EXHIBIT 10.70
| [AHCCCS LOGO] | **** **Notice of Request for Proposal**  SOLICITATION NO.: YH09-0001

PAGE  1  OF  175  | (AHCCCS)   Arizona Health Care Cost Containment System   701 East Jefferson, MD 5700   Phoenix, Arizona 85034 |
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**SECTION A: SOLICITATION, OFFER AND AWARD**

**Solicitation Contact Person:**

MichaelVeit                                                                         Telephone: (602) 417-4762Contracts and Purchasing Section                                    Telefax: (602)417-5957701 E. Jefferson,MD5700                                                  E-Mail: Michael.Veit@azahcccs.govPhoenix, Arizona85034                                                      Issue Date: February 1, 2008

**LOCATION:        ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM ADMINISTRATION(AHCCCS)**

                                Contracts and Purchasing Section (FirstFloor)                                701 E. Jefferson, MD5700                                Phoenix, Arizona 85034

DESCRIPTION:                                   **ACUTE CARE SERVICES**PROPOSAL DUE DATE:                    March 28, 2008 AT 3:00 P.M. MST

Offeror’s Conference:A Prospective Offeror’s Conference and Technical Assistance Session has been scheduled on February 11, 2008 from 8:30 AM to 12:00 PM, and a Information Technology (IT) PMMIS Technical Interface Meeting from 1:00 PM to 5:00 PM. in the Gold Room, at AHCCCS, 701E. Jefferson, Phoenix, AZ 85034.

Persons with a disability may request a reasonable accommodation, such as a sign language interpreter, by contacting the person named above. Requests should be made as early as possible to allow time to arrange theaccommodation.

**QUESTIONS CONCERNING THIS SOLICITATION SHALL BE SUBMITTED IN THE FORMAT DESCRIBED IN SECTION I, INSTRUCTIONS TO OFFERORS, TO THE SOLICITATION CONTACT PERSON NAMED ABOVE, IN WRITING VIA E-MAIL ONLY BY 5:00 PM ON FEBRUARY 15,2008.**

Competitive sealed proposals will be received at the above specified location, until the time and date cited. Proposals received by the correct time and date will be opened and the name of each offeror will be publiclyread.

Proposals must be in the actual possession of AHCCCS on or prior to the time and date and at the location indicated above. **Late proposals shall not be considered.**

Proposals must be submitted in a sealed envelope or package with the Solicitation Number and the offeror’s name and address clearly indicated on the envelope or package. All proposals must be typewritten. Additionalinstructions for preparing a proposal are included in this solicitation document.

**OFFERORS ARE STRONGLY ENCOURAGED TO CAREFULLY READ THE ENTIRE SOLICITATION.**

**OFFER**

The undersigned Offeror hereby agrees to provide all services in accordance with the terms and requirements stated herein, including all exhibits, amendments, and final proposal revisions (if any). Signature also acknowledgesreceipt of all pages indicated in the Table of Contents.

Arizona Transaction (Sales) Privilege Tax License No.:                N/AFederal Employer IdentificationNo.:                                               62-1831567E-Mail Address:Fax:                                                                          nnovick@abrazohealth.comVHS Phoenix Health Plan, LLC7878 North 16th Street, Suite 105Phoenix, AZ  85020

For clarification of this offer,contact:                                             Nancy Novick                                                                                                               Phone: 602-824-3810                                                                                                               Fax: 602-824-3857                                                                                                               /s/ NancyNovick                                                                                                                                                               Signature of Person Authorized to Sign Offer                                                                                                               Nancy Novick, CEO

**CERTIFICATION**By signature in the Offer section above, the bidder certifies:

1.    The submission of the offer did not involve collusion or other anti-competitive practices.2.    The bidder shall not discriminate against any employee or applicant for employment in violation of Federal Executive       Order 11246, State Executive Order 99-4 or A.R.S. §§ 41-1461 through 1465.3.    The bidder has not given, offered to give, nor intends to give at any time hereafter any economic opportunity, future       employment, gift, loan, gratuity, special discount, trip, favor, or service to a public servant in connection with the        submitted offer. Failure to provide a valid signature affirming the stipulations required by this clause shall result in        rejection of the offer. Signing the offer with a false statement shall void the offer, any resulting contract and may be        subject to legal remedies provided by law.4.    **The bidder certifies that the above referenced organization ___ is/ X  is not a small business with less than 100       employees or has gross revenues of $4 million or less.**

**ACCEPTANCE OF OFFER (to be completed by AHCCCS)**

Your offer, including all exhibits, amendments and final proposal revisions (if any), contained herein, is accepted.

The Contractor is now bound to provide all services listed by the attached contract and based upon the solicitation, including all terms, conditions, specifications, amendments, etc., and the Contractor’s Offer asaccepted by AHCCCS.

This contract shall henceforth be referred to as Contract No.YH09 - 0001

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Awarded this 1st day of May 2008

/s/ MichaelVeit                                                   Michael Veit, as AHCCCS Contracting Officer and not personally

**TABLE OF CONTENTS**

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| SECTION B: CAPITATION RATES........................................................................................................................... SECTION C: DEFINITIONS......................................................................................................................................... SECTION D: PROGRAM REQUIREMENTS.............................................................................................................

INTRODUCTION...........................................................................................................................................................         1.  TERM OF CONTRACT AND OPTION TO RENEW..................................................................................         2.  ELIGIBILITY CATEGORIES............................................................................................................................         3.  ENROLLMENT AND DISENROLLMENT....................................................................................................         4.  ANNUAL ENROLLMENT CHOICE..............................................................................................................         5.  ENROLLMENT AFTER CONTRACT AWARD..........................................................................................         6.  AUTO-ASSIGNMENT ALGORITHM...........................................................................................................         7.  AHCCCS MEMBER IDENTIFICATION CARDS........................................................................................         8.  MAINSTREAMING OF AHCCCS MEMBERS............................................................................................         9.  TRANSITION OF MEMBERS........................................................................................................................         10. SCOPE OF SERVICES.....................................................................................................................................         11. SPECIAL HEALTH CARE NEEDS................................................................................................................         12. BEHAVIORAL HEALTH SERVICES............................................................................................................         13. AHCCCS GUIDELINES, POLICIES AND MANUALS..............................................................................         14. MEDICAID SCHOOL BASED CLAIMING PROGRAM (MSBC)............................................................         15. PEDIATRIC IMMUNIZATIONS AND THE VACCINES FOR CHILDREN  PROGRAM.....................         16. STAFF REQUIREMENTS AND SUPPORT SERVICES.............................................................................         17. WRITTEN POLICIES, PROCEDURES AND JOB DESCRIPTIONS.........................................................         18. MEMBER INFORMATION...........................................................................................................................         19. SURVEYS..........................................................................................................................................................         20. CULTURAL COMPETENCY.........................................................................................................................         21. MEDICAL RECORDS.....................................................................................................................................         22. ADVANCE DIRECTIVES...............................................................................................................................         23. QUALITY MANAGEMENT (QM)...............................................................................................................         24. MEDICAL MANAGEMENT (MM)..............................................................................................................         25. ADMINISTRATIVE PERFORMANCE STANDARDS..............................................................................         26. GRIEVANCE SYSTEM....................................................................................................................................         27. NETWORK DEVELOPMENT........................................................................................................................         28. PROVIDER AFFILIATION TRANSMISSION............................................................................................         29. NETWORK MANAGEMENT.......................................................................................................................         30. PRIMARY CARE PROVIDER  STANDARDS............................................................................................         31. MATERNITY CARE PROVIDER STANDARDS........................................................................................         32. REFERRAL MANAGEMENT PROCEDURES AND STANDARDS.......................................................         33. APPOINTMENT STANDARDS...................................................................................................................         34. FEDERALLY QUALIFIED HEALTH CENTERS AND RURAL HEALTH CLINICS.............................        34. FEDERALLY QUALIFIED HEALTH CENTERS AND RURAL HEALTH CLINICS.............................         35. PROVIDER MANUAL....................................................................................................................................         36. PROVIDER REGISTRATION.........................................................................................................................         37. SUBCONTRACTS...........................................................................................................................................         38. CLAIMS PAYMENT/HEALTH INFORMATION SYSTEM ....................................................................         39. SPECIALTY CONTRACTS............................................................................................................................         40. HOSPITAL SUBCONTRACTING AND REIMBURSEMENT..................................................................         41. RESPONSIBILITY FOR NURSING FACILITY REIMBURSEMENT........................................................         42. PHYSICIAN INCENTIVES/PAY FOR PERFORMANCE ..........................................................................         43. MANAGEMENT SERVICES AGREEMENT AND COST ALLOCATION PLAN.................................         44. RESERVED........................................................................................................................................................         45. RESERVED........................................................................................................................................................         46. PERFORMANCE BOND OR BOND SUBSTITUTE...................................................................................         47. AMOUNT OF PERFORMANCE BOND......................................................................................................         48. ACCUMULATED FUND DEFICIT ..............................................................................................................         49. ADVANCES, DISTRIBUTIONS, LOANS AND INVESTMENTS............................................................         50. FINANCIAL VIABILITY STANDARDS ....................................................................................................         51. SEPARATE INCORPORATION....................................................................................................................         52. MERGER, REORGANIZATION AND CHANGE OF OWNERSHIP .......................................................         53. COMPENSATION...........................................................................................................................................         54. PAYMENTS TO CONTRACTORS...............................................................................................................         55. CAPITATION ADJUSTMENTS ..................................................................................................................         56. RESERVED........................................................................................................................................................         57. REINSURANCE...............................................................................................................................................         58. COORDINATION OF BENEFITS..................................................................................................................         59. COPAYMENTS ...............................................................................................................................................         60. MEDICARE SERVICES AND COST SHARING ........................................................................................         61. MARKETING ..................................................................................................................................................         62. CORPORATE COMPLIANCE.......................................................................................................................         63. RECORDS RETENTION.................................................................................................................................         64. DATA EXCHANGE REQUIREMENTS .......................................................................................................         65. ENCOUNTER DATA REPORTING .............................................................................................................         66. ENROLLMENT AND CAPITATION TRANSACTION UPDATES........................................................         67. PERIODIC REPORT REQUIREMENTS........................................................................................................         68. REQUESTS FOR INFORMATION................................................................................................................         69. DISSEMINATION OF INFORMATION......................................................................................................         70. OPERATIONAL AND FINANCIAL READINESS REVIEWS..................................................................         71. OPERATIONAL AND FINANCIAL REVIEWS..........................................................................................         72. SANCTIONS....................................................................................................................................................         73. BUSINESS CONTINUITY AND RECOVERY PLAN..................................................................................         74. TECHNOLOGICAL ADVANCEMENT .......................................................................................................         75. PENDING LEGISLATIVE / OTHER ISSUES................................................................................................         76. SUPPORT OF ARIZONA BASED TRANSLATIONAL AND CLINICAL RESEARCH ......................         77. RESERVED........................................................................................................................................................         78. RESERVED........................................................................................................................................................SECTION E: CONTRACT CLAUSES.........................................................................................................................        1) APPLICABLE LAW..........................................................................................................................................         2) AUTHORITY.....................................................................................................................................................         3) ORDER OF PRECEDENCE...............................................................................................................................         4) CONTRACT INTERPRETATION AND AMENDMENT ...........................................................................         5) SEVERABILITY.................................................................................................................................................         6) RELATIONSHIP OF PARTIES .......................................................................................................................         7) ASSIGNMENT AND DELEGATION.............................................................................................................         8) INDEMNIFICATION........................................................................................................................................         9) INDEMNIFICATION -- PATENT AND COPYRIGHT ................................................................................         10) COMPLIANCE WITH APPLICABLE LAWS, RULES AND REGULATIONS .....................................         11) ADVERTISING AND PROMOTION OF CONTRACT..............................................................................         12) PROPERTY OF THE STATE ........................................................................................................................         13) THIRD PARTY ANTITRUST VIOLATIONS..............................................................................................         14) RIGHT TO ASSURANCE...............................................................................................................................         15) TERMINATION FOR CONFLICT OF INTEREST......................................................................................         16) GRATUITIES...................................................................................................................................................         17) SUSPENSION OR DEBARMENT ................................................................................................................         18) TERMINATION FOR CONVENIENCE .......................................................................................................         19) TEMPORARY MANAGEMENT/OPERATION OF A CONTRACTOR AND TERMINATION.........         20) TERMINATION - AVAILABILITY OF FUNDS.........................................................................................         21) RIGHT OF OFFSET ........................................................................................................................................         22) NON-EXCLUSIVE REMEDIES......................................................................................................................         23) NON-DISCRIMINATION .............................................................................................................................         24) EFFECTIVE DATE..........................................................................................................................................         25) INSURANCE....................................................................................................................................................         26) DISPUTES........................................................................................................................................................         27) RIGHT TO INSPECT PLANT OR PLACE OF BUSINESS.........................................................................         28) INCORPORATION BY REFERENCE............................................................................................................         29) COVENANT AGAINST CONTINGENT FEES............................................................................................         30) CHANGES........................................................................................................................................................         31) TYPE OF CONTRACT ...................................................................................................................................         32) AMERICANS WITH DISABILITIES ACT.................................................................................................         33) WARRANTY OF SERVICES.........................................................................................................................         34) NO GUARANTEED QUANTITIES .............................................................................................................         35) CONFLICT OF INTEREST ............................................................................................................................         36) CONFIDENTIALITY AND DISCLOSURE OF CONFIDENTIAL INFORMATION..............................         37) COOPERATION WITH OTHER CONTRACTORS ...................................................................................         38) ASSIGNMENT OF CONTRACT AND BANKRUPTCY...........................................................................         39) OWNERSHIP OF INFORMATION AND DATA ......................................................................................         40) AUDITS AND INSPECTIONS .....................................................................................................................         41) LOBBYING.......................................................................................................................................................         42) CHOICE OF FORUM......................................................................................................................................         43) DATA CERTIFICATION ..............................................................................................................................         44) OFF SHORE PERFORMANCE OF WORK PROHIBITED........................................................................         45) FEDERAL IMMIGRATION AND NATIONALITY ACT.........................................................................         46) IRS W-9 FORM................................................................................................................................................         47) CONTINUATION OF PERFORMANCE THROUGH TERMINATION..................................................SECTION F: RESERVED............................................................................................................................................... SECTION G: REPRESENTATIONS AND CERTIFICATIONS OF OFFEROR...................................................... SECTION H: EVALUATION FACTORS AND SELECTION PROCESS................................................................ SECTION I: INSTRUCTIONS TO OFFERORS.......................................................................................................... SECTION J: LIST OF ATTACHMENTS.................................................................................................................... ATTACHMENT A: MINIMUM SUBCONTRACT PROVISIONS.........................................................................        1. ASSIGNMENT AND DELEGATION OF RIGHTS AND RESPONSIBILITIES ........................................         2. AWARDS OF OTHER SUBCONTRACTS....................................................................................................         3. CERTIFICATION OF COMPLIANCE – ANTI-KICKBACK AND LABORATORY TESTING.............         4. CERTIFICATION OF TRUTHFULNESS OF REPRESENTATION............................................................         5. CLINICAL LABORATORY IMPROVEMENT AMENDMENTS OF 1988................................................         6. COMPLIANCE WITH AHCCCS RULES RELATING TO AUDIT AND INSPECTION..........................         7. COMPLIANCE WITH LAWS AND OTHER REQUIREMENTS ...............................................................         8. CONFIDENTIALITY REQUIREMENT ..........................................................................................................         9. CONFLICT IN INTERPRETATION OF PROVISIONS ................................................................................         10. CONTRACT CLAIMS AND DISPUTES .....................................................................................................         11. ENCOUNTER DATA REQUIREMENT .......................................................................................................         12. EVALUATION OF QUALITY, APPROPRIATENESS, OR TIMELINESS OF SERVICES ...................         13. FRAUD AND ABUSE.....................................................................................................................................         14. GENERAL INDEMNIFICATION ..................................................................................................................         15. INSURANCE....................................................................................................................................................         16. LIMITATIONS ON BILLING AND COLLECTION PRACTICES ............................................................         17. MAINTENANCE OF REQUIREMENTS TO DO BUSINESS AND PROVIDE SERVICES....................         18. NON-DISCRIMINATION REQUIREMENTS..............................................................................................         19. PRIOR AUTHORIZATION AND UTILIZATION MANAGEMENT .....................................................         20. RECORDS RETENTION.................................................................................................................................         21. SEVERABILITY...............................................................................................................................................         22. SUBJECTION OF SUBCONTRACT.............................................................................................................         23. TERMINATION OF SUBCONTRACT.........................................................................................................         24. VOIDABILITY OF SUBCONTRACT............................................................................................................         25. WARRANTY OF SERVICES.........................................................................................................................         26. OFF-SHORE PERFORMANCE OF WORK PROHIBITED .......................................................................         27. FEDERAL IMMIGRATION AND NATIONALITY ACT..........................................................................ATTACHMENT B: MINIMUM NETWORK STANDARDS *(BY GEOGRAPHIC SERVICE AREA)..............* ATTACHMENT C: RESERVED ................................................................................................................................. ATTACHMENT D: SAMPLE LETTER OF INTENT .............................................................................................. ATTACHMENT E: INSTRUCTIONS FOR PREPARING CAPITATION PROPOSAL....................................... ATTACHMENT F: PERIODIC REPORT REQUIREMENTS................................................................................... ATTACHMENT G: AUTO-ASSIGNMENT ALGORITHM.................................................................................... ATTACHMENT H(1): ENROLLEE GRIEVANCE SYSTEM STANDARDS AND POLICY................................ ATTACHMENT H(2): PROVIDER CLAIM DISPUTE STANDARDS AND POLICY......................................... ATTACHMENT I: RESERVED.................................................................................................................................... ATTACHMENT J: OFFEROR’S CHECKLIST.......................................................................................................... ATTACHMENT K: COST SHARING COPAYMENTS............................................................................................. | 7 8 17 17 17 19 21 24 24 24 25 25 25 26 35 36 38 39 39 40 43 44 45 45 45 46 47 52 53 54 55 57 57 58 59 60 61 62 62 62 63 63 65 68 69 69 70 71 71 71 72 72 73 73 73 74 74 75 76 77 77 77 81 84 84 85 85 86 87 88 90 90 91 91 91 91 92 93 93 95 96 96 96 97 97 97 97 97 97 97 97 98 98 98 98 98 99 99 99 99 99 99 100 101 101 101 101 101 101 102 102 102 102 102 103 103 103 103 103 103 104 104 104 104 105 105 105 105 105 105 105 106 107 112 114 133 134 134 134 134 134 135 135 135 135 135 135 135 135 136 136 136 136 136 136 137 137 137 137 137 138 138 138 138 139 150 151 155 156 161 164 169 171 172 175 |
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**SECTION B: CAPITATION RATES**

The Contractor shall provide services as described in this contract. In consideration for these services, the Contractor will be paid Contractor-specific rates per member per month for the term October 1, 2008 through September 30, 2009. See Attachment E, Instructions for Preparing Capitation Proposal, for more information.

**SECTION C:        DEFINITIONS**

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**638 TRIBAL FACILITY**A facility that is operated by an Indian tribe and that is authorized to provideservices pursuant to Public Law (P.L.) 93-638, as amended.

**1931 (also referred to as TANF related)**Eligible individuals and families under Section 1931 of the Social Security Act,with household income levels at or below 100% of the federal poverty level(FPL).

**ACOM***AHCCCS Contractor Operations Manual*, available on the AHCCCS website atwww.azahcccs.gov.

**ADHS**Arizona Department of Health Services, the state agency mandated to serve thepublic health needs of all Arizona citizens.

**ADHS BEHAVIORAL HEALTH RECIPIENT**A Title XIX or Title XXI acute care member who is eligible for and is receivingbehavioral health services through ADHS and its subcontractors.

**ADJUDICATED CLAIMS**Claims that have been received and processed by the Contractor, and whichresulted in a payment or denial of payment

**AGENT**Any person who has been delegated the authority to obligate or act on behalf ofanother person or entity on who has been delegated the authority to obligate oract on behalf of another person or entity.

**AHCCCS**Arizona Health Care Cost Containment System, which is composed of theAdministration, Contractors, and other arrangements through which health careservices are provided to an eligible person, as defined by A.R.S. § 36-2902, etseq.

**AHCCCS BENEFITS**See “COVERED SERVICES”.

**AHCCCS CARE**Eligible individuals and childless adults whose income is less than 100% of theFPL, and who are not categorically linked to another Title XIX program. Alsoknown as “NON MEDICAL EXPENSE DEDUCTION MEMBER (NONMED)”

**AHCCCS MEMBER**See “MEMBER”.

**ALTCS**The Arizona Long Term Care System, a program under AHCCCS that deliverslong-term, acute, behavioral health and case management services to members, asauthorized by A.R.S. § 36-2932.

**AMBULATORY CARE**Preventive, diagnostic and treatment services provided on an outpatient basis byphysicians, nurse practitioners, physician assistants and other health careproviders.

**AMERICAN INDIAN HEALTH PROGRAM (AIHP)**The program that delivers health care to the eligible Native American populationliving on reservations through the Indian Health Service (IHS). Formerly knownas AHCCCS IHS FFS Program.

**AMPM***AHCCCS Medical Policy Manual,*available on the AHCCCS website atwww.azahcccs.gov.

**ANNUAL ENROLLMENT CHOICE (AEC)**The opportunity, given each member annually, to change to another Contractor intheir GSA.

**APPEAL RESOLUTION**The written determination by the Contractor concerning an appeal.

**ARIZONA ADMINISTRATIVE CODE (A.A.C.)**State regulations established pursuant to relevant statutes. For purposes of thissolicitation, the relevant sections of the A.A.C. are referred to throughout thisdocument as “AHCCCS Rules”.

**A.R.S.**Arizona Revised Statutes.

**BBA**The Balanced Budget Act of 1997.

**BIDDER’S LIBRARY**A repository of manuals, statutes, rules and other reference material located onthe AHCCCS website at www.azahcccs.gov.

**BOARD CERTIFIED**An individual who has successfully completed all prerequisites of the respectivespecialty board and successfully passed the required examination forcertification.

**BORDER COMMUNITIES**Cities, towns or municipalities located in Arizona and within a designatedgeographic service area whose residents typically receive primary or emergencycare in adjacent Geographic Service Areas (GSA) or neighboring states,excluding neighboring countries, due to service availability or distance. (R9-22-201.F, R9-22-201.G, R9-22-101.B)

**BREAST AND CERVICAL CANCER TREATMENT PROGRAM (BCCTP)**Eligible individuals under the Title XIX expansion program for women withincome up to 250% of the FPL, who are diagnosed with and need treatment forbreast and/or cervical cancer or cervical lesions and are not eligible for otherTitle XIX programs providing full Title XIX services. Qualifying individualscannot have other creditable health insurance coverage, including Medicare.

**CAPITATION**Payment to a Contractor by AHCCCS of a fixed monthly payment per person inadvance, for which the Contractor provides a full range of covered services asauthorized under A.R.S. § 36-2904 and § 36-2907.

**CATEGORICALLY LINKED TITLE XIX MEMBER**Member eligible for Medicaid under Title XIX of the Social Security Actincluding those eligible under 1931 provisions of the Social Security Act, SixthOmnibus Budget Reconciliation Act (SOBRA), Supplemental Security Income(SSI), and SSI-related groups. To be categorically linked, the member must beaged 65 or over, blind, disabled, a child under age 19, a parent of a dependentchild, or pregnant.

**CLAIM DISPUTE**A dispute, filed by a provider or Contractor, whichever is applicable, involving apayment of a claim, denial of a claim, imposition of a sanction or reinsurance.

**CLEAN CLAIM**A claim that may be processed without obtaining additional information from theprovider of service or from a third party, but does not include a claim underinvestigation for fraud or abuse or under review for medical necessity.

**CMS**Centers for Medicare and Medicaid Services, an organization within the U.S.Department of Health and Human Services, which administers the Medicare andMedicaid programs and the State Children’s Health Insurance Program.

**COMPETITIVE BID PROCESS**A state procurement system used to select Contractors to provide coveredservices on a geographic basis.

**CONTINUING OFFEROR (INCUMBENT)**An AHCCCS Contractor during CYE ‘08 that submits a proposal pursuant to thissolicitation.

**CONTRACT SERVICES**See “COVERED SERVICES”.

**CONTRACT YEAR (CY)**Corresponds to the federal fiscal year (October 1 through September 30).

**CONTRACTOR**An organization or entity agreeing through a direct contracting relationship withAHCCCS to provide the goods and services specified by this contract inconformance with the stated contract requirements, AHCCCS statute and rules,and federal law and regulations.

**CONVICTED**A judgment of conviction has been entered by a federal, state or local court,regardless of whether an appeal from that judgment is pending.

**COPAYMENT**A monetary amount specified by the Director that the member pays directly to aContractor or provider at the time covered services are rendered, as defined inR9-22-701.

**COVERED SERVICES**Health care services to be delivered by a Contractor, which are designated inSection D of this contract; AHCCCS Rules R9-22, Article 2, and R9-31, Article2, and the *AMPM* [42 CFR 438.210(a)(4)].

**CRS**The Children's Rehabilitative Services administered by ADHS, as defined in R9-22-1401.

**CRS-ELIGIBLE**An individual who has completed the CRS application process, as delineated inthe *CRS Policy and Procedure Manual,* and has met all applicable criteria to beeligible to receive CRS-related services.

**CY**See “CONTRACT YEAR”.

**CYE**Contract Year Ending; same as “CONTRACT YEAR”.

**DAYS**Calendar days, unless otherwise specified as defined in the text, as defined inR9-22-101.

**DELEGATED AGREEMENT**A type of subcontract with a qualified organization or person to perform one ormore functions required to be provided by the Contractor pursuant to thiscontract.

**DIRECTOR**The Director of AHCCCS.

**DISENROLLMENT**The discontinuance of a member’s ability to receive covered services through aContractor.

**DME**Durable medical equipment, which is an item or appliance that can withstandrepeated use, is designated to serve a medical purpose, and is not generally usefulto a person in the absence of a medical condition, illness or injury as defined inR9-22-101.

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**DUAL ELIGIBLE**A member who is eligible for both Medicare and Medicaid.

**ELIGIBILITY DETERMINATION**A process of determining, through a written application and requireddocumentation, whether an applicant meets the qualifications for Title XIX orTitle XXI.

**EMERGENCY MEDICAL CONDITION**A medical condition manifesting itself by acute symptoms of sufficient severity(including severe pain) such that a prudent layperson who possesses an averageknowledge of health and medicine could reasonably expect the absence ofimmediate medical attention to result in: a) placing the patient’s health (or, withrespect to a pregnant woman, the health of the woman or her unborn child) inserious jeopardy, b) serious impairment to bodily functions, or c) seriousdysfunction of any bodily organ or part [42 CFR 438.114(a)].

**EMERGENCY MEDICAL SERVICE**Covered inpatient and outpatient services provided after the sudden onset of anemergency medical condition as defined above. These services must be furnishedby a qualified provider, and must be necessary to evaluate or stabilize theemergency medical condition [42 CFR 438.114(a)].

**ENCOUNTER**A record of a health care-related service rendered by a provider or providersregistered with AHCCCS to a member who is enrolled with a Contractor on thedate of service.

**ENROLLEE**An eligible person who is enrolled in AHCCCS, as defined in A.R.S. § 36-2901,A.R.S. § 36-2981, A.R.S. § 36-2901.01, and 42 CFR 438.10(a).

**ENROLLMENT**The process by which an eligible person becomes a member of a Contractor’splan.

**EPSDT**Early and Periodic Screening, Diagnosis and Treatment; services for personsunder 21 years of age, as described in AHCCCS Rules R9-22, Article 2.

**FAMILY PLANNING SERVICES EXTENSION PROGRAM**A program that provides only family planning services for a maximum of twoconsecutive 12-month periods to a SOBRA woman whose pregnancy has endedand who is not otherwise eligible for full Title XIX services.

**FEDERALLY QUALIFIED HEALTH CENTER (FQHC)**An entity that meets the requirements and receives a grant and funding pursuantto Section 330 of the Public Health Service Act. An FQHC includes anoutpatient health program or facility operated by a tribe or tribal organizationunder the Indian Self-Determination and Education Assistance Act (P.L. 93-638)or an urban Indian organization receiving funds under Title V of the IndianHealth Care Improvement Act (P.L. 94-437).

**FEE-FOR-SERVICE (FFS)**A method of payment to registered providers on an amount per-service basis.

**FES**Federal Emergency Services program covered under R9-22-217, to treat anemergency medical condition for a member who is determined eligible underA.R.S. § 36-2903.03 (D).

**FFP**Federal financial participation (FFP) refers to the contribution that the federalgovernment makes to the Title XIX and Title XXI program portions ofAHCCCS, as defined in 42 CFR 400.203.

**FISCAL YEAR (FY)**The budget year - federal fiscal year: October 1 through September 30; Statefiscal year: July 1 through June 30.

**FREEDOM OF CHOICE (FC)**The opportunity given to each member who does not specify a Contractorpreference at the time of enrollment to choose between the Contractors availablewithin the Geographic Service Area in which the member is enrolled.

**FREEDOM TO WORK (TICKET TO WORK)**Eligible individuals under the Title XIX expansion program that extendseligibility to individuals 16 through 64 years old who meet SSI disability criteria;whose earned income, after allowable deduction, is at or below 250% of the FPLand who are not eligible for any other Medicaid program.

**GEOGRAPHIC SERVICE AREA (GSA)**A specific county or defined grouping of counties designated by AHCCCSwithin which a Contractor provides, directly or through subcontract, coveredhealth care to members enrolled with that Contractor.

**GRIEVANCE SYSTEM**A system that includes a process for enrollee grievances, enrollee appeals,provider claim disputes, and access to the state fair hearing system.

**HEALTHCARE GROUP OF ARIZONA (HCG)**A prepaid medical coverage plan marketed to small, uninsured businesses andpolitical subdivisions within the state.

**HEALTH PLAN**See “CONTRACTOR”.

**HIFA**The CMS Health Insurance Flexibility and Accountability DemonstrationInitiative , which targets State Children's Health Insurance Program (Title XXI)funding for populations with incomes at or below 200 % of the FPL.

**HIFA PARENTS**Parents of Medicaid-(SOBRA) and KidsCare-eligible children who are nototherwise eligible for Medicaid. All eligible parents except Native Americansmust pay an enrollment fee and a monthly premium based on household income.

**HIPAA**The Health Insurance Portability and Accountability Act (P.L. 104-191); alsoknown as the Kennedy-Kassebaum Act, signed August 21, 1996.

**IBNR**Incurred but not reported: liability for services rendered for which claims havenot been received.

**HIS**Indian Health Service authorized as a federal agency pursuant to 25 U.S.C. 1661.

**KIDSCARE**A program for individuals under the age of 19 years, who are eligible under theSCHIP program, in households with income at or below 200% FPL. Allmembers, except Native American members, are required to pay a premiumamount based on the number of children in the family and the gross familyincome. Also referred to as “Title XXI”.

**LIABLE PARTY**A person or entity that is or may be, by agreement, circumstance or otherwise,liable to pay all or part of the medical expenses incurred by an AHCCCSapplicant or member.

**LIEN**A legal claim, filed with the County Recorder’s office in the county in which amember resides and/or in the county an injury was sustained, for the purpose ofensuring that AHCCCS receives reimbursement for medical services paid. Thelien is attached to any settlement the member may receive as a result of an injury.

**MANAGED CARE**Systems that integrate the financing and delivery of health care services tocovered individuals by means of arrangements with selected providers to furnishcomprehensive services to members; establish explicit criteria for the selection ofhealth care providers; have financial incentives for members to use providers andprocedures associated with the plan; and have formal programs for quality,utilization management and the coordination of care.

**MANAGEMENT SERVICES AGREEMENT**A type of subcontract with an entity in which the owner of the Contractordelegates some or all of the comprehensive management and administrativeservices necessary for the operation of the Contractor.

**MANAGEMENT SERVICES SUBCONTRACTOR**An entity to which the Contractor delegates the comprehensive management andadministrative services necessary for the operation of the Contractor

**MANAGING EMPLOYEE**A general manager, business manager, administrator, director, or other individualwho exercises operational or managerial control over or who directly orindirectly conducts the day-to-day operation of an institution, organization oragency.

**MATERIAL OMISSION**Facts, data or other information excluded from a report, contract, etc.; theabsence of which could lead to erroneous conclusions following reasonablereview of such report, contract, etc.

**MAJOR UPGRADE**Any upgrade or changes that may result in a disruption to the following: loadingof contracts, providers or members, issuing prior authorizations or theadjudication of claims.

**MEDICAID**A federal/state program authorized by Title XIX of the Social Security Act, asamended.

**MEDICAL EXPENSE DEDUCTION (MED)**Title XIX waiver member whose family income exceeds the limits of all otherTitle XIX categories (except ALTCS) and has family medical expenses thatreduce income to or below 40% of the FPL. MED members may or may nothave a categorical link to Title XIX.

**MEDICAL MANAGEMENT**An integrated process or system that is designed to assure appropriate utilizationof health care resources, in the amount and duration necessary to achieve desiredhealth outcomes, across the continuum of care (from prevention to end of lifecare).

**MEDICARE**A federal program authorized by Title XVIII of the Social Security Act, asamended.

**MEDICARE MANAGED CARE PLAN**A managed care entity that has a Medicare contract with CMS to provide servicesto Medicare beneficiaries, including Medicare Advantage Plan (MAP), MedicareAdvantage Prescription Drug Plan (MAPDP), MAPDP Special Needs Plan, orMedicare Prescription Drug Plan

**MEDICARE PART DEXCLUDED DRUGS**Medicare Part D is the prescription drug coverage option available to Medicarebeneficiaries, including those also eligible for Medicaid. Medications that areavailable under this benefit are not covered by AHCCCS. Certain drugs that areexcluded from coverage by Medicare continue to be covered by AHCCCS.Those medications are barbiturates, benzodiazepines, and over-the-countermedication as defined in the AMPM. Prescription medications that are coveredunder Medicare, but are not on a Part D health plan’s formulary are notconsidered excluded drugs, and are not covered by AHCCCS.

