for such high-risk consultation or referrals, the
standards of care promulgated by the Statewide Perinatal Program of the Illinois
Department of Human Services. Risk appropriate care shall be ongoing during the
perinatal period. The Contractor shall provide a plan to the Department on how
it will ensure that maternity care is received at the appropriate perinatal
facility for the level of risk associated with each pregnancy.
 
(8) The consulting physician at the perinatal center will determine the
management of the Enrollee at that point in time. Should transport be required,
the consultant at the perinatal center will identify the most appropriate mode
of transport for
 
50
 
such a transfer. Should the perinatal center be unable to accept the Enrollee
due to bed unavailability, that center will arrange for admission of the
Enrollee to an alternate Level III perinatal center. All records required for
appropriate management of the high-risk Enrollee receiving consultation or
referral to a perinatal center will be provided to the consulting physician as
indicated. The Contractor will obtain from the consulting physician all
necessary correspondence to enable the Primary Care Provider to provide, or
arrange for the provision of, appropriate follow-up care for the mother or
neonate following discharge.
 
(9) The Contractor shall employ strategies to ensure that pregnant women receive
maternity care and shall provide training to Providers to ensure that best
practice guidelines are followed to address the medical needs.
 
(d) Complex and Serious Medical Conditions.
 
(1) The Contractor shall provide or arrange to provide quality care for
Enrollees with complex and serious medical conditions. At a minimum, the
Contractor shall provide and document the following:
 
(A) Timely identification of Enrollees with complex and serious medical
conditions.
 
(B) Assessment of such conditions and identification of appropriate medical
procedures for monitoring or treating them.
 
(C) A Chronic Care Action Plan that is symptom-based and developed in
conjunction with the Enrollee or if a child, with the parent, guardian or
care-taker relative, as appropriate, and a copy of this Chronic Care Action Plan
shall be provided to the Enrollee.
 
(D) Implementation of a treatment plan in accordance with this Article V,
Section 5.9(c)(l).
 
(2) The Contractor shall have procedures in place to identify Enrollees with
special health care needs in order to identify any ongoing special conditions of
the Enrollee that require a course of treatment or regular care monitoring.
Appropriate health care professionals shall make such assessments. Such
procedures must be delineated in the Contractor's Quality Assurance Plan, and
ongoing monitoring shall occur in compliance with Exhibit A, Section
4.a.iv(d)(2).
 
(3) The Contractor shall have a mechanism in place to allow Enrollees with
special health care needs as defined by the Contractor to have direct access to
a specialist as appropriate for each Enrollee's condition and identified needs.
 
(e) Access Standards.
 
(1) Appointments. Time specific appointments for routine, preventive care shall
be made available within five (5) weeks from the date of request for such care
 
51

but within 2 weeks for infants under 6 months. Enrollces with more serious
problems not deemed Emergency Medical Conditions shall be triaged and, if
necessary, provided within 24 hours. Enrollces with problems or complaints that
are not deemed serious shall be seen within three (3) weeks from the date of
request for such care. Initial prenatal visits without expressed problems shall
be made available within two (2) weeks for Enrollees in their first trimester,
within one (1) week for Enrollees in their second trimester, and within three
(3) days for Enrollces in their third trimester. The Contractor shall have an
established policy that scheduled Enrollces shall not routinely wait for more
than one (1) hour to be seen by a Provider and no more than six (6) scheduled
appointments shall be made for each Primary Care Provider per hour.
Notwithstanding this limit, the Department recognizes that physicians
supervising other licensed health care Providers may routinely account for more
than six (6) appointments per hour.
 
(2) Services Requiring Prior Authorization. The Contractor shall provide, or
arrange for the provision of, Covered Services as cxpcditiously as the
Enrollcc's health condition requires. Ordinarily, Covered Services shall be
provided within fourteen (14) calendar days after receiving the request for
service from a Provider, with a possible extension of up to fourteen (14)
calendar days, if the Enrollee requests the extension or the Contractor provides
written justification to the Department that there is a need for additional
information and the Enrollee will not be harmed by the extension. If the
Physician indicates, or the Contractor determines that following the ordinary
time frame could seriously jeopardize the Enrollcc's life or health, the
Contractor shall provide, or arrange for the provision of, the Covered Service
no later than seventy-two (72) hours after receipt of the request for service,
with a possible extension of up to fourteen (14) calendar days, if the Enrollee
requests the extension or the Contractor provides written justification to the
Department that there is a need for additional information and the Enrollee will
not be harmed by the extension.
 
(f) Coordination with Other Service Providers.
 
(1) The Contractor shall encourage the Plan Providers and subcontractors to
cooperate and communicate with other service providers who serve Enrollees. Such
other service providers may include: Community Behavioral Health Providers;
Special Supplemental Nutrition Programs for Women, Infants, and Children
(commonly referred to as "WIC" programs); Head Start programs; Early
Intervention programs; Public Health providers; local health departments;
school-based clinics; and school systems. Such cooperation may include
performing annual physical examinations for school and the sharing of
information (with the consent of the Enrollee).
 
(2) The Contractor shall participate in the Family Case Management Program,
which shall include, but is not limited to:
 
(A) Coordinating services and sharing information with existing Family Case
Management Providers for its Enrollees;
 
(B) Developing internal policies, procedures, and protocols for the organization
and its provider network for use with Family Case Management Providers serving
Enrollees; and

 
52

 
(C) Conducting periodic meetings with Family Case Management Providers
performing problem resolution and handling of grievances and issues, including
policy review and technical assistance.
 
(g) The Contractor and the Department shall agree on an implementation schedule
for any quality assurance or quality improvement requirements in this Contract
that were not contained in the contract between Contractor and the Department
that was in place immediately preceding this Contract. Further, the Contractor
and the Department shall review all quality assurance and quality improvement
provisions of this Contract to determine whether changes to the requirements
should be made in order to achieve all of the goals of those provisions in a
cost effective manner.
 
5.14 Authorization of Services. The Contractor shall have in place and follow
written policies and procedures when processing requests for initial and
continuing authorizations of Covered Services. Such policies and procedures
shall ensure consistent application of review criteria for authorization
decisions by a health care professional or professionals with expertise in
treating the Enrollee's condition or disease and provide that the Contractor
shall consult with the Provider requesting such authorization when appropriate.
If the Contractor declines to authorize Covered Services that are requested by a
Provider or authorizes one or more services in an amount, scope, or duration
that are less than that requested, the Contractor shall notify the Provider
orally or in writing and shall furnish the Enrollee with written notice of such
decision. Such notice shall meet the requirements set forth in 42 C.F.R.
438.404.
 
5.15 Case Management. The Contractor must offer and provide case management
services which coordinate and monitor the care of members with specific
diagnoses, or who require high-cost and/or extensive services.
 
(a) MCOs must inform all members and contracting providers of the MCOs case
management services.
 
(b) The MCO's case management system must include, at a minimum, the following
components:
 
(1) specification of the criteria used by the MCO to identify those potentially
eligible for case management services, including diagnosis, cost threshold
and/or amount of service utilization, and the methodology or process (e.g.
administrative data, provider referrals, self-referrals) used to identify the
members who meet the criteria for case management;
 
(2) a process for comprehensive assessment of the member's health condition to
confirm the results of a positive identification, and determine the need for
case management, including information regarding the credentials of the staff
performing the assessments of CSHCN;
 
(3) a process to inform members and their PCPs in writing that they have been
identified as meeting the criteria for case management, including their
enrollment into case management services;
 
53
 

(4) the procedure by which the MCO will assure the timely development of a care
treatment plan for any member receiving case management services; offer both the
member and the member's PCP/specialist the opportunity to participate in the
care treatment plan's development based on the health needs assessment; and
provide for the periodic review of the member's need for case management and
updating of the care treatment plan; and
 
(5) a process to facilitate, maintain, and coordinate communication between
service providers, and member/family, including an accountable point of contact
to help obtain medically necessary care, assist with health-related services and
coordinate care needs.
 
5.16 Children with Special Health Care Needs (CSHCN). The Contractor must
establish a CSI-ICN program with the goal of conducting timely identification
and screening, assuring a thorough and comprehensive assessment, and providing
appropriate and targeted case management services for any CSHCN. All CSHCN
children shall receive case management services.
 
(a) Identification of CSHCN. The Contractor must implement mechanisms to
identify CSHCNs who are in need of a follow-up assessment including: PCP
referrals; outreach;
and contacting newly-enrolled children.
 
(b) Assessment of CSHCN. The Contractor must implement mechanisms to assess
children with a positive identification as a CSHCN including, but not limited to
the following:
 
(1) Use of a CSHCN Standard Assessment Tool;
 
(2) Completion of the assessment by a physician, physician assistant, RN, LPN,
licensed social worker, or a graduate of a two or four year allied health
program; and
 
(3) Oversight and monitoring by either a registered nurse or a physician, if
another medical professional completes the assessment.
 
(c) Case Management of CSHCN. The Contractor must implement mechanisms to
provide case management services for all CSHCN with a positive assessment
including the components required for Case Management and the elements listed in
the Case Management requirements.
 
(d) Access to Specialists for CSHCN. The Contractor must implement mechanisms to
notify all CSHCN with a positive assessment and determined to need case
management of their right to directly access a specialist. Such access may be
assured through, for example, a standing referral or an approved number of
visits, and documented in the care treatment plan.
 
5.17 Choice of Physicians. The Contractor shall afford to each Enrollee a choice
of Primary Care Provider and, where appropriate, a Women's Health Care Provider.
 
54

(a) In each Contracting Area, there shall be at least one(l) full-time
equivalent Physician for each 1,200 Enrollees, including one(l) full-time
equivalent Primary Care Provider for each 2,000 Enrollees. In each Contracting
Area, there shall be at least one (1) Women's Health Care Provider for each
2,000 female Enrollees between the ages of nineteen (19) and forty-four (44), at
least one(l) Physician specializing in obstetrics for each 300 pregnant female
Enrollees and at least one (1) pediatrician for each 2,000 Enrollees under age
nineteen (19). All Physicians providing services shall have and maintain
admitting privileges and, as appropriate, delivery privileges at an Affiliated
or nearby hospital; or, in lieu of these admitting and delivery privileges, the
Physicians shall have a written referral agreement with a Physician who is in
the Contractor's network and who has such privileges at an Affiliated or nearby
hospital. When cnrollccs arc admitted to a non-affiliated hospital by a plan
physician, Contractor is obligated to pay the hospital at a rate negotiated
between the hospital and the Contractor. The agreement must provide for the
transfer of medical records and coordination of care between Physicians.
 
(b) In any Contracting Area in which the Contractor does not satisfy the
full-time equivalent provider requirements set forth above, the Contractor may
demonstrate compliance with these requirements by demonstrating that (i) the
Contractor's full time equivalent Physician ratios exceed ninety percent (90%)
of the requirements set forth above, and (ii) that Covered Services are being
provided in such Contracting Area in a manner which is timely and otherwise
satisfactory. The Contractor shall comply with Section 1932(b)(7) of the Social
Security Act.
 
5.18 Timely Payments to Providers. The Contractor shall make payments to
Providers for Covered Services on a timely basis consistent with the Claims
Payment Procedure described at 42 U.S.C. § 1396a(a)(37)(A) and Illinois Public
Act 91-0605. Complaints and/or disputes concerning payments for the provision of
services as described in this paragraph shall be subject to the Contractor's
Provider grievance resolution system. In particular, the Contractor must pay 90
percent (90%) of all "clean claims" from Providers within thirty (30) days
following receipt. Further, the Contractor must pay 99 percent (99%) of all
"clean claims" from Providers within ninety (90) days following receipt. For
purposes of this Section 5.15, a "clean claim" means one that can be processed
without obtaining additional information from the Provider who provided the
service or from a third party, except that it shall not mean a claim submitted
by or on behalf of a Provider who is under investigation for fraud or abuse, or
a claim that is under review for medical necessity.
 
The Contractor shall pay for all appropriate Emergency Services rendered by a
non-Affiliated Provider within thirty (30) days of receipt of a complete and
correct claim. If the Contractor determines it does not have sufficient
information to make payment, the Contractor shall request all necessary
information from the non-Affiliated Provider within thirty (30) days of
receiving the claim, and shall pay the non-Affiliated Provider within thirty
(30) days after receiving such information. Such payment shall be made at the
same rate the Department would pay for such services according to the level of
services provided. Determination of appropriate levels of service for payment
shall be based upon the symptoms and condition of the Enrollee at the time the
Enrollee is initially examined by the non-Affiliated Provider and not upon the
final determination of the Enrollee's actual medical condition, unless the
actual medical condition is more severe. Within the time limitation stated
above, the Contractor may review the need for, and the intensity of, the
services provided by non-Affiliated Providers.
 
55

 
The Contractor shall pay for all Post-Stabilization Services as a Covered
Service in any the following situations: (a) the Contractor authorized such
services; (b) such services were administered to maintain the Enrollee's
stabilized condition within one (1) hour of a request to the Contractor for
authorization of further Post-Stabilization Services; or (c) the Contractor did
not respond to a request to authorize such services within one (1) hour, the
Contractor could not be contacted, or, if the treating Provider is a
non-Affiliated Provider, the Contractor and the treating Provider could not
reach an agreement concerning the Enrollee's care and an Affiliated Provider was
unavailable for a consultation, in which case the Contractor must pay for such
services rendered by the treating non-Affiliated Provider until an Affiliated
Provider was reached and either concurred with the treating non-Affiliated
Provider's plan of care or assumed responsibility for the Enrollee's care.
 
The Contractor shall pay for all Emergency Services and Post-Stabilization
Services rendered by a non-Affiliated Provider, for which the Contractor would
pay if rendered by an Affiliated Provider, at the same rate the Department would
pay for such services exclusive of disproportionate share payments and Mcdicaid
percentage adjustments, unless a different rate was agreed upon by the
Contractor and non-Affiliated Provider.
 
The Contractor shall accept claims from non-Affiliated Providers for at least
one (1) year after the date the services arc provided. The Contractor shall not
be required to pay for claims initially submitted by such non-Affiliated
Providers more than one(l) year after the date of service.
 
5.19 Grievance Procedure and Appeal Procedure.
 
(a) Grievance. The Contractor shall establish and maintain a procedure for
reviewing Grievances registered by Enrollces. All Grievances shall be registered
initially with the Contractor and may later be appealed to the Department. The
Contractor's procedures must:
(1)be submitted to the Department in writing and approved in writing by the
Department;
(2) provide for prompt resolution, and (3) assure the participation of
individuals with authority to require corrective action. The Contractor must
have a Grievance Committee for reviewing Grievances registered by its Enrollees,
and Enrollees must be represented on the Grievance Committee. At a minimum, the
following elements must be included in the Grievance process:
 
(1) An informal system, available internally, to attempt to resolve all
Grievances;
 
(2) A formally structured Grievance system that is compliant with Section 45 of
the Managed Care Reform and Patient Rights Act and 42 C.F.R. Part 438 Subpart F
to handle all Grievances subject to the provisions of such sections of the Act
and regulations (including, without limitation, procedures to ensure expedited
decision making when an Enrollee's health so necessitates);
 
(3) A formally structured Grievance Committee must be available for Enrollees
whose Grievances cannot be handled informally and are not appropriate for the
 
56

procedures set up under the Managed Care Reform and Patient Rights Act. All
Enrollecs must be informed that such a system exists. Grievances at this stage
must be in writing and sent to the Grievance Committee for review;
 
(4) The Grievance Committee must have at least twenty-five percent (25%)
representation by members of Contractor's prepaid plans, with at least one (1)
Enrollee of Contractor's services under this Contract on the Committee. The
Department may require that one(l) member of the Grievance Committee be a
representative of the Department;
 
(5) Final decisions under the Managed Care Reform and Patient Rights Act
procedures and those of the Grievance Committee may be appealed by the Enrollee
to the Department under its Fair Hearings system;
 
(6) A summary of all Grievances heard by the Grievance Committee and by
independent external reviewers and the responses and disposition of those
matters must be submitted to the Department quarterly;
 
(7) An Enrollee may appoint a guardian, caretaker relative, Primary Care
Provider, Women's Health Care Provider, or other Physician treating the Enrollee
to represent him throughout the Grievance process.
 