**MEMBER**See “ENROLLEE”.

**NON-CONTRACTING PROVIDER**A person or entity that provides services as prescribed in A.R.S. § 36-2901, butdoes not have a subcontract with an AHCCCS Contractor.

**NON-MEDICAL EXPENSE DEDUCTION (NON MED) MEMBER**See “AHCCCS CARE”.

**NPI**National Provider Identifier assigned by the CMS contracted nationalenumerator.

**OFFEROR**An organization or other entity that submits a proposal to the Administration inresponse to this RFP, as defined in R9-22-101.

**PERFORMANCE STANDARDS**A set of standardized measures designed to assist AHCCCS in evaluating,comparing and improving the performance of its Contractors.

**PMMIS**AHCCCS’s Prepaid Medical Management Information System.

**POST STABILIZATION SERVICES**Medically necessary services, related to an emergency medical condition,provided after the member’s condition is sufficiently stabilized in order tomaintain, improve or resolve the member’s condition so that the member couldbe safely discharged or transferred to another location [42 CFR 438-114(a)].

**POTENTIAL ENROLLEE**A Medicaid-eligible recipient who is not yet enrolled with a Contractor [42 CFR438.10(a)].

**PRIMARY CARE PROVIDER (PCP)**An individual who meets the requirements of A.R.S. § 36-2901, and who isresponsible for the management of a member’s health care. A PCP may be aphysician defined as a person licensed as an allopathic or osteopathic physicianaccording to A.R.S. Title 32, Chapter 13 or Chapter 17, or a practitioner definedas a physician assistant licensed under A.R.S. Title 32, Chapter 25, or a certifiednurse practitioner licensed under A.R.S. Title 32, Chapter 15.

**PRIOR PERIOD**The period of time, prior to a member’s enrollment, during which the member iseligible for covered services. The time frame is from the effective date ofeligibility to the day a member is enrolled with a Contractor.

**PROVIDER**Any person or entity that contracts with AHCCCS or a Contractor for theprovision of covered services to members according to the provisions A.R.S. §36-2901 or any subcontractor of a provider delivering services pursuant to A.R.S.§ 36-2901.

**QUALIFIED MEDICARE BENEFICIARY DUAL ELIGIBLE (QMB DUAL)**A person, eligible under A.R.S. § 36-2971(6), who is entitled to Medicare Part Ainsurance and meets certain income and residency requirements of the QualifiedMedicare Beneficiary program. A QMB who is also eligible for Medicaid, iscommonly referred to as a QMB dual eligible.

**RATE CODE**Eligibility classification for capitation payment purposes.

**REGIONAL BEHAVIORAL HEALTH AUTHORITY (RBHA)**An organization under contract with ADHS, that administers covered behavioralhealth services in a geographically specific area of the state. Tribal governments,through an agreement with ADHS, may operate a tribal regional behavioralhealth authority (TRBHA) for the provision of behavioral health services toNative American members living on-reservation.

**REINSURANCE**A risk-sharing program provided by AHCCCS to Contractors for thereimbursement of certain contract service costs incurred for a member beyond apredetermined monetary threshold.

**RELATED PARTY**A party that has, or may have, the ability to control or significantly influence aContractor, or a party that is, or may be, controlled or significantly influenced bya Contractor. "Related parties" include, but are not limited to, agents, managingemployees, persons with an ownership or controlling interest in the Offeror andtheir immediate families, subcontractors, wholly-owned subsidiaries or suppliers,parent companies, sister companies, holding companies, and other entitiescontrolled or managed by any such entities or persons.

**RISK GROUP**Grouping of rate codes that are paid at the same capitation rate.

**RFP**Request For Proposal is a document prepared by AHCCCS, which describes theservices required and instructs prospective Offerors about how to prepare aresponse (proposal), as defined in R9-22-101.

**RURAL HEALTH CLINIC (RHC)**A clinic located in an area designated by the Bureau of Census as rural, and bythe Secretary of the DHHS as medically underserved or having an insufficientnumber of physicians, which meets the requirements under 42 CFR 491.

**SCHIP**State Children’s Health Insurance Program under Title XXI of the SocialSecurity Act. The Arizona version of SCHIP is referred to as “KidsCare”. See“KIDSCARE”.

**SCOPE OF SERVICES**See “COVERED SERVICES”.

**SERVICE LEVEL AGREEMENT**A type of subcontract with a corporate owner or any of its divisions or subsidiariesthat requires specific levels of service for administrative functions or services forthe Contractor, specifically related to fulfilling the Contractor’s obligations toAHCCCS under the terms of this contract.

**SOBRA**Eligible pregnant women under Section 9401 of the Sixth Omnibus Budget andReconciliation Act of 1986, amended by the Medicare Catastrophic CoverageAct of 1988, 42 U.S.C. 1396a(a)(10)(A)(ii)(IX), November 5, 1990, withindividually budgeted incomes at or below 150% of the FPL, and children infamilies with individually budgeted incomes ranging from below 100% to 140%of the FPL, depending on the age of the child.

**SOBRA FAMILY PLANNING**Female members eligible for family planning services only, for a maximum oftwo consecutive 12-month periods following the loss of SOBRA eligibility.

**SPECIAL HEALTH CARE NEEDS**Members with special health care needs are those members who have serious andchronic physical, developmental or behavioral conditions, and who also requiremedically necessary health and related services of a type or amount beyond thatgenerally required by members.

**STATE**The State of Arizona.

**STATE ONLY TRANSPLANT MEMBERS**Individuals who are eligible under one of the Title XIX eligibility categories andfound eligible for a transplant, but subsequently lose Title XIX eligibility due toexcess income become eligible for one of two extended eligibility options asspecified in A.R.S. 36-2907.10 and A.R.S. 36-2907.11.

**STATE PLAN**The written agreements between the State and CMS, which describe how theAHCCCS program meets CMS requirements for participation in the Medicaidprogram and the State Children’s Health Insurance Program.

**SUBCONTRACT**An agreement entered into by the Contractor with a provider of health careservices, who agrees to furnish covered services to members, or with any otherorganization or person who agrees to perform any administrative function orservice for the Contractor specifically related to fulfilling the Contractor'sobligations to AHCCCS under the terms of this contract, as defined in R9-22-101.

**SUBCONTRACTOR**(1) A provider of health care who agrees to furnish covered services to members.(2) A person, agency or organization with which the Contractor has contracted ordelegated some of its management/administrative functions or responsibilities.(3) A person, agency or organization with which a fiscal agent has entered into acontract, agreement, purchase order or lease (or leases of real property) to obtainspace, supplies, equipment or services provided under the AHCCCS agreement.

**SUPPLEMENTAL SECURITY INCOME (SSI) AND SSI RELATED GROUPS**Eligible individuals receiving income through federal cash assistance programsunder Title XVI of the Social Security Act who are aged, blind or disabled andhave household income levels at or below 100% of the FPL.

**SUPPLEMENTAL SECURITY DISABILITY INSURANCE TEMPORARY MEDICAL COVERAGE (SSDITMC)**Eligible individuals who have been enrolled in AHCCCS at any time within themost recent 24 months and became ineligible for AHCCCS coverage due toexcess income; and who are not covered by creditable health insurance, includingMedicare.

**TEMPORARY ASSISTANCE TO NEEDY FAMILIES (TANF)**A federal cash assistance program under Title IV of the Social Security Actestablished by the Personal Responsibility and Work Opportunity ReconciliationAct of 1996 (P.L. 104-193). It replaced Aid To Families With DependentChildren (AFDC).

**THIRD PARTY LIABILITY (TPL)**See “LIABLE PARTY”.

**TITLE XIX MEMBER**A member eligible for federally funded Medicaid programs under Title XIX ofthe Social Security Act including those eligible under 1931 provisions of theSocial Security Act, Sixth Omnibus Budget Reconciliation Act (SOBRA),Supplemental Security Income (SSI), SSI-related groups, Title XIX Waivergroups, Medicare Cost Sharing groups, Breast and Cervical Cancer Treatmentprogram and Freedom to Work program.

**TITLE XIX WAIVER GROUP (TWG)MEMBER**All AHCCCS Care (Non-MED) and MED members who do not meet therequirements of a categorically linked Medicaid program.

**TITLE XXI MEMBER**A member eligible for acute care services under Title XXI of the Social SecurityAct, referred to in Federal legislation as the “State Children’s Health InsuranceProgram” (SCHIP and HIFA). The Arizona version of SCHIP is referred to as“KidsCare.”

**WWHP**Well Woman Health-Check Program, administered by the Arizona Departmentof Health Services and funded by the Centers for Disease Control and Prevention.(See AMPM Chapter 400)

**YEAR**See “CONTRACT YEAR”.

**YOUNG ADULT TRANSITIONAL INSURANCE (YATI)**Eligible individuals, between 18 and 21 years of age who were formerly enrolledthrough the foster care program.

[END OF DEFINITIONS]

**SECTION D: PROGRAM REQUIREMENTS**

**INTRODUCTION**

The Arizona Health Care Cost Containment System (AHCCCS) Administration is the single state agency for the Medicaid and SCHIP programs. AHCCCS has operated under an 1115 Research and Demonstration Waiver since 1982 when it became the first statewide Medicaid managed care system in the nation. The program is a modelpublic-private collaboration that includes the state and its counties, the federal government, and managed care contractors and providers from both the public and private sectors. AHCCCS has remained a leader in Medicaid Managed Care through the diligent pursuit of excellence and cost effectiveness by Managed Care Contractors (MCOs) in collaboration with the AHCCCS Administration.

In order to continue this collaboration, Contractors must continue to add value to the program. A Contractor adds value when it:

            •Recognizes that Medicaid members are entitled to care and assistance navigating the service delivery                   system and demonstrates special effort to assure members receive necessary services, including                   prevention and screening services.               •Recognizes that Medicaid members with special health care needs or chronic health conditions require                   care coordination, and provides that coordination. This is particularly true if a member must receive                   services from other AHCCCS Contractors in addition to the Contractor.               •Recognizes that Medicaid members have the right to contact their elected officials in an effort to                  secure necessary services and assist members in order to reduce their need to contact elected officials.                  The Contractor provides information to elected officials to help them respond to the member.               •Recognizes that health care providers are an essential partner in the delivery of health care services,                  and operates in a manner that is efficient and effective for health care providers as well as the                  Contractor.               •Avoids administrative practices that place unnecessary burdens on providers with little or no impact                  on quality of care or cost containment.               •Recognizes that performance improvement is both clinical and operational in nature and self monitors                  and self corrects as necessary to improve contract compliance or operational excellence.               •Recognizes that the program is publicly funded, and as such is subject to public scrutiny and behaves                  in a manner that is supported by the general public.               •Recognizes that the program is subject to significant regulation and operates in compliance with those                  regulations.

AHCCCS encourages Contractor innovation and application of best practices. The AHCCCS administration isalways looking for ways to reduce administrative costs and improve program efficiency. Over the term of thecontract, AHCCCS will work collaboratively with contractors to evaluate ways to reduce program complexity,improve chronic disease management, reduce administrative burdens, leverage joint purchasing power, andreduce unnecessary Medicaid/SCHIP administrative and medical costs.

**1.****TERM OF CONTRACT AND OPTION TO RENEW**

The initial term of this contract shall be 10/1/08 through 9/30/11, with two additional one-year options to renew.All contract renewals shall be through contract amendment. AHCCCS shall issue amendments prior to the enddate of the contract when there is an adjustment to capitation rates and/or changes to the scope of servicescontained herein. Changes to the scope of services include, but are not limited, to changes in the enrolledpopulation, changes in covered services and changes in GSAs.

If the Contractor has been awarded a contract in more than one GSA, each such contract will be consideredseparately renewable. AHCCCS may renew the Contractor’s contract in one GSA, but not in another. Incapping of the Contractor’s enrollment in all GSAs. Further, AHCCCS may require the Contractor to renew allcurrently awarded GSAs, or may terminate the contract if the Contractor does not agree to renew all currentlyawarded GSAs.

When AHCCCS issues an amendment to the contract, the provisions of such renewal will be deemed to havebeen accepted 60 days after the date of mailing by AHCCCS, even if the amendment has not been signed by theContractor, unless within that time the Contractor notifies AHCCCS in writing that it refuses to sign the renewalamendment. If the Contractor provides such notification, AHCCCS will initiate contract terminationproceedings.

***Contractor’s Notice of Intent Not To Renew:***If the Contractor chooses not to renew this contract, theContractor may be liable for certain costs associated with the transition of its members to a different Contractor.If the Contractor provides AHCCCS written notice of its intent not to renew this contract at least 180 days beforeits expiration, this liability for transition costs may be waived by AHCCCS.

***Contract Termination:***In the event that the contract or any portion thereof is terminated for any reason, orexpires, the Contractor shall assist AHCCCS in the transition of its members to other Contractors, and shallabide by standards and protocols set forth in Paragraph 9, Transition of Members. In addition, AHCCCSreserves the right to extend the term of the contract on a month-to-month basis to assist in any transition ofmembers. The Contractor shall make provision for continuing all management and administrative servicesuntil the transition of all members is completed and all other requirements of this contract are satisfied. TheContractor shall be responsible for providing all reports set forth in this contract and necessary for thetransition process, and shall be responsible for the following:

a. Notification of subcontractors and members.b. Payment of all outstanding obligations for medical care rendered to members. Until AHCCCS is satisfied   that the Contractor has paid all such obligations, the Contractor shall provide the following reports to   AHCCCS on a monthly basis (due the 15thday of the month, for the preceding month):                (1) A monthly claims aging report by provider/creditor including IBNR amounts;                (2) A monthly summary of cash disbursements and provider/creditor settlements;                (3) A monthly accounting of Member Grievances and Provider Claim Disputes and their disposition;                (4) Additional reporting as requested in the termination letter issued by AHCCCS.c. Quarterly and Audited Financial Statements up to the date of contract termination. The financial statement   requirement will not be absolved without an official release from AHCCCS.d. Encounter reporting until all services rendered prior to contract termination have reached adjudicated status   and data validation of the information has been completed, as communicated by a letter of release from   AHCCCS.e. Cooperation with reinsurance audit activities on prior contract years until release has been granted by   AHCCCS.f. Cooperation with any open reconciliation activities including, but not limited to, PPC or SSDI-TMC until   release has been granted by AHCCCS.g. Quarterly Quality Management and Medical Management reports will be submitted as required by Section   D, Paragraphs 23, Quality Management, and 24, Medical Management, as appropriate to provide AHCCCS   with information on services rendered up to the date of Contract termination. This will include quality of care   (QOC) concern reporting based on the date of service, as opposed to the date of reporting, for a period of 3   months after contract termination.h. Performance Bond will be required until remaining AHCCCS liabilities are less than $50,000.i. In the event of termination or suspension of the contract by AHCCCS, such termination or suspension shall   not affect the obligation of the Contractor to indemnify AHCCCS for any claim by any third party against the   State or AHCCCS arising from the Contractor's performance of this contract and for which the Contractor   would otherwise be liable under this contract.j. Any dispute by the Contractor, with respect to termination or suspension of this contract by AHCCCS, shall   be exclusively governed by the provisions of Section E, Paragraph 26, Disputes.k. Any funds advanced to the Contractor for coverage of members for periods after the date of termination shall   be returned to AHCCCS within 30 days of termination of the contract.l. Record retention requirements, as described in Section D Paragraph 63; Section E, Paragraph 40 and   Attachment A, Paragraph 20, will apply.

**2.****ELIGIBILITY CATEGORIES**

AHCCCS is Arizona’s Title XIX Medicaid program operating under an 1115 Waiver and Title XXI programoperating under Title XXI State Plan authority. Arizona has the authority to require mandatory enrollment inmanaged care. All Acute Care Program members eligible for AHCCCS benefits, with exceptions as identifiedbelow, are enrolled with Acute Care Contractors that are paid on a capitated basis. AHCCCS pays for healthcare expenses on a fee-for-service (FFS) basis for Title XIX- and Title XXI- eligible members who receiveservices through the Indian Health Service; for Title XIX eligible members who are entitled to emergencyservices under the Federal Emergency Services (FES) program; and for Medicare cost sharing beneficiariesunder QMB programs.

The following describes the eligibility groups enrolled in the managed care program and covered under thiscontract [42 CFR 434.6(a)(2)].

***Title XIX***

***1931 (Also referred to as TANF-related):***Eligible individuals and families under the 1931 provision ofthe Social Security Act, with household income levels at or below 100% of the FPL.

***SSI and SSI Related Groups:***Eligible individuals receiving income through federal cash assistanceprograms under Title XVI of the Social Security Act who are aged, blind or disabled and havehousehold income levels at or below 100% of the FPL.

***Freedom to Work (Ticket to Work)*****:**Eligible individuals under the Title XIX expansion program thatextends eligibility to individuals 16 through 64 years old who meet SSI disability criteria, and whoseearned income after allowable deductions is at or below 250% of the FPL, and who are not eligible forany other Medicaid program. These members must pay a premium to AHCCCS, depending on income.

***SOBRA:***Under the Sixth Omnibus Budget Reconciliation Act of 1986, eligible pregnant women, withindividually budgeted income at or below 150% of the FPL, and children in families with individuallybudgeted incomes ranging from below 100% to 140% of the FPL, depending on the age of the child.

***SOBRA Family Planning:***Family planning extension program that covers the costs for familyplanning services only, for a maximum of two consecutive 12-month periods following the loss ofSOBRA eligibility.

***Breast and Cervical Cancer Treatment Program (BCCTP):***Eligible individuals under the Title XIXexpansion program for women with incomes up to 250% of the FPL, who are diagnosed with and needtreatment for breast and/or cervical cancer or cervical lesions and are not eligible for other Title XIXprograms. Eligible members cannot have other creditable health insurance coverage, includingMedicare.

***Young Adult Transitional Insurance (YATI):***Former foster care children between 18 and 21 years ofage.

***Title XIX Waiver Group***

***AHCCCS Care (Non-MED):***Eligible individuals and couples whose income is at or below 100% of theFPL, and who are not categorically linked to another Title XIX program. Also known as Non-MEDmembers.

***MED:***Title XIX waiver member whose family income exceeds the limits of all other Title XIXcategories (except ALTCS) and has family medical expenses that reduce income to at or below 40% ofthe FPL. MED members may or may not have a categorical link to Title XIX.

***Title XXI***

***KidsCare:***Individuals under the age of 19 years, eligible under the SCHIP program, who are inhouseholds with incomes at or below 200% FPL. All members except Native American members arerequired to pay a premium amount based on the number of children in the family and the gross familyincome. Also referred to as Title XXI.

***HIFA Parents:***Non-Title XIX-eligible parents of KidsCare children or parents of Title XIX SOBRAeligiblechildren who are eligible under the HIFA demonstration initiative waiver. HIFA parents (exceptNative American members) are required to pay a one-time enrollment fee and a monthly premium toAHCCCS, based on household income. Due to funding considerations, this program has an enrollmentcap.

***State-Only***

***Social Security Disability Insurance Temporary Medical Coverage (SSDI-TMC):***Laws 2006, Chapter373 established a Temporary Medical Coverage Program. SSDI-TMC provides health care coverage topersons who:

1. Are citizens or qualified immigrants and residents who have been enrolled in AHCCCS at any time   within the last 24 months; and2. Become ineligible for AHCCCS coverage due to excess income making them over income for   Medicaid; and3. Are not yet eligible for Medicare; and4. Are not covered by creditable health insurance.

In order to participate in SSDI-TMC, eligible persons must pay a premium. Participants becomeineligible for SSDI-TMC once they become eligible for Medicare. SSDI-TMC is funded entirely by theState. Contractors will be capitated for these members under unique rate codes. SSDI-TMC membersare not eligible for prior period coverage, any supplemental payments or reinsurance. Members areentitled to all AHCCCS Acute Care covered services. This program is subject to the availability of fundsand enrollment may be capped and/or frozen.

***State-Only Transplants:***Title XIX individuals, for whom medical necessity for a transplant has beenestablished and who subsequently lose Title XIX eligibility may become eligible for and select one oftwo extended eligibility options as specified in A.R.S. 36-2907.10 and A.R.S. 36-2907.11. The extendedeligibility is authorized only for those individuals who have met all of the following conditions:

                1. The individual has been determined ineligible for Title XIX due to excess income;                2. The individual has been placed on a donor waiting list before eligibility expired;                3. The individual has entered into a contractual arrangement with the transplant facility to pay the                   amount of income which is in excess of the eligibility income standards (referred to as                   transplant share of cost).

The following options for extended eligibility are available to these members:

Option 1: Extended eligibility is for one 12-month period immediately following the loss of AHCCCSeligibility. The member is eligible for all AHCCCS covered services as long as they continue to bemedically eligible for a transplant. If determined medically ineligible for a transplant at any time duringthe period, eligibility will terminate at the end of the calendar month in which the determination ismade.

Option 2: As long as medical eligibility for a transplant (status on a transplant waiting list) ismaintained, at the time that the transplant is scheduled to be performed the transplant candidate will bere-enrolled with his/her previous Contractor to receive all covered transplant services. Option 2-eligibleindividuals are not eligible for any non-transplant related health care services from AHCCCS.

**3.****ENROLLMENT AND DISENROLLMENT**

AHCCCS has the exclusive authority to enroll and disenroll members. The Contractor shall not disenroll anymember for any reason unless directed to do so by AHCCCS. The Contractor may request AHCCCS tochange the member’s enrollment in accordance with the ACOM *Enrollment Choice* and *Change of ContractorPolicy*. The Contractor may not request disenrollment because of an adverse change in the member’s healthstatus or because of the member’s utilization of medical services, diminished mental capacity, oruncooperative or disruptive behavior resulting from his or her special needs. An AHCCCS member mayrequest disenrollment from the Contractor for cause at any time. Requests due to situations defined in SectionA (1) of the ACOM *Change of Plan Policy* should be referred to AHCCCS Member Services via mail or at(602) 417-4000 or (800) 962-6690. For medical continuity requests, the Contractor shall follow theprocedures outlined in the ACOM *Change of Plan Policy*, before notifying AHCCCS. AHCCCS will disenrollthe member through the ACOM *Change of Plan Policy* when the member:

                1. Becomes ineligible for the AHCCCS program;                2. Moves out of the Contractor’s service areas;                3. Changes contractors during the member’s open enrollment/annual enrollment choice period;                4. The Contractor does not, because of moral or religious objections, cover the service the member seeks; or                5. When approved for a Contractor change [42 CFR 438.56].

Members may submit plan change requests to the Contractor or the AHCCCS Administration. A denial of anyplan change request must include a description of the member’s right to appeal the denial.

Eligibility for the various AHCCCS coverage groups is determined by one of the following agencies:

*Social Security Administration (SSA)*SSA determines eligibility for the Supplemental Security Income(SSI) cash program. SSI cash recipients are automaticallyeligible for AHCCCS coverage.

*Department of Economic Security (DES)*DES determines eligibility for families with children undersection 1931 of the Social Security Act, pregnant women andchildren under SOBRA, the Adoption Subsidy Program, Title IVEfoster care children, Young Adult Transitional InsuranceProgram, the Federal Emergency Services program (FES), HIFAparents of SOBRA-eligible children and Title XIX WaiverMembers.

*AHCCCS*AHCCCS determines eligibility for the SSI/Medical AssistanceOnly groups, including the FES program for this population(aged, disabled, blind), the Arizona Long Term Care System(ALTCS), the Qualified Medicare Beneficiary program and otherMedicare cost sharing programs, BCCTP, the Freedom to Workprogram, the Title XXI KidsCare program, HIFA parents ofKidsCare children, the SSDI-TMC program, and the State-OnlyTransplant program.

AHCCCS Acute Care members are enrolled with Contractors in accordance with the rules set forth in A.A.CR9-22, Article 17, A.A.C. R9-31, Articles 3 and 17.

***Member Choice of Contractor***All AHCCCS members eligible for services covered under this contract have a choice of available Contractors.Information about these Contractors will be given to each applicant during the application process forAHCCCS benefits. If there is only one Contractor available for the applicant’s Geographic Service Area, nochoice is offered as long as the Contractor offers the member a choice of PCPs. Members who do not choose aContractor prior to AHCCCS being notified of their eligibility are automatically assigned to a Contractor basedon family continuity or the auto-assignment algorithm. Once assigned, AHCCCS sends a Freedom of Choicenotice to the member and gives them 30 days to choose a different Contractor from the auto-assignedContractor. See Section D, Paragraph 6, Auto-Assignment Algorithm, for further explanation.

The Contractor will share with AHCCCS the cost of providing information about the Acute Care Contractorsto potential members and to those eligible for annual enrollment choice.

Exceptions to the above enrollment policies for Title XIX members include previously enrolled members whohave been disenrolled for less than 90 days. These members will be automatically enrolled with the sameContractor, if still available. Women who become eligible for the Family Planning Services ExtensionProgram, will remain assigned to their current Contractor.

The effective date of enrollment for a new Title XIX member with the Contractor is the day AHCCCS takesthe enrollment action. The Contractor is responsible for payment of medically necessary covered servicesretroactive to the member’s beginning date of eligibility, as reflected in PMMIS.

SSDI-Temporary Medical Coverage and KidsCare Title XXI members must select a Contractor prior to beingdetermined eligible, and therefore will not be auto-assigned. HIFA parents who do not choose a Contractorwill be enrolled with their child’s Contractor following the enrollment rules set forth in R9-31-1719.

When a member is transferred from Title XIX to Title XXI and has not made a Contractor choice for TitleXXI, the member will remain with his/her current Contractor and a Freedom of Choice notice will be sent tothe member. The member may then change plans no later than 30 days from the date the Freedom of Choicenotice is sent.

The effective date of enrollment for a Title XXI member (including HIFA parents) and SSDI-TemporaryMedical Coverage members will be the first day of the month following notification to the Contractor. In theevent that eligibility is determined on or after the 25thday of the month, eligibility will begin on the 1stday ofthe second month following the determination.

***Prior Period Coverage:***AHCCCS provides prior period coverage for the period of time prior to the Title XIXmember’s enrollment during which the member is eligible for covered services. The time frame is from theeffective date of eligibility to the day the member is enrolled with the Contractor. The Contractor receivesnotification from the Administration of the member’s enrollment. The Contractor is responsible for payment ofall claims for medically necessary covered services, including all behavioral health services, provided tomembers during prior period coverage. This may include services provided prior to the contract year (SeeSection D, Paragraph 53, Compensation, for a description of the Contractor’s reimbursement from AHCCCSfor this eligibility time period).

For behavioral health services, the 72-hour maximum liability period specified in A.A.C. R9-22-210.01 doesNOT apply to services provided during prior period coverage. Additionally, behavioral health servicesprovided during the PPC period are not considered in the calculation of the maximum of 72 hours of inpatientemergency behavioral health services as described in the rule. Pursuant to A.R.S. 36-545 et seq., court-orderedbehavioral health screening and evaluation services are the responsibility of the county. Refer also to SectionD, Paragraph 12, Behavioral Health Services.

***Newborns****:*Newborns born to AHCCCS eligible mothers enrolled at the time of the child's birth will beenrolled with the mother's Contractor, when newborn notification is received by AHCCCS. The Contractor isresponsible for notifying AHCCCS of a child’s birth to an enrolled member. Capitation for the newborn willbegin on the date notification is received by AHCCCS. The effective date of AHCCCS eligibility will be thenewborn’s date of birth, and the Contractor is responsible for all covered services to the newborn, whether ornot AHCCCS has received notification of the child’s birth. AHCCCS is currently available to receivenotification 24 hours a day, 7 days a week via phone or the AHCCCS website. Each eligible mother of anewborn is sent a letter advising her of her right to choose a different Contractor for her child; the date of thechange will be the date of processing the request from the mother. If the mother does not request a change, thechild will remain with the mother's Contractor.

Newborns of FES mothers are auto-assigned to a Contractor and mothers of these newborns sent lettersadvising them of their right to choose a different Contractor for their children. In the event the FES motherchooses a different Contractor, AHCCCS will recoup all capitation paid to the originally assigned Contractorand the baby will be enrolled retroactive to the date of birth with the second Contractor. The secondContractor will receive prior period capitation from the date of birth to the day before assignment andprospective capitation from the date of assignment forward. The second Contractor will be responsible for allcovered services to the newborn from date of birth.

***Enrollment Guarantees:***Upon initial capitated enrollment as a Title XIX-eligible member, the member isguaranteed a minimum of five full months of continuous enrollment. Upon initial capitated enrollment as aTitle XXI-eligible member, the member is guaranteed a minimum of 12 full months of continuous enrollment.Enrollment guarantees do not apply to HIFA parents and SSDI-Temporary Medical Coverage members. Theenrollment guarantee is a one-time benefit. If a member changes from one Contractor to another within theenrollment guarantee period, the remainder of the guarantee period applies to the new Contractor. Theenrollment guarantee may not be granted or may be terminated if the member is incarcerated, or if a minorchild is adopted. AHCCCS Rules R9-22, Article 17, and R9-31, Article 3, describes other reasons for whichthe enrollment guarantee may not apply.

***Native Americans****:*Native Americans, on- or off-reservation, may choose to receive services from IndianHealth Service (IHS), a P.L. 93-638 tribal facility or any available Contractor. If a choice is not made withinthe specified time limit, Native American Title XIX members living on-reservation will be assigned to theAHCCCS American Indian Health Program (AIHP) as FFS members. The designation of a zip code as a‘reservation zip code’, not the physical location of the residence, is the factor that determines whether amember is considered on or off-reservation for these purposes. Further, if the member resides in a zip code thatcontains land on both sides of a reservation boundary and the zip code is assigned as off-reservation, thephysical location of the residence does not change the off-reservation designation for the member. NativeAmerican Title XIX members living off-reservation who do not make a Contractor choice will be assigned toan available Contractor using the AHCCCS protocol for family continuity and the auto-assignment algorithm.Native American Title XXI members must make a choice prior to being determined eligible. Title XXI HIFAparent members’ enrollment will follow the Title XIX enrollment rules. Native Americans may change fromAHCCCS AIHP FFS to a Contractor or from a Contractor to AHCCCS AIHP FFS at any time.

**4.****ANNUAL ENROLLMENT CHOICE**

AHCCCS conducts an Annual Enrollment Choice (AEC) for members on their annual anniversary date [42CFR 438.56(c)(2)(ii)]. AHCCCS may hold an open enrollment in any GSA or combination of GSAs, asdeemed necessary. During AEC, members may change Contractors subject to the availability of otherContractors within their Geographic Service Area. A members is mailed a printed enrollment form and otherinformation required by the Balanced Budget Act of 1997 (BBA) 60 days prior to his/her AEC date and maychoose a new Contractor by contacting AHCCCS to complete the enrollment process. If the member does notparticipate in the AEC, no change of Contractor will be made (except for approved changes under the ACOM*Change of Plan Policy*) during the new anniversary year. This holds true if a Contractor’s contract is renewedand the member continues to live in a Contractor’s service area. The Contractor shall comply with the ACOM*Member Transition for Annual Enrollment Choice Policy, Open Enrollment and Other Plan Changes Policy,*and the *AMPM*.

**5.****ENROLLMENT AFTER CONTRACT AWARD**

In the event that AHCCCS does not award a CYE ’09 contract to an incumbent contractor, AHCCCS willdirect enrollment effective October 1, 2008, for those members enrolled with an exiting Contractor. Memberswill be auto assigned to all or select Contractors utilizing the auto assignment algorithm found in the*Conversion Group Assignment* section of Attachment G, Auto-Assignment Algorithm. The members in theConversion Group will have the opportunity to choose an alternate Contractor, according to the details inAttachment G, Auto-Assignment Algorithm.

AHCCCS will also use an enhanced auto-assignment algorithm in certain GSAs for new Contractors or thoseincumbent Contractors defined as small Contractors. This enhanced algorithm may be in effect beginningOctober 1, 2008, for a period of no less than three months and no more than six months. Those Contractors notdefined as new or small Contractors in a GSA may not receive auto-assigned members during the enhancedalgorithm period. See Attachment G, Auto-Assignment Algorithm, for details.

In addition to auto-assignment, AHCCCS will make changes to both annual enrollment choice materials andnew enrollee materials prior to October 1, 2008, to reflect the change in available contractors. The autoassignment algorithm will be adjusted to exclude auto assignment of new enrollees to exiting Contractor(s)effective August 1, 2008.

**6.****AUTO-ASSIGNMENT ALGORITHM**

Members who do not exercise their right to choose and do not have family continuity are assigned to a Contractorthrough an auto-assignment algorithm. Once auto-assigned, AHCCCS sends a Freedom of Choice notice to themember and gives him/her 30 days to choose a different Contractor from the auto-assigned Contractor. Thealgorithm is a mathematical formula used to distribute members to the various Contractors in a manner that ispredictable and consistent with AHCCCS goals. The algorithm favors those Contractors with lower capitationrates and higher Program scores in this procurement and as described below. For further details on the AHCCCSAuto-Assignment Algorithm, refer to Attachment G. AHCCCS may change the algorithm at any time during theterm of the contract in response to Contractor-specific issues (e.g. imposition of an enrollment cap).

In future contract years, AHCCCS may adjust the auto-assignment algorithm in consideration of Contractors’clinical performance measure results when calculating target percentages. Ranking in the algorithm may beweighted, based on the number of Performance Measures for which a Contractor is meeting the current AHCCCSMinimum Performance Standard (MPS) as a percentage of the total number of measures utilized in thecalculation. AHCCCS will determine and communicate the Performance Measures to be used to evaluateContractor performance prior to the beginning of the contract year to be measured.

**7.****AHCCCS MEMBER IDENTIFICATION CARDS**

The Contractor is responsible for paying the costs of producing AHCCCS member identification cards. TheContractor will receive an invoice the month following the issue date of the identification card.

**8.****MAINSTREAMING OF AHCCCS MEMBERS**

To ensure mainstreaming of AHCCCS members, the Contractor shall take affirmative action so that membersare provided covered services without regard to payer source, race, color, creed, gender, religion, age, nationalorigin (to include those with limited English proficiency), ancestry, marital status, sexual preference, geneticinformation, or physical or mental handicap, except where medically indicated. The Contractor must take intoaccount a member’s literacy and culture when addressing members and their concerns, and must takereasonable steps to encourage subcontractors to do the same. The Contractor must make interpreters, includingassistance for the vision- or hearing- impaired, available free of charge for all members to ensure appropriatedelivery of covered services. The Contractor must provide members with information instructing them how toaccess these services.

Prohibited practices include, but are not limited to, the following, in accordance with Title VI of the US CivilRights Act of 1964, 42 USC, Section 2001, Executive Order 13166, and rules and regulation promulgatedaccording to, or as otherwise provided by law:

a. Denying or not providing a member any covered service or access to an available facility.b. Providing to a member any covered service which is different, or is provided in a different manner or at a   different time from that provided to other members, other public or private patients or the public at large,   except where medically necessary.c. Subjecting a member to segregation or separate treatment in any manner related to the receipt of any   covered service; restricting a member in any way in his or her enjoyment of any advantage or privilege   enjoyed by others receiving any covered service.d. The assignment of times or places for the provision of services on the basis of the race, color, creed,   religion, age, sex, national origin, ancestry, marital status, sexual preference, income status, AHCCCS   membership, or physical or mental handicap of the participants to be served.

If the Contractor knowingly executes a subcontract with a provider with the intent of allowing or permittingthe subcontractor to implement barriers to care (i.e., the terms of the subcontract act to discourage the fullutilization of services by some members); the Contractor will be in default of its contract.

If the Contractor identifies a problem involving discrimination by one of its providers, it shall promptlyintervene and implement a corrective action plan. Failure to take prompt corrective measures may place theContractor in default of its contract.

**9.****TRANSITION OF MEMBERS**

The Contractor shall comply with the AMPM and the ACOM *Member Transition for Annual EnrollmentChoice, Open Enrollment and Other Plan Changes Policy* standards for member transitions betweenContractors or GSAs, participation in or discharge from CRS or CMDP, to or from an ALTCS Contractor, andupon termination or expiration of a contract. AHCCCS may discontinue enrollment of members with theContractor three months prior to the contract termination date. The Contractor shall develop and implementpolicies and procedures which comply with these policies to address transition of:

a. Members with significant medical conditions such as a high-risk pregnancy or pregnancy within the last   30 days, the need for organ or tissue transplantation, chronic illness resulting in hospitalization or nursing   facility placement, etc.;b. Members who are receiving ongoing services such as dialysis, home health, chemotherapy and/or radiation   therapy, or who are hospitalized at the time of transition;c. Members who have conditions requiring ongoing monitoring or screening such as elevated blood lead   levels and members who were in the NICU after birth.d. Members who frequently contact AHCCCS, state and local officials, the Governor’s Office and/or the media.e. Members who have received prior authorization for services such as scheduled surgeries, out-of-area   specialty services, or nursing home admission;f. Prescriptions, DME and medically necessary transportation ordered for the transitioning member by the   relinquishing Contractor; andg. Medical records of the transitioning member (the cost, if any, of reproducing and forwarding medical   records shall be the responsibility of the relinquishing AHCCCS Contractor).h. Any members transitioning to CMDP.

When relinquishing members, the Contractor is responsible for timely notification to the receiving Contractorregarding pertinent information related to any special needs of transitioning members. The Contractor, whenreceiving a transitioning member with special needs, is responsible for coordinating care with the relinquishingContractor in order that services are not interrupted, and for providing the new member with Contractor andservice information, emergency numbers and instructions about how to obtain services.

**10.****SCOPE OF SERVICES**

The Contractor shall provide covered services to AHCCCS members in accordance with all applicable federaland state laws regulations and policies, including those listed by reference in attachments and this contract.The services are described in detail in AHCCCS Rules R9-22, Article 2, the *AHCCCS Medical Policy Manual*(*AMPM*) and the *AHCCCS Contractor Operations Manual (ACOM),* all of which are incorporated herein byreference, except for provisions specific to the Fee-for-Service program, and may be found on the AHCCCSwebsite (http://www.azahcccs.gov/) [42 CFR 438.210(a)(1)]. To be covered, services must be medicallynecessary and cost effective. The covered services are briefly described below. Except for annual well womanexams, behavioral health and children’s dental services, covered services must be provided by or coordinatedwith a primary care provider.

The Contractor shall coordinate all services it provides to a member with any services the member receivesfrom other entities, including behavioral health services the member receives through an ADHS/RBHAprovider and Children’s Rehabilitative Services (CRS) provided through ADHS/CRSA. The Contractor shallensure that, in the process of coordinating care, each member’s privacy is protected in accordance with theprivacy requirements in 45 CFR Parts 160 and 164, Subparts A and E, to the extent that they are applicable [42CFR 438.208(b)(4) and 438.224].

Services must be rendered by providers that are appropriately licensed or certified, operating within their scopeof practice, and registered as an AHCCCS provider. The Contractor shall provide the same standard of carefor all members, regardless of the member's eligibility category. The Contractor shall ensure that the servicesare sufficient in amount, duration and scope to reasonably be expected to achieve the purpose for which theservices are furnished. The Contractor shall not arbitrarily deny or reduce the amount, duration, or scope of arequired service solely because of diagnosis, type of illness, or condition of the member. The Contractor mayplace appropriate limits on a service on the basis of criteria such as medical necessity; or for utilization control,provided the services furnished can reasonably be expected to achieve their purpose [42 CFR 438.210(a)(3)].

If the Contractor does not, because of a moral or religious objection, cover one or more of the services listed inthis contract, it must notify AHCCCS of the objection. The Contractor must arrange for those services to beprovided by another entity. Any alternative arrangement must be approved in advance by AHCCCS. Requestsfor approval must be submitted to the Division of Health Care Management, Acute Care Operations Unit, 90days prior to implementation.

Authorization of Services: For the processing of requests for initial and continuing authorizations of services,the Contractor shall have in place and follow written policies and procedures. The Contractor shall havemechanisms in place to ensure consistent application of review criteria for authorization decisions. Anydecision to deny a service authorization request or to authorize a service in an amount, duration or scope that isless than requested, shall be made by a health care professional who has appropriate clinical expertise intreating the member’s condition or disease [42 CFR 438.210(b)].

Notice of Action: The Contractor shall notify the requesting provider and give the member written notice ofany decision by the Contractor to deny, reduce, suspend or terminate a service authorization request, or toauthorize a service in an amount, duration, or scope that is less than requested. The notice shall meet therequirements of 42 CFR 438.404, AHCCCS Rules and ACOM *Notice of Action Policy*. The notice to theprovider must also be in writing as specified in Attachment H(1) of this contract.

The Contractor shall ensure that its providers are not restricted or inhibited in any way from communicatingfreely with members regarding their health care, medical needs and treatment options, even if needed servicesare not covered by the Contractor.

***Ambulatory Surgery****:*The Contractor shall provide surgical services for either emergency or scheduledsurgeries when provided in an ambulatory or outpatient setting, such as a freestanding surgical center or ahospital-based outpatient surgical setting.

***American Indian Health Program (AIHP)*****:**AHCCCS will reimburse claims on a FFS basis for acute careservices that are medically necessary, eligible for 100% Federal reimbursement, and are provided to Title XIXmembers enrolled with the Contractor in an IHS or a 638 tribal facility. Encounters for Title XIX services inIHS or tribal facilities will not be accepted by AHCCCS or considered in capitation rate development.

The Contractor is responsible for reimbursement to IHS or tribal facilities for services provided to Title XXINative American members enrolled with the Contractor. The Contractor may choose to subcontract with anIHS or 638 tribal facility as part of its provider network for the delivery of Title XXI covered services.Expenses incurred by the Contractor for Title XXI services delivered in an IHS or 638 tribal facility shall beencountered and considered in capitation rate development.

***Anti-hemophilic Agents and Related Services:***The Contractor shall provide services for the treatment ofhemophilia and Von Willebrand’s disease (See Section D, Paragraph 57, Reinsurance, *CatastrophicReinsurance*).

***Audiology***: The Contractor shall provide audiology services to members under the age of 21 years, includingthe identification and evaluation of hearing loss and rehabilitation of the hearing loss through medical orsurgical means. i.e., Only the identification and evaluation of hearing loss are covered for members 21 years ofage and older unless the hearing loss is due to an accident or injury-related emergent condition. Pursuant toA.A.C. R9-22-212, hearing aids are not covered for members 21 and older.

***Behavioral Health***: The Contractor shall provide behavioral health services as described in Section D,Paragraph 12, Behavioral Health Services. Also refer to Prior Period Coverage in Section D, Paragraph 3,Enrollment and Disenrollment.

***Children's Rehabilitative Services (CRS):***The program for children with CRS-covered conditions isadministered by the Arizona Department of Health Services (ADHS) for children who meet CRS eligibilitycriteria. The Contractor shall refer children to the CRS program who are potentially eligible for servicesrelated to CRS-covered conditions, as specified in R9-22, Article 2, and A.R.S. Title 36, Chapter 2, Article 3.The Contractor is responsible for care of members until Children’s Rehabilitative Services Administration(CRSA) determines those members eligible. In addition, the Contractor is responsible for covered services forCRS-eligible members unless and until the Contractor has received written confirmation from CRSA thatCRSA will provide the requested service. The Contractor shall require the member’s Primary Care Provider(PCP) to coordinate the member’s care with the CRS Program. For more detailed information regardingeligibility criteria, referral practices, and Contractor-CRS coordination issues, refer to the CRS Policy andProcedures Manual located on the Arizona Department of Health Services website at http://www.azdhs.gov/and the related ACOM policy.

The Contractor shall respond to requests for services potentially covered by CRSA in accordance with therelated ACOM policy. The Contractor is responsible for addressing prior authorization requests if CRSA failsto comply with the timeframes specified in the related ACOM policy. The Contractor remains ultimatelyresponsible for the provision of all covered services to its members, including emergency services not relatedto a CRS condition, emergency services related to a CRS condition rendered outside the CRS network, andAHCCCS-covered services denied by CRSA for the reason that it is not a service related to a CRS condition.

Referral to CRSA does not relieve the Contractor of the responsibility for providing timely medicallynecessary AHCCCS services not covered by CRSA. In the event that CRSA denies a medically necessaryAHCCCS service for the reason that it is not related to a CRS condition, the Contractor must promptly respondto the service authorization request and authorize the provision of medically necessary services. CRSA cannotcontest the Contractor prior authorization determination if CRSA fails to timely respond to a serviceauthorization request. The Contractor, through its Medical Director, may request review from the CRSRegional Medical Director when it denies a service for the reason that it is not covered by the CRS Program.The Contractor may also request a hearing with the Administration if it is dissatisfied with the CRSAdetermination. If the AHCCCS Hearing Decision determines that the service should have been provided byCRSA, CRSA shall be financially responsible for the costs incurred by the Contractor in providing the service.

A member with private insurance is not required to utilize CRSA. This includes members with Medicarewhether they are enrolled in Medicare FFS or a Medicare Managed Care plan. If a member uses the privateinsurance network or Medicare for a CRS-covered condition, the Contractor is responsible for all applicabledeductibles and copayments. If the member is on Medicare, the ACOM *Medicare Cost Sharing for Membersin Traditional Fee for Service Medicare Policy* and *Medicare Cost Sharing for Members in MedicareManaged Care Plans Policy* shall apply. When the private insurance or Medicare is exhausted, or certainannual or lifetime limits are reached with respect to CRS-covered conditions, the Contractor shall refer themember to CRSA for determination of eligibility for CRS services. If the member with private insurance orMedicare chooses to enroll with CRS, CRS becomes the secondary payer responsible for all applicabledeductibles and copayments. The Contractor is not responsible to provide services in instances when the CRS-eligible member who has no primary insurance or Medicare refuses to receive CRS-covered services throughthe CRS program. If the Contractor becomes aware that a member with a CRS-covered condition refuses toparticipate in the CRS application process or refuses to receive services through the CRS Program, the membermay be billed by the provider in accordance with AHCCCS regulations regarding billing for unauthorizedservices.

***Chiropractic Services****:*The Contractor shall provide chiropractic services to members under age 21 whenprescribed by the member’s PCP and approved by the Contractor in order to ameliorate the member’s medicalcondition. Medicare approved chiropractic services for any member shall also be covered, subject tolimitations specified in 42 CFR 410.22, for Qualified Medicare Beneficiaries if prescribed by the member’sPCP and approved by the Contractor.

***Dialysis***: The Contractor shall provide medically necessary dialysis, supplies, diagnostic testing andmedication for all members when provided by Medicare-certified hospitals or Medicare-certified end stagerenal disease (ESRD) providers. Services may be provided on an outpatient basis or on an inpatient basis if thehospital admission is not solely to provide chronic dialysis services.

***Early and Periodic Screening, Diagnosis and Treatment (EPSDT):***The Contractor shall providecomprehensive health care services through primary prevention, early intervention, diagnosis and medicallynecessary treatment to correct or ameliorate defects and physical or mental illness discovered by the screeningsfor members under age 21. The Contractor shall ensure that these members receive required health screenings,including those for developmental/behavioral health, in compliance with the AHCCCS periodicity schedule.The Contractor shall submit all EPSDT reports to the AHCCCS Division of Health Care Management, asrequired by the *AMPM*. The Contractor is required to meet specific participation/utilization rates for membersas described in Section D, Paragraph 23, Quality Management.

The Contractor shall ensure the initiation and coordination of a referral to the ADHS/RBHA system formembers in need of behavioral health services. The Contractor shall follow up with the RBHA to monitorwhether members have received these health services.

The Contractor is encouraged to assign EPSDT-aged members to providers that are trained on and who useAHCCCS-approved developmental screening tools.

***Early Detection Health Risk Assessment, Screening, Treatment and Primary Prevention:***The Contractorshall provide primary prevention education to adult members. The Contractor shall provide health care servicesthrough screening, diagnosis and medically necessary treatment for members 21 years of age and older. Theseservices include, but are not limited to, screening and treatment for hypertension; elevated cholesterol; coloncancer; sexually transmitted diseases; tuberculosis; HIV/AIDS; breast and cervical cancer; and prostate cancer.Nutritional assessment and treatment are covered when medically necessary to meet the nutritional needs ofmembers who may have a chronic debilitating disease. Physical examinations, diagnostic work-ups andmedically necessary immunizations are also covered as found in Arizona Administrative Code Section R9-22-205. Required assessment and screening services for members under age 21 are specified in the AHCCCSEPSDT periodicity schedule.

***Emergency Services****:*The Contractor shall have and/or provide the following as a minimum:

a. Emergency services facilities adequately staffed by qualified medical professionals to provide prehospital,    emergency care on a 24-hour-a-day, 7-day-a-week basis, for the sudden onset of a medically    emergent condition. Emergency medical services are covered without prior authorization. The    Contractor is encouraged to contract with emergency service facilities for the provision of emergency    services. The Contractor shall be responsible for educating members and providers regarding    appropriate utilization of emergency room services including behavioral health emergencies. The    Contractor shall monitor emergency service utilization (by both provider and member) and shall have    guidelines for implementing corrective action for inappropriate utilization;b. All medical services necessary to rule out an emergency condition; andc. Emergency transportation.

Per the Balanced Budget Act of 1997, 42 CFR 438.114, the following conditions apply with respect tocoverage and payment of emergency services:

The Contractor must cover and pay for emergency services regardless of whether the provider that furnishesthe service has a contract with the Contractor.

The Contractor may not deny payment for treatment obtained under either of the following circumstances:

1. A member had an emergency medical condition, including cases in which the absence of medical   attention would not have resulted in the outcomes identified in the definition of emergency medical   condition under 42 CFR 438.114.2. A representative of the Contractor (an employee or subcontracting provider) instructs the member to   seek emergency medical services.

Additionally, the Contractor may not:

1. Limit what constitutes an emergency medical condition as defined in 42 CFR 438.114, on the basis of   lists of diagnoses or symptoms.2. Refuse to cover emergency services based on the failure of the emergency room provider, hospital, or   fiscal agent to notify the Contractor of the member’s screening and treatment within 10 calendar days   of presentation for emergency services. Claims submission by the hospital within 10 calendar days of   presentation for the emergency services constitutes notice to the Contractor. This notification   stipulation is only related to the provision of emergency services.3. Require notification of Emergency Department treat and release visits as a condition of payment   unless the plan has prior approval of the AHCCCS Administration.

A member who has an emergency medical condition may not be held liable for payment of subsequentscreening and treatment needed to diagnose the specific condition or stabilize the patient.The attending emergency physician, or the provider actually treating the member, is responsible fordetermining when the member is sufficiently stabilized for transfer or discharge, and such determination isbinding on the Contractor responsible for coverage and payment. The Contractor shall comply with BBAguidelines regarding the coordination of post-stabilization care.

For additional information and requirements regarding emergency services, refer to AHCCCS Rules R9-22-201et seq. and 42 CFR 438.114.

***Family Planning****:*The Contractor shall provide family planning services in accordance with the *AMPM,* forall members who choose to delay or prevent pregnancy. These include medical, surgical, pharmacological andlaboratory services, as well as contraceptive devices. Information and counseling, which allow members tomake informed decisions regarding family planning methods, shall also be included. If the Contractor does notprovide family planning services, it must contract for these services through another health care deliverysystem.

The Contractor shall provide services to members enrolled in the Family Planning Services ExtensionProgram, a program that provides family planning services only, for a maximum of two consecutive 12-monthperiods, to women whose SOBRA eligibility has terminated. The Contractor is also responsible for notifyingAHCCCS when a SOBRA woman is sterilized to prevent inappropriate enrollment in the SOBRA FamilyPlanning Services Extension Program. Notification should be made at the time the newborn is reported orafter the sterilization procedure is completed.

***Home and Community Based Services (HCBS):***Assisted living facility, alternative residential setting, orhome and community based services (HCBS) as defined in R9-22, Article 2, and R9-28, Article 2 that meet theprovider standards described in R9-28, Article 5, and subject to the limitations set forth in the *AMPM.* Theseservices are covered in lieu of a nursing facility.

***Home Health****:*This service shall be provided under the direction of a physician to prevent hospitalization orinstitutionalization and may include nursing, therapies, supplies and home health aide services. It shall beprovided on a part-time or intermittent basis.

***Hospice****:*These services are covered for members who are certified by a physician as being terminally ill andhaving six months or less to live. See the *AMPM* for details on covered hospice services.

***Hospital****:*Inpatient services include semi-private accommodations for routine care, intensive and coronarycare, surgical care, obstetrics and newborn nurseries, and behavioral health emergency/crisis services. If themember’s medical condition requires isolation, private inpatient accommodations are covered. Nursingservices, dietary services and ancillary services such as laboratory, radiology, pharmaceuticals, medicalsupplies, blood and blood derivatives, etc. are also covered. Outpatient hospital services include any of theabove, which may be appropriately provided on an outpatient or ambulatory basis (i.e., laboratory, radiology,therapies, ambulatory surgery, etc.). Observation services may be provided on an outpatient basis, ifdetermined reasonable and necessary, when deciding whether the member should be admitted for inpatientcare. Observation services include the use of a bed and periodic monitoring by hospital nursing staff and/orother staff to evaluate, stabilize or treat medical conditions of a significant degree of instability and/ordisability.

***Immunizations****:*The Contractor shall provide immunizations for adults (21 years of age and older) to includebut not limited to: diphtheria-tetanus, influenza, pneumococcus, rubella, measles and hepatitis-B and others asmedically indicated. For all members under the age of 21, immunization requirements include but are notlimited to: diphtheria, tetanus, pertussis vaccine (DTaP), inactivated polio vaccine (IPV), measles, mumps,rubella (MMR) vaccine, H. influenza, type B (HIB) vaccine, hepatitis B (Hep B) vaccine, varicella zoster virus(VZV) vaccine and pneumococcal conjugate vaccine (PCV) (see Section D, Paragraph 15, PediatricImmunizations and the Vaccines for Children Program). The Contractor is required to meet specificimmunization rates for members under the age of 21, which are described in Section D, Paragraph 23, QualityManagement. (Please refer to the AMPM for current immunization requirements.)

***Incontinence Supplies***: The Contractor shall cover incontinence supplies as specified in AHCCCS RuleA.A.C. R9-22-212 and the AMPM.

***Laboratory****:*Laboratory services for diagnostic, screening and monitoring purposes are covered whenprovided by a CLIA (Clinical Laboratory Improvement Act) approved free-standing laboratory, hospital,clinic, physician office or other health care facility laboratory.

Upon written request, the Contractor may obtain laboratory test data on members from a freestandinglaboratory or hospital- based laboratory subject to the requirements specified in A.R.S. § 36-2903(Q) and (R).The data shall be used exclusively for quality improvement activities and health care outcome studies requiredand/or approved by the Administration.

***Maternity****:*The Contractor shall provide pre-conception counseling, pregnancy identification, prenatal care,treatment of pregnancy related conditions, labor and delivery services, and postpartum care for members.Services may be provided by physicians, physician assistants, nurse practitioners, or certified nurse midwives.Members may select or be assigned to a PCP specializing in obstetrics. All members, anticipated to have alow-risk delivery, may elect to receive labor and delivery services in their home, if this setting is included inthe allowable settings of the Contractor and the Contractor has providers in its network that offer home laborand delivery services. All members anticipated to have a low-risk prenatal course and delivery may elect toreceive prenatal care, labor and delivery and postpartum care provided by certified nurse midwives, if theseproviders are in the Contractor’s network. Members receiving maternity services from a certified nursemidwife must also be assigned to a PCP for other health care and medical services. The Contractor shall allowwomen and their newborns to receive up to 48 hours of inpatient hospital care after a routine vaginal deliveryand up to 96 hours of inpatient care after a cesarean delivery. The attending health care provider, inconsultation with the mother, may discharge the mother or newborn prior to the minimum length of stay. Anormal newborn may be granted an extended stay in the hospital of birth when the mother’s continued stay inthe hospital is beyond the 48 or 96 hour stay.

The Contractor shall inform all assigned AHCCCS pregnant women of voluntary prenatal HIV testing and theavailability of medical counseling if the test is positive. The Contractor shall provide information in themember handbook and annually in the member newsletter, which encourages pregnant women to be tested andprovides instructions about where testing is available. Semi-annually, the Contractor shall report to AHCCCSthe number of pregnant women who have been identified as HIV/AIDS-positive. This report is due no laterthan 30 days after the end of the second and fourth quarters of the contract year.

***Medical Foods****:*Medical foods are covered within limitations defined in the *AMPM* for members diagnosedwith a metabolic condition included under the ADHS Newborn Screening Program and specified in the*AMPM*. The medical foods, including metabolic formula and modified low protein foods, must be prescribedor ordered under the supervision of a physician.

***Medical Supplies, Durable Medical Equipment (DME), Orthotic and Prosthetic Devices****:*These services arecovered when prescribed by the member’s PCP, attending physician, practitioner, or by a dentist. Medicalequipment may be rented or purchased only if other sources, which provide the items at no cost, are notavailable. The total cost of the rental must not exceed the purchase price of the item. Reasonable repairs oradjustments of purchased equipment are covered to make the equipment serviceable and/or when the repaircost is less than renting or purchasing another unit.

***Nursing Facility****:*The Contractor shall provide services in nursing facilities, including religious non-medicalhealth care institutions, for members who require short-term convalescent care not to exceed 90 days percontract year. In lieu of a nursing facility, the member may be placed in an assisted living facility, analternative residential setting, or receive home and community based services (HCBS) as defined in R9-22,Article 2 and R9-28, Article 2 that meet the provider standards described in R9-28, Article 5, and subject to thelimitations set forth in the *AMPM.*

Nursing facility services must be provided in a dually-certified Medicare/Medicaid nursing facility, whichincludes in the per-diem rate: nursing services; basic patient care equipment and sickroom supplies; dietaryservices; administrative physician visits; non-customized DME; necessary maintenance and rehabilitationtherapies; over-the-counter medications; social, recreational and spiritual activities; and administrative,operational medical direction services. See Section D, Paragraph 41, Responsibility for Nursing FacilityReimbursement, for further details.

The Contractor shall notify the Assistant Director of the Division of Member Services, by Email, when amember has been residing in a nursing facility for 75 days. This will allow AHCCCS time to follow-up on thestatus of the ALTCS application and to consider potential fee-for-service coverage, if the stay goes beyond the90-day per contract year maximum. The notice should be sent via e-mail toHealthPlan75DayNotice@azahcccs.gov.

                Notifications must include:                1. Member Name                2. AHCCCS ID                3. Date of Birth                4. Name of Facility                5. Admission Date to the Facility                6. Date they reach the 75 days                7. Name of Contractor of enrollment

***Nutrition****:*Nutritional assessments may be conducted as a part of the EPSDT screenings for members underage 21, and to assist members 21 years of age and older whose health status may improve with nutritionalintervention. Assessment of nutritional status on a periodic basis may be provided as determined necessary,and as a part of the health risk assessment and screening services provided by the member’s PCP. AHCCCScovers nutritional therapy on an enteral, parenteral or oral basis, when determined medically necessary toprovide either complete daily dietary requirements or to supplement a member’s daily nutritional and caloricintake and when AHCCCS criteria specified in the *AMPM* are met.

***Oral Health****:*The Contractor shall provide all members under the age of 21 years with all medically necessarydental services including emergency dental services, dental screening and preventive services in accordancewith the AHCCCS periodicity schedule, as well as therapeutic dental services, dentures, and pretransplantationdental services. The Contractor shall monitor compliance with the EPSDT periodicity schedulefor dental screening services. The Contractor is required to meet specific utilization rates for members asdescribed in Section D, Paragraph 23, Quality Management. The Contractor shall ensure that members arenotified when dental screenings are due if the member has not been scheduled for a visit. If a dental screeningis not received by the member, a second notice must be sent. Members under the age of 21 may request dentalservices without referral and may choose a dental provider from the Contractor’s provider network. Formembers who are 21 years of age and older, the Contractor shall provide emergency dental care, medicallynecessary dentures and dental services for transplantation services as specified in the *AMPM*.

***Physician****:*The Contractor shall provide physician services to include medical assessment, treatments andsurgical services provided by licensed allopathic or osteopathic physicians.

***Podiatry****:*The Contractor shall provide podiatry services to include bunionectomies, casting for the purpose ofconstructing or accommodating orthotics, medically necessary orthopedic shoes that are an integral part of abrace, and medically necessary routine foot care for patients with a severe systemic disease that prohibits careby a nonprofessional person.

***Post-stabilization Care Services Coverage and Payment:***Pursuant to AHCCCS Rule A.A.C. R9-22-210 and42 CFR 438.114, 422.113(c) and 422.133, the following conditions apply with respect to coverage andpayment of emergency and of post-stabilization care services, except where otherwise noted in the contract:

The Contractor must cover and pay for post-stabilization care services without authorization, regardless ofwhether the provider that furnishes the service has a contract with the Contractor, for the following situations:

1. Post-stabilization care services that were pre-approved by the Contractor; or2. Post-stabilization care services were not pre-approved by the Contractor because the Contractor   did not respond to the treating provider’s request for pre-approval within one hour after being   requested to approve such care or could not be contacted for pre-approval.3. The Contractor representative and the treating physician cannot reach agreement concerning the   member’s care and a Contractor physician is not available for consultation. In this situation, the   Contractor must give the treating physician the opportunity to consult with a Contractor physician   and the treating physician may continue with care of the patient until a Contractor physician is   reached or one of the criteria in 42 CFR 422.113(c)(3) is met.

Pursuant to 42 CFR 422.113(c)(3), the Contractor’s financial responsibility for post-stabilization care servicesthat have not been pre-approved ends when:

1. A Contractor physician with privileges at the treating hospital assumes responsibility for the   member’s care;2. A Contractor physician assumes responsibility for the member’s care through transfer;3. A Contractor representative and the treating physician reach an agreement concerning the   member’s care; or4. The member is discharged.

***Pregnancy Terminations:***AHCCCS covers pregnancy termination if the pregnant member suffers from aphysical disorder, physical injury, or physical illness, including a life endangering physical condition causedby or arising from the pregnancy itself, that would, as certified by a physician, place the member in danger ofdeath unless the pregnancy is terminated, or the pregnancy is a result of rape or incest.

The attending physician must acknowledge that a pregnancy termination has been determined medicallynecessary by submitting the Certificate of Necessity for Pregnancy Termination. This certificate must besubmitted to the Contractor’s Medical Director. The Certificate must certify that, in the physician'sprofessional judgment, one or more of the previously mentioned criteria have been met.

***Prescription Drugs:***Medications ordered by a PCP, attending physician, dentist or other authorized prescriberand dispensed under the direction of a licensed pharmacist are covered subject to limitations related toprescription supply amounts, Contractor formularies and prior authorization requirements. The Contractormay include over-the-counter medications in the formulary, as defined in the AMPM. An appropriate overthe-counter medication may be prescribed, when it is determined to be a lower-cost alternative to prescriptiondrugs.

Medicare Part D: AHCCCS covers those drugs ordered by a PCP, attending physician, dentist or otherauthorized prescriber and dispensed under the direction of a licensed pharmacist subject to limitations relatedto prescription supply amounts, and the Contractor’s prior authorization requirements if they are excluded fromMedicare Part D coverage. Medications that are covered by Part D, but are not on a specific Part D HealthPlan’s formulary are not considered excluded drugs and will not be covered by AHCCCS.

***Primary Care Provider (PCP****):*PCP services are covered when provided by a physician, physician assistant ornurse practitioner selected by, or assigned to, the member. The PCP provides primary health care and servesas a coordinator in referring the member for specialty medical services [42 CFR 438.208(b)]. The PCP isresponsible for maintaining the member’s primary medical record, which contains documentation of all healthrisk assessments and health care services of which they are aware whether or not they were provided by thePCP.

***Radiology and Medical Imaging****:*These services are covered when ordered by the member’s PCP, attendingphysician or dentist and are provided for diagnosis, prevention, treatment or assessment of a medical condition.Services are generally provided in hospitals, clinics, physician offices and other health care facilities.

***Rehabilitation Therapy****:*The Contractor shall provide occupational, physical and speech therapies. Therapiesmust be prescribed by the member’s PCP or attending physician for an acute condition and the member musthave the potential for improvement due to the rehabilitation. Physical therapy for all members, andoccupational and speech therapies for members under the age of 21, are covered in both inpatient andoutpatient settings. For those members who are 21 and over, occupational and speech therapies are covered ininpatient settings only.

***Respiratory Therapy****:*This therapy is covered in inpatient and outpatient settings when prescribed by themember’s PCP or attending physician, and is necessary to restore, maintain or improve respiratory functioning.

***Transplantation of Organs and Tissue, and Related Immunosuppressant Drugs:***These services are coveredwithin limitations defined in the *AMPM* for members diagnosed with specified medical conditions. Servicesinclude pre-transplant inpatient or outpatient evaluation; donor search; organ/tissue harvesting or procurement;preparation and transplantation services; and convalescent care. In addition, if a member receives, or hasreceived, a transplant covered by a source other than AHCCCS, medically necessary non-experimentalservices are provided, within limitations, after the discharge from the acute care hospitalization for thetransplantation. AHCCCS has contracted with transplantation providers for the Contractor’s use or theContractor may select its own transplantation provider.

***Transportation****:*These services include emergency and non-emergency medically necessary transportation.Emergency transportation, including transportation initiated by an emergency response system such as 911,may be provided by ground, air or water ambulance to manage an AHCCCS member’s emergency medicalcondition at an emergency scene and transport the member to the nearest appropriate medical facility. Non-emergency transportation shall be provided for members who are unable to provide their own transportationfor medically necessary services. The Contractor shall ensure that members have coordinated, reliable,medically necessary transportation to ensure members arrive on-time for regularly scheduled appointments andare picked up upon completion of the entire scheduled treatment.

***Triage/Screening and Evaluation****:*These are covered services when provided by acute care hospitals, IHSfacilities, a PL 93-638 tribal facility and after-hours settings to determine whether or not an emergency exists,assess the severity of the member’s medical condition and determine what services are necessary to alleviate orstabilize the emergent condition. Triage/screening services must be reasonable, cost effective and meet thecriteria for severity of illness and intensity of service.

***Vision Services/Ophthalmology/Optometry***: The Contractor shall provide all medically necessary emergencyeye care, vision examinations, prescriptive lenses, and treatments for conditions of the eye for all membersunder the age of 21. For members who are 21 years of age and older, the Contractor shall provide emergencycare for eye conditions which meet the definition of an emergency medical condition. Also covered for thispopulation is cataract removal, and medically necessary vision examinations and prescriptive lenses, ifrequired, following cataract removal and other eye conditions as specified in the *AMPM*.

Members shall have full freedom to choose, within the Contractor’s network, a practitioner in the field of eyecare, acting within the scope of their practice, to provide the examination, care or treatment for which themember is eligible. A “practitioner in the field of eye care” is defined to be either an ophthalmologist or anoptometrist.

**11.****SPECIAL HEALTH CARE NEEDS**

The Contractor shall have in place a mechanism to identify all members with special health care needs [42CFR 438.240(b)(4)]. The Contractor shall implement mechanisms to assess each member identified as havingspecial health care needs, in order to identify any ongoing special conditions of the member which require acourse of treatment or regular care monitoring. The assessment mechanisms shall use appropriate health careprofessionals [42 CFR 438.208(c)(2)]. The Contractor shall share with other entities providing services to thatmember the results of its identification and assessment of that member’s needs so that those activities need notbe duplicated [42 CFR 438.208(b)(3)].

For members with special health care needs determined to need a specialized course of treatment or regularcare monitoring, the Contractor must have procedures in place to allow members to directly access a specialist(for example through a standing referral or an approved number of visits) as appropriate for the member’scondition and identified needs [42 CFR 438.208(c)(4)].

The Contractor shall have a methodology to identify providers willing to provide medical home services andmake reasonable efforts to offer access to these providers.

The American Academy of Pediatrics (AAP) describes care from a medical home as:                • Accessible                • Continuous                • Coordinated                • Family-centered                • Comprehensive                • Compassionate                • Culturally effective

The Contractor shall ensure that populations with ongoing medical needs, including but not limited to dialysis,radiation and chemotherapy, have coordinated, reliable, medically necessary transportation to ensure membersarrive on-time for regularly scheduled appointments and are picked up upon completion of the entire scheduledtreatment.