(b) Appeals. The Contractor shall establish and maintain a procedure for
reviewing Appeals made by Enrollecs or Providers on behalf of Enrollecs. All
Appeals shall be registered initially with the Contractor and may later be
appealed to the Department. The Contractor's procedures must: (l)be submitted to
the Department in writing and approved in writing by the Department; (2) provide
for prompt resolution, and (3) assure the participation of individuals with
authority to require corrective action. The Contractor must have a committee in
place for reviewing Appeals made by its Enrollecs. At a minimum, the following
elements must be included in the Appeal process:
 
(1) A system that allows an Enrollee or Provider to file an Appeal either orally
or in writing, within a reasonable period of time following the date of the
notice of action that generates such Appeal, which reasonable period of time
shall not be less than twenty (20) days nor more than ninety (90) days; provided
that the Contractor may require an Enrollee or Provider to follow an oral Appeal
with a written, signed Appeal unless the Enrollee or Provider has requested
review on an expedited basis;
 
(2) A formally structured Appeals system that is compliant with Section 45 of
the Managed Care Reform and Patient Rights Act and Subpart F of Section 438 of
the Code of Federal Regulations to handle all Appeals subject to the provisions
of such sections of the Act and C.F.R. (including, without limitation,
procedures to ensure expedited decision making when an Enrollee's health so
necessitates and procedures allowing for an external independent review of
Appeals that are denied by the Contractor);
 
(3) Final decisions of Appeals not resolved wholly in favor of the Enrollee may
be appealed by the Enrollee to the Department under its Fair Hearings system;
 
57

(4) A summary of all Appeals filed by Enrollees and the responses and
disposition of those matters (including decisions made following an external
independent review) must be submitted to the Department quarterly;
 
(5) An Enrollee may appoint a guardian, caretaker relative, Primary Care
Provider, Women's Health Care Provider, or other Physician treating the Enrollee
to represent him throughout the Appeal process.
 
(c) The Contractor agrees to review its Grievance and Appeal procedures, at
regular intervals, for the purpose of amending same when necessary. The
Contractor shall amend the procedures only upon receiving the prior written
consent of the Department. The Contractor farther agrees to supply the
Department and/or its designee with the information and reports prescribed in
its approved procedure. This information shall be furnished to the Department
upon its request.
 
(d) The Contractor shall establish a complaint and resolution system for
Providers that includes a Provider dispute process.
 
5.20 Enrollee Satisfaction Survey. The Contractor shall annually conduct a
Consumer Assessment of Health Plans (CAHPS) survey as approved by the
Department. The survey sampling and administration must follow specifications
contained in the most current HEDIS volume. Contractor must contract with an
NCQA-Ccrtificd HEDIS Survey Vendor to administer the survey and submit results
according to the HEDIS survey specifications. The Contractor shall submit its
findings and explain what actions it will take on its findings as part of the
comprehensive Annual QA/UR/PR Report.
 
5.21 Provider Agreements and Subcontracts.
 
(a) The Contractor may provide or arrange to provide any Covered Services
identified in Article V, Section 5.1 with Affiliated Providers or fulfill any
other obligations under this Contract by means ofsubcontractual relationships.
 
(1) All Provider agreements and/or subcontracts entered into by the Contractor
must be in writing and are subject to the following conditions:
 
(A) The Affiliated Providers and subcontractors shall be bound by the terms and
conditions of this Contract that are appropriate to the service or activity
delegated under the subcontract. Such requirements include, but arc not limited
to, the record keeping and audit provisions of this Contract, such that the
Department or Authorized Persons shall have the same rights to audit and inspect
subcontractors as they have to audit and inspect the Contractor.
 
(B) The Contractor shall remain responsible for the performance of any of its
responsibilities delegated to Affiliated Providers or subcontractors.
 
58

(C) No Provider agreement or subcontract can terminate the legal
responsibilities of the Contractor to the Department to assure that all the
activities under this Contract will be carried out.
 
(D) All Affiliated Providers providing Covered Services for the Contractor under
this Contract must currently be enrolled as Providers in the HFS Medical
Program. The Contractor shall not contract or subcontract with an Ineligible
Person or a Person who has voluntarily withdrawn from the HFS Medical Program as
the result of a settlement agreement.
 
(E) All Provider agreements and subcontracts must comply with the Lobbying
Certification contained in Article IX, Section 9.22 of this Contract.
 
(F) All Affiliated Providers shall be furnished with information about the
Contractor's Grievance and Appeal procedures at the time the Provider enters
into an agreement with the Contractor and within fifteen (15) days following any
substantive change to such procedures.
 
(G) The Contractor must retain the right to terminate any Provider agreement
and/or subcontract, or impose other sanctions, if the performance of the
Affiliated Provider or subcontractor is inadequate.
 
(b) With respect to all Provider agreements and subcontracts made by the
Contractor, the Contractor further warrants:
 
(1) That such Provider agreements and subcontracts are binding;
 
(2) That it will promptly terminate all contracts with Providers and/or
subcontractors, or impose other sanctions, if the performance of the Affiliated
Provider or subcontractor is inadequate;
 
(3) That it will promptly terminate contracts with Providers who are terminated,
barred, suspended, or have voluntarily withdrawn as a result of a settlement
agreement, under cither Section 1128 or Section 1128A of the Social Security
Act, from participating in any program under federal law including any program
under Titles XVIII, XIX, XX or XXI of the Social Security Act or are otherwise
excluded from participation in the HFS Medical Program;
 
(4) That all laboratory testing Sites providing services under this Contract
must possess a valid Clinical Laboratory Improvement Amendments ("CLIA")
certificate and comply with the CLIA regulations found at 42 C.F.R. Part 493;
and
 
(5) That it will monitor the performance of all Affiliated Providers and
subcontractors on an ongoing basis, subject each Affiliated Provider and
subcontractor to formal review on a triennial basis, and, to the extent
deficiencies or areas for improvement are identified during an informal or
formal review, require that the Affiliated Provider or subcontractor take
appropriate corrective action.
 
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(c) The Contractor will submit to the Department copies of model Provider
agreements and/or subcontracts, initially and revised, that relate to Covered
Services, assignment of risk and data reporting functions and any substantial
deviations from these model Provider agreements or subcontracts. The Contractor
shall provide copies of any other model Provider agreement or subcontract or any
actual Provider agreement or subcontract to the Department upon request. The
Department reserves the right to require the Contractor to amend any Provider
agreement or subcontract as necessary to conform with the Contractor's duties
and obligations under this Contract.
 
The Contractor may designate in writing certain information disclosed under this
Article V, Section 5.21 as confidential and proprietary. If the Contractor makes
such a designation, the Department shall consider said information exempt from
copying and inspection under Section 7(l)(b) or (g) of the State Freedom of
Information Act (5 ILCS 140/1 et seq.). If the Department receives a request for
said information under the State Freedom of Information Act, however, it may
require the Contractor to submit justification for asserting the exemption.
Additionally, the Department may honor a properly executed criminal or civil
subpoena for such documents without such being deemed a breach of this Contract
or any subsequent amendment hereto.
 
(d) Prior to entering into a Provider agreement or subcontract, the Contractor
shall submit a disclosure statement to the Department specifying any Provider
agreement or subcontract and Providers or subcontractors in which any of the
following have a five percent (5%) or more financial interest:
 
(1) any Person also having a five percent (5%) or more financial interest in the
Contractor or its affiliates as defined by 42 C.F.R. 455.101;
 
(2) any director, officer, trustee, partner or employee of the Contractor or its
affiliates; or
 
(3) any member of the immediate family of any Person designated in (1)
or(2)above.
 
(e) Any contract or subcontract between the Contractor and a FQHC or a RHC shall
be executed in accordance with 1902(a)(13)(C) and 1903(m)(2)(A)(ix) of the
Social Security Act, as amended by the Balanced Budget Act of 1997 and shall
provide payment that is not less than the level and amount of payment which the
Contractor would make for the Covered Services if the services were furnished by
a Provider which is not an FQHC or a RHC.
 
5.22 Site Registration and Primary Care Provider/Women's Health Care Provider
Approval and Credentialing.
 
(a) The Contractor shall register with the Department each Site prior to
assigning Enrollees to that Site to receive primary care. A fully executed
Provider agreement must be in place between the Contractor and the Site prior to
registration of the Site. All FQHCs and RHCs must be registered as unique sites,
and all Enrollees receiving Covered Services at those unique sites must be
reflected in those Sites in the Department's system. The Contractor must give
advance notice to the Department as soon as practicable of the anticipated
closing of a Site. If it is not possible to give advance notice of a closing of
a Site, the Contractor shall notify the Department immediately when a Site is
closed.
 
60

 
(b) The Contractor shall submit to the Department for approval the name, license
numbers, and other information requested in a format designated by the
Department of all proposed Primary Care Providers and Women's Health Care
Providers, as such new Primary Care Providers and Women's Health Care Providers
are added to the Contractor's network through executed Provider agreements. A
Primary Care Provider or Women's Health Care Provider may not be offered to
Enrollees until the Department has given its written approval of the Primary
Care Provider or Women's Health Care Provider.
 
(c) All Primary Care Providers and Women's Health Care Providers must be
crcdcntialed by the Contractor. The crcdentialing process may be two-tiered, and
the Contractor may assign Enrollees to a Primary Care Provider or Women's Health
Care Provider following preliminary credentialing, provided that full
crcdentialing is completed within a reasonable time following the assignment of
Enrollees to the Primary Care Provider or Women's Health Care Provider. The
Contractor must notify the Department when the crcdentialing process is
completed and the results of the process. If the Contractor utilizes a single
tiered credentialing process, the Contractor shall not assign Enrollees to a
Primary Care Provider or Women's Health Care Provider until such Provider has
been fully credentialed.
 
(d) The Contractor's Provider selection policies and procedures shall not
discriminate against particular Providers that serve high-risk populations or
specialize in conditions that require costly treatment.
 
(e) The Department, at its sole discretion, may eliminate or modify the
requirement for Site reporting at any time during the term of this Contract.
 
5.23 Advance Directives. The Contractor shall comply with all rules concerning
the maintenance of written policies and procedures with respect to advance
directives as promulgated by CMS as set forth in 42 C.F.R. §422.128. The
Contractor shall provide adult Enrollees with oral and written information on
advance directives policies, and include a description of applicable State law.
Such information shall reflect changes in State law as soon as possible, but no
later than ninety (90) days after the effective date of the change.
 
5.24 Fees to Enrollees Prohibited. Neither the Contractor, its Affiliated
Providers, or non-Affiliated Providers shall seek or obtain funding through fees
or charges to any Enrollee receiving Covered Services pursuant to this Contract,
except as permitted or required by the Department in 89 111. Adm. Code 125
and/or the Department's fee-for-service copayment policy then in effect. The
Contractor acknowledges that imposing charges in excess of those permitted under
this Contract is a violation of §1128B(d) of the Social Security Act and
subjects the Contractor to criminal penalties. The Contractor shall have
language in all of its Provider subcontracts reflecting this requirement.
 
5.25 Fraud and Abuse Procedures.
 
(a) The Contractor shall have an affirmative duty to timely report suspected
Fraud, Abuse or criminal acts in the HFS Medical Program by Participants,
Providers, the
 
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Contractor's employees, or Department employees to the Healthcare and Family
Services Office of Inspector General. To this end, the Contractor shall
establish the following procedures, in writing:
 
(1) the Contractor shall form a compliance committee and appoint a single
individual to serve as liaison to the Department regarding the reporting of
suspected Fraud or Abuse;
 
(2) the Contractor's procedure shall ensure that any of Contractor's personnel
or subcontractors who identify suspected Fraud or Abuse shall make a report to
Contractor's liaison;
 
(3) the Contractor's procedure shall ensure that the Contractor's liaison shall
provide notice of any suspected Fraud or Abuse to the OIG immediately upon
receiving such report.
 
(4) the Contractor shall submit a quarterly report certifying that the report
includes all instances of suspected Fraud or Abuse or shall certify that there
was no suspected Fraud or Abuse during that quarter. Reports shall be considered
timely if they are made as soon as the Contractor knew or should have known of
the suspected Fraud or Abuse and the certification is received within thirty
(30) days after the end of the quarter;
 
(5) the Contractor shall ensure that all its personnel and subcontractors
receive notice of these procedures.
 
(b) The Contractor shall not conduct any investigation of the suspected Fraud or
Abuse of Department personnel, but shall report all incidents immediately to the
OIG.
 
(c) The Contractor may conduct investigations of suspected Fraud or Abuse of its
personnel, Providers, subcontractors, or Enrollees. If so directed by the OIG or
if the investigation discloses potential criminal acts, the Contractor shall
immediately cease its internal investigation notify the OIG.
 
(d) The Contractor shall cooperate with all OIG investigations of suspected
Fraud or Abuse.
 
5.26 Misrepresentation Procedures. If an Enrollee states that one of the
Contractor's Marketing representatives made a Misrepresentation, the Contractor
shall conduct a retention interview with the Enrollee either at the time the
allegation is made, if the Enrollee is on the telephone, or as soon as possible
thereafter, if the Enrollee must be contacted. If, during the retention
interview, the Enrollee requests disenrollment from the Contractor, the
Contractor shall send a disenrollment form to the Enrollee within three (3)
business days following the date of the request. The Contractor shall notify the
Department in accordance with the terms of this Article V, Section 5. ll(a)(4).
 
5.27 Enrollee-Provider Communications. Subject to this Article V, Section 5.1
(g), and in accordance with the Managed Care Reform and Patient Rights Act, the
Contractor shall not prohibit or otherwise restrict a Provider from advising an
Enrollee about the health status of
 
62
 

the Enrollee or medical care or treatment for the Enrollee's condition or
disease regardless of whether benefits for such care or treatment are provided
under this Contract, if the Provider is acting within the lawful scope of
practice, and shall not retaliate against a Provider for so advising an
Enrollee.
5.28 HIPAA Compliance. Contractor shall comply with the terms of Sections B and
C of the HIPAA Compliance Obligations set forth in Attachment III.

63

ARTICLE VI
DUTIES OF THE DEPARTMENT
 
6.1 Enrollment. Once the Department has determined that an individual is a
Potential Enrollee and after the Potential Enrollee has selected the
Contractor's Plan, such individual shall become a Prospective Enrollee. A
Prospective Enrollee shall become an Enrollee on the effective date of coverage.
Coverage shall begin as specified in Article IV, Section 4.2. The Department
shall make available to the Contractor, prior to the first day of each month, an
834 Audit File.
 
6.2 Payment. The Department shall pay the Contractor for the performance of the
Contractor's duties and obligations hereunder. Such payment amounts shall be as
set forth in Article VII of this Contract and Attachment 1 hereto. Unless
specifically provided herein, no payment shall be made by the Department for
extra charges, supplies or expenses, including, but not limited to, Marketing
costs incurred by the Contractor.
 
6.3 Department Review of Marketing Materials. Review of all Marketing Materials
required by this Contract to be submitted to the Department for prior approval
shall be completed by the Department on a timely basis not to exceed thirty (30)
days from the date of receipt by the Department; provided, however, that if the
Department fails to notify the Contractor of approval or disapproval of
submitted materials within thirty (30) days after receiving such materials, the
Contractor may begin to use such materials. The Department, at any time,
reserves the right to disapprove any materials that the Contractor used and/or
distributed prior to receiving the Department's express written approval. In the
event the Department disapproves any materials, the Contractor immediately shall
cease use and/or distribution of such materials.
 
6.4 HIPAA Compliance. The Department shall comply with the terms of Section D of
the HIPAA Compliance Obligations set forth in Attachment III.
 
64
 

ARTICLE VII
PAYMENT AND FUNDING
 
7.1 Capitation Payment. The Department shall pay the Contractor on a Capitation
basis, based on the age and gender categories of the Enrollcc as shown on the
table in Attachment I, a sum equal to the product of the approved Capitation
rate and the number of Enrollees enrolled in that category as of the first day
of that month. Rates reflected in Attachment I are for the period August 1, 2006
through July 31, 2008. At the end of the two year period, the Department will
develop an update to the rates which will be offered to the Contractor through
an amendment to the Contract.
 
7.2 Hospital Delivery Case Rate Payment. The Department shall pay the Contractor
a Hospital Delivery Case Rate as shown in Attachment I for each hospital
delivery paid by the Contractor. This payment will be generated upon receipt of
the hospital Encounter Data that groups to a diagnostic related grouping (DRG)
of 370, 371, 372, 373, 374 or 375 and is accepted by the Department within 15
months of the date of service. These payments will be generated on a monthly
basis only for the Encounter Data that is accepted by the Department. Rates
reflected in Attachment I are for the period August 1, 2006 through July 31,
2008. At the end of the two year period, the Department will develop an update
to the rates which will be offered to the Contractor through an amendment to the
Contract.
 
7.3 Actuarially Sound Rate Representation. The Department represents that
actuarially sound Capitation rates and Hospital Delivery Case Rates were
developed by the Department's contracted actuarial firm. The rates were
developed from the fcc-for-scrvicc equivalent values to be consistent with the
Federal regulations promulgated pursuant to the Balanced Budget Act of 1997. The
fee-for-service equivalent values were modified to reflect the following
adjustments: projection of future medical cost increases for the two-year rate
period beginning August 1, 2006, managed care utilization and cost adjustments,
and an administration allowance for compliance with CMS rate setting guidelines
and actuarial principles.
 