**12.****BEHAVIORAL HEALTH SERVICES**

AHCCCS members, except for SOBRA Family Planning members, are eligible for comprehensive behavioralhealth services. For SOBRA Family Planning members, there is no behavioral health coverage. With theexception of the Contractor’s providers’ medical management of certain behavioral health conditions asdescribed under “Medication Management Services”, the behavioral health benefit for these members isprovided through the ADHS - Regional Behavioral Health Authority (RBHA) system. The Contractor shall beresponsible for member education regarding these benefits; provision of limited emergency inpatient services;and screening and referral to the RBHA system of members identified as requiring behavioral health services.

**Member Education:**The Contractor shall be responsible for educating members in the member handbook andother printed documents about covered behavioral health services and where and how to access services.Covered services include:

a. Behavior Management (behavioral health personal care, family support/home care training, self-help/peer   support)b. Behavioral Health Case Management Services (limited)c. Behavioral Health Nursing Servicesd. Emergency Behavioral Health Caree. Emergency and Non-Emergency Transportationf. Evaluation and Assessmentg. Individual, Group and Family Therapy and Counselingh. Inpatient Hospital Services (the Contractor may provide services in alternative inpatient settings that are    licensed by the Arizona Department of Health Services, Division of Assurance and Licensure, the Office    of Behavioral Health Licensure, in lieu of services in an inpatient hospital. These alternative settings must be    lower cost than traditional inpatient settings. The cost of the alternative settings will be considered in    capitation rate development)i.  Non-Hospital Inpatient Psychiatric Facilities Services (Level I residential treatment centers and sub-acute    facilities)j.  Laboratory and Radiology Services for Psychotropic Medication Regulation and Diagnosisk. Opioid Agonist Treatmentl.  Partial Care (Supervised day program, therapeutic day program and medical day program)m. Psychosocial Rehabilitation (living skills training; health promotion; supportive employment services)n. Psychotropic Medicationo. Psychotropic Medication Adjustment and Monitoringp. Respite Care (with limitations)q. Rural Substance Abuse Transitional Agency Servicesr. Screenings. Behavioral Health Therapeutic Home Care Services

**Referrals**: As specified in Section D, Paragraph 10, Scope of Services, EPSDT, the Contractor must providedevelopmental/behavioral health screenings for members up to 21 years of age in compliance with theAHCCCS periodicity schedule. The Contractor shall ensure the initiation and coordination of behavioralhealth referrals of these members to the RBHA when determined necessary through the screening process.The Contractor is responsible for RBHA referral and follow-up collaboration, as necessary, for other membersidentified as needing behavioral health evaluation and treatment. Members may also access the RBHA systemfor evaluation by self-referral or be referred by schools, State agencies or other service providers. TheContractor is responsible for providing transportation to a member’s first RBHA evaluation appointment if amember is unable to provide his/her own transportation.

**Emergency Services**: Once a member is enrolled, the Contractor is responsible for providing up to 72 hoursinpatient emergency behavioral health services to members with psychiatric or substance abuse diagnoses whoare not behavioral health recipients in accordance with AHCCCS Rule R9-22-210.01. These emergencyinpatient behavioral health services are in addition to a Contractor’s responsibility to reimburse all medicallynecessary behavioral health services received during prior period coverage. Reimbursement for court orderedscreening and evaluation services is not the responsibility of the Contractor and instead falls to the countypursuant to A.R.S. 36-545. For additional information regarding behavioral health services refer to Title 9Chapter 22 Articles 2 and 12. It is expected that the Contractor initiate a referral to the RBHA for evaluationand behavioral health recipient eligibility as soon as possible after admission.

When members present in an emergency room setting, the Contractor is responsible for all emergency medicalservices including triage, physician assessment and diagnostic tests. For members who are not ADHSbehavioral health recipients, the Contractor is responsible to provide medically necessary psychiatricconsultations or psychological consultations in emergency room settings to help stabilize the member ordetermine the need for inpatient behavioral health services. ADHS is responsible for medically necessarypsychiatric consultations provided to ADHS behavioral health recipients in emergency room settings.

**Comorbidities:**The Contractor must ensure that members with diabetes who are being discharged from theArizona State Hospital (AzSH) are issued the same brand and model of both glucometer and supplies they weretrained to use while in the facility. Care must be coordinated with the AzSH prior to discharge to ensure that allsupplies are authorized and available to the member upon discharge.

In the event that a member’s mental health status renders them incapable or unwilling to manage their medicalcondition and the member has a skilled medical need, the Contractor must arrange ongoing medically necessarynursing services.

**Coordination of Care:**The Contractor is responsible for ensuring that a medical record is established by thePCP when behavioral health information is received from the RBHA or provider about an assigned member evenif the PCP has not yet seen the assigned member. In lieu of actually establishing a medical record, suchinformation may be kept in an appropriately labeled file but must be associated with the member’s medical recordas soon as one is established. The Contractor shall require the PCP to respond to RBHA/provider informationrequests pertaining to ADHS behavioral health recipient members within 10 business days of receiving therequest. The response should include all pertinent information, including, but not limited to, current diagnoses,medications, laboratory results, last PCP visit, and recent hospitalizations. The Contractor shall require the PCP todocument or initial signifying review of member behavioral health information received from a RBHAbehavioral health provider who is also treating the member. For prior period coverage, the Contractor isresponsible for payment of all claims for medically necessary covered behavioral health services.

**Medication Management Services:**The Contractor shall allow PCPs to provide medication managementservices (prescriptions, medication monitoring visits, laboratory and other diagnostic tests necessary fordiagnosis and treatment of behavioral disorders) to members with diagnoses of depression, anxiety andattention deficit hyperactivity disorder. The Contractor shall make available, on the Contractor’s formulary,medications for the treatment of these disorders. AHCCCS has established a work group to identify bestpractices and evidence-based practice guidelines for the treatment of anxiety, depression and ADHD disorders.The Contractor shall be required to participate in the AHCCCS work group meetings. Decisions from the workgroup shall be implemented by the Contractor, and may include, but are not limited to, assuring that PCPs aretrained on and follow AHCCCS-approved evidence-based practice guidelines, implementation of monitoringprocesses and reporting of guidelines.

The Contractor may implement step therapy for behavioral health medications used for treating anxiety,depression and ADHD disorders. If the RBHA/behavioral health provider provides documentation to theContractor that step therapy has already been completed, or is medically contraindicated, the Contractor shallcontinue to provide the medication at the dosage at which the member has been stabilized, unless there issubsequently a change in medical condition of the member.

The Contractor shall ensure that training and education are available to PCPs regarding behavioral healthreferral and consultation procedures. The Contractor shall establish policies and procedures for referral andconsultation and shall describe them in its provider manual. Policies for referral must include, at a minimum,criteria, processes, responsible parties and minimum requirements no less stringent than those specified in thiscontract for the forwarding of member medical information.

**Transfer of Care:**When a PCP has initiated medication management services for a member to treat abehavioral health disorder, and it is subsequently determined by the PCP or Contractor that the member shouldbe transferred to a RBHA prescriber for evaluation and/or continued medication management services, theContractor will require and ensure that the PCP or Contractor coordinates the transfer of care. All affectedsubcontracts shall include this provision. The Contractor shall establish policies and procedures for thetransition of members who are referred to the RBHA for ongoing treatment. The Contractor shall ensure thatPCPs maintain continuity of care for these members. The policies and procedures must address, at aminimum, the following:

1. Guidelines for when a transition of the member to the RBHA for ongoing treatment is indicated.2. Protocols for notifying the RBHA of the member’s transfer, including reason for transfer, diagnostic   information, and medication history.3. Protocols and guidelines for the transfer of medical records, including but not limited to which parts of   the medical record are to be copied, timeline for making the medical record available to the RBHA,   observance of confidentiality of the member’s medical record, and protocols for responding to RBHA   requests for additional medical record information.4. Protocols for transition of prescription services, including but not limited to notification to the RBHA   of the member’s current medications and timeframes for dispensing and refilling medications during   the transition period. This coordination must ensure at a minimum, that the member does not run out   of prescribed medications prior to the first appointment with a RBHA prescriber and that all relevant   member pertinent medical information as outlined above and including the reason for transfer is   forwarded to the receiving RBHA prescriber prior to the member’s first scheduled appointment with   the RBHA prescriber.5. Contractor activities to monitor to ensure that members are appropriately transitioned to the RBHA for   care.

The Contractor shall ensure that its quality management program incorporates monitoring of the PCP’smanagement of behavioral health disorders and referral to, coordination of care with and transfer of care toRBHA providers as required under this contract.

**13.****AHCCCS GUIDELINES, POLICIES AND MANUALS**

All AHCCCS guidelines, policies and manuals are hereby incorporated by reference into this contract. Allguidelines, policies and manuals are available on the AHCCCS internet website, located at www.azahcccs.gov.The Contractor is responsible for complying with the requirements set forth within. In addition, linkages toAHCCCS Rules (Arizona Administrative Code), Statutes and other resources are also available to allinterested parties through the AHCCCS website. Upon adoption by AHCCCS, updates will be made availableto the Contractor. The Contractor shall be responsible for implementing these requirements and maintainingcurrent copies of updates.

**14.****MEDICAID SCHOOL BASED CLAIMING PROGRAM (MSBC)**

Pursuant to an Intergovernmental Agreement with the Department of Education, and a contract with a ThirdParty Administrator, AHCCCS reimburses participating school districts for specifically identified Medicaidservices when provided to Medicaid eligible children who are included under the Individuals with DisabilitiesEducation Act (IDEA). The Medicaid services must be identified in the member’s Individual Education Plan(IEP) as medically necessary for the child to obtain a public school education.

MSBC services are provided in a school setting or other approved setting specifically to allow children toreceive a public school education. They do not replace medically necessary services provided outside theschool setting or other MSBC approved alternative setting. Currently, services include audiology, therapies(OT, PT and speech/language); behavioral health evaluation and counseling; nursing and attendant care; andspecialized transportation. The Contractor’s evaluations and determinations of medical necessity shall bemade independent of the fact that the child is receiving MSBC services.

The Contractor and its providers must coordinate with schools and school districts that provide MSBC servicesto the Contractor’s enrolled members. Services should not be duplicative. Contractor case managers, workingwith special needs children, should coordinate with the appropriate school staff working with these members.Transfer of member medical information and progress toward treatment goals between the Contractor and themember’s school or school district is required as appropriate and should be used to enhance the servicesprovided to members.

**15.****PEDIATRIC IMMUNIZATIONS AND THE VACCINES FOR CHILDREN PROGRAM**

Through the Vaccines for Children Program, the Federal and State governments purchase, and make availableto providers free of charge, vaccines for AHCCCS children under age 19. The Contractor shall not utilizeAHCCCS funding to purchase vaccines for members under the age of 19. If vaccines are not available throughthe VFC Program, the Contractor shall contact the AHCCCS Division of Health Care Management, ClinicalQuality Management Unit. Any provider, licensed by the State to administer immunizations, may register withADHS as a "VFC provider" and receive free vaccines. The Contractor shall not reimburse providers for theadministration of the vaccines in excess of the maximum allowable as set by CMS, found in the AHCCCS feeschedule. The Contractor shall comply with all VFC requirements and monitor its providers to ensure that, aphysician if acting as primary care physician (PCP) to AHCCCS members under the age of 19 is registeredwith ADHS/VFC.

In some GSAs, providers may choose not to provide vaccinations due to low numbers of children in theirpanels, etc. The Contractor must develop processes to ensure that vaccinations are available through a VFCenrolled provider or through the county Health Department. In all instances, the antigens are to be providedthrough the VFC program. The Contractor must develop processes to pay the administration fee to whoeveradministers the vaccine regardless of their contract status with the Contractor.

Arizona State law requires the reporting of all immunizations given to children under the age of 19.Immunizations must be reported at least monthly to the ADHS. Reported immunizations are held in a centraldatabase known as ASIIS (Arizona State Immunization Information System), which can be accessed byproviders to obtain complete, accurate immunization records. Software is available from ADHS to assistproviders in meeting this reporting requirement. The Contractor must educate its provider network about thesereporting requirements and the use of this resource and monitor to ensure compliance.

**16.****STAFF REQUIREMENTS AND SUPPORT SERVICES**

The Contractor shall have in place the organizational, operational, managerial and administrative systemscapable of fulfilling all contract requirements. For the purposes of this contract, the Contractor shall notemploy or contract with any individual who has been debarred, suspended or otherwise lawfully prohibitedfrom participating in any public procurement activity or from participating in non-procurement activities underregulations issued under Executive Order No. 12549 or under guidelines implementing Executive Order 12549[42 CFR 438.610 (a) & (b)].

The Contractor is responsible for maintaining a significant local (within the State of Arizona) presence. Thispresence includes staff designated below with an asterisk (*). The Contractor must obtain approval fromAHCCCS prior to moving functions outside the State of Arizona. Such a request for approval must besubmitted to the Division of Health Care Management at least 60 days prior to the proposed change inoperations and must include a description of the processes in place that assure rapid responsiveness to effectchanges for contract compliance. The Contractor shall be responsible for any additional costs associated withon-site audits or other oversight activities of required functions located outside of the State of Arizona. At thebeginning of each contract year the Contractor must provide, to the Division of Health Care Management, alisting of all functions and their locations.

The Contractor must employ sufficient staffing and utilize appropriate resources to achieve contractualcompliance. The Contractor’s resource allocation must be adequate to achieve outcomes in all functional areaswithin the organization. Adequacy will be evaluated based on outcomes and compliance with contractual andAHCCCS policy requirements, including the requirement for providing culturally competent services. If theContractor does not achieve the desired outcomes or maintain compliance with contractual obligations,additional monitoring and regulatory action may be employed by AHCCCS, up to and including actionsspecified in Section D, Paragraph 72, Sanctions, of the Contract.

An individual staff member shall be limited to occupying a maximum of two of the Key Staff positions listedbelow. The Contractor shall inform AHCCCS, Division of Health Care Management, in writing within sevendays, when an employee leaves one of the Key Staff positions listed below (this requirement does not apply toAdditional Required Staff, also listed below). The name of the interim contact person should be included withthe notification. The name and resume of the permanent employee should be submitted as soon as the new hirehas taken place. At a minimum, the following staff is required:

**Key Staff**

a. ****Administrator/CEO/COO*** or designee must be available, full time, to fulfill the responsibilities of the    position and to oversee the entire operation of the Contractor. The Administrator shall devote sufficient    time to the Contractor’s operations to ensure adherence to program requirements and timely responses to    AHCCCS Administration.

b. ****Medical Director/CMO*** who shall be an Arizona-licensed physician. The Medical Director shall be    actively involved in all-major clinical programs and QM and MM components of the Contractor. The    Medical Director shall devote sufficient time to the Contractor to ensure timely medical decisions,    including after-hours consultation as needed.c. ***Chief Financial Officer/CFO*** who is available, full time, to fulfill the responsibilities of the position and    to oversee the budget and accounting systems implemented by the Contractor.d. ***Pharmacy Director/Coordinator*** who is an Arizona licensed pharmacist or physician who oversees and    administers the prescription drug and pharmacy benefits. The Pharmacy Coordinator/Director may be an    employee or Contractor of the Plan.e. ***Dental Director/Coordinator*** who is responsible for coordinating dental activities of the health plan and    providing required communication between the plan and AHCCCS. The Dental Director/Coordinator may    be an employee or Contractor of the plan and must be licensed in Arizona if they are required to review or    deny dental services.f. ****Compliance Officer*** who will implement and oversee the Contractor’s compliance program. The    compliance officer shall be an on-site management official, available to all employees, with designated    and recognized authority to access records and make independent referrals to the AHCCCS Office of    Program Integrity. See Section D, Paragraph 62, Corporate Complianceg. ****Grievance Manager*** who will manage and adjudicate member and provider disputes arising under the    Grievance System including member grievances, appeals, and requests for hearing and provider claim    disputes.h. ***Business Continuity Planning Coordinator*** as noted in the ACOM *Business Continuity and Recovery*    *Plan Policy*i. ****Contract Compliance Officer*** who will serve as the primary point-of-contact for all Contractor    operational issues.    The primary functions of the Contract Compliance Officer are:    –Coordinate the tracking and submission of all contract deliverables    –Field and coordinate responses to AHCCCS inquiries    –Coordinate the preparation and execution of contract requirements such as OFRS, random and    periodic audits and ad hoc visitsj. ****Quality Management Coordinator*** who is an Arizona-licensed registered nurse, physician or physician's    assistant or a Certified Professional in Healthcare Quality (CPHQ). The QM Coordinator must have    experience in quality management and quality improvement.    The primary functions of the Quality Management Coordinator position are:    –Ensure individual and systemic quality of care    –Integrate quality throughout the organization    –Implement process improvement    –Resolve, track and trend quality of care grievances    –Ensure a credentialed provider networkk. ***Performance/Quality Improvement Coordinator*** The Performance/Quality Improvement Coordinator will    have a minimum qualification as a Certified Professional in Healthcare Quality (CPHQ) or comparable    education and experience in data and outcomes measurement.    The primary functions of the Performance/Quality Improvement Coordinator are:    –Focus organizational efforts on improving clinical quality performance measures    –Develop and implement performance improvement projects    –Utilize data to develop intervention strategies to improve outcomes    –Report quality improvement/performance outcomesl. ****Maternal Health/EPSDT (child health) Coordinator*** who shall be an Arizona licensed nurse, physician    or physician's assistant; or have a Master's degree in health services, public health, health care    administration or other related field, and/or a Certified Professional in Health Care Quality (CPHQ).    Staffing under this position should be sufficient to meet quality and performance measure goals.    The primary functions of the MCH/EPSDT Coordinator are:    –Ensuring receipt of EPSDT services    –Ensuring receipt of maternal and postpartum care    –Promoting family planning services    –Promoting preventive health strategies    –Identification and coordination assistance for identified member needs    –Interface with community partnersm. ****Medical Management Coordinator*** who is an Arizona licensed registered nurse, physician or physician’s    assistant if required to make medical necessity determinations; or have a Master’s degree in health    services, health care administration, or business administration if not required to make medical necessity    determination.    The primary functions of the Medical Management Coordinator are:    –Ensure adoption and consistent application of appropriate inpatient and outpatient medical necessity    criteria.    –Ensure appropriate concurrent review and discharge planning of inpatient stays is conducted.    –Develop, implement and monitor the provision of care coordination, disease management and case    management functions.    –Monitor, analyze and implement appropriate interventioins based on utilization data, including    identifying and correcting over or under utilization of services.n. ****Behavioral Health Coordinator*** who shall be a behavioral health professional as described in Health    Services Rule R9-20. The Behavioral Health Coordinator shall devote sufficient time to ensure that the    Contractor’s behavioral health referral and coordination activities are implemented per AHCCCS    requirements.    The primary functions of the Behavioral Health Coordinator are:    –Coordinate member behavioral care needs with the RBHA system    –Develop processes to coordinate behavioral health care between PCPs and RBHAs    –Participate in the identification of best practices for behavioral health in a primary care setting    –Coordinate behavioral care with medically necessary serviceso. ***Member Services Manager*** who shall coordinate communications with members; serve in the role of    member advocate; coordinate issues with appropriate areas within the organization; resolve member    inquiries/problems and meet standards for resolution, telephone abandonment rates and telephone hold    times.p. ****Provider Services Manager*** who shall coordinate communications between the Contractor, its    subcontractors, IHS and tribally-operated health programs under P.L. 93-638 (Indian Self-Determination    and Education Assistance Act); provide assistance to providers in resolving problems; respond to provider    inquiries; educate providers about participation in the AHCCCS program and maintain a sufficient    provider network.q. ***Claims Administrator***    The primary functions of the Claims Administrator are:    –Develop and implement claims processing systems capable of paying claims in accordance with state    and federal requirements    –Develop processes for cost avoidance    –Ensure minimization of claims recoupments    –Meet claims processing timelines    –Meet AHCCCS encounter reporting requirementsr. ****Provider Claims Educator*** (full-time equivalent employee for a Contractor with over 100,000 members)    The position is fully integrated with the Contractor’s grievance, claims processing, and provider relations    systems and facilitates the exchange of information between these systems and providers.    The primary functions of the Provider Claims Educator are:    –Educate contracted and non-contracted providers (i.e.: professional and institutional) regarding    appropriate claims submission requirements, coding updates, electronic claims transactions and    electronic fund transfer, and available Contractor resources such as provider manuals, website, fee    schedules, etc.    –Interfaces with the Contractor’s call center to compile, analyze, and disseminate information from    provider calls    –identifies trends and guides the development and implementation of strategies to improve provider    satisfaction    –Frequently communicates (i.e.: telephonic and on-site) with providers to assure the effective exchange    of information and gain feedback regarding the extent to which providers are informed about    appropriate claims submission practices

**Additional Required Staff**

s. ***Prior Authorization staff*** to authorize health care 24 hours per day, 7 days per week. This staff shall    include an Arizona-licensed nurse, physician or physician's assistant. The staff will work under the    direction of an Arizona-licensed registered nurse, physician, or physician’s assistant.t. ****Concurrent Review staff*** to conduct inpatient concurrent review. This staff shall consist of an Arizona-licensed    nurse, physician, or physician's assistant. The staff will work under the direction of an Arizona-licensed    nurse.u. ****Clerical and Support staff*** to ensure appropriate functioning of the Contractor's operation.v. ***Member Services staff*** There shall be sufficient Member Service staff to enable members to receive    prompt resolution of their inquiries/problems.w. ****Provider Services staff*** There shall be sufficient Provider Services staff to enable providers to receive    prompt responses and assistance (See Section D, Paragraph 29, Network Management, for more    information).x. ***Claims Processing staff*** There shall be sufficient, appropriately trained, Claim Processing staff to ensure    the timely and accurate processing of original claims, resubmissions and overall adjudication of claims.y. ***Encounter Processing staff*** There shall be sufficient, appropriately trained, Encounter Processing staff to    ensure the timely and accurate processing and submission to AHCCCS of encounter data and reports.

**Staff Training and Meeting Attendance**

The Contractor shall ensure that all staff members have appropriate training, education, experience andorientation to fulfill the requirements of the position. AHCCCS may require additional staffing for aContractor that has substantially failed to maintain compliance with any provision of this contract and/orAHCCCS policies.

The Contractor must provide initial and ongoing staff training that includes an overview of AHCCCS;AHCCCS Policy and Procedure Manuals; Contract requirements and State and Federal requirements specificto individual job functions. The Contractor shall ensure that all staff members having contact with members orproviders receive initial and ongoing training with regard to the appropriate identification and handling ofquality of care/service concerns.

New and existing transportation, prior authorization and member services representatives must be trained inthe geography of any/all GSA(s) in which the Contractor holds a contract and have access to mapping searchengines (e.g. MapQuest, Yahoo Maps, Google Maps, etc) for the purposes of authorizing services in;recommending providers in; and transporting members to, the most geographically appropriate location.

The Contractor shall provide the appropriate staff representation for attendance and participation in meetingsand/or events scheduled by AHCCCS. All meetings shall be considered mandatory unless otherwise indicated.

**17.****WRITTEN POLICIES, PROCEDURES AND JOB DESCRIPTIONS**

The Contractor shall develop and maintain written policies, procedures and job descriptions for each functionalarea of its plan, consistent in format and style. The Contractor shall maintain written guidelines fordeveloping, reviewing and approving all policies, procedures and job descriptions. All policies and proceduresshall be reviewed at least annually to ensure that the Contractor's written policies reflect current practices.Reviewed policies shall be dated and signed by the Contractor's appropriate manager, coordinator, director oradministrator. Minutes reflecting the review and approval of the policies by an appropriate committee are alsoacceptable documentation. All medical and quality management policies must be approved and signed by theContractor's Medical Director. Job descriptions shall be reviewed at least annually to ensure that current dutiesperformed by the employee reflect written requirements.

Based on provider or member feedback, if AHCCCS deems a Contractor policy or process to be inefficientand/or place unnecessary burden on the members or providers, the Contractor will be required to work withAHCCCS to change the policy or procedure within a time period specified by AHCCCS.

**18.****MEMBER INFORMATION**

The Contractor shall be accessible by phone for general member information during normal business hours.All enrolled members will have access to a toll free phone number. All informational materials, prepared bythe Contractor, shall be approved by AHCCCS prior to distribution to members. The reading level and name ofthe evaluation methodology used should be included. The Contractor should refer to the ACOM *MemberInformation Policy* for further information and requirements.

All materials shall be translated when the Contractor is aware that a language is spoken by 3,000 or 10%,whichever is less, of the Contractor’s members, who also have limited English proficiency (LEP).

All vital materials shall be translated when the Contractor is aware that a language is spoken by 1,000 or 5%,whichever is less, of the Contractor’s members, who also have LEP. Vital materials must include, at aminimum, Notices of Action, vital information from the member handbooks and consent forms.

All written notices informing members of their right to interpretation and translation services in a languageshall be translated when the Contractor is aware that 1,000 or 5%, whichever is less, of the Contractor’smembers speak that language and have LEP [42 CFR 438.10(c)(3)].

Oral interpretation services must be available and free of charge to all members regardless of the prevalence ofthe language. The Contractor must notify all members of their right to access oral interpretation services andhow to access them. Refer to the ACOM *Member Information Policy* [42 CFR 438.10(c)(4) and (5)].

The Contractor shall make every effort to ensure that all information prepared for distribution to members iswritten using an easily understood language and format and as further described in the AHCCCS *MemberInformation Policy*. Regardless of the format chosen by the Contractor, the member information must beprinted in a type, style and size, which can easily be read by members with varying degrees of visualimpairment. The Contractor must notify its members that alternative formats are available and how to accessthem [42 CFR 438.10(d)].

When there are program changes, notification shall be provided to the affected members at least 30 days beforeimplementation.

The Contractor shall produce and provide the following printed information to each member or family within10 days of receipt of notification of the enrollment date [42 CFR 438.10(f)(3)]:

I. A member handbook which, at a minimum, shall include the items listed in the ACOM *Member*   *Information Policy.*

   The Contractor shall review and update the Member Handbook at least once a year. The handbook must be   submitted to AHCCCS, Division of Health Care Management for approval by August 15th of each   contract year, or within four weeks of receiving the annual renewal amendment, whichever is later.

II. A description of the Contractor’s provider network, which at a minimum, includes those items listed in the   ACOM *Member Information Policy.*

The Contractor must give written notice about termination of a contracted provider, within 15 days afterreceipt or issuance of the termination notice, to each member who received their primary care from, or is seenon a regular basis by, the terminated provider. Affected members must be informed of any other changes inthe network 30 days prior to the implementation date of the change [42 CFR 438.10(f)(4) and (5)]. TheContractor shall have information available for potential enrollees as described in the ACOM *MemberInformation Policy.*

The Contractor must develop and distribute, at a minimum, quarterly newsletters during the contract year. Thefollowing types of information are to be contained in the newsletter:

            •Educational information on chronic illnesses and ways to self-manage care               •Reminders of flu shots and other prevention measures at appropriate times               •Medicare Part D issues               •Cultural Competency               •Contractor specific issues               •Tobacco cessation information               •HIV/AIDS testing for pregnant women               •Other information as required by the Administration

The Contractor will, on an annual basis, inform all members of their right to request the following information[42 CFR 438.10(f)(6) and 42 CFR 438.100(a)(1) and (2)]:

                a. An updated member handbook at no cost to the member                b. The network description as described in the ACOM *Member Information Policy*

This information may be sent in a separate written communication or included with other written informationsuch as in a member newsletter.

**19.****SURVEYS**

The Contractor may be required to perform its own annual general or focused member survey. All suchContractor surveys, along with a timeline for the project, shall be approved in advance by AHCCCS DHCM.The results and the analysis of the results shall be submitted to the Acute Care Operations Unit within 45 daysof the completion of the project. AHCCCS may require inclusion of certain questions.

AHCCCS may periodically conduct surveys of a representative sample of the Contractor's membership andproviders. AHCCCS will consider suggestions from the Contractor for questions to be included in eachsurvey. The results of these surveys, conducted by AHCCCS, will become public information and available toall interested parties upon request. The draft reports from the surveys will be shared with the Contractor priorto finalization. The Contractor will be responsible for the cost of these surveys based on its share of AHCCCSenrollment.

**20.****CULTURAL COMPETENCY**

The Contractor shall have a Cultural Competency Plan that meets the requirements of the ACOM *CulturalCompetency Policy*. An annual assessment of the effectiveness of the plan, along with any modifications to theplan, must be submitted to the Division of Health Care Management, no later than 45 days after the start ofeach contract year. This plan should address all services and settings [42 CFR 438.206(c)(2)].

**21.****MEDICAL RECORDS**

The member's medical record is the property of the provider who generates the record. Each member is entitledto one copy of his or her medical record free of charge. The Contractor shall have written policies andprocedures to maintain the confidentiality of all medical records.

The Contractor is responsible for ensuring that a medical record is established when information is received abouta member. If the PCP has not yet seen the member, such information may be kept temporarily in anappropriately labeled file, in lieu of establishing a medical record, but must be associated with the member’smedical record as soon as one is established.

The Contractor shall have written policies and procedures for the maintenance of medical records so that thoserecords are documented accurately and in a timely manner, are readily accessible, and permit prompt andsystematic retrieval of information.

The Contractor shall have written standards for documentation on the medical record for legibility, accuracy andplan of care, which comply with the *AMPM*.

The Contractor shall have written plans for providing training and evaluating providers' compliance with theContractor's medical records standards. Medical records shall be maintained in a detailed and comprehensivemanner, which conforms to good professional medical practice, permits effective professional medical reviewand medical audit processes, and which facilitates an adequate system for follow-up treatment. Medical recordsmust be legible, signed and dated.

When a member changes PCPs, his or her medical records or copies of medical records must be forwarded to thenew PCP within 10 business days from receipt of the request for transfer of the medical records.

AHCCCS is not required to obtain written approval from a member, before requesting the member's medicalrecord from the PCP or any other agency. The Contractor may obtain a copy of a member's medical recordswithout written approval of the member, if the reason for such request is directly related to the administration ofthe AHCCCS program. AHCCCS shall be afforded access to all members' medical records whether electronic orpaper within 20 business days of receipt of request.

Information related to fraud and abuse may be released so long as protected HIV-related information is notdisclosed (A.R.S. §36-664(I)).

**22.****ADVANCE DIRECTIVES**

In accordance with 42 CFR 422.128, the Contractor shall maintain policies and procedures addressingadvanced directives for adult members that specify:

1. Each contract or agreement with a hospital, nursing facility, home health agency, hospice or organization   responsible for providing personal care, must comply with Federal and State law regarding advance   directives for adult members [42 CFR 438.6(i)(1)]. Requirements include:

a) Maintaining written policies that address the rights of adult members to make decisions about medical   care, including the right to accept or refuse medical care, and the right to execute an advance directive.   If the agency/organization has a conscientious objection to carrying out an advance directive, it must   be explained in policies. (A health care provider is not prohibited from making such objection when   made pursuant to A.R.S. § 36-3205.C.1.)b) Provide written information to adult members regarding each individual’s rights under State law to   make decisions regarding medical care, and the health care provider's written policies concerning   advance directives (including any conscientious objections) [42 CFR 438.6(i)(3)]c) Documenting in the member’s medical record whether or not the adult member has been provided the   information and whether an advance directive has been executed.d) Not discriminating against a member because of his or her decision to execute or not execute an   advance directive, and not making it a condition for the provision of care.e) Providing education to staff on issues concerning advance directives including notification of direct   care providers of services, such as home health care and personal care, of any advanced directives   executed by members to whom they are assigned to provide services.

2. The Contractor shall require subcontracted PCPs, which have agreements with the entities described in   paragraph 1 above, to comply with the requirements of subparagraphs 1 (a) through (e) above. The   Contractor shall also encourage health care providers specified in subparagraph a. to provide a copy of the   member’s executed advanced directive, or documentation of refusal, to the member’s PCP for inclusion in   the member’s medical record.

3. The Contractor shall provide written information to adult members that describe the following:

a) A member’s rights under State law, including a description of the applicable State law.b) The organization’s policies respecting the implementation of those rights, including a statement of any   limitation regarding the implementation of advance directives as a matter of conscience.c) The member’s right to file complaints directly with AHCCCS.d) Changes to State law as soon as possible, but no later than 90 days after the effective date of thechange [42 CFR 438.6(i)(4)].

**23.****QUALITY MANAGEMENT (QM)**

The Contractor shall provide quality medical care and services to members, regardless of payer source oreligibility category. The Contractor shall promote improvement in the quality of care provided to enrolledmembers through established quality management and performance improvement processes. The Contractorshall execute processes to assess, plan, implement and evaluate quality management and performance

improvement activities, as specified in the AMPM [42 CFR 438.240(a)(1) and (e)(2)].

The Contractor quality assessment and performance improvement programs, at a minimum, shall comply withthe requirements outlined in the AMPM and this Paragraph.

A. Quality Management Program:The Conractor shall have an ongoing quality management program for the services it furnishes to membersthat includes the requirements listed in AMPM Capter 900 and the following:1. A written Quality Assessment and Performance Improvement (QA/PI) plan, an evaluation of the   previous year’s QA/PI program, and Quarterly QA/PI reports that address its strategies for   performance improvement and conducting the quality management activites.2. QM/PI Program monitoring and evaluation activites that includes Peer Review and Quality   Management Committees chaired by the Contractor’s Chief Medical Officer.3. Protection of medical records and any other personal health and enrollment information that identifies   a particular member or subset of members in accordance with Federal and State privacy requirements.4. Member rights and responsibilities.5. Uniform provisional credentialing, initial credentialing, re-credentialing and organizational credential   verification [42 CFR 438.206(b)(6)]. The Contractor shall demonstrate that its providers are   credentialed and reviewed through the Contractor’s Credentialing Committee that is chaired by the   Contractor’s Medical Director [42 CFR 438.214]. The Contractor should refer to Section D, Paragraph25, Administrative Performance Standards, and Attachement F, Periodic Report Requirements, for   reporting requirements. The process:                a. Shall follow a documented process for provisional credentialing, initial credentialing, recredentialing                   and organizational credential verification of providers who have signed                   contracts or participation agreements with the Contractor;                b. Shall not discriminate against particular providers that serve high-risk populations or                   specialize in conditions that require costly treatment;                c. Shall not employ or contract with providers excluded from participation in Federal health care                   programs.6. Tracking and trending of member and provider issues, which includes investigation and analysis of   quality of care issues, abuse, neglect and unexpected deaths. The resolution process must include:                a. Acknowledgement letter to the originator of the concern;                b. Documentation of all steps utilized during the investigation and resolution process;                c. Follow-up with the member to assist in ensuring immediate health care needs are met;                d. Closure/resolution letter that provides sufficient detail to ensure that the member has an                   understanding of the resolution of their issue, any responsibilities they have in ensuring all                   covered, medically necessary care needs are met, and a Contractor contact name/telephone                   number to call for assistance or to express any unresolved concerns;                e. Documentation of implemented corrective action plan(s) or action(s) taken to resolve the                   concern;                f. Analysis of the effectiveness of the interventions taken.7. Mechanisms to assess the quality and appropriateness of care furnished to members with special   health care needs.8. Participation in community initiatives including applicable activities of the Medicare Quality   Improvement Organization (QIO).9. Performance improvement programs including performance measures and performance improvement   projects.

B. Performance Improvement:The Contractor’s quality management program shall be designed to achieve, through ongoing measurementsand intervention, significant improvement, sustained over time, in the areas of clinical care and non-clinicalcare that are expected to have a favorable effect on health outcomes and member satisfaction. The Contractormust [42 CFR 438.240(b)(2) and (c)]:                1. Measure and report to the State its performance, using standard measures required by the State, or as                   required by CMS;                2. Submit to the State data specified by the State, that enables the State to measure the Contractor’s                   performance; or                3. Perform a combination of the activities.

*I. Performance Measures:*

The Contractor shall comply with AHCCCS quality management requirements to improve performance for allAHCCCS established performance measures. Complete descriptions of the AHCCCS clinical qualityPerformance Measure can be found in the most recently published reports of acute-care performance measureslocated on the AHCCCS website. AHCCCS uses Healthcare Effectiveness Data and Information Set (alsoknown as the Health Plan Employer Data and Information Set, or HEDIS) technical specifications from theNational Committee for Quality Assurance (NCQA) for all clinical quality performance Measures. The onlyexception to AHCCCS’ use of the HEDIS methodology is in the performance measure titled “EPSDTParticipation”. AHCCCS bases the measurement of EPSDT Participation on the methodology established inCMS “Form 416” which can be found on the CMS website (www.cms.hhs.gov).

Contractors must comply with national performance measures and levels that may be identified and developedby the Centers for Medicare and Medicaid Services in consultation with AHCCCS and/or other relevantstakeholders. CMS has been working in partnership with states in developing core performance measures forMedicaid and SCHIP programs. The current AHCCCS-established performance measures may be subject tochange when these core measures are finalized and implemented.

AHCCCS intends to implement a hybrid methodology for collecting and reporting Performance Measure rates,as allowed by NCQA, for selected HEDIS measures. Contractors shall collect data from medical records andprovide these data with supporting documentation, as instructed by AHCCCS, for each hybrid measure asrequested. The number of records that each Contractor will be required to collect will be based on HEDISsampling guidelines and may be affected by the Contractor’s previous rate for the measure being collected.

AHCCCS may begin implementation of the hybrid methodology with the following measures: AdolescentImmunizations, Cervical Cancer Screening and Timeliness of Prenatal Care. AHCCCS may implement hybridmethodology for collecting and reporting additional measures in this, or future, contract years.

In addition, the Contractor must have in place a process for internal monitoring of Performance Measure rates,using a standard methodology established or adopted by AHCCCS, for each required Performance Measure.The Contractor’s Quality Assessment/Performance Improvement Program will report its performance on anongoing basis to its Administration. It also will report this Performance Measure data to AHCCCS inconjunction with its Quarterly EPSDT and Adult Quarterly Monitoring Report.

The Contractor must meet AHCCCS stated Minimum Performance Standards for each population/eligibilitycategory for which AHCCCS reports results. However, it is equally important that the Contractor continuallyimprove performance measure outcomes from year to year. The Contractor shall strive to meet the goalestablished by AHCCCS.

                ***Minimum Performance Standard*** – A Minimum Performance Standard (MPS) is the minimal                expected level of performance by the Contractor. If a Contractor does not achieve this standard, the                Contractor will be required to submit a corrective action plan and may be subject to a sanction of up to                $100,000 dollars for each deficient measure.

***                Goal***– If the Contractor has already met or exceeded the AHCCCS Minimum PerformanceStandard                for any measure, the Contractor must strive to meet the established Goal for the measure(s).

A Contractor must show demonstrable and sustained improvement toward meeting AHCCCS PerformanceStandards. AHCCCS may impose sanctions on Contractors that do not show statistically significantimprovement in a measure rate and require the Contractor to demonstrate that they are allocating increasedadministrative resources to improving rates for a particular measure or service area. AHCCCS also mayrequire a corrective action plan and may sanction any Contractor that shows a statistically significant decreasein its rate, even if it meets or exceeds the Minimum Performance Standard.

An evidence-based corrective action plan must be received by AHCCCS within 30 days of receipt ofnotification of the deficiency from AHCCCS. This plan must be approved by AHCCCS prior toimplementation. AHCCCS may conduct one or more follow-up on-site reviews to verify compliance with acorrective action plan.

All Performance Measures apply to all member populations [42 CFR 438.240(a)(2), (b)(2) and (c)]. AHCCCSmay analyze and report results by line of business, by GSA or county, and/or applicable demographic factors.

AHCCCS has established standards for the measures listed below.

The following table identifies the Minimum Performance Standards (MPS) and Goals for each measure:

**                                Acute-care ContractorPerformance Standards**

**Performance Measure****                      Minimum Performance Standard    Goal (Health People Goals)**

Immunization of Two-year-olds4:3:1:3:3:1Series                                                  82%                                                       80%4:3:1:3:3:1:4Series                                               43%                                                       80%DTaP - 4doses                                                    85%                                                       90%Polio - 3 doses(*)                                               90%                                                       90%MMR - 1 dose(*)                                               90%                                                       90%Hib - 3 doses(*)                                                  86%                                                       90%HBV - 3 doses(*)                                                90%                                                       90%Varicella - 1 dose(*)                                           86%                                                       90%PCV – 4 doses(*)                                               47%                                                       90%Adolescent Immunizations(1)                           TBD                                                       90%

Children’s Dental Visits 2 to 21

Years                                                                     55%                                                       57%Well-child Visits 15 Months                             65%                                                       90%Well-child Visits 3 - 6 Years                              64%                                                       80%Adolescent Well-care Visits                             41%                                                       50%EPSDTParticipation                                           68%                                                       80%Children's Access to PCPs 24 Months             93%                                                       97%Children's Access to PCPs 25 months-6Years                                                   83%                                                       97%Children’s Access to PCPs 7-11Years                                                                     83%                                                       97%Children's Access to PCPs 12-19 Years           81%                                                       97%Cervical Cancer Screening                                 65%                                                       90%Breast Cancer Screening                                    54%                                                       70%Adult Preventive/AmbulatoryCare 20-44Years                                                  78%                                                       96%Adult Preventive/AmbulatoryCare 45-64Years                                                  85%                                                       96%Timeliness of Prenatal Care                               80%                                                       90%ChlamydiaScreening                                          51%                                                       62%Appropriate Medications for Asthma             86%                                                       93%Diabetes Care: Hb A1c Testing                        77%                                                       89%Diabetes Care: Eye Exam                                    49%                                                       68%Diabetes Care: LDL-C Screening                      81%                                                       91%

**Notes:******Contractor Performance is evaluated annually on the AHCCCS-reported rate for each measure. Ratesfor measures that include only members under 21 years of age are reported and evaluated separatelyfor Title XIX and Title XXI eligibility groups.

The MPS is based on the national HEDIS Medicaid mean for 2006 as reported by NCQA or, if themost recent AHCCCS statewide average is greater than the national Medicaid mean, the MPS is basedon the AHCCCS statewide average for Medicaid members.

Goals are based on Healthy People 2010 Objectives; if there was no comparable objective set for aparticular measure, the most recent HEDIS 90thpercentile rate for Medicaid plans nationally was usedas the benchmark.

(*) AHCCCS will continue to measure and report results of these individual antigens; however, aContractor may not be held accountable for specific Performance Standards unless AHCCCSdetermines that completion of a specific antigen or antigens is affecting overall completion of thechildhood immunization series.

(1) NCQA is in the process of making revisions to the measure, and current AHCCCS data is not yetavailable.

The Contractor shall participate in immunization audits, at intervals specified by AHCCCS, based on randomsampling to verify the immunization status of members at 24 months of age. If records are missing for morethan 5 percent of the Contractor’s final sample, the Contractor is subject to sanctions by AHCCCS. AnExternal Quality Review Organization (EQRO) may conduct a study to validate the Contractor’s reportedrates.

In addition, AHCCCS shall measure and report the Contractor’s EPSDT Participation Rate, utilizing the CMS416 methodology. The Contractor must take affirmative steps to increase member participation in the EPSDTprogram. The EPSDT participation rate is the number of children younger than 21 years receiving at least onemedical screen during the contract year, compared to the number of children expected to receive at least onemedical screen. The number of children expected to receive at least one medical screen is based on theAHCCCS EPSDT periodicity schedule and the average period of eligibility.

The Contractor must monitor rates for postpartum visits and low/very low birth weight deliveries andimplement interventions as necessary to improve or sustain these rates. These activities will be monitored byAHCCCS during the Operational and Financial Review.

*II. Performance Improvement Program:*

The Contractor shall have an ongoing program of performance improvement projects that focus on clinical andnon-clinical areas as specified in the AMPM, and that involve the following [42 CFR 438.240(b)(1) and(d)(1)]:

1. Measurement of performance using objective quality indicators.2. Implementation of system interventions to achieve improvement in quality3. Evaluation of the effectiveness of the interventions.4. Planning and initiation of activities for increasing or sustaining improvement.

The Contractor shall report the status and results of each project to AHCCCCS as requested. Eachperformance improvement project must be completed in a reasonable time period so as to generally allowinformation on the success of performance improvement projects in the aggregate to produce new informationon quality of care every year [42 CFR 438.240(d)(2)].

*III. Data Collection Procedures:*

When requested, the Contractor must submit data for standardized Performance Measures and/or PerformanceImprovement Projects as required by AHCCCS within specified timelines and according to AHCCCSprocedures for collecting and reporting the data. Contractor is responsible for collecting valid and reliable dataand using qualified staff and personnel to collect the data. Data collected for Performance Measures and/orPerformance Improvement Projects must be returned by the Contractor in the format and according toinstructions from AHCCCS, by the due date specified. Any extension for additional time to collect and reportdata must be made in writing in advance of the initial due date. Failure to follow the data collection andreporting instructions that accompany the data request may result in sanctions imposed on the Contractor.

**24. MEDICAL MANAGEMENT (MM)**

The Contractor shall execute processes to assess, plan, implement and evaluate medical management activities,as specified in the *AMPM* Chapter 1000, Utilization Management*,* that include at least the following:

1. Pharmacy Management; including the evaluation, reporting, analysis and interventions based on the dataand reported through the MM Committee.2. Prior authorization and Referral Management;For the processing of requests for initial and continuing authorizations of services the Contractor shall:                a) Have in effect mechanisms to ensure consistent application of review criteria for                   authorization decisions;                b) Consult with the requesting provider when appropriate [42 CFR 438.210(b)(2)];                c) Monitor and ensure that all enrollees with special health care needs have direct access to care.3. Development and/or Adoption of Practice Guidelines [42 CFR 438.236(b)], that                a) Are based on valid and reliable clinical evidence or a consensus of health care professionals                   in the particular field;                b) Consider the needs of the Contractor’s members;                c) Are adopted in consultation with contracting health care professionals;                d) Are reviewed and updated periodically as appropriate;                e) Are disseminated by the Contractor to all affected providers and, upon request, to enrollees                   and potential enrollees [42 CFR 438.236(c)];                f) Provide a basis for consistent decisions for utilization management, member education,                   coverage of services, and other areas to which the guidelines apply [42 CFR 438.236(d)].4. Concurrent review:                a) Consistent application of review criteria; Provide a basis for consistent decisions for                   utilization management, coverage of services, and other areas to which the guidelines apply;                b) Discharge planning.5. Continuity and coordination of care;6. Monitoring and evaluation of over and/or under utilization of services [42 CFR 438-240(b)(3)];7. Evaluation of new medical technologies, and new uses of existing technologies;8. Disease Management or Chronic Care Program that reports results and provides for analysis of the program   through the MM Committee; and9. Quarterly Utilization Management Report (details in the *AMPM*)10. Within the first two years of the contract term, the Contractor must review all prior authorization   requirements for services, items or medications and submit a report to AHCCCS providing the rationale for the   requirements. AHCCCS shall determine and provide a format for the report.

The Contractor shall have a process to report MM data and management activities through a MM Committee.The Contractor’s MM committee will analyze the data, make recommendations for action, monitor theeffectiveness of actions and report these findings to the committee. The Contractor shall have in effectmechanisms to assess the quality and appropriateness of care furnished to members with special health careneeds [42 CFR 438.240(b)(4)].

The Contractor will assess, monitor and report quarterly through the MM Committee medical decisions toassure compliance with Notice of Action timeliness, language and content, and that the decisions comply withall Contractor coverage criteria. This includes quarterly evaluation of all Notice of Action decisions that aremade by a subcontracted entity.

The Contractor shall maintain a written MM plan that addresses its plan for monitoring MM activitiesdescribed in this section. The plan must be submitted for review by AHCCCS Division of Health CareManagement within timelines specified in Attachment F.

In addition to care coordination as specified in this contract, the Contractor must proactively provide carecoordination for members who have multiple complaints regarding services or the AHCCCS Program. Thisincludes, but is not limited to**,** members who do not meet the Contractor's criteria for case management as wellas members who contact governmental entities for assistance, including AHCCCS.

**25.****ADMINISTRATIVE PERFORMANCE STANDARDS**

This paragraph contains requirements for the Contractor’s Member Services, Provider Services and ClaimsServices telephonic performance; as well as the measurement of credentialing timeliness. All reported data issubject to validation through periodic audit and/or Operational and Financial Review.

***Telephone Standards***

The maximum allowable speed of answer (SOA) is 45 seconds. The SOA is defined as the on line wait time inseconds that the member/provider waits from the moment the call is connected in the Contractor’s phoneswitch until the call is picked up by a Contractor representative or Interactive Voice Recognition System(IVR). If the Contractor has IVR capabilities, callers must be given the choice of completing their call by IVRor by Contractor representative.

The Contractor shall meet the following standards for its member services and centralized provider telephoneline statistics. All calls to the line shall be included in the measure.                a. The Monthly Average Abandonment Rate shall be 5% or less;                b. First Contact Call Resolution shall be 70% or better; and                c. The Monthly Average Service Level shall be 75% or better.

The Monthly Average Abandonment Rate (AR) is:

Number of calls abandoned in a 24-hour periodTotal number of calls received in a 24-hour period

The ARs are then summed and divided by the number of days in the reporting period.

First Contact Call Resolution Rate (FCCR) is:

                Number of calls received in 24-hour period for which no follow up communication or internal                phone transfer is needed, divided by Total number of calls received in 24-hour period

The daily FCCRs are then summed and divided by the number of days in the reporting period.

The Monthly Average Service Level (MASL) is:

Calls answered within 45 seconds for the month reportedTotal of month’s answered calls + month’s abandoned calls + (if available) month’s calls receiving a busy signal

Note: Do **not** use average daily service levels divided by the days in the reporting period.

On a monthly basis the measures are to be reported for both the Member Services and Provider telephone lines.For each of the Administrative Measures a. through c., the Contractor shall also report the number of days inthe reporting period that the standard was not met. The Contractor shall include in the report the instances ofdown time for the centralized telephone lines, the dates of occurrence and the length of time they were out ofservice. The reports should be sent to the Contractor's assigned Operations and Compliance Officer in theAcute Care Operations Unit of the Division of Health Care Management. The deadline for submission of thereports is the 15th day of the month following the reporting period (or the first business day following the15th). Back up documentation for the report, to the level of measured segments in the 24-hour period, shall beretained for a rolling 12-month period. AHCCCS will review the performance measure calculation proceduresand source data for this report.

***Credentialing Timeliness***

The Contractor is required to process credentialing applications in a timely manner. To assess the timeliness ofprovisional and initial credentialing a Contractor will divide the number of complete applications processed(approved/denied) during the time period by the number of complete applications that were received during thetime period, as follows:

Complete applications processedComplete applications received

The standards for processing are listed by category below:

Type of Credentialing         14 days                  90days                  120days                                180 daysProvisional                            100%Initial                                                                     90%                       95%                                        100%

The Contractor will also report the following information with regard to all credentialing applications on aquarterly basis, as specified in Attachment F, Periodic Report Requirements:

                1. Number of applications received                2. Number of completed applications received (separated by type: provisional, initial)                3. Number of completed provisional credentialing applications approved                4. Number of completed provisional credentialing applications denied                5. Number of initial credentialing applications approved                6. Number of initial credentialing applications denied                7. Number of initial (include provisional in this number) applications processed within 90, 120, 180 days

**26.****GRIEVANCE SYSTEM**

The Contractor shall have in place a written grievance system process for subcontractors, enrollees and non-ontracted providers, which defines their rights regarding disputed matters with the Contractor. TheContractor’s grievance system for enrollees includes a grievance process (the procedures for addressingenrollee grievances), an appeals process and access to the state’s fair hearing process. The Contractor shallprovide the appropriate personnel to establish implement and maintain the necessary functions related to thegrievance systems process. Refer to Attachments H(1) and H(2) for *Enrollee Grievance System* and *ProviderGrievance System Standards and Policy*, respectively.

The Contractor may delegate the grievance system process to subcontractors, however, the Contractor mustensure that the delegated entity complies with applicable Federal and State laws, regulations and policies,including, but not limited to 42 CFR Part 438 Subpart F. The Contractor shall remain responsible forcompliance with all requirements. The Contractor shall also ensure that it timely provides written informationto both enrollees and providers, which clearly explains the grievance system requirements. This informationmust include a description of: the right to a state fair hearing, the method for obtaining a state fair hearing, therules that govern representation at the hearing, the right to file grievances, appeals and claim disputes, therequirements and timeframes for filing grievances, appeals and claim disputes, the availability of assistance inthe filing process, the toll-free numbers that the enrollee can use to file a grievance or appeal by phone, thatbenefits will continue when requested by the enrollee in an appeal or state fair hearing request concerningcertain actions which are timely filed, that the enrollee may be required to pay the cost of services furnishedduring the appeal/hearing process if the final decision is adverse to the enrollee, and that a provider may file anappeal on behalf of an enrollee with the enrollee’s written consent. Information to enrollees must meet culturalcompetency and limited English proficiency requirements as specified in Section D, Paragraph 18, MemberInformation, and Section D, Paragraph 20, Cultural Competency.

The Contractor shall be responsible to provide the necessary professional, paraprofessional and clericalservices for the representation of the Contractor in all issues relating to the grievance system and any othermatters arising under this contract which rise to the level of administrative hearing or a judicial proceeding.Unless there is an agreement with the State in advance, the Contractor shall be responsible for all attorney feesand costs awarded to the claimant in a judicial proceeding.

The Contractor will provide reports on the Grievance System as required in the Grievance System ReportingGuide available on the AHCCCS website.

**27.****NETWORK DEVELOPMENT**

The Contractor shall develop and maintain a provider network that is designed to support a medical home formembers and sufficient to provide all covered services to AHCCCS members [42 CFR 438.206(b)(1)]. It shallensure covered services are provided promptly and are reasonably accessible in terms of location and hours ofoperation [42 CFR 438.206(c)(1)(i) and (ii)]. There shall be sufficient personnel for the provision of coveredservices, including emergency medical care on a 24-hour-a-day, 7-days-a-week basis [42 CFR 438.206(c)(1)(iii)].

The network shall be sufficient to provide covered services within designated time and distance limits. ForMaricopa and Pima Counties only, this includes a network such that 95% of its members residing within theboundary area of metropolitan Phoenix and Tucson do not have to travel more than 5 miles to visit a PCP, dentistor pharmacy. Additionally, a Contractor in Maricopa and/or Pima counties must have at least one contractedhospital in each of the service districts specified in Attachment B. In rural counties the contractor must have asufficient network of physicians to provide adequate inpatient and outpatient services to the Contractor’smembers.. For inpatient services Hospitalists may satisfy this requirement. See Attachment B for GSAspecific requirements.

The Contractor is expected to design a network that provides a geographically convenient flow of patientsamong network providers. The provider network shall be designed to reflect the needs and servicerequirements of AHCCCS’s culturally and linguistically diverse member population. The Contractor shalldesign their provider networks to maximize the availability of community based primary care and specialtycare access and that reduces utilization of emergency services, one day hospital admissions, hospital basedoutpatient surgeries when lower cost surgery centers are available, and hospitalization for preventable medicalproblems. The Contractor must provide a comprehensive provider network that ensures its membership hasaccess at least equal to community norms. Services shall be as accessible to AHCCCS members in terms oftimeliness, amount, duration and scope as those services are available to non-AHCCCS persons within the sameservice area [42 CFR 438.210(a)(2)]. The Contractor is expected to consider the full spectrum of care whendeveloping its network. The Contractor is encouraged to have available non-emergent after-hours physician orprimary care services within its network. The Contractor must also consider communities whose residentstypically receive care in neighboring states/border communities. If the Contractor is unable to provide anyservices locally, it must notify AHCCCS and shall provide reasonable alternatives for members to access care.These alternatives must be approved by AHCCCS. If the Contractor’s network is unable to provide medicallynecessary services required under contract, the Contractor must adequately and timely cover these servicesthrough an out of network provider until a network provider is contracted. The Contractor and out of networkprovider must coordinate with respect to authorization and payment issues in these circumstances [42 CFR438.206(b)(4) and (5)].

The Contractor must pay all AHCCCS registered Arizona Early Intervention Program (AzEIP) providers,regardless of their contract status with the Contractor, when Individual Family Service Plans identify and meetthe requirement for medically necessary EPSDT covered services.

The Contractor is also encouraged to develop non-financial incentive programs to increase participation in itsprovider network.

AHCCCS is committed to workforce development and support of the medical residency and dental studenttraining programs in the state of Arizona. AHCCCS expects the Contractor to support these efforts. AHCCCSencourages plans to contract with or otherwise support the many Graduate Medical Education (GME)Residency Training Programs currently operating in the state and to investigate opportunities for residentparticipation in Contractor medical management and committee activities. In the event of a contracttermination between the Contractor and a Graduate Medical Education Residency Training Program or trainingsite, the Contractor may not remove members from that program in such a manner as to harm the stability ofthe program. AHCCCS reserves the right to determine what constitutes risk to the program. If a ResidencyTraining Program is in need of patients in order to maintain accreditation, AHCCCS may require a Contractorwithin the program’s GSA to make members available to the program. Further, the Contractor must attempt tocontract with graduating residents and providers that are opening new practices in, or relocating to, Arizona,especially in rural or underserved areas.

The Contractor shall not discriminate with respect to participation in the AHCCCS program, reimbursement orindemnification against any provider based solely on the provider’s type of licensure or certification [42 CFR438.12(a)(1)]. In addition, the Contractor must not discriminate against particular providers that service high-riskpopulations or specialize in conditions that require costly treatment [42 CFR 438.214(c)]. This provision,however, does not prohibit the Contractor from limiting provider participation to the extent necessary to meet theneeds of the Contractor’s members. This provision also does not interfere with measures established by theContractor to control costs consistent with its responsibilities under this contract [42 CFR 438.12(b)(1)]. If aContractor declines to include individual or groups of providers in its network, it must give the affected providerstimely written notice of the reason for its decision [42 CFR 438.12(a)(1)]. The Contractor may not includeproviders excluded from participation in Federal health care programs, under either section 1128 or section1128A of the Social Security Act [42 CFR 438.214(d)].

See Attachment B, Minimum Network Requirements, for details on network requirements by Geographic ServiceArea.

***Provider Network Development and Management Plan:***The Contractor shall develop and maintain a providernetwork development and management plan, which ensures that the provision of covered services will occur asstated above. The requirements for the Network Development and Management Plan are found in the ACOM*Provider Network Development and Management Plan Policy* [42 CFR 438.207(b)]. This plan shall be updatedannually and submitted to AHCCCS, Division of Health Care Management, 45 days from the start of eachcontract year.

**28.****PROVIDER AFFILIATION TRANSMISSION**

The Contractor shall submit information quarterly regarding its provider network. This information shall besubmitted in the format described in the *Provider Affiliation Transmission User Manual* on October 15, January15, April 15, and July 15 of each contract year. The manual may be found on the AHCCCS website. If theprovider affiliation transmission is not timely, accurate and complete, the Contractor may be required to submit acorrective action plan and may be subject to sanction.

**29.****NETWORK MANAGEMENT**

The Contractor shall have policies on how the Contractor will [42 CFR 438.214(a)]:

a. Communicate with the network regarding contractual and/or program changes and requirements;b. Monitor network compliance with policies and rules of AHCCCS and the Contractor, including compliance   with all policies and procedures related to the grievance process and ensuring the member’s care is not   compromised during the grievance process;c. Evaluate the quality of services delivered by the network;d. Provide or arrange for medically necessary covered services should the network become temporarily   insufficient within the contracted service area;e. Monitor the adequacy, accessibility and availability of its provider network to meet the needs of its members,   including the provision of care to members with limited proficiency in English;f. Process expedited and temporary credentials;g. Recruit, select, credential, re-credential and contract with providers in a manner that incorporate quality   management, utilization, office audits and provider profiling;h. Provide training for its providers and maintain records of such training;i. Track and trend provider inquiries/complaints/requests for information and take systemic action as necessary   and appropriate;j. Ensure that provider calls are acknowledged within 3 business days of receipt; resolved and the result   communicated to the provider within 30 business days of receipt.

Contractor policies shall be subject to approval by AHCCCS, Division of Health Care Management, and shallbe monitored through operational audits.

The Contractor is required to obtain prior approval from AHCCCS, DHCM regarding material changes tooperations. A material change to operations is defined as any change in overall business operations (i.e.,policy, process, protocol, etc.) that could have an impact on or reasonably be foreseen to have an impact onmore than 5% of the members and/or providers. The Contractor must submit the request for approval ofmaterial change, including draft notification to affected members and providers, 60 days prior to the expectedimplementation of the change. The request should contain, at a minimum, information regarding the nature ofthe change; the reason for the change; methods of communication to be used; and the anticipated effectivedate. If AHCCCS does not respond to the Contractor within 30 days; the request and the notices are deemedapproved. A material change in Contractor operations requires 30 days advance written notice to affectedproviders and members. The requirements regarding material changes do not extend to contract negotiationsbetween the Contractor and a provider.

The Contractor may be required to conduct meetings with providers to address issues (or to provide generalinformation, technical assistance, etc.) related to federal and state requirements, changes in policy,reimbursement matters, prior authorization and other matters as identified or requested by the Administration.

The Contractor shall give hospitals and provider groups 90 days notice prior to a contract termination withoutcause. Contracts between the Contractor and single practitioners are exempt from this requirement.

All material changes in the Contractor's provider network must be approved in advance by AHCCCS, Division ofHealth Care Management [42 CFR 438.207(c)]. A material change to the network is defined as one whichaffects, or can reasonably be foreseen to affect, the Contractor's ability to meet the performance and networkstandards as described in this contract. It also includes any change that would cause more than 5% of members inthe GSA to change the location where services are received or rendered. The Contractor must submit the requestfor approval of material change, including draft notification to affected members, 60 days prior to the expectedimplementation of the change. The request must include a description of any short-term gaps identified as aresult of the change and the alternatives that will be used to fill them. If AHCCCS does not respond within 30days the request and the notice are deemed approved. A material change in Contractor network requires 30days advance written notice to affected members. For emergency situations, AHCCCS will expedite theapproval process.

The Contractor shall notify AHCCCS, Division of Health Care Management, within one business day of anyunexpected changes that would impair its provider network. This notification shall include (1) information abouthow the change will affect the delivery of covered services, and (2) the Contractor's plans for maintaining thequality of member care, if the provider network change is likely to affect the delivery of covered services.

*Homeless Clinics:*A Contractor in Maricopa and Pima County must contract with homeless clinics at the AHCCCS Fee-for-Servicerate for Primary Care services. Contracts must stipulate that:

                1. Only those members that request a homeless clinic as a PCP may be assigned to them; and                2. Members assigned to a homeless clinic may be referred out-of-network for needed specialty services

The Contractor must make resources available to assist homeless clinics with administrative issues such asobtaining Prior Authorization, and resolving claims issues.

AHCCCS will convene meetings, as necessary, with the Contractor and the homeless clinics to resolveadministrative issues and perceived barriers to the homeless members receiving care. Representatives from theContractor must attend these meetings.

*E-Prescribing*:The Contractor must work in collaboration with the Administration to implement E-Prescribing.

**30.****PRIMARY CARE PROVIDER STANDARDS**

The Contractor shall include in its provider network a sufficient number of PCPs to meet the requirements ofthis contract. Health care providers designated by the Contractor as PCPs shall be licensed in Arizona asallopathic or osteopathic physicians who generally specialize in family practice, internal medicine, obstetrics,gynecology, or pediatrics; certified nurse practitioners or certified nurse midwives; or physician’s assistants[42 CFR 438.206(b)(2)].

The Contractor shall assess the PCP’s ability to meet AHCCCS appointment availability and other standardswhen determining the appropriate number of its members to be assigned to a PCP. The Contractor should alsoconsider the PCP’s total panel size (i.e., AHCCCS and non-AHCCCS patients) when making thisdetermination. AHCCCS members shall not comprise the majority of a PCP’s panel of patients. AHCCCSshall inform the Contractor when a PCP has a panel of more than 1,800 AHCCCS members (assigned by asingle Contractor or multiple Contractors), to assist in the assessment of the size of their panel. Thisinformation will be provided on a quarterly basis. The Contractor will adjust the size of a PCP’s panel, asneeded, for the PCP to meet AHCCCS appointment and clinical performance standards.

The Contractor shall have a system in place to monitor and ensure that each member is assigned to anindividual PCP and that the Contractor’s data regarding PCP assignments is current. The Contractor isencouraged to assign members with complex medical conditions, who are age 12 and younger, to boardcertified pediatricians. PCP’s, with assigned members diagnosed with AIDS or as HIV positive, shall meetcriteria and standards set forth in the *AMPM*.

The Contractor shall ensure that providers serving EPSDT-aged members utilize AHCCCS-approved standarddevelopmental screening tools and are trained in the use of the tools. The Contractor is encouraged to assignEPSDT-aged members to providers that are trained in the use of, and have expressed willingness to use,AHCCCS-approved developmental screening tools.

To the extent required by this contract, the Contractor shall offer members freedom of choice within itsnetwork in selecting a PCP [42 CFR 438.6(m) and 438.52(d)]. The Contractor may restrict this choice when amember has shown an inability to form a relationship with a PCP, as evidenced by frequent changes, or whenthere is a medically necessary reason. When a new member has been assigned to the Contractor, theContractor shall inform the member in writing of his enrollment and of his PCP assignment within 10 days ofthe Contractor's receipt of notification of assignment by AHCCCS. The Contractor shall include with theenrollment notification a list of all the Contractor's available PCPs, the process for changing the PCPassignment, should the member desire to do so, as well as the information required in the ACOM *MemberInformation Policy*. The Contractor shall confirm any PCP change in writing to the member. Members maymake both their initial PCP selection and any subsequent PCP changes either verbally or in writing.

At a minimum, the Contractor shall hold the PCP responsible for the following activities [42 CFR438.208(b)(1)]:

a. Supervision, coordination and provision of care to each assigned member;b. Initiation of referrals for medically necessary specialty care;c. Maintaining continuity of care for each assigned member;d. Maintaining the member’s medical record, including documentation of all services provided to the   member by the PCP, as well as any specialty or referral services. Services potentially requiring medical   follow up are the only dental services whose documentation must be included in the medical record.

The Contractor shall establish and implement policies and procedures to monitor PCP activities and to ensurethat PCPs are adequately notified of, and receive documentation regarding, specialty and referral servicesprovided to assigned members by specialty physicians, and other health care professionals. Contractor policiesand procedures shall be subject to approval by AHCCCS, Division of Health Care Management, and shall bemonitored through operational audits.

The Contractor will work with AHCCCS to develop a methodology to reimburse school based clinics.AHCCCS and the Contractor will identify coordination of care processes and reimbursement mechanisms.The Contractor will be responsible for payment of these services directly to the clinics.

**31.****MATERNITY CARE PROVIDER STANDARDS**

The Contractor shall ensure that a maternity care provider is designated for each pregnant member for the

duration of her pregnancy and postpartum care and that those maternity services are provided in accordancewith the *AMPM*. The Contractor may include in its provider network the following maternity care providers:

a. Arizona licensed allopathic and/or osteopathic physicians who are Obstetricians or general   practitice/family practice providers who provide maternity care services.b. Physician Assistantsc. Nurse Practitionersd. Certified Nurse Midwives

Pregnant members may choose, or be assigned, a PCP who provides obstetrical care. Such assignment shall beconsistent with the freedom of choice requirements for selecting health care professionals while ensuring thatthe continuity of care is not compromised. Members who choose to receive maternity services from a certifiednurse midwife shall also be assigned to a PCP for medical care, as primary care is not within the scope ofpractice for certified nurse midwives.

All physicians and certified nurse midwives who perform deliveries shall have OB hospital privileges or adocumented hospital coverage agreement for those practitioners performing deliveries in alternate settings.Certified midwives perform deliveries only in the member’s home. Labor and delivery services may also beprovided in the member’s home by physicians, certified nurse practitioners and certified nurse midwives whoinclude such services within their practice.