7.4 New Covered Services. The financial impact of any new Covered Services added
to the Contractor's responsibilities under this Contract will be evaluated from
an actuarial perspective by the Department and, if deemed material, in the
Department's sole opinion, the rates set forth in this Contract shall be amended
accordingly.
 
7.5 Adjustments. Payments to the Contractor will be adjusted for retroactive
disenrollments of Enrollees, retroactive Enrollments of newboms, changes to
Enrollee information that affect the Capitation and Hospital Delivery Case rates
(i.e., region of residence, eligibility classification, age, gender), financial
sanctions imposed in accordance with Article IX, Section 9.10, rate changes in
accordance with amendments to Attachment 1 or third-party liability collections
received by the Contractor, or other miscellaneous adjustments provided for
herein. Adjustments shall be retroactive only to eighteen (18) months, unless
otherwise provided for in writing by the Department.
 
7.6 Copayments The Contractor may charge copayments to Enrollees in a manner
consistent with 89 111. Adm. Code, Part 125 and/or the Department's
fee-for-service copayment
 
 
65

policy then in effect. If the Contractor desires to charge such copayments, the
Contractor must provide written notice to the Department before charging such
copayments. Such written notice to the Department shall include a copy of the
policy the Contractor intends to give the Providers in its network. This policy
must set forth the amount, manner, and circumstances in which copayments may be
charged. Such policy is subject to the prior written approval of the Department.
In the event the Contractor wishes to impose a charge for copayments after
enrollment of a Participant, it must first provide at least sixty (60) days
prior written notice to such Participant. The Contractor shall be responsible
for promptly refunding to a Participant any copayment that, in the sole
discretion of the Department, has been inappropriately collected for Covered
Services. The Contractor shall not charge copayments to any Enrollee who is an
American Indian or Alaska Native. The Department will prospectivcly identify
Enrollees who are American Indians or Alaska Natives.
 
7.7 Availability of Funds. Payment of obligations of the Department under this
Contract are subject to the availability of funds and the appropriation
authority as provided by law. Obligations of the State will cease immediately
without penalty of further payment being required if in any State fiscal year
the Illinois General Assembly or federal funding source fails to appropriate or
otherwise make available sufficient funds for this Contract within thirty (30)
days of the end of the State's fiscal year.
 
(a) If State funds become unavailable, as set forth herein, to meet the
Department's obligations under this Contract in whole or in part, the Department
will provide the Contractor with written notice thereof prior to the
unavailability of such funds, or as soon thereafter as the Department can
provide written notice.
 
(b) In the event that funds become unavailable to fund this Contract in whole,
this Contract shall terminate; in accordance with Article VIII, Section 8.6(c)
of this Contract. In the event that funds become unavailable to fund this
Contract in part, it is agreed by both parties that this Contract may be
renegotiated (as to premium or scope of services) or amended in accordance with
Article IX, Section 9.9(c). Should the Contractor be unable or unwilling to
provide fewer Covered Services at a reduced Capitation rate, or otherwise be
unwilling or unable to amend this Contract within ten (10) business days after
receipt of a proposed amendment, the Contract shall be terminated on a date set
by the Department not to exceed thirty (30) days from the date of such notice.
 
7.8 Quality Performance Payment. During year one of this Contract, the
Department shall withhold one-half of one percent (0.5%) of each Capitation
payment. During years two and three, the withhold shall be one percent (1%) of
each Capitation payment. These funds will be used to make quality performance
payments to assess performance of certain quality of care indicators. The
quality performance payments will be made as follows:
 
(a) Calendar year 2005 HEDIS Scores will be used as the baseline to measure
improvement in calendar year 2006 HEDIS Scores to determine quality performance
payments made following the end of Contract year one. For years two and three of
the Contract, the HEDIS Scores measurement year will be 2007 and 2008,
respectively. The previous year's score will be the baseline for each year. The
lack of a HEDIS Score for a particular measure for either a baseline year or a
measurement year will result in the withheld amount for the measurement year
being retained by the Department.

 
 
66
 

(b) The HEDIS measures used to determine the quality performance payments are:
 
• Childhood Immunization Status - Combo 2;
 
• Well-Child Visits in the First 15 Months of Life - 6 or more Visits;
 
• Well-Child Visits in the Third, Fourth, Fifth and Sixth Years of Life;
 
• Breast Cancer Screening;
 
• Cervical Cancer Screening;
 
• Timeliness of Prenatal Care;
 
• Use of Appropriate Medications for People with Asthma - Ages Combined; and
 
• Comprehensive Diabetes Care - HbA 1 C Testing.
 
The Department may, in its sole discretion, revise the quality performance
payment measures. The Department will notify the Contractor of such revision at
least two (2) months prior to the beginning of the calendar year on which the
measurement will be based. Any measures used will be a subset of those listed in
Exhibit A, paragraph 13.
 
(c) Funds withheld from the Contractor that are not paid out through quality
performance payments will be retained by the Department.
 
(d) If the Contract is terminated on a date when the Department has withheld
fees for a measurement year that has not ended, HEDIS scores will be calculated
based on the twelve (12) months of operation prior to termination. Any expense
for such a measurement will be borne by the Contractor.
 
(e) One-eighth of the withheld money will be allotted to each measure in this
Section 7.8(b). The withheld amount for each measure will be paid to the
Contractor if the Contractor achieves the improvement in HEDIS score required
for that measure as follows:
 
(1) If the Contractor's baseline year measure is below 30 %, the Contractor's
measurement year score must exceed the Contractor's baseline year score by 15
percentage points.
 
(2) If the Contractor's baseline year measure is between 30% and 50%, the
Contractor's measurement year score must exceed the Contractor's baseline year
score ten percentage points.
 
(3) If the Contractor's baseline year measure is above 50%, the Contractor's
measurement year score must exceed the Contractor's baseline year score by five
percentage points.
 
 
67
 

(4) Whenever the Contractor's baseline year measure is above the 50th percentile
for the baseline year's HEDIS Medicaid Benchmarks, regardless of the percentage
score, the Contractor's measurement year score must exceed the Contractor's
baseline year score by two and one-half percentage points.
 
(5) Whenever the Contractor's baseline year measure is above the 75th percentile
for the baseline year's HEDIS Medicaid Benchmarks, regardless of the percentage
score, the Contractor need only maintain a score above the 75 percentile
benchmark of the baseline year.
 
7.9 Denial of Payment Sanction by CMS. The Department shall deny payments
otherwise provided for under this Contract for new Enrollees when, and for so
long as, payment for those Enrollees is denied by CMS under 42 C.F.R. §438.726.
 
7.10 Hold Harmless. The Contractor shall indemnify and hold the Department
harmless from any and all claims, complaints or causes of action which arise as
a result of the Contractor's failure to pay either any Provider for rendering
Covered Services to Enrollees or any vendor, subcontractor, or the Department's
mail vendor, cither on a timely basis or at all, regardless of the reason or for
any dispute arising between the Contractor and a vendor, mail vendor, Provider,
or subcontractor; provided, however, that this provision will not nullify the
Department's obligation under Article V, Section 5.1 to cover services that are
not Covered Services under this Contract, but that are eligible for payment by
the Department.
 
The Contractor warrants that Enrollees will not be liable for any of the
Contractor's debts should the Contractor become insolvent or subject to
insolvency proceedings as set forth in 215 ILCS 125/1-1 ctsca.
 
7.11 Payment in Full. Acceptance of payment of the rates specified in this
Article VII for any Enrollcc is payment in full for all Covered Services
provided to that Enrollcc, except to the extent the Contractor charges such
Enrolice a copayment as permitted in this Contract.
 
7.12  820 Payment File. For each payment made, the Department will make
available an 820 Payment File. This file will include, but is not limited to,
identification of each Enrollee for whom payment is being made. This file is to
be electronically retrieved by the Contractor.
 
7.13 Medical Loss Ratio Guarantee
 
(a) For each calendar quarter beginning July 1, 2006 during which the Contractor
was under contract to the Department, if the Contractor's Medical Eoss Ratio
(MER) is less than 82%, the Department may recover by deduction from future
payments a percentage of the quarter's premium revenue equal to the difference
between the reported MER and 82%.
 
(b) Medical Eoss Ratio shall be calculated by dividing total hospital and
medical expenses incurred in Illinois by premium revenue paid by the Department.
Premium revenue for a quarter shall be the premium revenue accrued, including
Hospital Delivery Case Rate Payments. Expenses reported as Incurred But Not
Reported (IBNR) shall be subject to review by the Department for actuarial
soundness. All elements of reports used to calculate MER are subject to audit by
the Department. Audits may be ordered by the Department within 30 days of
Departmental receipt of each quarterly report, and audits shall encompass the
total subject matter of that report.
 
68

 
(c) Hospital and medical expenses are the incurred costs of providing direct
care to Enrollees for Covered Services. Outreach and general education are not
included in medical expenses.
 
(d) At the end of the eight quarters ending each June 2008, the Department will
review the Contractor's MLR for the full eight quarters and may recover or
reconcile previous recoveries so that the Department has recovered the
percentage of the total premium revenue for the eight quarters equal to the
difference between the cumulative MLR below 82% and 82%. Reconciliation shall
consist of payment by the Contractor of any difference below the annualized 82%
MLR not previously deducted, or repayment to the Contractor of deductions over
the annualized 82% MLR previously made by the Department. A similar
reconciliation may be performed at the end of the four quarters ending June 2009
or the termination of any contractual relationship betv/ccn the parties.
Notwithstanding the provisions of section 7.12(b), the Department may order an
audit of the reporting for the full eight quarters within 45 days of
Departmental receipt of a cumulative report of the eight quarters.
(e) The Contractor shall report all information necessary to effectuate this
section pursuant to NAIC quidclines in a format and on a schedule consistent
with NAIC guidelines. The Department may request additional supporting
information necessary to effectuate this section, and the Contractor shall
report this information to the Department in a timely manner.

69

ARTICLE VIII
 
TERM RENEWAL AND TERMINATION
 
8.1 Term. This Contract shall take effect on August 1, 2006 and shall continue
for a period of one year. This Contract shall renew automatically for two
consecutive one-year terms, unless either party gives the other party written
notice ninety (90) days prior to the end of the then-current term. Once either
party receives notice of the other party's intent not to renew, such nonrenewal
shall be irrevocable.
 
8.2 Continuing Duties in the Event of Termination. Upon termination of this
Contract, the parties are obligated to perform those duties which remain under
this Contract. Such duties include, but are not limited to, payment to
Affiliated or non-Affiliated Providers, completion of customer satisfaction
surveys, cooperation with medical records review, all reports for periods of
operation, including Encounter Data, and retention of records. Termination of
this Contract does not eliminate the Contractor's responsibility to the
Department for overpayments which the Department determines in a subsequent
audit may have been made to the Contractor, nor docs it eliminate any
responsibility the Department may have for underpayments to the Contractor. The
Contractor warrants that if this Contract is terminated, the Contractor shall
promptly supply all information in its possession or that may be reasonably
obtained, which is necessary for the orderly transition ofEnrollees and
completion of all Contract responsibilities.
 
8.3 Termination With and Without Cause.
 
(a) This Contract may be terminated by the Department with cause upon, at least,
fifteen (15) days written notice to the Contractor for any reason set forth in
Section 1932(e)(4)(A) of the Social Security Act. In the event such notice is
given, the Contractor may request in writing a hearing, in accordance with
Section 1932 of the Social Security Act by the date specified in the notice. If
such a request is made by the date specified, then a hearing under procedures
determined by the Department will be provided prior to termination. The
Department reserves the right to notify Enrollccs of the hearing and its
purpose, to inform them that they may discnroll, and to suspend further
enrollment with the Contractor during the pendency of the hearing and any
related proceedings.
 
(b) This Contract may be terminated by the Department or the Contractor without
cause upon sixty (60) days written notice to the other party. Any such date of
termination established by the Contractor shall coincide with the last day of a
coverage month.
 
8.4 Temporary Management. While one or more agencies within the State of
Illinois have the authority and retain the power to impose temporary management
upon Contractor for repeated violations of the Contract, the Department will
exercise its option to terminate the Contract prior to imposing temporary
management. This does not preclude other state agencies from exercising such
power at their discretion.
 
8.5 Termination for Breach of HIPAA Compliance Obligations. Upon the
Department's learning of a material breach of the terms of the HIPAA Compliance
Obligations, set forth in Attachment 111 ("HIPAA Compliance Obligations"),
incorporated by reference and made a part hereof, the Department shall:
 
70

(1) provide the Contractor with an opportunity to cure the breach or end the
violation, and terminate this Contract if the Contractor does not cure the
breach or end the violation within the time specified by the Department; or
 
(2) immediately terminate this Contract if the Contractor has breached a
material term of the HIPAA Compliance Obligations and cure is not possible; or
 
(3) report the violation to the Secretary of the U.S. Department of Health and
Human Services, if neither termination nor cure by the Contractor is feasible.
 
8.6 Automatic Termination. This Contract may, in the sole discretion of the
Department, automatically terminate on a date set by the Department for any of
the following reasons:
 
(a) refusal by the Contractor to sign an amendment to this Contract as described
in Article IX, Section 9.9(c); or
 
(b) legislation or regulations are enacted or a court of competent jurisdiction
interprets a law so as to prohibit the continuance of this Contract or the HFS
Medical Program; or
 
(c) funds become unavailable as set forth in Article VII, Section 7.7(b); or
 
(d) the Contractor fails to maintain a Certificate of Authority, as required by
Article II, Section 2.6.
 
8.7 Reimbursement in the Event of Termination. In the event of termination of
this Contract, reimbursement for any and all claims for Covered Services
rendered to Enrollees prior to the effective termination date shall be the
Contractor's responsibility.
 
71
 

ARTICLE IX
GENERAL TERMS
 
9.1 Records Retention, Audits, and Reviews. The Contractor shall maintain all
business, professional and other records in accordance with 45 C.F.R. Part 74,
45 C.F.R. Part 160 and 45 C.F.R. Part 164 subparts A and E, the specific terms
and conditions of this Contract, and pursuant to generally accepted accounting
and medical practice. The Contractor shall maintain, for a minimum of six (6)
years after completion of the Contract and after final payment is made under the
Contract, adequate books, records, and supporting documents to verify the
amounts, recipients, and uses of all disbursements of funds passing in
conjunction with the Contract. If an audit, litigation or other action involving
the records is started before the end of the six (6) year period, the records
must be retained until all issues arising out of the action are resolved.
Failure to maintain the books, records, and supporting documents required by
this Section shall establish a presumption in favor of the State for the
recovery of any funds paid by the State under the Contract for which adequate
books, records, and supporting documentation are not available, in Illinois, to
support their purported disbursement.
 
The Contract and all books, records, and supporting documents related to the
Contract shall be made available, at no charge, in Illinois, by the Contractor
for review and audit by the Department, the United States Department of 1-Icalth
and Human Services, the Auditor General or other Authorized Persons. The
Contractor agrees to cooperate fully with any such review or audit and to
provide full access in Illinois to all relevant materials.
 
The Contractor shall provide any information necessary to disclose the nature
and extent of all expenditures made under this Contract. Such information must
be sufficient to fully disclose all compensation of Marketing personnel pursuant
to Article V, Section 5.2(g). The Department, the Auditor General or other
Authorized Persons may inspect and audit any financial records of the Contractor
or its subcontractors relating to the Contractor's capacity to bear the risk of
financial losses.
 
The Department, the Auditor General or other Authorized Persons may also
evaluate, through inspection or other means, the quality, appropriateness, and
timeliness of services performed under this Contract.
 
The Department shall perform quality assurance reviews to determine whether the
Contractor is providing quality and accessible health care to Enrollces under
this Contract. The reviews may include, but are not limited to, a sample review
of medical records of Enrollees, Enrollee surveys and examination by consultants
or reviews and assessments performed by the Contractor. The specific points of
quality assurance which will be reviewed include, but are not limited to:
 
(1) legibility of records
(2) completeness of records
(3) peer review and quality control provisions
(4) utilization review
(5) availability, timeliness, and accessibility of care
(6) continuity of care

 
72
 

(7) utilization reporting
(8) use of services
(9) quality and outcomes of medical care
(10) quality improvement initiatives
 
The Department shall provide for an annual (as appropriate) external independent
review of the above that is conducted by a qualified independent entity, such as
the Department's EQRO.
 