**32.****REFERRAL MANAGEMENT PROCEDURES AND STANDARDS**

The Contractor shall have adequate written procedures regarding referrals to specialists, to include, at aminimum, the following:

a. Use of referral forms clearly identifying the Contractor.b. PCP referral shall be required for specialty physician services, except that women shall have direct access   to in-network GYN providers, including physicians, physician assistants and nurse practitioners within the   scope of their practice, without a referral for preventive and routine services [42 CFR 438.206(b)(2)]. In   addition, for members with special health care needs determined to need a specialized course of treatment   or regular care monitoring, the Contractor must have a mechanism in place to allow such members to   directly access a specialist (for example through a standing referral or an approved number of visits) as   appropriate for the member’s condition and identified needs. Any waiver of this requirement by the   Contractor must be approved in advance by AHCCCS.c. Specialty physicians shall not begin a course of treatment for a medical condition other than that for which   the member was referred, unless approved by the member’s PCP.d. A process in place that ensures the member's PCP receives all specialist and consulting reports and a   process to ensure PCP follow-up of all referrals including EPSDT referrals for behavioral health services.e. A referral plan for any member who is about to lose eligibility and who requests information on low-cost   or no-cost health care services.f. Referral to Medicare Managed Care Plan.g. Allow for a second opinion from a qualified health care professional within the network, or if one is not   available in network, arrange for the member to obtain one outside the network, at no cost to the member    [42 CFR 438.206(b)(3)].

The Contractor shall comply with all applicable physician referral requirements and conditions defined inSections 1903(s) and 1877 of the Social Security Act and their implementing regulations which include, butare not limited to, 42 CFR Part 411, Part 424, Part 435 and Part 455. Sections 1903(s) and 1877 of the Actprohibits physicians from making referrals for designated health services to health care entities with which thephysician or a member of the physician’s family has a financial relationship. Designated health servicesinclude:

                a. Clinical laboratory services                b. Physical therapy services                c. Occupational therapy services                d. Radiology services                e. Radiation therapy services and supplies                f. Durable medical equipment and supplies                g. Parenteral and enteral nutrients, equipment and supplies                h. Prosthetics, orthotics and prosthetic devices and supplies                i. Home health services                j. Outpatient prescription drugs                k. Inpatient and outpatient hospital services

**33.****APPOINTMENT STANDARDS**

The Contractor shall monitor appointment availability utilizing the methodology found in the ACOM*Appointment Availability Monitoring and Reporting Policy* to ensure that the following standards are met:

*Wait time for Appointment*:For **Primary Care Appointments**, the Contractor shall be able to provide:

a. Emergency PCP appointments - same day of requestb. Urgent care PCP appointments - within 2 days of requestc. Routine care PCP appointments - within 21 days of request

For **specialty referrals**, the Contractor shall be able to provide:

a. Emergency appointments - within 24 hours of referralb. Urgent care appointments - within 3 days of referralc. Routine care appointments - within 45 days of referral

For **dental appointments**, the Contractor shall be able to provide:

a. Emergency appointments - within 24 hours of requestb. Urgent care appointments - within 3 days of requestc. Routine care appointments - within 45 days of request

For **maternity care**, the Contractor shall be able to provide initial prenatal care appointments for enrolledpregnant members as follows:

a. First trimester - within 14 days of requestb. Second trimester - within 7 days of requestc. Third trimester - within 3 days of requestd. High risk pregnancies - within 3 days of identification of high risk by the Contractor or maternity   care provider, or immediately if an emergency exists

For purposes of the sections above, “urgent” is defined as an acute, but not necessarily life-threateningcondition which, if not attended to, could endanger the patient’s health.

*Wait time in Office*:The Contractor shall actively monitor and ensure that a member's waiting time for a scheduled appointment atthe PCP’s or specialist’s office is no more than 45 minutes, except when the provider is unavailable due to anemergency.

*Wait time for Transportation*:If a member needs non-emergent medically necessary transportation, the Contractor shall require itstransportation provider to schedule the transportation so that the member arrives on time for the appointment,but no sooner than one hour before the appointment; does not have to wait more than one hour after calling fortransportation after the conclusion of the appointment to be picked up; nor have to wait for more than one hourafter conclusion of the treatment for transportation home; nor be picked up prior to the completion oftreatment. The Contractor must develop and implement a quarterly performance auditing protocol to evaluatecompliance with the standards above for all subcontracted transportation vendors/brokers and requirecorrective action if standards are not met.

The Contractor must use the results of appointment availability monitoring to assure adequate appointmentavailability in order to reduce unnecessary emergency department utilization. The Contractor is also encouragedto contract with or employ the services of non-emergency facilities to address member non-emergency care issuesoccurring after regular office hours or on weekends.

The Contractor shall establish processes to monitor and reduce the appointment “no-show” rate by providerand service type. As best practices are identified, AHCCCS may require implementation by the Contractor.

The Contractor shall have written policies and procedures about educating its provider network regardingappointment time requirements. The Contractor must assign a specific staff member or unit within itsorganization to monitor compliance with appointment standards. The Contractor must develop a correctiveaction plan when appointment standards are not met; if appropriate, the corrective action plan should bedeveloped in conjunction with the provider [42 CFR 438.206(c)(1)(iv), (v) and (vi)]. Appointment standardsshall be included in the Provider Manual. The Contractor is encouraged to include the standards in the providersubcontract.

**34.****FEDERALLY QUALIFIED HEALTH CENTERS AND RURAL HEALTH CLINICS**

The Contractor is encouraged to use FQHCs/RHCs in Arizona to provide covered services. AHCCCS requiresthe Contractor to negotiate rates of payment with FQHCs/RHCs for non-pharmacy services that are comparableto the rates paid to providers that provide similar services. AHCCCS reserves the right to review a Contractor’snegotiated rates with an FQHC/RHC for reasonableness and to require adjustments when negotiated rates arefound to be substantially less than those being paid to other, non-FQHC/RHC providers for comparable services.

The Contractor is required to submit member information for Title XIX members for each FQHC/RHC on aquarterly basis to the AHCCCS Division of Health Care Management. AHCCCS will perform periodic audits ofthe member information submitted. The Contractor should refer to the AHCCCS Reporting Guide for AcuteCare Contractors with the Arizona Health Care Cost Containment System for further guidance. TheFQHCs/RHCs registered with AHCCCS are listed on the AHCCCS website **(http://www.azahcccs.gov).
**35.****PROVIDER MANUAL**

The Contractor shall develop, distribute and maintain a provider manual as described in the ACOM *ProviderInformation Policy*.

**36.****PROVIDER REGISTRATION**

The Contractor shall ensure that all of its subcontractors register with AHCCCS as an approved service provider.A Provider Participation Agreement must be signed by each provider who is not already an AHCCCS registeredprovider. The original shall be forwarded to AHCCCS. The provider registration process must be completed inorder for the Contractor to report services a provider renders to enrolled members and for the Contractor to bepaid reinsurance. The National Provider Identifier (NPI) is required on all claim submissions and subsequentencounters (from providers who are eligible for a NPI). The Contractor shall work with providers to obtain theirNPI.

Except as otherwise required by law or as otherwise specified in a contract between a Contractor and a provider,the AHCCCS Administration fee-for-service provisions referenced in the AHCCCS Provider ParticipationAgreement located on the AHCCCS website (e.g. billing requirements, coding standards, payment rates) are inforce between the provider and Contractor.

**37.****SUBCONTRACTS**

The Contractor shall be legally responsible for contract performance whether or not subcontracts are used [42

CFR 438.230(a) and 434.6(c)]. No subcontract shall operate to terminate the legal responsibility of theContractor to assure that all activities carried out by the subcontractor conform to the provisions of this contract.Subject to such conditions, any function required to be provided by the Contractor pursuant to this contract maybe subcontracted to a qualified person or organization. All such subcontracts must be in writing [42 CFR438.6(L)]. See the ACOM *Contractor Claims Processing by Health Plan Subcontracted Providers Policy.*

All subcontracts entered into by the Contractor are subject to prior review and written approval by AHCCCS,Division of Health Care Management, and shall incorporate by reference the terms and conditions of thiscontract. The following types of Administrative Services subcontracts shall be submitted to AHCCCS, Divisionof Health Care Management for prior approval at least 30 days prior to the beginning date of the subcontract.Administrative Services Subcontracts:

                1. Delegated agreements that subcontract:                                a) Any function related to the management of the contract with AHCCCS. Examplesinclude                                   member services, provider relations, quality management,medical management (e.g., prior                                   authorization, concurrent review, medical claims review)                                b) Claims processing, including pharmacy claims.                                c) Credentialing including those for only primary source verification                2. All Management Service Agreements                3. All Service Level Agreements with any Division or Subsidiary of a corporate parent owner

AHCCCS may, at its discretion, communicate directly with the governing body or Parent Corporation of theContractor regarding the performance of a subcontractor or Contractor respectively.

The Contractor shall maintain a fully executed original of all subcontracts, which shall be accessible to AHCCCSwithin two business days of request by AHCCCS. All requested subcontracts must have full disclosure of allterms and conditions and must fully disclose all financial or other requested information. Information may bedesignated as confidential but may not be withheld from AHCCCS as proprietary. Information designated asconfidential may not be disclosed by AHCCCS without the prior written consent of the Contractor except asrequired by law. All subcontracts shall comply with the applicable provisions of Federal and State laws,regulations and policies.

Before entering into a subcontract which delegates Contractor duties or responsibilities to a subcontractor, theContractor must evaluate the prospective subcontractor’s ability to perform the activities to be delegated. If theContractor delegates duties or responsibilities such as utilization management or claims processing to asubcontractor, then the Contractor shall establish a written agreement that specifies the activities and reportingresponsibilities delegated to the subcontractor. The written agreement shall also provide for revoking delegationor imposing other sanctions if the subcontractor’s performance is inadequate. In order to determine adequateperformance, the Contractor shall monitor the subcontractor’s performance on an ongoing basis and subject it toformal review according to a periodic schedule. The schedule for review shall be submitted to AHCCCS,Division of Health Care Management for prior approval. As a result of the performance review, any deficienciesmust be communicated to the subcontractor in order to establish a corrective action plan. The results of theperformance review and the correction plan shall be communicated to AHCCCS upon completion [42 CFR438.230(b)].

A merger, reorganization or change in ownership of an Administrative Services subcontractor of the Contractorshall require a contract amendment and prior approval of AHCCCS.

Contractor must submit the Annual Subcontractor Assignment and Evaluation Report (within 90 days fromthe start of the contract year) detailing any Contractor duties or responsibilities that have been subcontracted asdescribed under administrative subcontracts previously in this section. If the Contractor does not assign anyduties under the subcontract types listed in the paragraph above, a statement to this effect must be submitted inlieu of the Annual Subcontractor Assignment and Evaluation Report. The Annual Subcontractor Assignmentand Evaluation Report will include the following:

            •Subcontractor’s name               •Delegated duties and responsibilities               •Most recent review date of the duties, responsibilities and financial position of the subcontractor               •A comprehensive evaluation of the performance (operational and financial) of the subcontractor               •Identified areas of deficiency               •Corrective action plans as necessary               •Next scheduled review date

The Contractor shall promptly inform AHCCCS, Division of Health Care Management, in writing if asubcontractor is in significant non-compliance that would affect their abilities to perform the duties andresponsibilities of the subcontract.

The Contractor shall not include covenant-not-to-compete requirements in its provider agreements. Specifically,the Contractor shall not contract with a provider and require that the provider not provide services for any otherAHCCCS Contractor. In addition, except for cost sharing requirements, the Contractor shall not enter intosubcontracts that contain compensation terms that discourage providers from serving any specific eligibilitycategory.

The Contractor must enter into a written agreement with any provider (including out-of-state providers) theContractor reasonably anticipates will be providing services at the request of the Contractor more than 25 timesduring the contract year [42 CFR 438.206(b)(1)]. Exceptions to this requirement include the following:

1. If a provider who provides services more than 25 times during the contract year refuses to enter into a written   agreement with the Contractor, the Contractor shall submit documentation of such refusal to AHCCCS,   Division of Health Care Management within seven days of its final attempt to gain such agreement.2. If a provider performs emergency services such as an emergency room physician or an ambulance company,   a written agreement is not required.3. Individual providers as detailed in the *AMPM*.4. Hospitals, as discussed in Section D, Paragraph 40, Hospital Subcontracting and Reimbursement.5. If a provider primarily performs services in an inpatient setting.6. If upon the Medical Director’s review, it is determined that the Contractor or members would not benefit by   adding the provider to the contracted network.

Any other exceptions to this requirement must be approved by AHCCCS, Division of Health Care Management.If AHCCCS does not respond within 30 days; the requested exception is deemed approved. The Contractor mayrequest an expedited review and approval.

All subcontracts must contain verbatim all the provisions of Attachment A, Minimum Subcontract Provisions. Inaddition, each provider subcontract must contain the following [42 CFR 438.206(b)(1)]:

1. Full disclosure of the method and amount of compensation or other consideration to be received by the   subcontractor.2. Identification of the name and address of the subcontractor.3. Identification of the population, to include patient capacity, to be covered by the subcontractor.4. The amount, duration and scope of medical services to be provided, and for which compensation will be   paid.5. The term of the subcontract including beginning and ending dates, methods of extension, termination and    re-negotiation.6. The specific duties of the subcontractor relating to coordination of benefits and determination of third-party   liability.7. A provision that the subcontractor agrees to identify Medicare and other third-party liability coverage and to   seek such Medicare or third party liability payment before submitting claims to the Contractor.8. A description of the subcontractor's patient, medical, dental and cost record keeping system.9. Specification that the subcontractor shall cooperate with quality management/quality improvement programs,   and comply with the utilization management and review procedures specified in 42 CFR Part 456, as   specified in the *AMPM*.10. A provision stating that a merger, reorganization or change in ownership of an Administrative Services   subcontractor of the Contractor shall require a contract amendment and prior approval of AHCCCS.11. A provision that indicates that AHCCCS is responsible for enrollment, re-enrollment and dis-enrollment of   the covered population.12. A provision that the subcontractor shall be fully responsible for all tax obligations, Worker's Compensation   Insurance, and all other applicable insurance coverage obligations which arise under this subcontract, for   itself and its employees, and that AHCCCS shall have no responsibility or liability for any such taxes or   insurance coverage.13. A provision that the subcontractor must obtain any necessary authorization from the Contractor or AHCCCS   for services provided to eligible and/or enrolled members.14. A provision that the subcontractor must comply with encounter reporting and claims submission   requirements as described in the subcontract.15. Provision(s) that allow the Contractor to suspend, deny, refuse to renew or terminate any subcontractor in   accordance with the terms of this contract and applicable law and regulation.16. A provision that the subcontractor may provide the member with factual information, but is prohibited from   recommending or steering a member in the member’s selection of a Contractor.17. A provision that compensation to individuals or entities that conduct utilization management and concurrent   review activities is not structured so as to provide incentives for the individual or entity to deny, limit or   discontinue medically necessary services to any enrollee (42 CFR 438.210(e)).

**38.****CLAIMS PAYMENT/HEALTH INFORMATION SYSTEM**

The Contractor shall develop and maintain a health information system that collects, analyzes, integrates, and

reports data. The system shall provide information on areas including, but not limited to, service utilization,claim disputes and appeals [42 CFR 438.242(a)].

The Contractor will ensure that changing or making major upgrades to the information systems affectingclaims processing, or any other major business component, will be accompanied by a plan which includes atimeline, milestones, and adequate testing before implementation. At least six months before the anticipatedimplementation date, the Contractor shall provide the system change plan to AHCCCS for review andcomment.

The Contractor must have a health information system that integrates member demographic data, providerinformation, service provision, claims submission and reimbursement. This system must be capable ofcollecting, storing and producing information for the purposes of financial, medical and operationalmanagement.

In support of this requirement, the Contractor will be required to have an independent audit of the ClaimsPayment/Health Information System completed within two (2) calendar years of the initiation of the Contract; orby September 30, 2010 (CYE10). The Contractor must submit a signed agreement on or before December 31st2008, with a schedule for completion, entered into with an independent auditing firm of their selection to beapproved by the AHCCCS Division of Health Care Management. The Division of Health Care Management willmonitor the scope of this audit, to include no less than a verification of contract information management(contract loading and auditing), claims processing and encounter submission processes. In addition to thisrequirement, the Contractor may be required in future contract years to initiate additional independent ClaimSystem/Health Information System audit at the direction of the AHCCCS Administration. In the event of asystem change or upgrade, the Contractor will be required to initiate an independent Claim System/HealthInformation System audit.

In addtition to the above required audit, the Contractor shall develop and implement an internal claims auditfunction that will include the following:               •Verification that provider contracts are loaded correctly               •Accuracy of payments against provider contract terms

The Contractor shall develop and maintain a HIPAA compliant claims processing and payment system capable ofprocessing, cost avoiding and paying claims in accordance with A.R.S. §§ 36-2903 and 2904 and AHCCCSRules R9-22 Article 7. The system must be adaptable to updates in order to support future AHCCCS claimsrelated Policy requirements as needed.

The contractor must include nationally recognized methodologies to correctly pay claims including but notlimited to:               •Correct Coding Initiative (CCI) for Professional and Outpatient services;               •Multiple Surgical Reductions;               •Global Day Bundling;               •Multi Channel Lab Test Bundling

The Contractor claims payment system must be able to assess and/or apply the following data related edits:               •Benefit Package Variations;               •Timeliness Standards;               •Data Accuracy;               •Adherence to AHCCCS Policy;               •Provider Qualifications;               •Member Eligibility and Enrollment;               •Over-Utilization Standards

This system must produce a remittance advice related to the Contractor’s payments and/or denials to providersand must include at a minimum:               •an adequate description of all denials and adjustments;               •the reasons for such denials and adjustments;               •the amount billed;               •the amount paid;               •application of COB;               •provider rights for claim disputes.

The related remittance advice must be sent with the payment, unless the payment is made by electronic fundstransfer (EFT). The remittance advice sent related to an EFT must be mailed, or sent to the provider, no later thanthe date of the EFT. If the remittance is made through EFT, a notice of the provider’s right for claim dispute mustbe sent to the provider concurrently.

The Contractor’s claims payment system, as well as its prior authorization and concurrent review process, mustminimize the likelihood of having to recoup already-paid claims. Any individual recoupment in excess of$50,000 per provider within a contract year must be approved in advance by AHCCCS, Division of Health CareManagement, Acute Care Operations Unit. If AHCCCS does not respond within 30 days the recoupment requestis deemed approved. AHCCCS must be notified of any cumulative recoupment greater than $50,000 perprovider Tax Identification Number per contract year. A Contractor shall not recoup monies from a providerlater than 12 months after the date of original payment on a clean claim, without prior approval from AHCCCS,as further described in the ACOM *Recoupment Request Policy*.

The Contractor is required to reimburse providers for previously recouped monies if the provider wassubsequently denied payment by the primary insurer based on timely filing limits or lack of prior authorizationand the member failed to disclose additional insurance coverage other than AHCCCS.

The Contractor must void encounters for claims that are recouped in full. For recoupments that result in areduced claim value or adjustments that result in an increased claim value, replacement encounters must besubmitted. AHCCCS will validate the submission of applicable voids and replacement encounters uponcompletion of any approved recoupment that meets the qualifications of this section. All replaced or voidedencounters must reach adjudicated status within 120 days of the approval of the recoupment. The Contractorshould refer to the ACOM *Recoupment Request Policy* and AHCCCS *Encounter Reporting User Manual* forfurther guidance.

Unless a subcontract specifies otherwise, a Contractor with 50,000 or more members shall ensure that 95% of allclean claims are adjudicated within 30 days of receipt of the clean claim and 99% are adjudicated within 60 daysof receipt of the clean claim. Unless a subcontract specifies otherwise, a Contractor with fewer than 50,000members shall ensure that 90% of all clean claims are adjudicated within 30 days of receipt of the clean claim and99% are adjudicated within 60 days of receipt of the clean claim. Additionally, unless a shorter time period isspecified in contract, the Contractor shall not pay a claim initially submitted more than 6 months after date ofservice or pay a clean claim submitted more than 12 months after date of service. Claim payment requirementspertain to both contracted and non-contracted providers. The receipt date of the claim is the date stamp on theclaim or the date electronically received. The receipt date is the day the claim is received at the Contractor’sspecified claim mailing address. The paid date of the claim is the date on the check or other form of payment [42CFR 447.45(d)]. Claims submission deadlines shall be calculated from the claim end date or the effective date ofeligibility posting, whichever is later as stated in A.R.S. 36-2904.H.

Effective for all non-hospital clean claims, in the absence of a contract specifying other late payment terms, aContractor is required to pay interest on late payments. Late claims payments are those that are paid after 45 daysof receipt of the clean claim (as defined in this contract). In grievance situations, interest shall be paid back to thedate interest would have started to accrue beyond the applicable 45 day requirement. Interest shall be at the rateof ten per cent per annum, unless a different rate is stated in a written contract. In the absence of interest paymentterms in a subcontract, interest shall accrue starting on the first day after a clean claim is contracted to be paid.For hospital clean claims, a slow payment penalty shall be paid in accordance with A.R.S. 2903.01. Wheninterest is paid, the Contractor must report the interest as directed in the AHCCCS *Encounter Reporting UserManual.*

AHCCCS will require the Contractor to participate in an AHCCCS workgroup to develop uniform guidelines forstandardizing hospital outpatient and outpatient provider claim requirements, including billing rules anddocumentation requirements. The workgroup may be facilitated by an AHCCCS selected consultant. TheContractor will be held responsible for the cost of this project based on its share of AHCCCS enrollment.

The Contractor is required to accept and generate HIPAA compliant electronic claims transactions from/to anyprovider interested and capable of electronic submission or electronic remittance receipt; and must be able tomake claims payments via electronic funds transfer. In addition, the Contractor shall implement and meet thefollowing milestone in order to make claims processing and payment more efficient and timely:

            •Receive and pay 60% of all claims (based on volume of actual claims excluding claims processed by                Pharmacy Benefit Managers (PBMs)) electronically by July 1, 2009

In accordance with the Deficit Reduction Act of 2005, Section 6085, Contractor is required to reimburse non-ontracted emergency services providers at no more than the AHCCCS Fee-For-Service rate. This applies toin state as well as out of state providers.

In accordance with Arizona Revised Statute 36-2903 and 36-2904, in the absence of a written negotiated rate,Contractor is required to reimburse non-contracted non-emergent in state providers at the AHCCCS feeschedule and methodology, or pursuant to 36-2905.01, at ninety-five percent of the AHCCCS Fee-For-Servicerates for urban hospital days. All payments are subject to other limitations that apply, such as providerregistration, prior authorization, medical necessity, and covered service.

The Contractor shall submit a monthly Claims Dashboard as specified in the AHCCCS *Claims DashboardReporting Guide*. The Monthly report must be received by the AHCCCS Division of Healthcare Management,no later than 15 days from the end of each month.

Within the first 6 months of the contract term, the Contractor must review claim requirements, including billingrules and documentation requirements, and submit a report to AHCCCS that will include the rationale for therequirements. AHCCCS shall determine and provide a format for the report.

**39.****SPECIALTY CONTRACTS**

AHCCCS may at any time negotiate or contract on behalf of the Contractor and AHCCCS for specializedhospital and medical services. AHCCCS will consider existing Contractor resources in the development andexecution of specialty contracts. AHCCCS may require the Contractor to modify its delivery network toaccommodate the provisions of specialty contracts. AHCCCS may consider waiving this requirement inparticular situations if such action is determined to be in the best interest of the State; however, in no case shallreimbursement exceeding that payable under the relevant AHCCCS specialty contract be considered in capitationrate development or risk sharing arrangements, including reinsurance.

During the term of specialty contracts, AHCCCS may act as an intermediary between the Contractor andspecialty Contractors to enhance the cost effectiveness of service delivery. Adjudication of claims related topayments provided under specialty contracts shall remain the responsibility of the Contractor. AHCCCS mayprovide technical assistance prior to the implementation of any specialty contracts.

Currently, AHCCCS only has specialty contracts for transplant services and anti-hemophilic agents and relatedpharmaceutical services. AHCCCS shall provide at least 60 days advance written notice to the Contractor priorto the implementation of any specialty contract. See Section D, Paragraph 57, Reinsurance, for further details.

**40.****HOSPITAL SUBCONTRACTING AND REIMBURSEMENT**

***Maricopa and Pima counties only:***The Inpatient Hospital Reimbursement Program is defined in the ArizonaRevised Statutes (A.R.S.) 36-2905.01, and requires hospital subcontracts to be negotiated between the Contractorand hospitals in Maricopa and Pima counties to establish reimbursement levels, terms and conditions.Subcontracts shall be negotiated by the Contractor and hospitals to cover operational concerns, such as timelinessof claims submission and payment, payment of discounts or penalties and legal resolution which may, as anoption, include establishing arbitration procedures. These negotiated subcontracts shall remain under closescrutiny by AHCCCS to ensure availability of quality services within specific service districts, equity of relatedparty interests and reasonableness of rates. The general provisions of this program encompass acute care hospitalservices and outpatient hospital services that result in an admission. The Contractor, upon request, shall makeavailable to AHCCCS, all hospital subcontracts and amendments. For non-emergency patient-days, theContractor shall ensure that at least 65% of its members use contracted hospitals. AHCCCS reserves the right tosubsequently adjust the 65% standard. Further, if in AHCCCS’s judgment the number of emergency days at aparticular non-contracted hospital becomes significant, AHCCCS may require a subcontract at that hospital. Inaccordance with R9-22-718, unless otherwise negotiated by both parties, the reimbursement for inpatientservices, including outliers, provided at a non-contracted hospital shall be based on the rates as defined in A.R.S.§ 36-2903.01, multiplied by 95%.

***All counties EXCEPT Maricopa and Pima:***The Contractor shall reimburse hospitals for member care inaccordance with AHCCCS Rule R9-22-705. The Contractor is encouraged to obtain subcontracts with hospitalsin all GSAs. The Contractor, upon request, shall make available to AHCCCS, all hospital subcontracts andamendments.

***Out-of-State Hospitals:***The Contractor shall reimburse out-of-state hospitals in accordance with AHCCCSRule R9-22-705. A Contractor serving border communities (excluding Mexico) is strongly encouraged toestablish contractual agreements with those out-of-state hospitals that are identified by GSA in Attachment B.

***Outpatient hospital services:***In the absence of a contract, the default payment rate for outpatient hospitalservices billed on a UB-92 will be based on the AHCCCS outpatient hospital fee schedule, rather than a hospital-specific cost-to-charge ratio (pursuant to ARS 36-2904).

***Hospital Recoupments:***The Contractor may conduct prepayment and post-payment medical reviews of allhospital claims including outlier claims. Erroneously paid claims are subject to recoupment. If the Contractorfails to identify lack of medical necessity through concurrent review and/or prepayment medical review, lack ofmedical necessity identified during post-payment medical review shall not constitute a basis for recoupment bythe Contractor. This prohibition does not apply to recoupments that are a result of an AHCCCS reinsuranceaudit. See also Section D, Paragraph 38, Claims Payment/Health Information System. For a more completedescription of the guidelines for hospital reimbursement, please consult the AHCCCS website for applicablestatutes and rules.

**41.****RESPONSIBILITY FOR NURSING FACILITY REIMBURSEMENT**

The Contractor shall provide medically necessary nursing facility services as outlined in Section D, Paragraph 10,Scope of Services. The Contractor shall also provide medically necessary nursing facility services for anyenrolled member who has a pending ALTCS application who is currently residing in a nursing facility and iseligible for services provided under this contract. If the member becomes ALTCS eligible and is enrolled with anALTCS Contractor before the end of the maximum 90 days per contract year of nursing facility coverage, theContractor is only responsible for nursing facility reimbursement during the time the member is enrolled with theContractor as shown in the PMMIS. Nursing facility services covered by another liable party (includingMedicare) while the member is enrolled with the Contractor, shall be applied to the 90 day per contract yearlimitation.

The Contractor shall not deny nursing facility services when the member’s eligibility, including prior periodcoverage, had not been posted at the time of admission. In such situations the Contrator shall impose reasonableauthorization requirements. There is no ALTCS enrollment, including prior period coverage, that occursconcurrently with AHCCCS acute enrollment.

The Contractor shall notify the Assitant Director of the Division of Member Services, when a member has beenresiding in a nursing facility for 75 days as specified in Section D, Paragraph 10, Scope of Services, under theheading *Nursing Facility.* This will allow AHCCCS time to follow-up on the status of the ALTCS applicationand to consider potential fee-for-service coverage if the stay goes beyond the 90 day per contract year maximum.

**42.****PHYSICIAN INCENTIVES/PAY FOR PERFORMANCE**

*Physician Incentives*Reporting of Physician Incentive Plans has been suspended by CMS until further notice. No reporting isrequired until suspension is lifted.

The Contractor must comply with all applicable physician incentive requirements and conditions defined in 42CFR 417.479. These regulations prohibit physician incentive plans that directly or indirectly make paymentsto a doctor or a group as an inducement to limit or refuse medically necessary services to a member. TheContractor is required to disclose all physician incentive agreements to AHCCCS and to AHCCCS memberswho request them.

The Contractor shall not enter into contractual arrangements that place providers at significant financial risk asdefined in 42 CFR 417.479 unless specifically approved in advance by the AHCCCS Division of Health CareManagement. In order to obtain approval, the following must be submitted to the AHCCCS Division ofHealth Care Management 45 days prior to the implementation of the contract [42 CFR 438.6(g)]:

1. A complete copy of the contract2. A plan for the member satisfaction survey3. Details of the stop-loss protection provided4. A summary of the compensation arrangement that meets the substantial financial risk definition.

The Contractor shall disclose to AHCCCS the information on physician incentive plans listed in 42 CFR417.479(h)(1) through 417.479(I) upon contract renewal, prior to initiation of a new contract, or upon requestfrom AHCCCS or CMS.

The Contractor shall also provide for compliance with physician incentive plan requirements as set forth in 42CFR 422.208, 422.210 and 438.6(h). These regulations apply to contract arrangements with subcontractedentities that provide utilization management services.

*Value Driven Healthcare/Pay for Performance*AHCCCS may explore opportunities to develop and implement system-wide Value Driven Healthcareprograms and pay for performance initiatives. The Contractor shall participate in the development andimplementation of such programs as requested by AHCCCS. Should the Contractor’s individual pay forperformance program conflict with AHCCCS programs, the Contractor may be required to close out theindividual program. AHCCCS may require the Contractor to provide PCP assignment information. TheContractor shall provide this information in a format specified by AHCCCS upon request.

*Transparency*AHCCCS programs will be in compliance with Federal and State transparency initiatives. AHCCCS maypublically report or make available any data, reports, analysis or outcomes related to Contractor activities,operations and/or performance. Public reporting may include, but is not limited to, the following components:

                a) Use of evidence based guidlelines                b) Identification and publication of top performing Contractors                c) Identification and publication of top performing providers                d) Program pay for performance payouts                e) Mandated publication of guidelines                f) Mandated publication of outcomes                g) Identification of Centers of Excellence for specific conditions, procedures or member populations                h) Establishment of Return on Investment goals

Any Contractor-selected and/or -developed pay for performance initiative that meets the requirements of 42CFR 417.479 must be approved by AHCCCS Division of Health Care Management prior to implementation.

*Public Reporting of Contractor Cost Management, Satisfaction and Quality Performance*AHCCCS is in the process of developing a cost management, satisfaction, and quality score card as part of theAHCCCS value driven decision support initiative. The score card information will made available tobeneficiaries, legislators and the public. These reports will be posted on the AHCCCS website and madeavailable at enrollment and reenrollment or at any time that beneficiaries are choosing a Contractor.Contractors are also encouraged to provide quality and cost information on network hospitals and providers tohelp enrollees choose among high performing value driven providers and hospitals.

**43.****MANAGEMENT SERVICES AGREEMENT AND COST ALLOCATION PLAN**

If a Contractor has subcontracted for management services, the management service agreement must be approvedin advance by AHCCCS, Division of Health Care Management. If there is a cost allocation plan as part of themanagement services agreement, it is subject to review by AHCCCS upon request. AHCCCS reserves the rightto perform a thorough review of actual management fees charged and/or corporate allocations made.

If there is a change in ownership of the entity with which the Contractor has contracted for management services,AHCCCS must review and provide prior approval of the assignment of the subcontract to the new owner.AHCCCS may offer open enrollment to the members assigned to the Contractor should a change in ownershipoccur. AHCCCS will not permit two Contractors to utilize the same management service company in the sameGSA.

The performance of management service subcontractors must be evaluated and included in the AnnualSubcontractor Assignment and Evaluation Report required by Section D, Paragraph 37, Subcontracts andAttachment F: Periodic Report Requirements.

**44.****RESERVED**

**45.****RESERVED**

**46.****PERFORMANCE BOND OR BOND SUBSTITUTE**

The Contractor shall be required to provide a performance bond of standard commercial scope issued by a suretycompany authorized to do business in this State, an irrevocable letter of credit, or a cash deposit ("PerformanceBond") to AHCCCS for as long as the Contractor has AHCCCS-related liabilities of $50,000 or moreoutstanding, or 15 months following the termination date of this contract, whichever is later, to guarantee: (1)payment of the Contractor's obligations to providers, non-contracting providers, and non-providers; and (2)performance by the Contractor of its obligations under this contract [42 CFR 438.116(a)(1) and (b)(1)]. ThePerformance Bond shall be in a form acceptable to AHCCCS as described in the ACOM *Performance BondPolicy* available on the AHCCCS website.

In the event of a default by the Contractor, AHCCCS shall, in addition to any other remedies it may have underthis contract, obtain payment under the Performance Bond or substitute security for the purposes of the following:

1. Paying any damages sustained by providers, non-contracting providers and non-providers by reason of a   breach of the Contractor's obligations under this contract,2. Reimbursing AHCCCS for any payments made by AHCCCS on behalf of the Contractor, and3. Reimbursing AHCCCS for any extraordinary administrative expenses incurred by reason of a breach of the   Contractor's obligations under this contract, including, but not limited to, expenses incurred after termination   of this contract for reasons other than the convenience of the State by AHCCCS.

In the event AHCCCS agrees to accept substitute security in lieu of the Performance Bond, irrevocable letter ofcredit or cash deposit, the Contractor agrees to execute any and all documents and perform any and all actsnecessary to secure and enforce AHCCCS's security interest in such substitute security including, but not limitedto, security agreements and necessary UCC filings pursuant to the Arizona Uniform Commercial Code. TheContractor must request acceptance from AHCCCS when a substitute security in lieu of the performance bond,irrevocable letter of credit or cash deposit is established. In the event such substitute security is agreed to andaccepted by AHCCCS, the Contractor acknowledges that it has granted AHCCCS a security interest in suchsubstitute security to secure performance of its obligations under this contract. The Contractor is solelyresponsible for establishing the credit-worthiness of all forms of substitute security. AHCCCS may, after writtennotice to the Contractor, withdraw its permission for substitute security, in which case the Contractor shallprovide AHCCCS with a form of security described above.