The Department shall adjust future payments or final payments if the findings of
a Department audit indicate underpayments or overpayments to the Contractor. If
no payments are due and owing to the Contractor, or if the overpaymcnt(s) exceed
the amount otherwise due to the Contractor, the Contractor shall immediately
refund all amounts which may be due the Department.
 
9.2 Nondiscrimination.
 
(a) The Contractor shall abide by all Federal and state laws, regulations, and
orders that prohibit discrimination because of race, color, religion, sex,
national origin, ancestry, age, physical or mental disability, including, but
not limited to, the Federal Civil Rights Act of 1964, the Americans with
Disabilities Act of 1990, the Federal Rehabilitation Act of 1973, Title IX of
the Education Amendments of 1972 (regarding education programs and activities),
the Age Discrimination Act of 1975, the Illinois Human Rights Act, and Executive
Orders 11246 and 11375. The Contractor further agrees to take affirmative action
to ensure that no unlawful discrimination is committed in any manner including,
but not limited to, the delivery of services under this Contract.
 
(b) The Contractor will not discriminate against Potential Enrollees,
Prospective Enrollees, or Enrollees on the basis of health status or need for
health services.
 
(c) The Contractor may not discriminate against any Provider who is acting
within the scope of his/her liiccnsure solely on the basis of that liccnsure or
certification.
 
(d) The Contractor will provide each Provider or group of Providers whom it
declines to include in its network written notice of the reason for its
decision.
 
(e) Nothing in subparagraph (c) or (d), above, may be construed to require the
Contractor to contract with Providers beyond the number necessary to meet the
needs of its enrollees; preclude the Contractor from using different
reimbursement amounts for different specialties or for different practitioners
in the same specialty; or preclude the Contractor from establishing measures
that are designed to maintain quality of services and control costs and are
consistent with its responsibilities to enrollees.
 
9.3 Confidentiality of Information. All information, records, data and data
elements collected and maintained for the operation of the Plan and pertaining
to Providers, Enrollees, applicants for public assistance, facilities, and
associations shall be protected by the Contractor and the Department from
unauthorized disclosure, pursuant to 305 ILCS 5/11.9, 5/11.10, and 5/11.12; 42
U.S.C. 654(2)(b); 42 C.F.R. Part 431, Subpart F; and 45 C.F.R. Part 303.21.

 
73
 
 
9.4 Notices. Notices required or desired to be given either party under this
Contract, unless specifically required to be given by a specific method, may be
given by any of the following methods: 1) United States mail, certified, return
receipt requested; 2) a recognized overnight delivery service; or 3) via
facsimile. Notices shall be deemed given on the date sent and shall be addressed
as follows:
 
Contractor: Thad Bereday
General Counsel
Harmony Health Plan of Illinois, Inc.
8735 Hcnderson Road, Rcn 2
Tampa.FL 33634
Facsimile: (813)290-6210
 
With Copy to: Keith Kudia
President, Illinois Operations Harmony Health Plan of Illinois, Inc.
200 West Adams Street, Suite 800 Chicago,IL 60606 Facsimile: (312)630-2022
 
Department: Illinois Department ofHealthcare and Family Services Kclly Carter,
Chief Bureau of Contract Management
201 South Grand Avenue East Springfield, Illinois 62763-0001 Facsimile: (217)
524-7535
 
9.5 Required Disclosures.
 
(a) Conflict of Interest.
 
(1) The Contractor, by signing this Contract, covenants that the Contractor is
not prohibited from contracting with State on any of the bases provided in 30
ILCS 500/50-13. The Contractor further covenants that it neither has nor shall
acquire any interest, public or private, direct or indirect, which conflicts in
any manner with the performance of Contractor's services and obligations under
this Contract. The Contractor further covenants that it shall not employ any
person having such an interest in connection with the Contractors performance
hercunder. The Contractor shall be under a continuing obligation to disclose any
conflicts to the Department, which shall, in its discretion, determine whether
any conflict is cause for the nonexecution or termination of this Contract and
any amendments hereto.
 
(2) The Contractor will provide information intended to identify any potential
conflicts of interest regarding its ability to perform the duties of this
Contract through the filing of a disclosure statement upon the execution of this
Contract, annually

 
74
 
on or before the anniversary date of this Contract, and within thirty-five (35)
days of any change occurring or of any request by the Department. The disclosure
statement shall contain the following information:
 
(A) The identities of any Persons that directly or indirectly provide service or
supplies to the HFS Medical Program with which the Contractor has any type of
business or financial relationship; and
 
(B) A statement describing how the Contractor will avoid any potential conflict
of interest with such Persons related to its duties under this Contract.
 
(b) Disclosure of Interest. The Contractor shall comply with the disclosure
requirements specified in 42 C.F.R. Part 455, including, but not limited to,
filing with the Department upon the execution of this Contract and within
thirty-five (35) days of a change occurring, a disclosure statement containing
the following:
 
(1) The name, FEIN and address of each Person With An Ownership Or Controlling
Interest in the Contractor, and for individuals include home address, work
address, date of birth, Social Security number and gender.
 
(2) Whether any of the individuals so identified are related to another so
identified as the individual's spouse, child, brother, sister or parent.
 
(3) The name of any Person With an Ownership or Controlling Interest in the
Contractor who also is a Person With an Ownership or Controlling Interest in
another managed care organization that has a contract with the Department to
furnish services under the HFS Medical Program, and the name or names of the
other managed care organization.
 
(4) The name and address of any Person With an Ownership or Controlling Interest
in the Contractor or who is an agent or employee of the Contractor who has been
convicted of a criminal offense related to that Person With an Ownership or
Controlling Interest's involvement in any program under Federal law including
any program under Titles XVIII, XIX, XX or XXI of the Social Security Act, since
the inception of such programs.
 
(5) Whether any Person identified in subsections (1) through (4) of this
section, is currently terminated, suspended, barred or otherwise excluded from
participation, or has voluntarily withdrawn as the result of a settlement
agreement, in any program under Federal law including any program under Titles
XVIII, XIX, XX or XXI of the Social Security Act or has within the last five (5)
years been reinstated to participation in any program under Federal law
including any program under Titles XVIII, XIX, XX or XXI of the Social Security
Act and prior to said reinstatement had been terminated, suspended, barred or
otherwise excluded from participation or has voluntarily withdrawn as the result
to a settlement agreement in such programs.
 
(6) Whether the Medical Director of the Plan is a Person With an Ownership or
Controlling Interest.
 
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9.6 CMS Prior Approval. The parties acknowledge that the terms of this Contract
and any amendments must receive the prior approval of CMS, and that failure of
CMS to approve any provision of this Contract will render that provision null
and void. The parties understand and agree that the Department's duties and
obligations under this Contract are contingent upon such approval.
 
9.7 Assignment. This Contract, including the rights, benefits and duties
hereunder, shall not be assignable by either party without the prior written
consent of the other party.
 
9.8 Similar Services. Nothing in this Contract shall prevent the Contractor from
performing similar services for other parties. However, the Contractor warrants
that at no time will the compensation paid by the Department for services
rendered under this Contract exceed the rate the Contractor charges for the
rendering of a similar benefit package of services to others in the Contracting
Area. The Contractor also warrants that the services it provides to its
Enrollees will be as accessible to them (in terms of timeliness, amount,
duration and scope) as those services are to nonenrolled Participants within the
Contracting Area.
 
9.9 Amendments.
 
(a) This Contract may be modified or amended by the mutual consent of both
parties at any time during its term. Amendments to this Contract must be in
writing and signed by authorized representatives of both parties.
 
(b) No change in, addition to or waiver of any term or condition of this
Contract shall be binding on the Department or the Contractor unless approved in
writing by authorized representatives of both parties.
 
(c) The Contractor shall, upon request by the Department and upon receipt of a
proposed amendment to this Contract, amend this Contract, if and when required
in the opinion of the Department, to comply with federal or State laws or
regulations. If the Contractor refuses to sign such amendment by the date
specified by the Department, which may not be less than ten (10) business days
after receipt, this Contract may terminate as provided in Article VIII, Section
8.6(a).
 
9.10 Sanctions. In addition to termination for cause pursuant to Article VIII,
Section 8.3(a), the Department may impose sanctions on the Contractor for the
Contractor's failure to substantially comply with the terms of this Contract.
Monetary sanctions imposed pursuant to this section may be collected by
deducting the amount of the sanction from any payments due to the Contractor or
by demanding immediate payment by the Contractor. The Department, at its sole
discretion, may establish an installment payment plan for payment of any
sanction. The determination of the amount of any sanction shall be at the sole
discretion of the Department, within the ranges set forth below. Self-reporting
by the Contractor will be taken into consideration in determining the sanction
amount.
 
76
 

The Department shall not impose any sanction where the noncompliance is directly
caused by the Department's action or failure to act or where a. force majeure
delays performance by the Contractor. The Department, in its sole discretion,
may waive the imposition of sanctions for failures that it judges to be minor or
insignificant.
 
Upon determination of substantial noncompliance, the Department shall give
written notice to the Contractor describing the noncompliance, the opportunity
to cure the noncompliance where a cure is allowed under this Contract and the
sanction which the Department will impose hereunder.
 
(a) Failure to Report or Submit. If the Contractor fails to submit any report or
other material required by the Contract to be submitted to the Department, other
than Encounter Data, by the date due, the Department will give notice to the
Contractor of the late report or material and the Contractor must submit it
within thirty (30) days following the notice. If the report or other material
has not been submitted within thirty (30) days following the notice, the
Department may, at its sole discretion, impose a sanction of $1,000.00 to
$5,000.00 for the late report.
 
(b) Failure to Submit Encounter Data. If the Department determines that the
Contractor has not demonstrated substantial progress towards compliance with the
requirements of Article V, Section 5.11 (a)(l)(B) regarding Encounter Data, the
Department will send the Contractor a notice of non-compliance. If the
Contractor does not demonstrate substantial progress towards compliance with
these requirements by the end of the thirty (30) day period following the
notice, the Department, without further notice, may impose a sanction of $
1,000.00 to $5,000.00. At the end of each subsequent period of thirty (30) days
in which no demonstrated progress is made towards compliance, the Department
may, without further notice, impose an additional sanction of $1,000.00 to
$5,000.00.
 
(c) Failure to Meet Minimum Standards of Care. If the Department determines that
the Contractor has not demonstrated progress towards compliance with the
requirements of Article V, Section 5.13 regarding minimum standards of care, the
Department will send the Contractor a notice of noncompliance. If the Contractor
does not demonstrate progress towards compliance with these requirements by the
end of the thirty (30) day period following the notice, the Department, without
further notice, may impose a sanction of $1,000.00 to $5,000.00. At the end of
each subsequent period of thirty (30) days in which no demonstrated progress is
made towards compliance, the Department may, without further notice, impose an
additional sanction of $1,000.00 to $5,000.00.
 
(d) Failure to Submit Quality and Performance Measures. If the Department
determines that the Contractor has not accurately conducted and submitted
quality and performance measures as required in Exhibit A, paragraph 13, the
Department will send the Contractor a notice of noncompliance. If the Contractor
has not met these requirements by the end of the sixty (60) day period following
the notice and the Department reasonably determines the failure is sanctionable,
the Department may, without further notice, impose a sanction of $1,000.00 to
$5,000.00 per each measure not accurately conducted or submitted.
 
(e) Failure to Participate in the Performance Improvement Projects. If the
Department determines that the Contractor has not fully participated in the
Performance
 
77
 

Improvement Project, the Department will send the Contractor a notice
ofnoncompliance. If the Contractor does not demonstrate progress towards
substantial compliance with these requirements by the end of the thirty (30) day
period following the notice and the Department reasonably determines the failure
is sanctionable, the Department, without further notice, may impose a sanction
of $1,000.00 to $5,000.00. At the end of each subsequent period of thirty (30)
days in which no demonstrated progress is made towards full compliance, the
Department may, without further notice, impose an additional sanction of
$1,000.00 to $5,000.00.
 
(f) Failure to Demonstrate Improvement in Areas of Deficiencies. If the
Department determines that the Contractor has not made significant progress in
monitoring, carrying out its quality improvement plan and demonstrating
improvement in areas of deficiencies, as identified in its HEDIS results,
quality monitoring, or Performance Improvement Project, the Department will send
the Contractor a notice of noncompliance. If the Contractor does not demonstrate
progress towards compliance with these requirements by the end of the thirty
(30) day period following the notice and the Department reasonably determines
the failure is sanctionable, the Department, without further notice, may impose
a sanction of $1,000.00 to $5,000.00. At the end of each subsequent period of
thirty (30) days in which no demonstrated progress is made towards full
compliance, the Department may, without further notice, impose an additional
sanction of $1,000.00 to $5,000.00.
 
(g) Imposition of Prohibited Charges. If the Department determines that the
Contractor has imposed a charge on an Enrollee that is prohibited by this
Contract, the Department may impose a sanction of $1,000.00 to $5,000.00.
 
(h) Misrepresentation or Falsification of Information. If the Department
determines that the Contractor has misrepresented or falsified information
furnished to a Potential Enrollee, Prospective Enrollee, Enrollee, Provider, the
Department or CMS, the Department may impose a sanction of $1,000.00 to
$5,000.00.
 
(i) Failure to Comply with the Physician Incentive Plan Requirements. If the
Department determines that the Contractor has failed to comply with the
Physician Incentive Plan requirements of Article V, Section 5.7, the Department
may impose a sanction of $1,000.00 to $5,000.00.
 
(j) Failure to Meet Access and Provider Ratio Standards. If the Department
determines that the Contractor has not met the Provider to Enrollee access
standards established in Article V, Sections 5.13(e) and/or 5.17 the Department
will send the Contractor a notice of noncompliance. If the Contractor has not
met these requirements by the end of the thirty (30) day period following the
notice the Department may, without further notice, (i) impose a sanction of
$1,000.00 to $5,000.00, (ii) suspend enrollment of Potential Enrollees with the
Contractor, or (iii) impose both sanctions. At the end of each subsequent period
of thirty (30) days in which no demonstrated progress is made towards
compliance, the Department may, without further notice, impose additional
sanctions of $1,000.00 to $5,000.00.
 
(k) Failure to Provide Covered Services. If the Department determines that the
Contractor has failed to provide, or arrange to provide, a medically necessary
service that the Contractor is required to provide under law or this Contract,
the Department may (i) impose a
 
78

sanction of $5,000.00 to $25,000.00, (ii) suspend enrollment of Potential
Enrollees with the Contractor, or (iii) impose both sanctions.
 
(1) Discrimination Related to Pre-Existing Conditions and/or Medical History. If
the Department determines that discrimination has occurred in relation to an
Enrollee's pre-existing condition or medical history indicating a probable need
for substantial medical services in the future has occurred, the Department may
(i) impose a sanction of $5,000.00 to $25,000.00, (ii) suspend enrollment of
Potential Enrollees with the Contractor or (iii) impose both sanctions.
 
(m) Pattern of Marketing Failures. Where the Department determines a pattern of
Marketing failures, the Department may (i) impose a sanction of $5,000.00 to
$25,000.00, (ii) suspend enrollment of Potential Enrollees with the Contractor,
or (iii) impose both sanctions.
 
(n) Other Failures. If the Department determines that the Contractor is in
substantial noncompliancc with any material terms of this Contract or any state
or federal laws affecting the Contractors conduct under this Contract, which are
not specifically enunciated in this Article IX but which the Department
reasonably deems sanctionable, the Department shall provide written notice to
the Contractor setting forth the specific failure or noncompliant activity. If
the Contractor does not correct the noncompliance within thirty (30) days of the
notice the Department, without further notice, may (i) impose a sanction of
$1,000.00 to $5,000.00, (ii) suspend enrollment of Potential Enrollees with the
Contractor, or (iii) impose both sanctions.
 
9.11 Sale or Transfer. The Contractor shall provide the Department with the
earliest possible actual notice of any sale or transfer of the Contractor's
business as it relates to this Contract. If the Contractor is otherwise subject
to SEC rules and regulations, actual notice shall be given to the Department as
soon as those SEC rules and regulations permit. The Department agrees that any
such notice shall be held in the strictest confidence until such sale or
transfer is publicly announced or consummated. The Department shall have the
right to terminate the Contract and any amendments thereto, without cause, upon
notification of such sale or transfer, in accordance with Article VIII, Section
8.3(b).
 
9.12 Coordination of Benefits for Enrollees.
 
(a) The Department is responsible for the identification of Enrollees with
health insurance coverage provided by a third party and ascertaining whether
third parties are liable for medical services provided to such Enrollees. Money
which the Department receives as a result of these collection activities shall
belong to the Department to the extent the Department has incurred any expense
or paid any claim and thereafter any excess receipts shall belong to the
Contractor, to the extent the Contractor has incurred any expense or paid any
claim, as permitted by law.
 
(b) The Contractor will conduct a data match for the Department to identify
Participants with active private health insurance through the Contractor. The
Department will assume the reasonable and customary costs of these semi-annual
matches. The discovery of a third party liability match will prevent the
Department from paying premiums for recipients already covered by the
Contractor. The Contractor will further make available to the Department

 
79
 
a contact person from whom the Department can request to make third party
liability inquiries for the purpose of maintaining accurate eligibility
information for these recipients.
 
(c) Upon the Department's verification that an Enrollee has third party coverage
for major medical benefits, the Department shall disenroll such Enrollee from
the Contractor's Plan as specified in Section 6.1 of the Contract. The
Capitation payments shall be adjusted accordingly. The Contractor shall be
notified of the disenrollment on the 834 Daily File.
 
(d) The Contractor shall report with the reported Encounter Data any and all
third party liability collections it receives so the Department can offset the
next month's Capitation payment accordingly.
 
(e) The Contractor shall report to the Department any health insurance coverage
for Enrollees it discovers at any time.
 
9.13 Subrogation. In the event an Enrollee is injured by the act or omission of
a third party, the Contractor shall have the right to pursue subrogation and
recover reimbursement from third parties for all Covered Services the Contractor
provided for Enrollee in exchange for the Capitation paid hereunder. Upon
receiving payment from the responsible party, the Contractor shall refund to the
Department the Capitation payment(s) received on behalf of the Enrollee for the
Covered Services involved, and shall be entitled to retain any payments received
in excess of that amount.
 
9.14 Agreement to Obey All Laws. The Contractor's obligations and services
hereunder are hereby made and must be performed in compliance with all
applicable federal and State laws, including, but not limited to, applicable
provisions of 45 C.F.R. Part 74 not hereto specified. In the provision of
services under this Contract, the Contractor and its subcontractors shall comply
with all applicable Federal and state statutes and regulations, and all
amendments thereto, that are in effect when this Contract is signed, or that
come into effect during the term of this Contract. This includes, but is not
limited to Title XIX of the Social Security Act and Title 42 of the Code of
Federal Regulations.
 
9.15 Severability. Invalidity of any provision, term or condition of this
Contract for any reason shall not render any other provision, term or condition
of this Contract invalid or unenforceable.
 
9.16 Contractor's Disputes With Providers. All disputes between the Contractor
and any Affiliated or non-Affiliated Provider, or between the Contractor and any
other subcontractor, shall be solely between such Provider or subcontractor and
the Contractor except to the extent that the Department determines that the
Contractor has not fulfilled its duties under the Contract.
 
9.17 Choice of Law. This Contract shall be governed and construed in accordance
with the laws of the State of Illinois. Should any provision of this Contract
require judicial interpretation, the parties agree and stipulate that the court
interpreting or considering this Contract shall not apply any presumption that
the terms of this Contract shall be more strictly construed against a party who
itself or through its agents prepared this Contract. The parties
 
80
 

acknowledge that all parties hereto have participated in the preparation of this
Contract either through drafting or negotiation and that each party has had full
opportunity to consult legal counsel of choice before execution of this
Contract. Any claim against the Department arising out of this Contract must be
filed exclusively with the Illinois Court of Claims (as defined in 705 ILCS
505/1), if jurisdiction is not accepted by that court, with the appropriate
State or federal court located in Sangamon County, Illinois. The State does not
waive sovereign immunity by entering into this Contract.
 
9.18 Debarment Certification. The Contractor certifies that it is not barred
from being awarded a contract or subcontract under Section 50-5 of the Illinois
Procurement Code (30 ILCS 500/1-1).
 
The Contractor certifies that it has not been barred from contracting with a
unit of State or local government as a result of a violation of 720 ILCS 5/33-E3
or 5/33-E4.
 
9.19 Child Support, State Income Tax and Student Loan Requirements. The
Contractor certifies that its officers, directors and partners are not in
default on an educational loan as provided in 5 ILCS 385/0.01 et seq., and is in
compliance with State income tax requirements and with child support payments
imposed upon it pursuant to a court or administrative order of this or any
state. The Contractor will not be considered out of compliance with this
requirement if (a) the Contractor provides proof of payment of past due amounts
in full or (b) the alleged obligation of past due amounts is being contested
through appropriate court or administrative agency proceedings and the
Contractor provides proof of the pendency of such proceedings or (c) the
Contractor provides proof of entry into payment arrangements acceptable to the
appropriate State agency are entered into. For purposes of this paragraph, a
partnership shall be considered barred if any partner is in default.
 
9.20 Payment of Dnes and Fees. The Contractor certifies that it is not
prohibited from selling goods or services to the State because it pays dues or
fees on behalf of its employees or agents or subsidizes or otherwise reimburses
them for payment of dues or fees to any club which unlawfully discriminates (see
775 ILCS 25/1-25/3).
 
9.21 Federal Taxpayer Identification. Under penalties of perjury, the Contractor
certifies that it has affixed its correct Federal Taxpayer Identification Number
on the signature page of this Contract. The Contractor certifies that it is not:
1) a foreign corporation, partnership, limited liability company, estate, or
trust; or 2) a nonresident alien individual except for those corporations
registered in Illinois as a foreign corporation.
 
9.22 Dru2 Free Workplace. The Contractor certifies that it is in compliance with
the requirements of 30 ILCS 580/1 etsec[., and has completed Attachment II to
this Contract.
 
9.23 Lobbying. The Contractor certifies to the best of his knowledge and belief,
that:
 
(a) No federal appropriated funds have been paid or will be paid by or on behalf
of the Contractor, to any Person for influencing or attempting to influence an
officer or employee of any agency, a Member of Congress, an officer or employee
of Congress, or an employee of a Member of Congress in connection with the
awarding of any federal contract, the making of any federal loan or grant, the
entering into of any cooperative agreement, or the
 
81

extension, continuation, renewal, amendment, or modification of any federal
contract, grant, loan, or cooperative agreement.
 
(b) If any funds other than Federally appropriated funds have been paid or will
be paid to any Person for influencing or attempting to influence an officer or
employee of any agency, a Member of Congress, an officer or employee of
Congress, or an employee of a Member of Congress in connection with this Federal
contract, grant, loan, or cooperative agreement, the Contractor shall complete
and submit a Federal Standard Form LLL, "Disclosure Form to Report Lobbying," in
accordance with its instructions. Such Disclosure Form may be obtained by
request from the Illinois Department of Healthcare and Family Services, Bureau
of Fiscal Operations.
 
(c) The Contractor shall require that the language of this certification be
included in all subcontracts and shall ensure that such subcontracts disclose
accordingly.
 
This certification is a material representation of fact upon which reliance was
placed when this Contract was entered into. Submission of this certification is
a prerequisite for making or entering into the transaction imposed by 31 U.S.C.
§1352. Any person who fails to file the required certification shall be subject
to a civil penalty of not less than ten thousand dollars ($10,000.00) and not
more than one hundred thousand dollars ($100,000.00) for each such failure.
 
9.24 Early Retirement. If the Contractor is an individual, the Contractor
certifies that he has informed the director of the Department in writing if he
was formerly employed by the Department and received an early retirement
incentive under Section 14-108.3 or Section 16-133.3 of the Illinois Pension
Code (40 ILCS 5/13 ct scq.). Contractor acknowledges and agrees that if such
early retirement incentive was received, this Contract is not valid unless the
official executing the Contract has made the appropriate filing with the Auditor
General prior to execution, pursuant to 30 ILCS 105/15a.
 
9.25 Sexual Harassment. The Contractor shall have written sexual harassment
policies that shall comply with the requirements of 75 ILCS 5/2-105.
 
9.26 Independent Contractor. The Contractor is an independent contractor for all
purposes under this Contract and is not a Provider as defined by the Public Aid
Code and the Administrative Rules. Employees of the Contractor are not employees
of the State of Illinois, and are, therefore, not entitled to any benefits
provided employees of the State under the Personnel Code and regulations or
other laws of the State of Illinois nor are they eligible for indemnity under
the State Employee Indemnity Act (5 ILCS 350/1 et seq.) The Contractor shall be
responsible for accounting for the reporting of State and Federal Income Tax and
Social Security Taxes, if applicable.
 
9.27 Solicitation of Employees. The Contractor and the Department agree that
they shall not, during the term of this Contract and for a period of one (1)
year after its termination, solicit for employment or employ, whether as
employee or independent contractor, any person who is or has been employed by
the other during the term of this Contract, in a managerial or policy-making
role relating to the duties and obligations under this Contract, without written
notice to the other. However, should an employee of the Contractor, without the
prior
 
82

knowledge of the management of the Department, take and pass all required
employment examinations and meet all relevant employment qualifications, the
Department may employ that individual and no breach of this Contract shall be
deemed to have occurred. The Contractor shall immediately notify the
Department's Ethics Officer in writing if the Contractor solicits or intends to
solicit for employment any of the Department's employees during the term of this
Contract. The Department will be responsible for keeping the Contractor informed
as to the name and address of the Ethics Officer.
 
9.28 Nonsolicitation. The Contractor warrants that it has not employed or
retained any company or person, other than a bona fide employee working solely
for the Contractor, to solicit or secure this Contract, and that he has not paid
or agreed to pay any company or person, other than a bona fide employee working
solely for the Contractor, any fee, commission, percentage, brokerage fee, gifts
or any other consideration contingent upon or resulting from the award or making
of this Contract. For breach or violation of this warranty, the Department shall
have the right to annul this Contract without liability, or in its discretion,
to deduct from compensation otherwise due the Contractor the commission,
percentage, brokerage fee, gift or contingent fee.
 
9.29 Ownership of Work Product. Any documents prepared by the Contractor solely
for the Department upon the Department's request or as required under this
Contract, shall be the property of the Department, except that the Contractor is
hereby granted permission to use, without payment, all such materials as it may
desire. Standard documents and reports, claims processing data and Enrollee
files and information prepared or maintained by the Contractor in order to
perform under this Contract are and shall remain the property of the Contractor,
subject to applicable confidentiality statutes; however, the Department shall be
entitled to copies of all such documents, reports or claims processing
information which relate to Enrollees or services performed hcrcunder. In the
event of any termination of the Contract, the Contractor shall cooperate with
the Department in supplying any required data in order to ensure a smooth
termination and provide for continuity of care of all Enrollees enrolled with
the Contractor. Notwithstanding anything to the contrary contained in this
Contract, all computer programs, electronic data bases, electronic data
processing documentation and source materials collected, developed, purchased or
used by the Contractor in order to perform its duties under this Contract, shall
be and remain the sole property of the Contractor.
 
9.30 Bribery Certification. By signing this Contract, the Contractor certifies
that neither it nor any of its officers, directors, partners, or subcontractors
have been convicted of bribery or attempting to bribe an officer or employee of
the State of Illinois, nor has the Contractor, its officers, directors, or
partners made an admission of guilt of such conduct which is a matter of record,
nor has an official, agent, or employee of the Contractor committed bribery or
attempted bribery on behalf of the Contractor, its officers, directors, partners
or subcontractors and pursuant to the direction or authorization of any
responsible official of the Contractor. The Contractor further certifies that it
will not subcontract with any subcontractors who have been convicted of bribery
or attempted bribery.
 
9.31 Nonparticipation in International Boycott. The Contractor certifies that
neither it nor any substantially owned Affiliated company is participating or
shall participate in an
 
83

international boycott in violation of the provisions of the U.S. Export
Administration Act of 1979 or the regulations of the U.S. Department of Commerce
promulgated under that Act.
 
9.32 Computational Error. The Department reserves the right to correct any
mathematical or computational error in payment subtotals or total contractual
obligation. The Department will notify the Contractor of any such corrections.
 
9.33 Survival of Obligations. The Contractor's and the Department's obligations
under this Contract that by their nature are intended to continue beyond the
termination or expiration of this Contract will survive the termination or
expiration of this Contract.
 
9.34 Clean Air Act and Clean Water Act Certification. The Contractor certifies
that it is in compliance with all applicable standards, orders or regulations
issued pursuant to the Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal
Water Pollution Control Act, as amended (33 U.S.C. 1251 et seq.). The Department
shall report violations to the United States Department of Health and Human
Services and the appropriate Regional Office of the United States Environmental
Protection Agency.
 
9.35 Non-Waiver. Failure of either party to insist on performance of any term or
condition of this Contract or to exercise any right or privilege hcreundcr shall
not be construed as a continuing or future waiver of such term, condition,
right, or privilege.
 
9.36 Notice of Change in Circumstances. In the event the Contractor, its parent
or related corporate entity becomes a party to any litigation, investigation, or
transaction that may reasonably be considered to have a material impact on the
Contractor's ability to perform under this Contract, the Contractor will
immediately notify the Department in writing.
 
9.37 Public Release of Information. News releases directly pertaining to this
Contract or the services or project to which it relates shall not be made
without prior approval by, and in coordination with, the Department, subject
however, to any disclosure obligations of the Contractor under applicable law,
rule or regulation.
 
The parties will cooperate in connection with media inquiries and in regard to
media campaigns or media initiatives involving this project.
 
The Contractor shall not disseminate any publication, presentation, technical
paper or other information related to the Contractor's duties and obligations
under this Contract unless such dissemination has been approved in writing by
the Department.
 
9.38 Payment in Absence of Federal Financial Participation. In addition to any
assessment of sanctions, pursuit of actual damages, or termination or
nonextension of this Contract, if any failure of the Contractor to meet the
requirements, including time frames, of this Contract results in the deferring
or disallowance of federal funds from the State, the Department will withhold
and retain an equivalent amount from payment(s) to the Contractor until such
federal funds are released to the State (at which time the Department will
release to the Contractor such funds as the Department was retaining as a result
thereof).
 
84

9.39 Employment Reporting. The Contractor certifies that it shall comply with
the requirements of 820 ILCS 405/1801.1, concerning newly hired employees.
 
9.40 Certification of Participation.
 
(a) The Contractor certifies that neither it, nor any employees, partners,
officers or shareholders owning at least five percent (5%) of said Contractor is
currently barred, suspended or terminated from participation in the Medicaid or
Medicare programs, nor are any of the above persons currently under sanction
for, or serving a sentence for conviction of any Medicaid or Medicare program
offenses.
 
(b) If Contractor, any employee, partner, officer or shareholder owning at least
five percent (5%) was ever (but is not currently) barred, suspended or
terminated from participation in the Medicaid or Medicare programs or was ever
sanctioned for or convicted of any Medicaid or Medicare program offenses, the
Contractor must immediately report to the Department in writing, including for
each offense, the date the offense occurred, the action causing the offense, the
penalty or sentence assessed and the date the penalty was paid or the sentence
completed.
 
9.41 Indemnification. To the extent allowed by law, the Contractor and the
Department agree to indemnify, defend and hold harmless the other party, its
officers, agents, dcsignccs, and employees from any and all claims and losses
accruing or resulting in connection with the performance of this Contract which
are due to the negligent or willful acts or omission of the other party. In the
event cither party becomes involved as a party to litigation in connection with
services or products provided under this Contract, that party agrees to
immediately give the other party written notice. The Party so notified, at its
sole election and cost, may enter into such litigation to protect its interests.
 
This indemnification is conditioned upon (1) the right of the Department or the
Contractor when such party is the indemnifying party pursuant to this Article
IX, Section 9.40 ("indemnifying party") to defend against any such action or
claim and to settle, compromise or defend same in the sole discretion of the
indemnifying party; (2) receipt of written notice by the indemnifying party as
soon as practicable after the party seeking indemnification's first notice of an
action or claim for which indemnification is sought hereunder; and (3) the full
cooperation of the party seeking indemnification in defense or handling of any
such action or claim.
 
9.42 Gifts.
 
(a) The Contractor and the Contractor's principals, employees, and
subcontractors are prohibited from giving gifts to employees of the Department,
and are prohibited from giving gifts to, or accepting gifts from, any Person who
has a contemporaneous contract with the Department involving duties or
obligations related to the Contract.
 
(b) The Contractor will provide the Department with advance notice of the
Contractor's providing gifts, excluding charitable donations, given as
incentives to community-based organizations in Illinois and Participants or
KidCare Participants in Illinois to assist the Contractor in carrying out its
responsibilities under this Contract.
 
 
85
 

9.43 Business Enterprise for Minorities, Females and Persons with Disabilities.
The Contractor certifies that it is in compliance with 30 ILCS 575/0.01 et seq..
and has completed Attachment IV.
 