The Contractor may not change the amount, duration or scope of the performance bond without prior writtenapproval from AHCCCS, Division of Health Care Management. The Contractor shall not leverage the bond foranother loan or create other creditors using the bond as security.

**47.****AMOUNT OF PERFORMANCE BOND**

The initial amount of the Performance Bond shall be equal to 80% of the total capitation payment expected tobe paid to the Contractor in the first month of the contract year, or as determined by AHCCCS. The totalcapitation amount (including delivery supplement) excludes premium tax. This requirement must be satisfiedby the Contractor no later than 30 days after notification by AHCCCS of the amount required. Thereafter,AHCCCS shall review the adequacy of the Performance Bond on a monthly basis to determine if thePerformance Bond must be increased. The Contractor shall have 30 days following notification by AHCCCSto increase the amount of the Performance Bond. The Performance Bond amount that must be maintainedafter the contract term shall be sufficient to cover all outstanding liabilities and will be determined byAHCCCS. The Contractor may not change the amount of the performance bond without prior writtenapproval from AHCCCS, Division of Health Care Management. Refer to the ACOM *Performance Bond andEquity Per Member Requirements Policy* for more details.

**48.****ACCUMULATED FUND DEFICIT**

The Contractor and its owners must review for accumulated fund deficits on a quarterly basis. In the event theContractor has a fund deficit, the Contractor and its owners shall fund the deficit through capital contributions ina form acceptable to AHCCCS within 30 days after the quarterly, draft or final annual financial statements inwhich the deficit is reported are due to AHCCCS, or in a timeframe otherwise requested by AHCCCS. AHCCCSmay, at its option, impose enrollment caps in any or all GSA’s as a result of an accumulated deficit, even ifunaudited.

**49.****ADVANCES, DISTRIBUTIONS, LOANS AND INVESTMENTS**

The Contractor shall not, without the prior approval of AHCCCS, make any advances, distributions, loans or loanguarantees to related parties or affiliates including another fund or line of business within its organization. TheContractor shall not, without prior approval of AHCCCS, make advances to providers in excess of $50,000. Allrequests for prior approval are to be submitted to the AHCCCS Division of Health Care Management. Refer tothe ACOM *Provider and Affiliate Advance Request Policy* for further information.

**50.****FINANCIAL VIABILITY STANDARDS**

The Contractor must comply with the AHCCCS-established financial viability standards. On a quarterly basis,AHCCCS will review the following ratios with the purpose of monitoring the financial health of the Contractor:Current Ratio; Equity per Member; Medical Expense Ratio; and the Administrative Cost Percentage.Sanctions may be imposed if the Contractor does not meet these financial viability standards. AHCCCS will takeinto account the Contractor’s unique programs for managing care and improving the heath status of memberswhen analyzing medical expense and administrative ratio results. However, if a critical combination of theFinancial Viability Standards are not met, or if the Contractor’s experience differs significantly from otherContractors, additional monitoring, such as monthly reporting, may be required.

***FINANCIAL VIABILITY STANDARDS***

***Current Ratio***Current assets divided by current liabilities. "Current assets" includesany long-term investments that can be converted to cash within 24hours without significant penalty (i.e., greater than 20%). A request toinclude long-term investments that can be converted to cash within 24hours in the current ratio calculation must be sent to AHCCCS, DHCM,within 30 days of the contract start date and within 30 days of contractrenewal.

*Standard: At least 1.00*

If current assets include a receivable from a parent company, the parentcompany must have liquid assets that support the amount of the intercompanyloan.

***Equity per Member***Unrestricted equity, less on-balance sheet performance bond, divided bythe number of non-SOBRA Family Planning Extension Servicesmembers enrolled at the end of the period.

*Standard: At least $150 for Contractors with enrollment < 100,000$100 for Contractors with enrollment of 100,000+*

Additional information regarding the Equity per Member requirementmay be found in the *Performance Bond and Equity per MemberRequirements* policy in the ACOM.

***Medical Expense Ratio***Total medical expenses divided by the sum of total capitation + DeliverySupplement +TPL+ Reinsurance less premium tax

*Standard: At least 84%*

***Administrative Cost Percentage***Total administrative expenses divided by the sum of total capitation +Delivery Supplement + TPL + Reinsurance less premium tax

*Standard: No greater than 10%*

The Contractor shall comply with all financial reporting requirements contained in Attachment F, Periodic ReportRequirements and the *Reporting Guide for Acute Health Care Contractors with the Arizona Health Care CostContainment System*, a copy of which may be found on the AHCCCS website. The required reports are subjectto change during the contract term and are summarized in Attachment F, Periodic Report Requirements.

**51.****SEPARATE INCORPORATION**

Within 60 days of contract award, a non-governmental Contractor shall have established a separate corporationfor the purposes of this contract, whose sole activity is the performance of the requirements of this contract.

**52.****MERGER, REORGANIZATION AND CHANGE OF OWNERSHIP**

A proposed merger, reorganization or change in ownership of the Contractor shall require prior approval ofAHCCCS and may require a contract amendment. AHCCCS may terminate this contract pursuant to Section D,Paragraph 1, Term of Contract and Option to Renew, if the Contractor does not obtain prior approval orAHCCCS determines that the change in ownership is not in the best interest of the State. AHCCCS may offeropen enrollment to the members assigned to the Contractor should a change in ownership occur. AHCCCS willnot permit one organization to own or manage more than one contract in the same GSA.

The Contractor must submit a detailed merger, reorganization and/or transition plan to AHCCCS, Division ofHealth Care Management, for review at least 60 days prior to the effective date of the proposed change. Thepurpose of the plan review is to ensure uninterrupted services to members, evaluate the new entity's ability tosupport the provider network, ensure that services to members are not diminished and that major components ofthe organization and AHCCCS programs are not adversely affected by such merger, reorganization or change inownership.

**53.****COMPENSATION**

The method of compensation under this contract will be Prior Period Coverage (PPC) capitation, prospectivecapitation, delivery supplement, reinsurance and third party liability, as described and defined within this contractand appropriate laws, regulations or policies.

Actuaries establish the capitation rates using practices established by the Actuarial Standards Board. AHCCCSprovides the following data to its actuaries for the purposes of rebasing the capitation rates.

                a. Utilization and unit cost data derived from adjudicated encounters                b. Both audited and unaudited financial statements reported by the Contractor                c. Market basket inflation trends                d. AHCCCS fee-for-service schedule pricing adjustments                e. Programmatic or Medicaid covered service changes that affect reimbursement                f. Other changes to medical practices or administrative requirements that affect reimbursement

AHCCCS adjusts its rates to best match payment to risk. This further ensures the actuarial basis for the capitationrates. The following are examples of risk factors that may be included:

                a. Reinsurance (as described in Section D, Paragraph 57)                b. Age/Gender                c. Medicare enrollment for SSI members                d. Delivery supplemental payment                e. Geographic Service Area adjustments                f. Risk sharing arrangements for specific populations                g. Member specific statistics, e.g. member acuity, member choice, member diagnosis, etc.

The above information is reviewed by AHCCCS’ actuaries in renewal years to determine if adjustments arenecessary. A Contractor may cover services that are not covered under the State Plan; however those services arenot included in the data provided to actuaries for setting capitation rates [42 CFR 438.6(e)].

AHCCCS anticipates utilizing an episodic/diagnostic risk adjustment methodology that will be applied toContractor specific capitation rates for rates effective no sooner than April 1, 2009, and annually thereaftereffective October 1. AHCCCS will use a national model, based on a Contractor's membership at a specifieddate, and will share the methodology with the Contractor prior to implementation. For the episodic/diagnosticrisk adjustment in CYE 09, AHCCCS will apply no more than 50% of the capitation rate adjustment to theremaining months of the contract year. Effective October 1, 2009, the full impact of the model will beapplied.The methodology may apply to any or all risk groups and GSAs.

***Prospective Capitation:***The Contractor will be paid capitation for all prospective member months, includingpartial member months. This capitation includes the cost of providing medically necessary covered services tomembers during the prospective period coverage.

***Prior Period Coverage (PPC ) Capitation:***Except for SOBRA Family Planning, SSDI-TMC, KidsCare, HIFAParents and State Only Transplants, the Contractor will be paid capitation for all PPC member months, includingpartial member months. This capitation includes the cost of providing medically necessary covered services,including behavioral health services, to members during prior period coverage. The PPC capitation rates will beset by AHCCCS and will be paid to the Contractor along with the prospective capitation described above. TheContractor will not receive PPC capitation for newborns of members who were enrolled at the time of delivery.

***Reconciliation of PPC Costs to Reimbursement:***AHCCCS will reconcile the Contractor’s PPC medical costexpenses to PPC capitation paid to the Contractor during the year. This reconciliation will limit the Contractor’sprofits and losses to 2%. Any losses in excess of 2% will be reimbursed to the Contractor, and likewise, profits inexcess of 2% will be recouped. Adjudicated encounter data will be used to determine medical expenses. Refer tothe ACOM *PPC Reconciliation Policy* for further details.

***Reconciliation of SSDI-TMC Costs to Reimbursement:***AHCCCS will reconcile the Contractor’s SSDI-TMCmedical expenses to SSDI-TMC capitation paid to the Contractor during the year. This reconciliation will limitthe Contractor’s profits and losses to 2%. Any losses in excess of 2% will be reimbursed to the Contractor, andlikewise, profits in excess of 2% will be recouped. Adjudicated encounter data will be used to determine medicalexpenses. Refer to the ACOM *SSDI-Temporary Medical Coverage Reconciliation Policy* for further details.

***Delivery Supplement:***When the Contractor has an enrolled woman who delivers during a prospectiveenrollment period, the Contractor will be entitled to a supplemental payment. Supplemental payments will notapply to women who deliver in a prior period coverage time period, SSDI-TMC members or State OnlyTransplant members. AHCCCS reserves the right at any time during the term of this contract to adjust theamount of this payment for women who deliver at home.

***State Only Transplants Option 1 and Option 2:***The Contractor will only be paid capitation for anadministrative component for those member months the member is enrolled with the Contractor. For Option 1members the Contractor will be paid the administrative component up to a 12-month continuous period ofextended eligibility. For Option 2 members the administrative component will be paid for the period of time thetransplant is scheduled or performed. All medically necessary covered services will be reimbursed 100% with nodeductible through Reinsurance payments based on adjudicated encounters. Delivery supplement payments willnot apply to women who deliver during the 12 month continuous period of extended eligibility specified asOption 1.

**54.****PAYMENTS TO CONTRACTORS**

Subject to the availability of funds, AHCCCS shall make payments to the Contractor in accordance with theterms of this contract provided that the Contractor’s performance is in compliance with the terms and conditionsof this contract. Payment must comply with requirements of A.R.S. Title 36. AHCCCS reserves the option tomake payments to the Contractor by wire or National Automated Clearing House Association (NACHA) transferand will provide the Contractor at least 30 days notice prior to the effective date of any such change.

Where payments are made by electronic funds transfer, AHCCCS shall not be liable for any error or delay intransfer or indirect or consequential damages arising from the use of the electronic funds transfer process. Anycharges or expenses imposed by the bank for transfers or related actions shall be borne by the Contractor. Exceptfor adjustments made to correct errors in payment, and as otherwise specified in this section, any savingsremaining to the Contractor as a result of favorable claims experience and efficiencies in service delivery at theend of the contract term may be kept by the Contractor.

All funds received by the Contractor pursuant to this contract shall be separately accounted for in accordancewith generally accepted accounting principles.

Except for funds received from the collection of permitted copayments and third-party liabilities, the only sourceof payment to the Contractor for the services provided hereunder is the Arizona Health Care Cost ContainmentSystem Fund. An error discovered by the State, with or without an audit, in the amount of fees paid to theContractor will be subject to adjustment or repayment by AHCCCS making a corresponding decrease in a currentContractor’s payment or by making an additional payment to the Contractor. When the Contractor identifies anoverpayment, AHCCCS must be notified and reimbursed within 30 days of identification.

No payment due the Contractor by AHCCCS may be assigned or pledged by the Contractor. This section shallnot prohibit AHCCCS at its sole option from making payment to a fiscal agent hired by the Contractor.

**55.****CAPITATION ADJUSTMENTS**

Except for changes made specifically in accordance with this contract, the rates set forth in Section B shall notbe subject to re-negotiation or modification during the contract period. AHCCCS may, at its option, reviewthe effect of a program change and determine if a capitation adjustment is needed. In these instances theadjustment will be prospective with assumptions discussed with the Contractor prior to modifying capitationrates. The Contractor may request a review of a program change if it believes the program change was notequitable; AHCCCS will not unreasonably withhold such a review.

If the Contractor is in any manner in default in the performance of any obligation under this contract, AHCCCSmay, at its option and in addition to other available remedies, adjust the amount of payment until there issatisfactory resolution of the default. The Contractor shall reimburse AHCCCS and/or AHCCCS may deductfrom future monthly capitation for any portion of a month during which the Contractor was not at risk due to, forexample:

a. death of a memberb. inmate of a public institutionc. duplicate capitation to the same Contractord. adjustment based on change in member’s contract typee. voluntary withdrawal

Upon becoming aware that a member may be an inmate of a public institution, the Contractor mustcontact AHCCCS for an eligibility determination.

If a member is enrolled twice with the same Contractor, recoupment will be made as soon as the doublecapitation is identified. AHCCCS reserves the right to modify its policy on capitation recoupments at any timeduring the term of this contract.

**56.****RESERVED**

**57.****REINSURANCE**

Reinsurance is a stop-loss program provided by AHCCCS to the Contractor for the partial reimbursement ofcovered services, as described below, for a member with an acute medical condition beyond an annualdeductible level. AHCCCS self-insures the reinsurance program through a deduction to capitation rates. Forall reinsurance payments AHCCCS bases reimbursement on adjudicated and approved encounters. Refer to the*AHCCCS Reinsurance Processing Manual* for further details on the Reinsurance Program.

***Inpatient Reinsurance***

Inpatient reinsurance covers partial reimbursement of covered inpatient facility medical services. See the tablebelow for applicable deductible levels and coinsurance percentages. The coinsurance percent is the rate atwhich AHCCCS will reimburse the Contractor for covered inpatient costs incurred above the deductible. Thedeductible is the responsibility of the Contractor. Per diem rates paid for nursing facility services providedwithin 30 days of an acute hospital stay, including room and board, provided in lieu of hospitalization for up to90 days in any contract year shall be eligible for reinsurance coverage. Same-day admit-and-discharge servicesdo not qualify for reinsurance.

The following table represents deductible and coinsurance levels effective October 1, 2008, through September30, 2009:

*                                                                               Annual DeductibleStatewide Plan Enrollment                               ProspectiveReinsurance                   Coinsurance*0-34,999                                                                 $20,000                                                  75%35,000-49,999                                                        $35,000                                                 75%50,000 andover                                                   $50,000                                                  75%

Annual deductible levels apply to all members except for SSDI-TMC, State Only Transplant and SOBRAFamily Planning members. Beginning October 1, 2009, and annually thereafter, each of the deductible levelsabove will increase by $5,000.

***Prospective Reinsurance:***This coverage applies to prospective enrollment periods. The deductible level isbased on the Contractor’s statewide AHCCCS acute care enrollment (not including SOBRA Family PlanningExtension services) as of October 1st each contract year, as shown in the table above. AHCCCS will adjust theContractor’s deductible level at the beginning of a contract year if the Contractor’s enrollment changes to thenext enrollment level. A Contractor at or above the 35,000 enrollment deductible level may elect a lowerdeductible prior to the beginning of a new contract year. These deductible levels are subject to change byAHCCCS during the term of this contract. Any change in deductible levels will have a corresponding impacton capitation rates.

PPC inpatient expenses are not covered for any members under the reinsurance program unless they qualifyunder catastrophic or transplant reinsurance.

***Catastrophic Reinsurance***

The Catastrophic Reinsurance program encompasses members receiving certain biotech drugs (listed below),and those members diagnosed with hemophilia, Von Willebrand’s Disease or Gaucher’s Disease. Foradditional detail and restrictions refer to the *AHCCCS Reinsurance Processing Manual* and the *AMPM*. Thereare no deductibles for catastrophic reinsurance cases. For member’s receiving Biotech drugs outside of thespecific conditions mentioned in this paragraph, AHCCCS will reimburse at 85% of the cost of the drug only.For those members diagnosed with hemophilia, Von Willebrand’s Disease and Gaucher’s Disease, allmedically necessary covered services provided during the contract year shall be eligible for reimbursement at85% of the AHCCCS allowed amount or the Contractor’s paid amount, whichever is lower, depending on thesubcap code. Reinsurance coverage for anti-hemophilic blood factors will be limited to 85% of the AHCCCScontracted amount or the Contractor’s paid amount, whichever is lower. All catastrophic claims are subject tomedical review by AHCCCS.

AHCCCS holds a single-source specialty contract for anti-hemophilic agents and related services forhemophilia. Non-hemophilia related services are not covered under this specialty contract. Non-hemophiliarelatedcare is defined as any care that is provided not related to the hemophilia services.

The Contractor may access anti-hemophilic agents and related pharmaceutical services for hemophilia or VonWillebrand’s under the terms and conditions of the specialty contract for members enrolled in their plans. Inthat instance, the Contractor is the authorizing payor. As such, the Contractor will provide prior authorization,care coordination, and reimbursement for all components covered under the contract for their members. AContractor utilizing the contract will comply with the terms and conditions of the contract. A Contractor mayuse the AHCCCS contract or contract with a provider of their choice.

The Contractor must notify AHCCCS, Division of Health Care Management, Medical Management Unit, ofcases identified for catastrophic reinsurance coverage, excluding coverage of Biotech drugs outside of thosecondition mentioned in this paragraph, within 30 days of initial diagnosis and/orenrollment with theContractor, and annually 30 days prior to the beginning of each contract year. Catastrophic reinsurance will bepaid for a maximum 30-day retroactive period from the date of notification to AHCCCS. The determination ofwhether a case or type of case is catastrophic shall be made by the Director or designee based on the followingcriteria; 1) severity of medical condition, including prognosis; and 2) the average cost or average length ofhospitalization and medical care, or both, in Arizona, for the type of case under consideration.

*HEMOPHILIA*: Catastrophic reinsurance coverage is available for all members diagnosed with Hemophilia(ICD9 codes 286.0, 286.1, 286.2).

*VON WILLEBRAND’S DISEASE:*Catastrophic reinsurance coverage is available for all members diagnosedwith von Willebrand’s Disease who are non-DDAVP responders and dependent on Plasma Factor VIII.

*GAUCHER’S DISEASE:*Catastrophic reinsurance is available for members diagnosed with Gaucher’s Diseaseclassified as Type I and are dependent on enzyme replacement therapy.

*BIOTECH DRUGS:*Catastrophic reinsurance is available to cover the cost of certain biotech drugs whenmedically necessary. These drugs, collectively referred to as Biotech Drugs, are the responsibility of theContractor unless the members is CRS enrolled, the medications are related to the management of a CRS-coveredcondition, and CRS is providing coverage. Catastrophic reinsurance will cover the drug cost only.The drugs covered are Cerazyme, Aldurazyme, Fabryzyme, Myozyme, and Elaprase. The Biotech Drugscovered under reinsurance will be reviewed by AHCCCS at the start of each contract year. AHCCCS reservesthe right to require the use of a generic equivalent where applicable. AHCCCS will reimburse at the lesser ofthe Biotech Drug or its generic equivalent for reinsurance purposes.

***Transplants***

This program covers members who are eligible to receive covered major organ and tissue transplantationincluding bone marrow, heart, heart/lung, lung, liver, kidney, and other organ transplantation. Bone grafts andcornea transplantation services are not eligible for transplant reinsurance coverage but are eligible under theregular inpatient reinsurance program. Refer to the *AMPM* for covered services for organ and tissuetransplants. Reinsurance coverage for transplants received at an AHCCCS contracted facility is paid at thelesser of 85% of the AHCCCS contract amount for the transplantation services rendered or 85% of theContractor’s paid amount. Reinsurance coverage for transplants received at a non-AHCCCS contracted facilityis paid the lesser of 85% of the lowest AHCCCS contracted rate, for the same organ or tissue, or the Contractorpaid amount. The AHCCCS contracted transplantation rates may be found on the AHCCCS website. When amember is referred to a transplant facility for an AHCCCS-covered organ transplant, the Contractor shallnotify AHCCCS, Division of Health Care Management, Medical Management Unit.

*Option 1 and Option 2 Transplant Services:*Reinsurance coverage for State Only Option 1 and Option 2members (as described in Section D, Paragraph 2, Eligibility Categories) for transplants received at anAHCCCS contracted facility is paid at the lesser of 100% of the AHCCCS contract amount for thetransplantation services rendered, or the Contractor paid amount, less the transplant share of cost. Fortransplants received at a facility not contracted with AHCCCS, payment is made at the lesser of 100% of thelowest AHCCCS contracted amount for the transplantation services rendered, or the Contractor paid amount,less the transplant share of cost. The AHCCCS contracted transplantation rates may be found on the AHCCCSwebsite. When a member is referred to a transplant facility for an AHCCCS-covered organ transplant, theContractor shall notify AHCCCS, Division of Health Care Management, Medical Management Unit asspecified in the *AMPM Chapter 300, Policy 310 Attachments A and B, Extended Eligibility Process/Procedurefor Covered Solid Organ and Tissue Transplants*.

***Option 1 Non-transplant Reinsurance***

All medically necessary covered services provided to Option 1 members, unrelated to the transplant, shall beeligible for reimbursement, with no deductible, at 100% of the Contractor’s paid amount based on adjudicatedencounters.

***Other***

For all reinsurance case types other than transplants, the Contractor will be reimbursed 100% for all medicallynecessary covered expenses provided in a contract year, after the Contractor paid amount in the reinsurancecase reaches $650,000. It is the responsibility of the Contractor to notify AHCCCS, Division of Health CareManagement, Reinsurance Supervisor, once a reinsurance case reaches $650,000. The Contractor is required tosplit encounters as necessary once the reinsurance case reaches $650,000. Failure to notify AHCCCS or failureto split and adjudicate encounters appropriately within 15 months from the end date or service will disqualifythe related encounters for 100% reimbursement consideration.

***Encounter Submission and Payments for Reinsurance***

***a) Encounter Submission:***All reinsurance associated encounters must reach a clean claim status withinfifteen months from the end date of service, or date of eligibility posting, whichever is later. Encounters forreinsurance claims that have passed the fifteen month deadline and are being adjusted due to a claim dispute orhearing decision must be submitted and pass all encounter and reinsurance edits within 90 calendar days of thedate of the claim dispute decision or hearing decision, or Director’s decision, whichever is applicable. Failureto submit the encounter within this timeframe will result in the loss of any related reinsurance dollars.

The Contractor must void encounters for any claims that are recouped in full. For recoupments that result in areduced claim value or any adjustments that result in an increased claim value, replacement encounters must besubmitted. For replacement encounters resulting in an increased claim value, the replacement encounter mustreach adjudicated status within 15 months of end date of service to receive additional reinsurance benefits.The Contractor should refer to Section D, Paragraph 65, Encounter Data Reporting, for encounter reportingrequirements.

***b) Payment of Inpatient and Catastrophic Reinsurance Cases:***AHCCCS will reimburse a Contractor forcosts incurred in excess of the applicable deductible level, subject to coinsurance percentages andMedicare/TPL payment, less any applicable quick pay discounts, slow payment penalties and interest.Amounts in excess of the deductible level shall be paid based upon costs paid by the Contractor, minus thecoinsurance and Medicare/TPL payment, unless the costs are paid under a subcapitated arrangement. Insubcapitated arrangements, the Administration shall base reimbursement of reinsurance encounters on thelower of the AHCCCS allowed amount or the reported health plan paid amount, minus the coinsurance andMedicare/TPL payment and applicable quick pay discounts, slow payment penalties and interest.

When a member with an annual enrollment choice changes Contractors within a contract year, for reinsurancepurposes, all eligible inpatient costs, nursing facility costs and inpatient psychiatric costs incurred for thatmember do not follow the member to the receiving Contractor. Encounters from the Contractor the member isleaving (for dates of service within the current contract year) will not be applied toward the receivingContractor’s deductible level. For further details regarding this policy and other reinsurance policies refer tothe *AHCCCS Reinsurance Processing Manual*.

***c) Payment of Transplant Reinsurance Cases:***Reinsurance benefits are based upon the lower of theAHCCCS contract amount or the Contractor’s paid amount, subject to coinsurance percentages. TheContractor is required to submit all supporting encounters for transplant services. Reinsurance payments willbe linked to transplant encounter submissions. In order to receive reinsurance payment for transplant stages,billed amounts and health plan paid amounts for adjudicated encountersmust agree with related claims and/orinvoices. Timeliness for each stage payment will be calculated based on the latest adjudication date for thecomplete set of encounters related to the stage. Please refer to the *AHCCCS Reinsurance Processing Manual*for the appropriate billing of transplant services.

***Reinsurance Audits***

***Pre-Audit:***Any medical audits on reinsurance cases will be conducted on a statistically significant randomsample selected based on utilization trends. The Division of Health Care Management will select reinsurancecases based on encounter data received during the contract year to assure timeliness of the audit process. TheContractor will be notified of the documentation required for the medical audit. For closed contracts, a 100%audit may be conducted.

***Audit:***AHCCCS will give the Contractor at least 45 days advance notice of any audit. The Contractor shallhave all requested medical records and financial documentation available to the nurse auditors. Anydocuments not requested in advance by AHCCCS shall be made available upon request of the Audit Teamduring the course of the audit. The Contractor representative shall be available to the Audit Team at all timesduring AHCCCS audit activities. If an audit should be conducted on-site, the Contractor shall provide theAudit Team with workspace, access to a telephone, electrical outlets and privacy for conferences.Audits may be completed without an on-site visit. For these audits, the Contractor will be asked to send therequired documentation to AHCCCS. The documentation will then be reviewed by AHCCCS.

***Audit Considerations:***Reinsurance consideration will be given to inpatient facility contracts and hearingdecisions rendered by the Office of Legal Assistance. Pre-hearing and/or hearing penalties discoverable duringthe review process will not be reimbursed under reinsurance.

Per diem rates may be paid for nursing facility and rehabilitation services provided the services are renderedwithin 30 days of an acute hospital stay, including room and board, provided in lieu of hospitalization for up to90 days in any contract year. The services rendered in these sub-acute settings must be of an acute nature and,in the case of rehabilitative or restorative services, steady progress must be documented in the medical record.

***Audit Determinations:***The Contractor will be furnished a copy of the Reinsurance Post-Audit Results letterapproximately 45 days after the audit and given an opportunity to comment and provide additional medical orfinancial documentation on any audit findings. AHCCCS may limit reinsurance reimbursement to a lower oralternative level of care if the Director or designee determines that the less costly alternative could and shouldhave been used by the Contractor. A recoupment of reinsurance reimbursements made to the Contractor mayoccur based on the results of the medical audit.

A Contractor whose reinsurance case is reduced or denied shall be notified in writing by AHCCCS and will beinformed of rationale for reduction or denial determination and the applicable grievance and appeal processavailable.

**58.****COORDINATION OF BENEFITS**

Pursuant to federal and state law, AHCCCS is the payer of last resort except under limited situations. This meansAHCCCS shall be used as a source of payment for covered services only after all other sources of payment havebeen exhausted. The Contractor shall coordinate benefits in accordance with 42 CFR 433.135 et seq., ARS 36-2903, and A.A.C. R9-22-1001 et seq. so that costs for services otherwise payable by the Contractor are costavoided or recovered from a liable party. The term “State” shall be interpreted to mean “Contractor” for purposesof complying with the federal regulations referenced above. The Contractor may require subcontractors to beresponsible for coordination of benefits for services provided pursuant to this contract.

The two methods used in the coordination of benefits are cost avoidance and post payment recovery. TheContractor shall use these methods as described in A.A.C. R9-22-1001 et seq. and federal and state law. See alsoSection D, Paragraph 60, Medicare Services and Cost Sharing.

***Cost Avoidance****:*The Contractor shall take reasonable measures to determine all legally liable parties. Thisrefers to any individual, entity or program that is or may be liable to pay all or part of the expenditures forcovered services. The Contractor shall cost-avoid a claim if it has established the probable existence of a liableparty at the time the claim is filed. Establishing liability takes place when the Contractor receives confirmationthat another party is, by statute, contract, or agreement, legally responsible for the payment of a claim for ahealthcare item or service delivered to a member. If the probable existence of a party’s liability cannot beestablished the Contractor must adjudicate the claim. The Contractor must then utilize post payment recoverywhich is described in further detail below. If the Administration determines that the Contractor is not activelyengaged in cost avoidance activities the Contractor shall be subject to sanctions in an amount not less than**three times** the amount that could have been cost avoided.

The Contractor shall not deny a claim for untimeliness if the untimely claim submission results from aprovider’s efforts to determine the extent of liability.If a third party insurer other than Medicare requires the member to pay any copayment, coinsurance ordeductible, the Contractor is responsible for making these payments, even if the services are provided outsideof the Contractor network. The Contractor is not responsible for paying coinsurance and deductibles that arein excess of what the Contractor would have paid for the entire service per a written contract with the providerperforming the service, or the AHCCCS FFS payment equivalent when no contract exists. If the Contractorrefers the member for services to a third-party insurer, other than Medicare, and the insurer requires paymentin advance of all copaycopayments, coinsurance and deductibles, the Contractor must make such payments inadvance.

*Members with CRS condition:*A member with private insurance or Medicare coverage is not required to utilizeCRSA. This includes members with Medicare whether they are enrolled in Medicare FFS or a MedicareManaged Care Plan. If the member uses the private insurance network for a CRS-covered condition, theContractor is responsible for all applicable deductibles and copayments. However, if the member hasMedicare coverage, the AHCCCS Policy 201- *Medicare Cost Sharing for Members in Traditional Fee forService Medicare* and Policy 202 - *Medicare Cost Sharing for Members in Medicare Managed Care Plans*shall apply. When the private insurance or Medicare is exhausted, or certain annual or lifetime limits arereached with respect to CRS-covered conditions, the Contractor shall refer the member to CRSA fordetermination for CRS services. If the member with private insurance or Medicare chooses to enroll with CRS,CRS becomes the secondary payer responsible for all applicable deductibles and copayments. The Contractoris not responsible to provide services in instances when the CRS-eligible member, who has no primaryinsurance or Medicare, refuses to receive CRS-covered services through the CRS Program. If the Contractorbecomes aware that a member with a CRS-covered condition refuses to participate in the CRS applicationprocess or refuses to receive services through the CRS Program, the member may be billed by the provider inaccordance with AHCCCS regulations regarding billing for unauthorized services.

***Post-payment Recoveries****:*Post-payment recovery is necessary in cases where the Contractor has notestablished the probable existence of a liable party at the time services were rendered or paid for, or wasunable to cost-avoid.The following sections set forth requirements for Contractor recovery actions includingrecoupment activities, other recoveries and total plan case requirements.

*Recoupments*: The Contractor must follow the protocols established in the ACOM *Recoupment Request Policy*.The Contractor must void encounters for claims that are recouped in full. For recoupments that result in anadjusted claim value, the Contractor must submit replacement encounters.

*Other Recoveries*: The Contractor shall identify the existence of potentially liable parties through the use oftrauma code edits, utilizing diagnostic codes 799.9 and 800 to 999.9 (excluding code 994.6), and otherprocedures. The Contractor shall not pursue recovery in the following circumstances, unless the case has beenreferred to the Contractor by AHCCCS or AHCCCS’s authorized representative:

Uninsured/underinsured motorist insurance                  Restitution RecoveryFirst-and third-party liability insurance                            Worker’s CompensationTortfeasors, including casualty                                        Estate RecoverySpecial Treatment Trust Recovery

Upon identification of any of the above situations, the Contractor shall promptly report cases to AHCCCS’sauthorized representative for determination of a “total plan” case. The Contractor is responsible for allrecovery actions for a “total plan” case. A total plan case is a case where payments for services rendered to themember are exclusively the responsibility of the Contractor; no reinsurance or fee-for-service payments areinvolved. By contrast, a “joint” case is one where fee-for-service payments and/or reinsurance payments areinvolved. In joint cases, the Contractor shall notify AHCCCS’s authorized representative within 10 businessdays of the identification of a liable party. Failure to report these cases may result in one of the remediesspecified in Section D, Paragraph 72, Sanctions. The Contractor shall cooperate with AHCCCS’s authorizedrepresentative in all collection efforts.

*Total Plan Case Requirements*: In “total plan” cases, the Contractor is responsible for performing all research,investigation, the mandatory filing of initial liens on cases that exceed $250, lien amendments, lien releases,and payment of other related costs in accordance with A.R.S. 36-2915 and A.R.S. 36-2916. The Contractorshall use the AHCCCS-approved casualty recovery correspondence when filing liens and when correspondingto others in regard to casualty recovery. The Contractor may retain up to 100% of its recovery collections if allof the following conditions exist:

                a. Total collections received do not exceed the total amount of the Contractor’s financial                   liability for the member;                b. There are no payments made by AHCCCS related to fee-for-service, reinsurance or                   administrative costs (i.e., lien filing , etc.); and                c. Such recovery is not prohibited by state or Federal law.

Prior to negotiating a settlement on a total plan case, the Contractor shall notify AHCCCS to ensure that thereis no reinsurance or fee-for-service payment that has been made by AHCCCS. Failure to report these casesprior to negotiating a settlement amount may result in one of the remedies specified in Section D, Paragraph72, Sanctions.

*Total Plan Cases*: the Contractor shall report settlement information to AHCCCS, utilizing the AHCCCS-approvedcasualty recovery Notification of Settlement form, within 10 business days from the settlement date.Failure to report these cases may result in one of the remedies specified in Section D, Paragraph 72, Sanctions.