9.44 Non-Delinquency Certification. Contractor certifies that Contractor is not
delinquent in the payment of any debt to the State and, therefore, is not barred
from being awarded a contract under 30 ILCS 500/50-11. Contractor acknowledges
that the Department may declare the Contract void if this certification is
false, or if Contractor is determined to be delinquent in the payment of any
debt to the State during the term of the Contract.
 
9.45 Litigation. In the event the Contractor, its parent or related corporate
entity becomes a party to litigation in any state or in federal court involving
allegations of fraud or false claims, the Contractor shall immediately notify
the Department in writing.
 
9.46 Insolvency. In the event the Contractor, its parent or related corporate
entity becomes insolvent or the subject of insolvency proceedings in any state,
the Contractor shall immediately notify the Department in writing.
 
IN WITNESS WHEREOF, the Department and the Contractor hereby execute and deliver
this Contract effective as of the Effective Date.
 

STATE OF ILLINOIS
DEPARTMENT OF HEALTHCARE AND FAMILY SERVICES
By: /s/ Barry Maram  
Barry S. Maram, Director
Date: July 26, 2006
 
HARMONY HEALTH PLAN OF ILLINOIS, INC.
By: /s/ Todd Farha    
Title: President & CEO
Date: July 21, 2006
FEIN: 36-4050495

 
86
 

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

ATTACHMENT I
RATE SHEETS
(a) Contractor Name: Harmony Health Plan of Illinois, Inc.
Address: 200 West Adams Street Chicago, IL 60606
 
(b) Contracting Area(s) Covered by the Contractor and Enrollment Limit:
 
Contracting Area
Enrollment Limit
 
Region III - St. Clair, Madison, Perry, Randolph, and Washington Counties
 
50,000
 
Region IV
 
100,000

 
(c) Total Enrollment Limit for all Contracting Areas: 150,000
 
(e) Standard Capitation Rates for Enrollees, effective August 1, 2006 through
July 31, 2008:*
 
Age/Gender
Mo = month
Yr = year
Region I (N.W. Illinois)
PMPM
Region II (Central Illinois) PMPM
Region III (Southern Illinois) PMPM
Region IV (Cook County) PMPM
Region V (Collar Counties) PMPM
 
0-3Mo
 
$1,290.99
 
$1 047.86
 
$1,214.79
 
$1,383.98
 
$1,008.88
 
4Mo-lYr
 
$122.07
 
$124.58
 
$147.56
 
$139.60
 
$131.27
 
2Yr-5Yr
 
$51.37
 
$55.46
 
$64.68
 
$59.00
 
$49.44
 
6Yr-13Yr
 
$43.52
 
$50.34
 
$55.12
 
$43.63
 
$40.03
 
14Yr-20Yr, Male
 
$75.31
 
$83.05
 
$78.87
 
$64.90
 
$82.39
 
14Yr-20Y, Female
 
$117.55
 
$118.15
 
$136.31
 
$100.33
 
$98.16
 
21Yr-44Yr,Male
 
$114.27
 
$136.04
 
$123.73
 
$127.39
 
$166.05
 
2 lYr-44Yr, Female
 
$157.98
 
$157.44
 
$166.17
 
$149.48
 
$151.36
 
45Yr+ Male and Female
 
$227.11
 
$255.07
 
$256.05
 
$239.45
 
$253.90

* Capitation rates listed are 100% of actuarially certified rates, but only
99.5% will be paid in year one of the Contract and 99% in year two of the
Contract in accordance with Section 7.8.
 
(f) Hospital Delivery Case Rate, effective August 1,2006 through July 31,2008:
 
 
Hospital Delivery Case Rate (per delivery)
 
$3,501.90
 
$3,424.73
 
$3,591.08
 
$3,977.36
 
$3,645.96

 
II-1
 

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

ATTACHMENT II
DRUG FREE WORKPLACE AGREEMENT
 
The Contractor certifies that he/she/it will not engage in the unlawful
manufacture, distribution, dispensation, possession, or use of a controlled
substance in the performance of the Contract.
 
CHECK THE BOX THAT APPLIES:
 

¨  
This business or corporation does not have twenty-five (25) or more employees.

 

x  
This business or corporation has twenty-five (25) or more employees, and the
Contractor certifies and agrees that it will provide a drug free workplace by:

 
A) Publishing a statement:
 
1) Notifying employees that the unlawful manufacture, distribution,
dispensation, possession or use of a controlled substance, including cannabis,
is prohibited in the grantee's or Contractor's workplace.
 
2) Specifying the actions that will be taken against employees for violations of
such prohibition.
 
3) Notifying the employees that, as a condition of employment on such contract,
the employee will:
 
a) abide by the terms of the statement; and
 
b) notify the employer of any criminal drug statute conviction for a violation
occurring in the workplace no later than five (5) days after such conviction.
 
B) Establishing a drug free awareness program to inform employees about:
 
1) the dangers of drug abuse in the workplace;
 
2) the Contractor's policy of maintaining a drug free workplace;
 
3) any available drug counseling, rehabilitation, and employee assistance
programs; and
 
4) the penalties that may be imposed upon an employee for drug violations.
 
C) Providing a copy of the statement required by subparagraph (a) to each
employee engaged in the performance of the contract or grant and to post the
statement in a prominent place in the workplace.
 
II-2

D) Notifying the contracting or granting agency within ten (10) days after
receiving notice under part (B) or paragraph (3) of subsection (a) above from an
employee or otherwise receiving actual notice of such conviction.
 
E) Imposing a sanction on, or requiring the satisfactory participation in a drug
abuse assistance or rehabilitation program by, any employee who is so convicted,
as required by section 5 of the Drug Free Workplace Act, 1992 Illinois Compiled
Statute, 30 ILCS 580/5.
 
F) Assisting employees in selecting a course of action in the event drug
counseling, treatment, and rehabilitation is required and indicating that a
trained referral team is in place.
 
G) Making a good faith effort to continue to maintain a drug free workplace
through implementation of me Drug Free Workplace Act, 1992 Illinois Compiled
Statute, 30 ILCS 580/1 et seq.
 

 
THE UNDERSIGNED AFFIRMS, UNDER PENALTIES OF PERJURY, THAT HE OR SHE IS
AUTHORIZED TO EXECUTE THIS CERTIFICATION ON BEHALF OF THE DESIGNATED
ORGANIZATION.
 

Harmony Health Plan of Illinois, Inc.
Printed Name of Organization
 
/s/ Todd S. Farha
Signature of Authorized Representative
_______________________________
Requisition/Contract/Grant ID Number
 
Todd Farha, President and CEO
Printed Name and Title
 
July 21, 2006
Date
 

 
 
II-3
 

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

ATTACHMENT III
HIPAA COMPLIANCE OBLIGATIONS
 
A. Definitions.
 
(1) "Designated Record Set" shall have the same meaning as the term "designated
record set" in 45 C.F.R. 164.501.
 
(2) "HIPAA" means the federal Health Insurance Portability and Accountability
Act, Public Law 104-191.
 
(3) "Individual" shall have the same meaning as the term "individual" in 45
C.F.R. 164.501 and shall include a person who qualifies as a personal
representative in accordance with 45 C.F.R. 164.502(g).
 
(4) "PHI" means Protected Health Information, which shall have the same meaning
as the term "protected health information" in 45 C.F.R. 164.501, limited to the
information created or received by the Contractor/Provider from or on behalf of
the Department.
 
(5) "Privacy Rule" shall mean the Standards for Privacy of Individually
Identifiable Health Information at 45 C.F.R. Part 160 and 45 C.F.R. Part 164
subparts A and E.
 
(6) "Required by law" shall have the same meaning as the term "required by law"
in 45 C.F.R. 164.501.
 
B. Contractor's Permitted Uses and Disclosures.
 
(1) Except as otherwise limited by this Contract, the Contractor may use or
disclose PHI to perform functions, activities, or services for, or on behalf of,
the Department as specified in this Contract, provided that such use or
disclosure would not violate the Privacy Rule if done by the Department.
 
(2) Except as otherwise limited by this Contract, the Contractor may use PHI for
the proper management and administration of the Contractor or to carry out the
legal responsibilities of the Contractor.
 
(3) Except as otherwise limited by this Contract, the Contractor may disclose
PHI for the proper management and administration of Contractor, provided that
the disclosures are required by law, or the Contractor obtains reasonable
assurances from the person to whom the PHI is disclosed that the PHI will remain
confidential and used or further disclosed only as required by law or for the
purpose for which it was disclosed to the person. The Contractor shall require
the person to whom the PHI was disclosed to notify the Contractor of any
instances of which the person is aware in which the confidentiality of the PHI
has been breached.
 
III-l
 

(4) Except as otherwise limited by this Contract, the Contractor may use PHI to
provide data aggregation services to the Department as permitted by 45 C.F.R.
164.504(e)(2)(i)(B).
 
(5) The Contractor may use PHI to report violations of law to appropriate
federal and state authorities, consistent with 45 C.F.R. 164.502(j)(l).
 
C. Limitations on the Contractor's Uses and Disclosures. The Contractor shall:
 
(6) Not use or further disclose PHI other than as permitted or required by the
Contract or as required by law;
 
(7) Use appropriate safeguards to prevent use or disclosure of PHI other than as
provided for by this Contract;
 
(8) Mitigate, to the extent practicable, any harmful effect that is known to the
Contractor of a use or disclosure of PHI by the Contractor in violation of the
requirements of this Contract;
 
(9) Report to the Department any use or disclosure of PHI not provided for by
this Contract of which the Contractor becomes aware;
 
(10) Ensure that any agents, including a subcontractor, to whom the Contractor
provides PHI received from the Department or created or received by the
Contractor on behalf of the Department, agree to the same restrictions and
conditions that apply through this Contract to the Contractor with respect to
such information;
 
(11) Provide access to PHI in a Designated Record Set to the Department or to
another individual whom the Department names, in order to meet the requirements
of 45 C.F.R. 164.524, at the Department's request, and in the time and manner
specified by the Department.
 
(12) Make available PHI in a Designated Record Set for amendment and to
incorporate any amendments to PHI in a Designated Record Set that the Department
directs or that the Contractor agrees to pursuant to 45 C.F.R. 164.526 at the
request of the Department or an individual, and in a time and manner specified
by the Department;
 
(13) Make the Contractor's internal practices, books, and records, including
policies and procedures and PHI, relating to the use and disclosure of PHI
received from the Department or created or received by the Contractor on behalf
of the Department available to the Department and to the Secretary of Health and
Human Services for purposes of determining the Department's compliance with the
Privacy Rule;
 
(14) Document disclosures of PHI and information related to disclosures of PHI
as would be required for the Department to respond to a request by an individual
for an accounting of disclosures of PHI in accordance with 45 C.F.R. 165.528;
 
III-2
 

(15) Provide to the Department or to an individual, in a time and manner
specified by the Department, information collected in accordance with the terms
of this Contract to permit the Department to respond to a request by an
individual for an accounting of disclosures of PHI in accordance with 45 C.F.R.
165.528;
 
(16) Return or destroy all PHI received from the Department or created or
received by the Contractor on behalf of the Department that the Contractor still
maintains in any form, and to retain no copies of such PHI, upon termination of
this Contract for any reason. If such return or destruction is not feasible, the
Contractor shall provide the Department with notice of such purposes that make
return or destruction infeasible, and upon the parties' written agreement that
return or destruction is infeasible, the Contractor shall extend the protections
of the Contracts to the PHI and limit further uses and disclosures to those
purposes that make the return or destruction of the PHI infeasible. This
provision shall apply equally to PHI that is in the possession of the Contractor
and to PHI that is in the possession of subcontractors or agents of the
Contractors.
 
D. Department Obligations. The Department shall:
 
(17) Provide the Contractor with the Department's Notice of Privacy Practices
and notify the Contractor of any changes to said Notice;
 
(18) Notify the Contractor of any changes in or revocation of permission by an
individual to use or disclose PHI, to the extent that such changes may affect
the Contractor's permitted or required uses and disclosures of PHI;
 
(19) Notify the Contractor of any restriction to the use or disclosure of PHI
that the Department had agreed to in accordance with 45 C.F.R. 165.522, to the
extent that such restriction may affect the Contractor's use or disclosure of
PHI;
 
(20) Not request that the Contractor use or disclose PHI in any manner that
would not be permissible under the Privacy Rule if done by the Department.
 
E. Interpretation. Any ambiguity in this Contract shall be resolved in favor of
a meaning that permits the Department to comply with the Privacy Rule.
 
III-3
 

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

ATTACHMENT IV
BUSINESS ENTERPRISE PROGRAM CONTRACTING GOAL
 
The Business Enterprise Program Act for Minorities, Females and Persons with
Disabilities (30 ILCS 575/1) establishes a goal that not less than 12% of the
total dollar amount of State contracts be awarded to businesses owned and
controlled by persons who arc minority, female or who have disabilities (the
percentages are 5%/5%/2% respectively) and have been certified as such ("BEPs").
This goal can be met by contracts let directly to such businesses by the State,
or indirectly by the State's contractor ordering goods or services from BEPs
when suppliers or subcontractors are needed to fulfill the contract. Call the
Business Enterprise Program at 312/814-4190 (Voice & TDD), 800/356-9206 (Toll
Free), or 800/526-0844 (Illinois Relay Center for Hearing Impaired) for a list
of certified businesses appropriate for the particular contract.
 
1. If you are a BEP, please identify which agency certified the business and in
what capacity by checking the applicable blanks:
 
Certifying Agency:
Capacity
__ Department of Central Management Services
__ Minority
__ Women's Business Development Center
__ Female
__ Chicago Minority Business Development Council
__ Person with Disability
__ Illinois Department of Transportation
__ Disadvantaged
__ Other (identify)
 

 
2. If the "Capacity" blank is not checked, do you have a written policy or goal
regarding contracting with BEPs?
 
Yes __ No T
 
• If "Yes", please attach a copy.
 
• If "No", will you make a commitment to contact BEPs and consider their
proposals?
 
Yes T No __
Will consider offers
 
3. Do you plan on ordering supplies or services in furtherance of this project
from BEPs?
 
Yes __ No T
 
• If "Yes", please identify what you plan to order, the estimated value as a
percentage of your total proposal, and the names of the BEPs you plan to use.
 
This information is submitted on behalf of____________________________
(Name of Vendor)
 
Name (printed): Todd Farha
Title: President and CEO
Signature: /s/ Todd S. Farha
Date: July 21, 2006

 
IV-1
 

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

EXHIBIT A
QUALITY ASSURANCE (QA)
 
1. All services provided by or arranged by the Contractor to be provided shall
be in accordance with prevailing professional community standards. The
Contractor shall establish a program that systematically and routinely collects
data to review that includes quality oversight and monitoring performance and
patient results. The program shall include provision for the interpretation of
such data to the Contractor's practitioners. The program shall be designed to
perform quantitative and qualitative analytical activities to assess
opportunities to improve efficiency, effectiveness, appropriate health care
utilization and health status and shall be updated no less frequently than
annually. The Contractor shall ensure that data received from Providers and
included in reports is accurate and complete by (1) verifying the accuracy and
timeliness of reported data; (2) screening the data for completeness, logic, and
consistency; and (3) collecting service information in standardized formats to
the extent feasible and appropriate. The Contractor shall have in effect a
program consistent with the utilization control requirements of 42 C.F.R. Part
456. This program will include, when required by the regulations, written plans
of care and certifications of need of care.
 
2. The Contractor shall establish procedures such that the Contractor shall be
able to demonstrate that it meets the requirements of the HMO Federal
qualification regulations (42 C.F.R. 417.106) and/or the Medicare HMO/CMP
regulations (42 C.F.R. 417.418(c)), as well as the regulations promulgated
pursuant to the Balanced Budget Act of 1997 (42 C.F.R. 438.200 et seq.). These
regulations require that the Contractor have an ongoing fully implemented
Quality Assurance program for health services that:
 
a. incorporates practice guidelines that meet the following criteria, and are
distributed to Affiliated Providers, as appropriate, and to Enrollees and
Potential Enrollees, upon request:

i. are based on valid and reliable clinical evidence or a consensus of Providers
in the particular field;
ii. consider the needs of Enrollees;
iii. are adopted in consultation with Affiliated Providers; and
iv. are reviewed and updated periodically as appropriate.
 
b. Monitors the health care services the Contractor provides, including
assessing the appropriateness and quality of care;
 
c. stresses health outcomes;
 
d. provides review by Physicians and other health professionals of the process
followed in the provision of health services;
 
e. includes fraud control provisions;
 
A-l
 

f. establishes and monitors access standards;
 
g. uses systematic data collection of performance and patient results, provides
interpretation of these data to its practitioners (including, without
limitation, patient-specific and aggregate data provided by the Department, such
as childhood immunization data, pregnancy status and/or child profile
information), and institutes needed changes; and
 
h. includes written procedures for taking appropriate remedial action whenever,
as determined under the quality assurance program, inappropriate or substandard
services have been furnished or services that should have been furnished have
not been provided.
 
3. The Contractor shall provide to the Department a written description of its
Quality Assurance Plan (QAP) for the provision of clinical services (e.g.,
medical, medically related services and behavioral health services). This
written description must meet federal and State requirements:
 
a. Goals and objectives — The written description shall contain a detailed set
of QA objectives that are developed annually and include a workplan and
timetable for implementation and accomplishment.
 
b. Scope — The scope of the QAP shall be comprehensive, addressing both the
quality of clinical care and the quality of non-clinical aspects of service,
such as and including: availability, accessibility, coordination, and continuity
of care.
 
c. Methodology — The QAP methodology shall provide for review of the entire
range of care provided, by assuring that all demographic groups, care settings,
(e.g., inpaticnt, ambulatory, and home care), and types of services (e.g.,
preventive, primary, specialty care, behavioral health and ancillary services)
are included in the scope of the review. Documentation of the monitoring and
evaluation plan shall be provided to Department.
 
d. Activities — The written description shall specify quality of care studies
and other activities to be undertaken over a prescribed period of time, and
methodologies and organizational arrangements to be used to accomplish them.
Individuals responsible for the studies and other activities shall be clearly
identified in the written workplan and shall be appropriately skilled or trained
to undertake such tasks. The written description shall provide for continuous
performance of the activities, including tracking of issues over time.
 
e. Provider review — The written description shall document how Physicians
licensed to practice medicine in all its branches and other health professionals
will be involved in reviewing quality of care and the provision of health
services and how feedback to health professionals and the Contractor staff
regarding performance and patient results will be provided.
 
f. Focus on health outcomes — The QAP methodology shall address health outcomes;
a complete description of the methodology shall be fully documented and provided
to Department.
 
A-2
 

g. Systematic process of quality assessment and improvement — The QAP shall
objectively and systematically monitor and evaluate the quality, appropriateness
of, and timely access to, care and service to members, and pursue opportunities
for improvement on an ongoing basis. Documentation of the monitoring activities
and evaluation plan shall be provided to the Department.
 
4. The Contractor shall provide the Department with the QAP written guidelines
which delineate the QA process, specifying:
 
a. Clinical areas to be monitored:
 
i. The monitoring and evaluation of clinical care shall reflect the population
served by the Contractor in terms of age groups, disease categories, and special
risk status, and shall include quality improvement initiatives, as determined
appropriate by the Contractor or as required by the Department.
 
ii. The QAP shall, at a minimum, monitor and evaluate care and services in
certain priority clinical areas of interest specified by the Department.
 
iii. At its discretion and/or as required by the Department, the Contractor's
QAP must monitor and evaluate other important aspects of care and service.
 
iv. At a minimum, the following areas shall be monitored:
 
(a) for pregnant women:
 
(1) number of prenatal visits;
(2) provision of ACOG recommended prenatal screening tests;
(3) neonatal deaths;
(4) birth outcomes;
(5) length ofhospitalization for the mother; and
(6) length of newborn hospital stay for the infant.
 
(b) for children:
 
(1) number of well-child visits appropriate for age;
(2) immunization status;
(3) lead screening status;
(4) number of hospitalizations;
(5) length of hospitalizations; and
(6) medical management for a limited number of medically complicated conditions
as agreed to by the Contractor and Department.
 
(c) for adults:
 
(1) preventive health care (e.g., initial health history and physical exam;
mammography; papanicolaou smear).
 
A-3
 

(d) for medically complicated conditions/chronic care (such conditions
specifically including, without limitation, diabetes and asthma):
 
(1) appropriate treatment, follow-up care, and coordination of care for
Enrollees of all ages; and
(2) identification of Enrollees with special health care needs and processes in
place to assure adequate, ongoing assessments, treatment plans developed with
the Enrollcc's participation in consultation with any specialists caring for the
Enrollee, the appropriateness and quality of care, and if approval is required,
such approval occurs in a timely manner.
(3) case management plan; and
(4) chronic care action plan.
 
(e) for behavioral health:
 
(1) behavioral health network adequate to serve the behavioral health care needs
of Enrollees, including services specifically for Enrollees under age 21 and
pregnant women;
(1) enrollcc access to timely behavioral health services;
(2) an individualized plan or treatment and provision of appropriate level of
care;
(3) coordination of care between the CBHPs, MCO behavioral health subcontractor
or internal program and the PCP;
(4) provision of follow up services and continuity of care
(5) involvement of the PCP in aftercare;
(6) member satisfaction with access to and quality of behavioral health
services; and behavioral health service utilization.
 
 
b. Use of Quality Indicators — Quality indicators are measurable variables
relating to a specified clinical area, which are reviewed over a period of time
to monitor the process of outcomes of care delivered in that clinical area:
 
i. The Contractor shall identify and use quality indicators that are objective,
measurable, and based on current knowledge and clinical experience.
 
ii. The Contractor shall document that methods and frequency of data collected
are appropriate and sufficient to detect need for program change.
 
iii. For the priority clinical areas specified by Department, the Contractor
shall monitor and evaluate quality of care through studies which address, but
are not limited to, the quality indicators also specified by Department.
 
A-4
 

c. Analysis of clinical care and related services, including behavioral health
services:
 
i. Appropriate clinicians shall monitor and evaluate quality through review of
individual cases where there are questions about care, and through studies
analyzing patterns of clinical care and related service.
 
ii. Multi disciplinary teams shall be used, where indicated, to analyze and
address systems issues.
 
iii. Clinical and related service areas requiring improvement shall be
identified and documented with a corrective action plan developed and monitored.
 
d. Conduct Quality Improvement Projects - Quality Improvement Projects shall be
designed to achieve, through ongoing measurements and intervention, significant
improvement of the quality of care rendered, sustained over time, and resulting
in a favorable effect on health outcome and Enrollee satisfaction. Performance
measurements and interventions shall be submitted to the Department annually as
part of the QA/UR/PR Annual Report and at other times throughout the year upon
request by the Department. If the Contractor implements a Quality Improvement
Project that spans more than one (1) year, the Contractor shall report annually
the status of such project and the results thus far.
 
e. Implementation of Remedial/Corrective Actions — The QAP shall include written
procedures for taking appropriate remedial action whenever, as determined under
the QAP, inappropriate or substandard services are furnished, including in the
area of behavioral health, or services that should have been furnished were not.
Quality assurance actions that result in remedial or corrective actions shall be
forwarded by the Contractor to the Department on a timely basis.
 
Written remedial/corrective action procedures shall include:
 
i. specification of the types of problems requiring remedial/corrective action;
 
ii. specification of the person(s) or body responsible for making the final
determinations regarding quality problems;
 
iii. specific actions to be taken;
 
iv. a provision for feedback to appropriate health professionals, providers and
staff;
 
v. the schedule and accountability for implementing corrective actions;
 
vi. the approach to modifying the corrective action if improvements do not
occur; and
 
vii. procedures for notifying a Primary Care Provider group that a particular
Physician licensed to practice medicine in all its branches is no longer
eligible to provide services to Enrollees.
 
A-5
 
 
f. Assessment of Effectiveness of Corrective Actions — The Contractor shall
monitor and evaluate corrective actions taken to assure that appropriate changes
have been made. The Contractor shall assure follow-up on identified issues to
ensure that actions for improvement have been effective and provide
documentation of same.
 
g. Evaluation of Continuity and Effectiveness of the QAP:
 
i. The Contractor shall conduct a regular (minimum annual) examination of the
scope and content of the QAP to ensure that it covers all types of services,
including behavioral health services, in all settings, as required.
 
ii. At the end of each year, a written report on the QAP shall be prepared by
the Contractor and submitted to the Department as a component part of the
QA/UR/PR Annual Report identified in Exhibit C, which report shall include,
without limitation:
 
(a) QA/UR/PR Plan
 
(1) Summary of Quality Assurance, Utilization Review, and Peer Review (QA/UR/PR)
activities during the fiscal year;
(2) Summary of changes in QA/UR/PR Plan that will be reflected in the next
fiscal year;
(3) Areas of deficiency and recommendations for corrective action;
(4) Evaluation of the overall effectiveness of the QAP; and
(5) Detailed Workplan for the next fiscal year
 
(b) Provider Network Adequacy — Application of a geographical mapping software
that has been approved by the Department, and identifies and evaluates network:
 
(1) PCPs;
(2) WHCPs;
(3) Specialists;
(4) Pharmacies;
(5) Tertiary care facilities (i.e., perinatal and children's hospitals);
(6) Ancillary services; and
(7) Behavioral health network
 
The report shall include all Providers and each Provider's admitting and, as
appropriate, delivery privileges at Affiliated or nearby hospitals or, in the
alternative, if the Provider does not have
 
A-6
 

such admitting and/or delivery privileges, a detailed description of the written
referral agreement with a Provider who is in the Contractor's network and who
has such privileges at an Affiliated or nearby hospital. The report shall also
include the updated Provider Directory and a summary of
credentialing/recredentialing and peer review activities.
 
(c) Outreach and Health Education
 
(1) Summary and outcomes of outreach activities; and
(2) Description of health education initiatives during fiscal year
 
(d) Coordination with Other Service Providers and Care Coordination Activities
 
(1) Description of coordination with other service providers; and
 
(2) Description of care coordination initiatives and outcomes
 
(e) Studies, Outcomes, and Relevant Statistics
 
(1) Results of medical record reviews and quality studies;
(2) Performance Improvement Projects results;
(3) Contractor's progress toward meeting the Department's preventive care
participation goals as set forth in Article V, Section 5.12 (a), (b), and (c) of
the Contract;
(4) Aggregated data on utilization of services;
(5) HED1S or Department-defined reporting;
(6) Trending and comparison of health outcomes;
(7) Outcomes of A-3 iv(a), A-3 iv(b), A-3 iv(c), A-3 iv(d), and A-3 iv(e);
(8) Enrollee Satisfaction Survey analysis; and
(9) Description of the way in which Department-generated data supplied to the
Contractor was utilized, accurate, and effective in developing ongoing quality
improvement strategies.
 
(f) Summary of Quality Improvement Activities
 
(1) Quality indicators and methodologies for measuring quality indicators;
(2) Quality improvement activities implemented;
(3) Results and demonstrated improvements; and
(4) Quality improvement ongoing workplan, including goals and objectives.
 
A-7
 
 
(g) Monitoring of Delegated Activities
 
(1) Description of the Contractor's oversight and monitoring activities,
including a summary of findings relative to each subcontractor's ability to
perform the required functions;
(2) Summary of deficiencies and quality improvement activities developed as a
result of the ongoing monitoring and periodic formal reviews, including the
workplan for implementation of the QI activities;
(3) Workplan for MCO monitoring of its subcontractors, including schedule for
formal reviews
 
5. The Contractor shall have a governing body to which the QAP shall be held
accountable ("Governing Body"). The Governing Body of the Contractor shall be
the Board of Directors or, where the Board's participation with quality
improvement issues is not direct, a designated committee of the senior
management of the Contractor. This Board of Directors or Governing Body shall be
ultimately responsible for the execution of the QAP. However, changes to the
medical quality assurance program shall be made by the chair of the QA
Committee.
 
Responsibilities of the Governing Body include:
 
a. Oversight of QAP — The Contractor shall document that the Governing Body has
approved the overall QAP and an annual QA plan.
 
b. Oversight Entity — The Governing Body shall document that it has formally
designated an accountable entity or entities within the organization to provide
oversight of QA, or has formally decided to provide such oversight as a
committee of the whole.
 
c. QAP Progress Reports — The Governing Body shall routinely receive written
reports from the QAP describing actions taken, progress in meeting QA
objectives, and improvements made.
 
d. Annual QAP Review — The Governing Body shall formally review on a periodic
basis (but no less frequently than annually) a written report on the QAP which
includes:
studies undertaken, results, subsequent actions, and aggregate data on
utilization and quantity of services rendered, to assess the QAP's continuity,
effectiveness and current acceptability. Behavioral health shall be included in
the Annual QAP Review.
 
e. Program Modification — Upon receipt of regular written reports from the QAP
delineating actions taken and improvements made, the Governing Body shall take
action when appropriate and direct that the operational QAP be modified on an
ongoing basis to accommodate review findings and issues of concern within the
Contractor. This activity shall be documented in the minutes of the meetings of
the Governing Board in sufficient detail to demonstrate that it has directed and
followed up on necessary actions pertaining to Quality Assurance.
 
A-8
 
6. The QAP shall delineate an identifiable structure responsible for performing
QA functions within the Contractor. This committee or other structure shall
have:
 
a. Regular Meetings — The structure/committee shall meet on a regular basis with
specified frequency to oversee QAP activities. This frequency shall be
sufficient to demonstrate that the structure/committee is following-up on all
findings and required actions, but in no case shall such meetings be held less
frequently than quarterly. A copy of the meeting summaries/minutes shall be
submitted to the Department no later than thirty (30) days after the close of
the quarterly reporting period.
 
b. Established Parameters for Operating — The role, structure and function of
the structure/committee shall be specified.
 
c. Documentation — There shall be records kept documenting the
structure's/committee's activities, findings, recommendations and actions.
 
d. Accountability — The QAP committee shall be accountable to the Governing Body
and report to it (or its designee) on a scheduled basis on activities, findings,
recommendations and actions.
 
e. Membership — There shall be active participation in the QA committee from
Plan Providers, who are representative of the composition of the Plan's
Providers. There shall be a majority of Contractor-Affiliated practicing
Physicians licensed to practice medicine in all its branches.
 
7. There shall be a designated senior executive who will be responsible for
program implementation. The Contractor's Medical Director shall have substantial
involvement in QA activities and shall be responsible for the required reports.
 
a. Adequate Resources — The QAP shall have sufficient material resources, and
staff with the necessary education, experience, or training, to effectively
carry out its specified activities.
 
b. Provider Participation in the QAP -
 
i. Participating Physicians licensed to practice medicine in all its branches
and other Providers shall be kept informed about the written QA plan.
 
ii. The Contractor shall include in all its Provider subcontracts and employment
agreements a requirement securing cooperation with the QAP for both Physicians
licensed to practice medicine in all its branches and non-physician Providers.
 
iii. Contracts shall specify that hospitals and other subcontractors will allow
access to the medical records of its Enrollees to the Contractor.
 
A-9
 

8. The Contractor shall remain accountable for all QAP functions, even if
certain functions are delegated to other entities. If the Contractor delegates
any QA activities to subcontractors:
 
a. There shall be a written description of the following: the delegated
activities; the delegate's accountability for these activities; and the
frequency of reporting to the Contractor.
 
b. The Contractor shall have written procedures for monitoring and evaluating
the implementation of the delegated functions and for verifying the actual
quality of care being provided.
 
c. There shall be evidence of continuous and ongoing evaluation of delegated
activities, including approval of quality improvement plans and regular
specified reports, as well as a formal review of such activities conducted on no
less than an annual basis.
 
d. If the Contractor or subcontractor identifies deficiencies or areas requiring
improvement, the Contractor and subcontractor shall take corrective action and
implement a quality improvement initiative, as appropriate.
 
9. The QAP shall contain provisions to assure that Physicians licensed to
practice medicine in all its branches and other health care professionals, who
are licensed by the State and who are under contract with the Contractor, are
qualified to perform their services and credentialed by the Contractor.
Recredcntialing shall occur at least once every three (3) years. The
Contractor's written policies shall include procedures for selection and
retention of Physicians and other Providers.
 
10. The Contractor shall put a basic system in place which promotes continuity
of care and case management. The Contractor shall provide documentation on:
 
a. Monitoring the quality of care across all services and all treatment
modalities.
 
b. Studies, reports, protocols, standards, worksheets, minutes, or such other
documentation as may be appropriate, concerning its QA activities and corrective
actions and make such documentation available to the Department upon request.
 
11. The findings, conclusions, recommendations, actions taken, and results of
the actions taken as a result of QA activity, shall be documented and reported
to appropriate individuals within the organization and through the established
QA channels. The Contractor shall document coordination ofQA activities and
other management activities.
 
a. QA information shall be used in recredentialing, recontracting and/or annual
performance evaluations.
 
b. QA activities shall be coordinated with other performance monitoring
activities, including utilization management, risk management, and resolution
and monitoring of member complaints and grievances.
 
A-10

c. There shall be a linkage between QA and the other management functions of the
Plan such as:
 
i. network changes;
 
ii. benefits redesign;
 
iii. medical management systems (e.g., pre-certification);
 
iv. practice feedback to Physicians licensed to practice medicine in all its
branches; and
 
v. patient education.

 
d. In the aggregate, without reference to individual Physicians licensed to
practice medicine in all its branches or Enrollee identifying information, all
Quality Assurance findings, conclusions, recommendations, actions taken, results
or other documentation relative to QA shall be reported to Department on a
quarterly basis or as requested by the Department. The Department shall be
notified of any Physician licensed to practice medicine in all its branches
terminated from a subcontract with the Contractor for a quality of care issue.
 
12. The Contractor shall, at the direction of the Department, cooperate with the
external, independent quality review process conducted by the EQRO. The
Contractor shall address the findings of the external review through its Quality
Assurance program by developing and implementing performance improvement goals,
objectives and activities, which shall be documented in the next quarterly
report submitted by the Contractor following the EQRO's findings.
 
13. The Contractor shall perform and report the quality and utilization measures
identified in the following chart using a complete HEDIS study, as directed by
the Department. The Contractor shall not modify the reporting methodology
prescribed by the Department without first obtaining the Department's written
approval. The Contractor must obtain an independent validation of its HEDIS
findings by a recognized entity, e.g., NCQA-certified auditor, as approved by
the Department.
 
Beginning Contract Year
Indicator
Methodology
Year l
Effectiveness of Care: Childhood Immunization Status
HEDIS
Year l
Effectiveness of Care: Breast Cancer Screen
HEDIS
Year l
Effectiveness of Care: Cervical Cancer Screening
HEDIS
Year l
Effectiveness of Care: Use of Appropriate Medications for Enrollees with Asthma
HEDIS
Year l
Effectiveness of Care: Comprehensive Diabetes Care
HEDIS
Year l
Effectiveness of Care: Controlling High Blood Pressure
HEDIS

 
A-ll
 

 Beginning Contract Year
 Indicator
 Methodology
Year l
Effectiveness of Care: Chlamydia Screening in Women
HEDIS
Year l
Effectiveness of Care: Medical Assistance with Smoking Cessation
HEDIS
Year l
Effectiveness of Care: Follow-up after hospitalization for mental illness
HEDIS
Year l
Access/Availability of Care: Prenatal and Postpartum Care
HEDIS
Year l
Access/Availability of Care: Adult access to Preventive/Ambulatory Health
Services
HEDIS
Year l
Access/Availability of Care: Initiation and Engagement of Alcohol and Other Drug
Dependence Treatment
HEDIS
Year l
Use of Services: Well Child Visits during first 15 months of life
HEDIS
Year l
Use of Services: Well Child Visits in the Third, Fourth, Fifth, and Sixth years
of life
HEDIS
Year l
Use of Services: Adolescent Well Care Visits
HEDIS
Year l
Use of Services; Frequency of Ongoing Prenatal Care
HEDIS
Year l
Use of Services: Births and Average Length of Stay, Newborns
HEDIS
Year 1
Use of Services: Discharges and Average Length of Stay - Maternity Care
HEDIS
Year 1
Use of Services: Mental Health Utilization (percentage ofEnrollees receiving
inpatient, day/night, and ambulatory services)
HEDIS
Year l
Use of Services: Mental Health Utilization (inpatient discharges and average
length of stay)
HEDIS
Year l
Use of Services: Chemical Dependency Utilization (inpatient discharges and
average length of stay)
HEDIS
Year l
Enrollee Satisfaction Surveys for Adults and Children
HEDIS CAHPS 3.OH
Year 2
Effectiveness of Care: Adolescent Immunization Status
HEDIS
Year 2
Effectiveness of Care: Appropriate Treatment for Children with Upper Respiratory
Infection
HEDIS
Year 2
Effectiveness of Care; Antidepressant Medication Management
HEDIS
Year 2
Access/Availability of Care: Children and Adolescents' access to Primary Care
Providers
HEDIS
Year 2
Use of Services: Childhood Lead Screening
HEDIS or Department-defined
Year 2
Use of Services: Outpatient Drug Utilization
HEDIS

 
A-12
 

 Beginning Contract Year
  Indicator   Methodology
Year 2
Use of Services: Inpatient Utilization - General Hospital/Acute Care
HEDIS
Year 2
Use of Services: Ambulatory Care
HEDIS
Year 2
Use of Services: Frequency of Selected Procedures
HEDIS
Year 2
Identification of Alcohol and Other Drug Services
HEDIS
Year 2
Descriptive Information: Board Certification
HEDIS
Year 2
Descriptive Information: Weeks of Pregnancy at Time of Enrollment in MCO
HEDIS

 
14. The Contractor shall monitor other performance measures as required by CMS
in accordance with notification by the Department.
 
A-13
 

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

EXHIBIT B UTILIZATION REVIEW/PEER REVIEW
 
1. The Contractor shall have a utilization review and peer review committee(s)
whose purpose will be to review data gathered and the appropriateness and
quality of care. The committee(s) shall review and make recommendations for
changes when problem areas are identified and report suspected Fraud and Abuse
in the HFS Medical Program to the Department's Office of Inspector General. The
committees shall keep minutes of all meetings, the results of each review and
any appropriate action taken. A copy of the minutes shall be submitted to the
Department no later than thirty (30) days after the close of the quarterly
reporting period. At a minimum, these programs must meet all applicable federal
and State requirements for utilization review. The Contractor and Department may
further define these programs.
 
2. The Contractor shall implement a Utilization Review Plan, including peer
review. The Contractor shall provide the Department with documentation of its
utilization review process. The process shall include:
 
a. Written program description — The Contractor shall have a written utilization
management program description which includes, at a minimum, procedures to
evaluate medical necessity criteria used and the process used to review and
approve the provision of medical services.
 
b. Scope — The program shall have mechanisms to detect under-utilization as well
as over-utilization.
 
c. Preauthorization and concurrent review requirements — For organizations with
preauthorization and concurrent review programs:
 
i. Have in effect mechanisms to ensure consistent application of review criteria
for authorization decisions;
 
ii. Utilize practice guidelines that have been adopted, pursuant to Exhibit A
 
iii. review decisions shall be supervised by qualified medical professionals and
any decision to deny a service authorization request or to authorize a service
in an amount, duration or scope that is less than requested must be made by a
health care professional who has appropriate clinical expertise in treating the
Enrollee's condition or disease;
 
iv. efforts shall be made to obtain all necessary information, including
pertinent clinical information, and consultation with the treating Physician
licensed to practice medicine in all its branches as appropriate;
 
v. the reasons for decisions shall be clearly documented and available to the
Enrollee and the requesting Provider, provided, however, that any decision to
deny
 
B-l

a service request or to authorize a service in an amount, duration or scope that
is less than requested shall be furnished in writing to the Enrollee;
 
vi. there shall be written well-publicized and readily available appeals
mechanisms for both Providers and patients;
 
vii. decisions and appeals shall be made in a timely manner as required by the
circumstances of the situation and shall be made in accordance with the
timeframes specified in the Contract for standard and expedited authorizations;
 
viii. there shall be mechanisms to evaluate the effects of the program using
data on member satisfaction, provider satisfaction or other appropriate
measures;
 
ix. if the organization delegates responsibility for utilization management, it
shall have mechanisms to ensure that these standards are met by the delegate.
 
3. The Contractor further agrees to review the utilization review procedures, at
regular intervals, but no less frequently than annually, for the purpose of
amending same, as necessary in order to improve said procedures. All amendments
must be approved by the Department. The Contractor further agrees to supply the
Department and/or its designce with the utilization information and data, and
reports prescribed in its approved utilization review system or the status of
such system. This information shall be furnished upon request by the Department.
 
4. The Contractor shall establish and maintain a peer review program approved by
the Department to review the quality of care being offered by the Contractor,
employees and subcontractors. This program shall provide, at a minimum, the
following:
 
a. A peer review committee comprised of Physicians licensed to practice medicine
in all its branches, formed to organize and proceed with the required reviews
for both the health professionals of the Contractor's staff and any contracted
Providers which include:
 
i. A regular schedule for review;
 
ii. A system to evaluate the process and methods by which care is given; and
 
iii. A medical record review process.
 
b. The Contractor shall maintain records of the actions taken by the peer review
committee with respect to providers and those records shall be available to the
Department upon request.
 
c. A system of internal medical review, including behavioral health services,
medical evaluation studies, peer review, a system for evaluating the processes
and outcomes of care, health education, systems for correcting deficiencies, and
utilization review.
 
B-2
 

d. At least two medical evaluation studies must be completed yearly that analyze
pressing problems identified by the Contractor, the results of such studies and
appropriate action taken. One of the studies may address an administrative
problem noted by the Contractor and one may address a clinical problem or
diagnostic category. One brief follow-up study shall take place for each medical
evaluation study in order to assess the actual effect of any action taken. The
Department must approve the Contractor's medical evaluation studies'topic and
design.
 
e. The Contractor shall participate in the annual collaborative Performance
Improvement Project, as mutually agreed upon and directed by the Department.
 
5. The Contractor further agrees to review the peer review procedures, at
regular intervals, but no less frequently than annually, for the purpose of
amending same in order to improve said procedures. All amendments must be
approved by the Department. The Contractor further agrees to supply the
Department and/or its designee with the information and reports related to its
peer review program upon request.
 
6. The Department may request that peer review be initiated on specific
providers.
 
7. The Department will conduct its own peer reviews at its discretion.
 
B-3
 

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

EXHIBIT C
SUMMARY OF REQUIRED REPORTS AND SUBMISSIONS
 
Report names, information submission requirements and corresponding frequencies
are listed herein. These shall be due to the Department no later than thirty
(30) days after the close of the reporting period unless otherwise stated.
Reports and submissions include hard copy reports and/or any electronic medium
as designated by the Department.
 
Report frequencies are defined as follows:
 
Annually - The State fiscal year of July 1 - June 30.
Quarterly - The last day of the fiscal quarter grouped as: J/A/S (1stqtr), O/N/D
(2ndqtr), J/F/M (3rd qtr), and A/M/J (4th qtr).

Monthly - The last day of a calendar month.

Name of Report/Submission
 
Frequency
HFS Prior Approval
Administrative
   
Disclosure Statements
Initially, Annually, on request and as changes occur
No
Encounter Data Report
At least monthly
No
Financial Reports
Concurrent with submissions to Department of Financial and Professional
Regulation
No
Report of Transactions with Parties of Interest
Annually
No
Electronic Data Certification
Monthly, no later than 5 days after the close of the reporting month
No
 
Enrollee Materials
   
Certificate or Document of Coverage and Any Changes or Amendments
Initially and as revised
Yes
Enrollee Handbook
Initially and as revised
Yes
Identification Card
Initially and as revised
Yes
Provider Directory
Initially and annually
Yes (only initially)
     

 
 
 
C-l

Name of Report/Submission
Frequency
HFS Prior Approval
 
Fraud/Abuse
   
Fraud and Abuse Report
Immediately upon identification or N/A knowledge of suspected Fraud or Abuse;
and quarterly as specified in Section 5.25.
N/A
Marketing
   
Marketing Allegation Investigation Disclosure
Monthly, on the first day of each month
No
Marketing Allegation Notification
Weekly
No
Marketing Gifts and Incentives
Initially and upon request
Yes
Marketing Materials
Initially and as revised
Yes
Marketing Plans and Procedures
Initially and as revised
Yes
Marketing Representative Listing
Monthly, on the first day of each month
No
Marketing Representative Termination Notification
As they occur
No
Marketing at Site Permission Statement
Annually
No
Marketing at Site Schedule
Monthly, on the first day of each month, and as revised
No
Marketing Schedule at Retail Locations
Monthly, on the first day of each No month, and as cancellations occur during
the month
No
Marketing Training Manuals
Initially and as revised
Yes

C-2
 
 
Name of Report/Submission
Frequency
HFS Prior Approval
 
Marketing Training Schedule and Agenda
Quarterly, 2 weeks prior to the No beginning of each quarter, and as revised
No
Provider Network
   
PCP and Affiliated Specialist File (electronic)
Monthly and daily updates and only when changes occur
Yes
Affiliated Hospital File (electronic)
Monthly
Yes
Enrollee Site Transfer
As each occurs
No
New Site Provider Affiliation File (electronic)
Initially, and as new sites/PCPs are Yes added
Yes
Provider Affiliation with Site Report
Montly, on the first day of each month
No
Site/PCP Approvals (paper format-A&B forms)
Initially, and as new sites/PCPs are added
Yes
Site Terminations
 
No
Quality Assurance/Medical
   
Grievance Procedures
Initially, and as revised
Yes
PCP Ratio Report
Quarterly
N/A
QA/UR/PR Annual Report
Annually, no later than 60 days after close of reporting period
N/A
QA/UR/PR Committee Meeting Minutes
Quarterly
No
Behavioral Health Report
Quarterly, no later than 60 days after close of reporting period
N/A
Quality Assurance, Utilization Review and Initially and as
revised Peer Review Plan (includes health education plan)
Initially and as revised
Yes

 

 
C-3
 

Name of Report/Submission
Frequency
HFS Prior Approval
Summary of Grievances or Appeals and Resolutions and External Independent
Reviews and Resolutions
Quarterly
N/A
Case Management Enrollees
Monthly, no later than 5 days after the close of the reporting month
No
Case Management Program Report
Initially and annually
Yes
Case Management Enrollees
Montly no later than 5 days after the close of the reporting month
No
CSHCN Program Report
Initially and annually
Yes
Subcontracts and Provider Agreements
   
Copies of Executed Subcontractor agreements
Upon request
N/A
Model Subcontractor Agreements
Initially and as revised
N/A

 

 
C-4
 

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

EXHIBIT D
 
Data Telecommunication Configuration Requirements
 
Third Party Network (TPN) or Internet Connection
 
The line connection to the Illinois Department of Central Management Services
(DCMS) data center must either be through the private State telecommunications
network to the DCMS Third Party Network (TPN) or through a secure connection via
the Internet. The secure connection over the Internet will be via Site-to-Site
Virtual Private Network (VPN).
 
Private State Telecommunications Network Requirements
 
If the Vendor chooses to connect through the private State telecommunications
network, the Department must submit the orders to DCMS for processing, design,
installation and configuration of the connection for the Vendor. The Vendor must
supply information concerning the circuit termination point, on-site contact,
and other information required for the order to be submitted to DCMS for
processing and installation by the appropriate DCMS contractor. The Vendor must
provide authorized Department personnel access to the location and the phone
demark for the location where the circuit is to be installed.
 
Internet Site-to-Site VPN Requirements
 
If the Vendor chooses to connect through secure connections via the Internet,
the connection must be made using Site-to-Site VPN. In this type of connection,
the Vendor will be responsible for the cost of the connection between the Vendor
and it's Internet Service Provider (ISP), troubleshooting and any redundancy
requirements associated with the Vendor's connection to the Internet or for
disaster recovery.
 
The Department will coordinate with the Vendor to ensure that any
authorization/certificate paperwork required for the establishment of the VPN
connection is completed.
 
DCMS currently utilizes a Cisco PIX model 520 firewall to provide VPN
connections to the DCMS data center. For VPN authentication, DCMS uses
"pre-shared keys". DCMS performs a Network Address Translation (NAT) of all
external addresses to make the connection conform to its IP addressing
structure. Only STATIC IP addresses, no subnet pool addresses, from the Vendor's
network are allowed by DCMS.
 
DCMS Supported Encryption Configurations
 
Phase 1 IKE Properties (ISAKMP Protection Suites)
 
• Encryption Algorithm:
 
• Triple-DES (3DES) supported only.
 
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• Data Integrity:
 
• Hashing Algorithm: SHA or MD5 supported (SHA is preferred)
 
• Diffie-Hellman Group: Group 2 supported only.
 
• Security Association Lifetime: 86400 seconds
 
Phase 2 IPSEC Properties:
 
• Encryption Algorithm:
 
• Triple-DES (3DES) supported only.
 
• Data Integrity:
 
• Hashing Algorithm: SHA or MD5 supported (SHA is preferred)
 
• Perfect Forward Secrecy: Disabled
 
Exchanging Configuration Information
 
The Department will work with the Vendor to determine the configuration and
define any connection parameters between the Vendor and the DCMS data center.
This will include any security requirements DCMS requires for the specific
connection type the Vendor is using. The Vendor is required to work with both
the Department and DCMS in exchanging configuration information required to make
the connection secure and functional for all parties.
 
Transmission Control Protocol/Internet Protocol (TCP/IP)
 
The Vendor shall cooperate in the coordination of the interface with DCMS and
the Department. TCP/IP (Transmission Control Protocol/Internet Protocol) must be
used for all connections from the Vendor to the DCMS data center.
 
Firewall Devices
 
The Vendor shall be responsible for the installation, configuration, and
troubleshooting of any firewall devices required on the Vendor's side of the
data communication link.
 
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