*Joint Cases*: AHCCCS’s authorized representative is responsible for performing all research, investigation andpayment of lien-related costs, subsequent to the referral of any and all relevant case information to AHCCCS’sauthorized representative by the Contractor. In joint cases, AHCCCS’s authorized representative is alsoresponsible for negotiating and acting in the best interest of all parties to obtain a reasonable settlement in jointcases and may compromise a settlement in order to maximize overall reimbursement, net of legal and othercosts. The Contractor will be responsible for their prorated share of the contingency fee. The Contractor’sshare of the contingency fee will be deducted from the settlement proceeds prior to AHCCCS remitting thesettlement to the Contractor.

***Other Reporting Requirements****:*If a Contractor discovers the probable existence of a liable party that is notknown to AHCCCS, the Contractor must report the information to the AHCCCS contracted vendor not laterthan 10 days from the date of discovery. In addition, the Contractor shall notify AHCCCS of any knownchanges in coverage within deadlines and in a format prescribed by AHCCCS in the *Technical InterfaceGuidelines*. Failure to report these cases may result in one of the remedies specified in Section D, Paragraph72, Sanctions.

At AHCCCS’s request, the Contractor shall provide an electronic extract of the Casualty cases, including openand closed cases. Data elements include, but are not limited to: the member’s first and last name; AHCCCSID; date of incident; claimed amount; paid/recovered amount; and case status. The AHCCCS TPL Sectionshall provide the format and reporting schedule for this information to the Contractor. AHCCCS will providethe Contractor with a file of all other coverage information, for the purpose of updating the Contractor’s files,as decribed in the *Technical Interface Guidelines*.

*Title XXI (KidsCare), HIFA Parents, BCCTP, SOBRA Family Planning and SSDI-TMC:*Eligibility forKidsCare, HIFA Parents, BCCTP, SOBRA Family Planning and SSDI-TMC benefits require that theapplicant/member not be enrolled with any other creditable health insurance plan. If the Contractor becomesaware of any such coverage, the Contractor shall notify AHCCCS immediately. AHCCCS will determine if theother insurance meets the creditable coverage definition in A.R.S. 36-2982(G).

*Contract Termination:*Upon termination of this contract, the Contractor will complete the existing third partyliability cases or make any necessary arrangements to transfer the cases to AHCCCS’s authorized TPLrepresentative.

**59.****COPAYMENTS**

Most of the AHCCCS members remain exempt from copayments while others are subject to an optionalcopayment. Those populations exempt or subject to optional copayments may not be denied services for theinability to pay the copayment [42 CFR 438.108]. Any copayments collected shall belong to the Contractor orits subcontractors. Attachment K, Copayments, provides detail of the populations and their related copaymentstructure.

**60.****MEDICARE SERVICES AND COST SHARING**

AHCCCS has members enrolled who are eligible for both Medicaid and Medicare. These members arereferred to as “dual eligibles”. Generally, the Contractor is responsible for payment of Medicare coinsuranceand/or deductibles for covered services provided to dual eligible members. However, there are different costsharing responsibilities that apply to dual eligible members based on a variety of factors. Unless priorapproval is obtained from AHCCCS, the Contractor must limit their cost sharing responsibility according tothe ACOM *Medicare Cost Sharing Policy*. The Contractor shall have no cost sharing obligation if theMedicare payment exceeds what the Contractor would have paid for the same service of a non-Medicaremember. Please refer to Section D, Paragraph 10, Scope of Services, for information regarding prescriptionmedication for Medicare Part D.

When a person with Medicare who is also eligible for Medicaid (dual eligible) is in a medical institution that isfunded by Medicaid for a full calendar month, the dual eligible person is not required to pay copayments fortheir Medicare covered prescription medications for the remainder of the calendar year. To ensure appropriateinformation is communicated for these members to the Centers for Medicare and Medicaid Services (CMS),the Contractor must, using the approved form, notify the AHCCCS Member Database ManagementAdministration (MDMA), via fax at (602) 253-4807 as soon as it determines that a dual eligible person isexpected to be in a medical institution that is funded by Medicaid for a full calendar month, regardless of thestatus of the dual eligible person’s Medicare lifetime or annual benefits. This includes:                a. Members who have Medicare part “B” only;                b. Members who have used their Medicare part “A” life time inpatient benefit;                c. Members who are in a continuous placement in a single medical institution or any                   combination of continuous placements in a medical institution.

For purposes of the medical institution notification, medical institutions are defined as acute hospitals,psychiatric hospital – Non IMD, psychiatric hospital – IMD, residential treatment center – Non IMD,residential treatment center – IMD, skilled nursing facilities, and Intermediate Care Facilities for the MentallyRetarded.

**61.****MARKETING**

The Contractor shall submit all proposed marketing and outreach materials and events that will involve thegeneral public to the AHCCCS Marketing Committee for prior approval in accordance with the ACOM*Marketing Outreach and Incentives Policy* [42 CFR 438.104]. The Contractor must have signed contracts withPCPs, specialists, dentists, and pharmacies in order for them to be included in marketing materials. Marketingmaterials that have received prior approval must be resubmitted to the Division of Health Care Managementevery two years for re-approval.

**62.****CORPORATE COMPLIANCE**

In accordance with A.R.S. Section 36-2918.01, and *AHCCCS Contractor Operation Manual (ACOM)*, Chapter100, the Contractor and its subcontractors and providers are required to immediately notify the AHCCCSOffice of Program Integrity (OPI) regarding any suspected fraud and report the information within 10 businessdays of discovery by completing the confidential AHCCCS Referral for Preliminary Investigation form for anyand all suspected fraud or abuse [42 CFR 455.1(a)(1)] This shall include acts of suspected fraud or abuse thatwere resolved internally but involved AHCCCS members or funds.

As stated in A.R.S. Section 13-2310, incorporated herein by reference, any person who knowingly obtains anybenefit by means of false or fraudulent pretenses, representations, promises, or material omissions is guilty of aClass 2 felony.

The Contractor agrees to permit and cooperate with any onsite review. A review by the AHCCCS Office ofProgram Integrity may be conducted without notice and for the purpose of ensuring program compliance. TheContractor also agrees to respond to electronic, telephonic or written requests for information within thetimeframe specified by AHCCCS Administration. The Contractor agrees to provide documents, includingoriginal documents, to representatives of the Office of Program Integrity upon request. The OPI shall allow areasonable time for the Contractor to copy the requested documents, not to exceed 20 business days from thedate of the OPI request.

The Contractor must have a mandatory compliance program, supported by other administrative procedures,that is designed to guard against fraud and abuse [42 CFR 438.608(a) and (b)] The Contractor shall havewritten criteria for selecting a Compliance Officer and job description that clearly outlines the responsibilitiesand authority of the position. The Compliance Officer shall have the authority to assess records andindependently refer suspected member fraud, provider fraud and member abuse cases to AHCCCS, Office ofProgram Integrity or other duly authorized enforcement agencies [42 CFR 455.17].

The compliance program shall be designed to both prevent and detect suspected fraud or abuse. Thecompliance program must include:

1. The written designation of a compliance officer and a compliance committee that are accountable to   the Contractor’s top management.2. The Compliance Officer must be an onsite management official who reports directly to top   management.3. Effective training and education.4. Effective lines of communication between the compliance officer and the organization’s employees.5. Enforcement of standards through well-publicized disciplinary guidelines.6. Provision for internal monitoring and auditing.7. Provision for prompt response to problems detected.8. Written policies, procedures, and standards of conduct that articulate the organization’s commitment   to comply with all applicable Federal and state standards.9. A Compliance Committee which shall be made up of, at a minimum, the Compliance Officer, a   budgetary official and other executive officials with decision making authority. The Compliance   Committee will assist the Compliance Officer in monitoring, reviewing and assessing the   effectiveness of the compliance program and timeliness of reporting.10. Pursuant to the Deficit Reduction Act of 2005 (DRA), the Contractor, as a condition for receiving   payments shall establish written policies for employees detailing:                a. The federal False Claims Act provisions;                b. The administrative remedies for false claims and statements;                c. Any state laws relating to civil or criminal penalties for false claims and statements;                d. The whistleblower protections under such laws.11. The Contractor must establish a process for training existing staff and new hires on the compliance   program and on the items in section 10. All training must be conducted in such a manner that can be   verified by AHCCCS.12. The Contractor must require, through documented policies and subsequent contract amendments, that   providers train their staff on the following aspects of the Federal False Claims Act provisions:                a. The administrative remedies for false claims and statements;                b. Any state laws relating to civil or criminal penalties for false claims and statements;                c. The whistleblower protections under such laws.

The Contractor is required to research potential overpayments identified by the AHCCCS Office of ProgramIntegrity [42 CFR 455.1(a)]. After conducting a cost benefit analysis to determine if such action is warranted,the Contractor should attempt to recover any overpayments identified. The AHCCCS Office of ProgramIntegrity shall be advised of the final disposition of the research and advised of actions, if any, taken by theContractor.

**63.****RECORDS RETENTION**

The Contractor shall maintain records relating to covered services and expenditures including reports to

AHCCCS and documentation used in the preparation of reports to AHCCCS. The Contractor shall comply withall specifications for record keeping established by AHCCCS. All records shall be maintained to the extent andin such detail as required by AHCCCS Rules and policies. Records shall include but not be limited to financialstatements, records relating to the quality of care, medical records, prescription files and other records specifiedby AHCCCS.

The Contractor agrees to make available, at all reasonable times during the term of this contract, any of its recordsfor inspection, audit or reproduction by any authorized representative of AHCCCS, State or Federal government.The Contractor shall be responsible for any costs associated with the reproduction of requested information.The Contractor shall preserve and make available all records for a period of five years from the date of finalpayment under this contract. HIPAA related documents must be retained for a period of six years per 45 CFR164.530(j)(2).

If this contract is completely or partially terminated, the records relating to the work terminated shall be preservedand made available for a period of five years from the date of any such termination. Records which relate togrievances, disputes, litigation or the settlement of claims arising out of the performance of this contract, or costsand expenses of this contract to which exception has been taken by AHCCCS, shall be retained by the Contractorfor a period of five years after the date of final disposition or resolution thereof.

**64.****DATA EXCHANGE REQUIREMENTS**

The Contractor is authorized to exchange data with AHCCCS relating to the information requirements of thiscontract and as required to support the data elements to be provided to AHCCCS in the formats prescribed byAHCCCS, which include formats prescribed by the Health Insurance Portability and Accountability Act(HIPAA). Details for the formats may be found in the *HIPAA Transaction Companion Documents & TradingPartner Agreements*, *the AHCCCS Encounter Reporting User Manual* and in the AHCCCS *Technical InterfaceGuidelines*, available on the AHCCCS website.

The information so recorded and submitted to AHCCCS shall be in accordance with all procedures, policies,rules, or statutes in effect during the term of this contract. If any of these procedures, policies, rules, regulationsor statutes are hereinafter changed, both parties agree to conform to these changes following appropriatenotification by AHCCCS.

The Contractor is responsible for any incorrect data, delayed submission or payment (to the Contractor or itssubcontractors), and/or penalty applied due to any error, omission, deletion, or erroneous insert caused byContractor-submitted data. Any data that does not meet the standards required by AHCCCS shall not be acceptedby AHCCCS.

The Contractor is responsible for identifying any inconsistencies immediately upon receipt of data fromAHCCCS. If any unreported inconsistencies are subsequently discovered, the Contractor shall be responsible forthe necessary adjustments to correct its records at its own expense.

The Contractor shall accept from AHCCCS original evidence of eligibility and enrollment in a form appropriatefor electronic data exchange. Upon request by AHCCCS, the Contractor shall provide to AHCCCS updated date-sensitive PCP assignments in a form appropriate for electronic data exchange.

The Contractor shall be provided with a Contractor-specific security code for use in all data transmissions madein accordance with contract requirements. Each data transmission by the Contractor shall include the Contractor'ssecurity code. The Contractor agrees that by use of its security code, it certifies that any data transmitted isaccurate and truthful, to the best of the Contractor's Chief Executive Officer, Chief Financial Officer ordesignee’s knowledge [42 CFR 438.606]. The Contractor further agrees to indemnify and hold harmless theState of Arizona and AHCCCS from any and all claims or liabilities, including but not limited to consequentialdamages, reimbursements or erroneous billings and reimbursements of attorney fees incurred as a consequence ofany error, omission, deletion or erroneous insert caused by the Contractor in the submitted input data. Neither theState of Arizona nor AHCCCS shall be responsible for any incorrect or delayed payment to the Contractor’sAHCCCS services providers (subcontractors) resulting from such error, omission, deletion, or erroneous inputdata caused by the Contractor in the submission of AHCCCS claims.

The costs of software changes are included in administrative costs paid to the Contractor. There is no separatepayment for software changes. A PMMIS systems contact will be assigned after contract award. AHCCCS willwork with the contractor as they evaluate Electronic Data Interchange options.

***Health Insurance Portability and Accountability Act (HIPAA****):*The Contractor shall comply with theAdministrative Simplification requirements of Subpart F of the HIPAA of 1996 (Public Law 107-191, 110Statutes 1936) and all Federal regulations implementing that Subpart that are applicable to the operations of theContractor by the dates required by the implementing Federal regulations as well as all subsequent requirementsand regulations as published.

**65.****ENCOUNTER DATA REPORTING**

**Encounter Submissions**

The accurate and timely reporting of encounter data is crucial to the success of the AHCCCS program. AHCCCSuses encounter data to pay reinsurance benefits, set fee-for-service and capitation rates, determine reconciliationamounts, determine disproportionate share payments to hospitals, and to determine compliance with performancestandards. The Contractor shall submit encounter data to AHCCCS for all services for which the Contractorincurred a financial liability and claims for services eligible for processing by the Contractor where no financialliability was incurred, including services provided during prior period coverage. This requirement is a conditionof the CMS grant award [42 CFR 438.242(b)(1)].

A Contractor shall prepare, review, verify, certify, and submit, encounters for consideration to AHCCCS.Upon submission, the Contractor certifies that the services listed were actually rendered [42 CFR 455.1(a)(2)].The encounters must be submitted in the format prescribed by AHCCCS.

Encounter data must be provided to AHCCCS as outlined in the *HIPAA Transaction Companion Documents &Trading Partner Agreements* and the *AHCCCS Encounter Reporting User Manual* and should be received byAHCCCS no later than 240 days after the end of the month in which the service was rendered, or the effectivedate of the enrollment with the Contractor, whichever date is later. Refer to Paragraph 64, Data ExchangeRequirements, for further information.

The Contractor will be assessed sanctions for noncompliance with encounter submission requirements.

**Encounter Reporting**

An Encounter Submission Tracking Report (ESTR) must be maintained and made available to AHCCCS uponrequest. The Tracking Report’s purpose is to link each claim to an adjudicated or pended encounter returned tothe Contractor. Further information regarding the Encounter Submission Tracking Report may be found in the*AHCCCS Encounter Reporting User Manual*.

In addition to the Encounter Submission Tracking Report, the Contractor must maintain and review a reportwhich reconciles financial fields of a claim (health plan paid, billed amount, health plan allowed, etc.) with thefinancial fields of adjudicated encounters. This report shall be available to AHCCCS upon request.

At least twice each month, AHCCCS provides the Contractor with full replacement files containing provider andmedical coding information. These files should be used by the Contractor to ensure accurate EncounterReporting. Refer to the *AHCCCS Encounter Reporting User Manual* for further information.

**Pended Encounter Corrections**

The Contractor must resolve all pended encounters within 120 days of the original processing date. Sanctionswill be imposed according to the following schedule for each encounter pended for more than 120 days unlessthe pend is due to AHCCCS error:

0 – 120 days          121 – 180 days      181 – 240 days      241 – 360 days      361 + daysNo sanction          $ 5 per month        $ 10 per month      $ 15 per month      $ 20 per month

“AHCCCS error” is defined as a pended encounter, which (1) AHCCCS acknowledges to be the result of itsown error, and/or (2) requires a change to the system programming, an update to the database reference table,or further research by AHCCCS. AHCCCS reserves the right to adjust the sanction amount if circumstanceswarrant. Upon completion of any changes to the AHCCCS system programming or updates to the databasereference tables, sanctions may be imposed from date of resolution. AHCCCS reserves the right to adjust thesanction amount if circumstances warrant.

Before imposing sanctions, AHCCCS will notify the Contractor, in writing, of the total number of sanctionableencounters pended more than 120 days. Pended encounters shall not be voided by the Contractor as a meansof avoiding sanctions for failure to correct encounters within 120 days. The Contractor shall document voidedencounters and shall maintain a record of the voided Claim Reference Number(s) (CRN) with appropriatereasons indicated. The Contractor shall, upon request, make this documentation available to AHCCCS forreview. Refer to the *AHCCCS Encounter Reporting User Manual* for further information.

**Encounter Corrections**

Contractors are required to submit replacement or voided encounters in the event that claims are subsequently

corrected following the initial encounter submission as described below. This includes corrections as a resultof inaccuracies identified by fraud and abuse audits or investigations conducted by AHCCCS or theContractor. The Contractor must void encounters for claims that are recouped in full. For recoupments thatresult in a reduced claim value or adjustments that result in an increased claim value, replacement encountersmust be submitted. For those recoupments requiring approval from AHCCCS, replacement encounters must besubmitted within 120 days of the recoupment approval from AHCCCS. Refer to the AHCCCS *EncounterReporting User Manual* for instructions regarding the submission of corrected encounters.

**Encounter Validation Studies**

Per the CMS requirement, AHCCCS will conduct encounter validation studies of the Contractor’s encountersubmissions, and sanction the Contractor for noncompliance with encounter submission requirements. Thepurpose of encounter validation studies is to compare recorded utilization information from a medical record orother source with the Contractor’s submitted encounter data. Any and all covered services may be validated aspart of these studies. Encounter validation studies will be conducted at least yearly.

AHCCCS may revise study methodology, timelines, and sanction amounts based on agency review or as aresult of consultations with CMS. The Contractor will be notified in writing of any significant change in studymethodology.

AHCCCS will notify the Contractor in writing of the sanction amounts and of the selected data needed forencounter validation studies. The Contractor will have 90 days to submit the requested data to AHCCCS. Inthe case of medical records requests, the Contractor’s failure to provide AHCCCS with the records requestedwithin 90 days may result in a sanction of $1,000 per missing medical record. If AHCCCS does not receive asufficient number of medical records from the Contractor to select a statistically valid sample for a study, theContractor may be sanctioned up to 5% of its annual capitation payment.

The criteria used in encounter validation studies may include timeliness, correctness, and omission ofencounters. Refer to the *AHCCCS Data Validation User Manual* for further information.

AHCCCS may also perform special reviews of encounter data, such as comparing encounter reports to theContractor’s claims files. Any findings of incomplete or inaccurate encounter data may result in the imposition ofsanctions or requirement of a corrective action plan.

**66.****ENROLLMENT AND CAPITATION TRANSACTION UPDATES**

AHCCCS produces daily enrollment transaction updates identifying new members and changes to existingmembers' demographic, eligibility and enrollment data, which the Contractor shall use to update its memberrecords. The daily enrollment transaction update, that is run immediately prior to the monthly enrollment andcapitation transaction, is referred to as the "last daily" and will contain all rate code changes made for theprospective month, as well as any new enrollments and disenrollments as of the 1stof the prospective month.AHCCCS also produces a daily Manual Payment Transaction, which identifies enrollment or disenrollmentactivity that was not included on the daily enrollment transaction update due to internal edits. The Contractorshall use the Manual Payment Transaction in addition to the daily enrollment transaction update to update itsmember records.

On a monthly basis AHCCCS provides the Contractor with an electronic file of all Acute members who mustcomplete a review of their eligibility in order to maintain enrollment with the Contractor. AHCCCS stronglyencourages the Contractor to utilize this file to support member retention efforts.

A weekly capitation transaction will be produced to provide the Contractor with member-level capitationpayment information. This file will show changes to the prospective capitation payments, as sent in the monthlyfile, resulting from enrollment changes that occur after the monthly file is produced. This file will also identifymass adjustments to and/or manual capitation payments that occurred at AHCCCS after the monthly file isproduced.

The monthly enrollment and monthly capitation transaction updates are generally produced two days before theend of every month. The update will identify the total active population for the Contractor as of the first day ofthe next month. These updates contain the information used by AHCCCS to produce the monthly capitationpayment for the next month. The Contractor must reconcile their member files with the AHCCCS monthlyupdate. After reconciling the monthly update information, the Contractor will record the results of thereconciliation, which will be made available upon request, and will resume posting daily updates beginning withthe last two days of the month. The last two daily updates are different from the regular daily updates in that theypay and/or recoup capitation into the next month. If the Contractor detects an error through the monthly updateprocess, the Contractor shall notify AHCCCS, Information Services Division.

Refer to Section D, Paragraph 64, Data Exchange Requirements, for further information.

**67.****PERIODIC REPORT REQUIREMENTS**

AHCCCS, under the terms and conditions of its CMS grant award, requires periodic reports and otherinformation from the Contractor. The submission of late, inaccurate, or otherwise incomplete reports shallconstitute failure to report subject to the penalty provisions described in Section D, Paragraph 72, *Sanctions* andAttachement F, Periodic Report Requirements.

Standards applied for determining adequacy of required reports are as follows [42 CFR 438.242(b)(2)]:

                a. *Timeliness:* Reports or other required data shall be received on or before scheduled due dates.                b. *Accuracy:* Reports or other required data shall be prepared in strict conformity with appropriate                   authoritative sources and/or AHCCCS defined standards.                c. *Completeness:* All required information shall be fully disclosed in a manner that is both responsive                   and pertinent to report intent with no material omissions.

The Contractor shall comply with all reporting requirements contained in this contract. AHCCCS requirementsregarding reports, report content and frequency of submission of reports are subject to change at any time duringthe term of the contract. The Contractor shall comply with all changes specified by AHCCCS. The Contractorshall be responsible for continued reporting beyond the term of the contract.

**68.****REQUESTS FOR INFORMATION**

AHCCCS may, at any time during the term of this contract, request financial or other information from theContractor. Responses shall fully disclose all financial or other information requested. Information may bedesignated as confidential but may not be withheld from AHCCCS as proprietary. Information designated asconfidential may not be disclosed by AHCCCS without the prior written consent of the Contractor except asrequired by law. Upon receipt of such written requests for information, the Contractor shall provide completeinformation as requested no later than 30 days after the receipt of the request unless otherwise specified in therequest itself.

**69.****DISSEMINATION OF INFORMATION**

Upon request, the Contractor shall assist AHCCCS in the dissemination of information prepared by AHCCCS orthe Federal government to its members. The cost of such dissemination shall be borne by the Contractor. Alladvertisements, publications and printed materials that are produced by the Contractor and refer to coveredservices shall state that such services are funded under contract with AHCCCS.

**70.****OPERATIONAL AND FINANCIAL READINESS REVIEWS**

AHCCCS may conduct Operational and Financial Readiness Reviews on the Contractor and will, subject to theavailability of resources, provide technical assistance as appropriate. The Readiness Review will be conductedprior to the start of business. The purpose of a Readiness Review is to assess Contractor’s readiness and ability toprovide covered services to members at the start of the contract. The Contractor will be permitted to commenceoperations only if the Readiness Review factors are met to AHCCCS's satisfaction.

**71.****OPERATIONAL AND FINANCIAL REVIEWS**

In accordance with CMS requirements, AHCCCS, or an independent external agent, will conduct annualOperational and Financial Reviews for the purpose of (but not limited to) identifying best practices and ensuringoperational and financial program compliance [42 CFR 438.204]. The reviews will identify areas whereimprovements can be made and make recommendations accordingly, monitor the Contractor's progress towardsimplementing mandated programs and provide the Contractor with technical assistance if necessary. TheContractor shall comply with all other medical audit provisions as required by AHCCCS Rule R9-22-521.

The type and duration of the Operational and Financial Review will be solely at the discretion of AHCCCS.Except in cases where advance notice is not possible or advance notice may render the review less useful,AHCCCS will give the Contractor at least three weeks advance notice of the date of the on-site review. Inpreparation for the on-site Operational and Financial Reviews, the Contractor shall cooperate fully withAHCCCS and the AHCCCS Review Team by forwarding in advance such policies, procedures, job descriptions,contracts, logs and other information that AHCCCS may request. The Contractor shall have all requestedmedical records on-site. Any documents, not requested in advance by AHCCCS, shall be made available uponrequest of the Review Team during the course of the review. The Contractor personnel, as identified in advance,shall be available to the Review Team at all times during AHCCCS on-site review activities. While on-site, theContractor shall provide the Review Team with appropriate workspace, access to a telephone, electrical outlets,internet access and privacy for conferences.

The Contractor will be furnished a draft copy of the Operational and Financial Review Report and given anopportunity to comment on any review findings prior to AHCCCS publishing the final report. Operational andFinancial Review findings may be used in the scoring of subsequent bid proposals by that Contractor.Recommendations, made by the Review Team to bring the Contractor into compliance with Federal, State,AHCCCS, and/or contract requirements, must be implemented by the Contractor. AHCCCS may conduct afollow-up Operational and Financial Review to determine the Contractor's progress in implementingrecommendations and achieving program compliance. Follow-up reviews may be conducted at any time after theinitial Operational and Financial Review.

The Contractor shall not distribute or otherwise make available the Operational and Financial Review Tool,draft Operational and Financial Review Report nor final report to other AHCCCS Contractors.AHCCCS may conduct an Operational and Financial Review in the event the Contractor undergoes a merger,reorganization, has a change in ownership or makes changes in three or more key staff positions within a 12-month period.

AHCCCS may request, at the expense of the Contractor, to conduct on-site reviews of functions performed atout-of-state locations. AHCCCS will coordinate travel arrangements and accommodations with the Contractor.In addition to the annual Operational and Financial Review AHCCCS may conduct unannounced site visits tomonitor contractual requirements and performance as needed.

**72.****SANCTIONS**

AHCCCS may impose monetary sanctions, suspend, deny, refuse to renew, or terminate this contract or anyrelated subcontracts in accordance with AHCCCS Rules R9-22-606, ACOM *Sanctions Policy* and the terms ofthis contract and applicable Federal or State law and regulations [42 CFR 422.208, 42 CFR 438.700, 702, 704and 45 CFR 92.36(i)(1)]. Written notice will be provided to the Contractor specifying the sanction to beimposed, the grounds for such sanction and either the length of suspension or the amount of capitation to bewithheld. The Contractor may dispute the decision to impose a sanction in accordance with the process outlinedin A.A.C. 9-34-401 et seq. Intermediate sanctions may be imposed, but are not limited to the following actions:

a. Substantial failure to provide medically necessary services that the Contractor is required to provide under   the terms of this contract to its enrolled members.b. Imposition of premiums or charges in excess of the amount allowed under the AHCCCS 1115 Waiver.c. Discrimination among members on the basis of their health status of need for health care services.d. Misrepresentation or falsification of information furnished to CMS or AHCCCS.e. Misrepresentation or falsification of information furnished to an enrollee, potential enrollee, or provider.f. Failure to comply with the requirement for physician incentive plan as delineated in Section D, Paragraph 42,   Physician Incentives/Pay for Performance.g. Distribution directly, or indirectly through any agent or independent Contractor, of marketing materials that   have not been approved by AHCCCS or that contain false or materially misleading information.h. Failure to meet AHCCCS Financial Viability Standards.i. Material deficiencies in the Contractor’s provider network.j. Failure to meet quality of care and quality management requirements.k. Failure to meet AHCCCS encounter standards.l. Violation of other applicable State or Federal laws or regulations.m. Failure to fund accumulated deficit in a timely manner.n. Failure to increase the Performance Bond in a timely manner.o. Failure to comply with any provisions contained in this contract and all policies referenced in this contract.p. Failure to report recovery cases as described in Section D, Paragraph 58, Coordination of Benefits.

AHCCCS may impose the following types of intermediate sanctions:

a. Civil monetary penaltiesb. Appointment of temporary management for a Contractor as provided in 42 CFR 438.706 and   A.R.S. §36-2903 (M).c. Granting members the right to terminate enrollment without cause and notifying the affected members of   their right to disenroll [42 CFR 438.702(a)(3)].d. Suspension of all new enrollments, including auto assignments after the effective date of the sanction.e. Suspension of payment for recipients enrolled after the effective date of the sanction until CMS or AHCCCS   is satisfied that the reason for imposition of the sanction no longer exists and is not likely to recur.f. Additional sanctions allowed under statue or regulation that address areas of noncompliance.

*Cure Notice Process:*Prior to the imposition of a sanction for non-compliance, AHCCCS may provide awritten cure notice to the Contractor regarding the details of the non-compliance. The cure notice willspecify the period of time during which the Contractor must bring its performance back into compliancewith contract requirements. If, at the end of the specified time period, the Contractor has complied withthe cure notice requirements, AHCCCS will take no further action. If, however, the Contractor has notcomplied with the cure notice requirements, AHCCCS may proceed with the imposition of sanctions. Referto the ACOM *Sanctions Policy* for details.

*Automatic Sanctions:*AHCCCS will assess the sanctions listed in Attachment F, Periodic ReportingRequirements on deliverables listed under DHCM Acute Care Operations, Clinical Quality Management andMedical Management that are not received by 5:00 PM on the due date indicated. If the due date falls on aweekend or a State Holiday, sanctions will be assessed on deliverables not received by 5:00 PM on the nextbusiness day.

**73.****BUSINESS CONTINUITY AND RECOVERY PLAN**

The Contractor shall adhere to all elements of the ACOM *Business Continuity and Recovery Plan Policy*. TheContractor shall develop a Business Continuity and Recovery Plan to deal with unexpected events that may affectits ability to adequately serve members. This plan shall, at a minimum, include planning and staff training for:

            •Electronic/telephonic failure at the Contractor's main place of business               •Complete loss of use of the main site and satellite offices out of state               •Loss of primary computer system/records               •Communication between the Contractor and AHCCCS in the event of a business disruption               •Periodic Testing

The Business Continuity and Recovery Plan shall be updated annually. The Contractor shall submit a summaryof the plan as specified in the ACOM *Business Continuity and Recovery Plan Policy* 15 days after the start of thecontract year*.* All key staff shall be trained and familiar with the Plan.

**74.****TECHNOLOGICAL ADVANCEMENT**

The Contractor must have a website with links to the following information:

                1. Formulary                2. Provider manual                3. Member handbook                4. Provider listing                5. When available, Member and Provider Survey Results                6. Performance Measure Results                7. Prior Authorization criteria                8. Evidence Based Medicine Guidelines

In addition to the above, the Contractor must include member related information, as described in theWebsite section of the ACOM *Member Information Policy* and ACOM *Provider Network InformationPolicy*, on its website.

The Contractor must be able to perform the following functions electronically:

                1. Provide Enrollment Verification in a HIPAA compliant 270/271 format                2. Accept the Benefit Enrollment and Maintenance transaction (834 format)                3. Accept the Payroll Deduction and Other Group Premium Payment for Insurance Products                   transaction (820 format)                4. Allow Claims inquiry and response in a HIPAA compliant 276/277 format                5. Accept HIPAA compliant electronic claims transactions in the 837 format (See Section D,                   Paragraph 38, Claims Payment/Health Information System)                6. Generate HIPAA compliant electronic remittance in the 835 format (See Section D, Paragraph 38,                   Claims Payment/Health Information System)                7. Make Claims payments via electronic funds transfer (See Section D, Paragraph 38, Claims                   Payment/Health Information System)                8. Acceptance of Prior Authorization requests, in a HIPAA compliant 278 format, no later than                   10/01/09. AHCCCS will work with Contractors to develop functionality requirements.

*Use of Website:*The Contractor is required to post their clinical performance indicators compared toAHCCCS standard and statewide averages on their website. In addition, AHCCCS will post Contractorperformance indicators on its website.

***Arizona Health-e Connection***In February of 2007, AHCCCS was awarded a CMS Transformation Grant of $11.7M to build a healthinformation exchange (HIE) and a web based suite of applications for accessing electronic health records(EHR). The HIE will serve to provide real time patient health information and clinical care automation forAHCCCS contracted health care providers, in accordance with the Governor’s executive order #2005-25 onArizona Health-e Connection Roadmap.

AHCCCS will develop a unified approach for AHCCCS Contractors to meet the goal of the executive orderand to connect AHCCCS, AHCCCS Contractors, ancillary subcontractors and registered providers into acommon web based electronic health information data exchange that will meet the standards established byState and Federal governments. AHCCCS health plans and program Contractors will cooperate in assistingAHCCCS with developing the Health-e project plan and shall implement required data exchange interfaces asrequired to meet the goals of the Governor's executive order.

CMS will provide grants to state Medicaid agencies to support development of IT infrastructure andapplications to achieve the goal of health information data exchange. AHCCCS Contractors will be requiredto:

                1) Encourage lab, pharmacy and ancillary subcontractors to develop common electronic                    interfaces for the exchange of data using standards based transactions.

                2) AHCCCS may issue Minimum Subcontract language that will require subcontractors to                    participate in the e-Health Initiative. The Contractor must amend all provider subcontracts to                    include the amended Minimum Subcontract provisions within six (6) months of issuance.

                3) The Contractor will cooperate in passing on any AHCCCS professional fee or facility                    reimbursement rate adjustments to primary care providers, nursing facility contractor,                    hospitals and any other providers determined by AHCCCS to be eligible for reimbursement                    for participation in the health information data exchange.

AHCCCS will continually work to enhance the functionality of the health information exchange, electronichealth records, electronic prescribing and web based applications. The AHCCCS Contractor is expected todeploy upgrades and enhancements as necessary to contracted providers.

**75.****PENDING LEGISLATIVE / OTHER ISSUES**

The following constitute pending items that may be resolved after the issuance of this contract. Any programchanges due to the resolution of the issues will be reflected in future amendments to the contract. Capitation ratesmay also be adjusted to reflect the financial impact of program changes. The items in this paragraph are subject tochange and should not be considered all-inclusive.

***Federal and State Legislation:***AHCCCS and its Contractors are subject to legislative mandates that may resultin changes to the program. AHCCCS will either amend the contract or incorporate changes in policiesincorporated in the contract by reference.

***Member Incentives:***AHCCCS may explore opportunities to develop member incentive programs to increase theuse of preventive health services and compliance with guidelines for recommended care and services for specifichealth conditions. The Contractor shall participate in the development and implementation of such programs asdirected by AHCCCS.

***Medical Home:***AHCCCS shall initiate a process to develop, implement and expand the medical home concept.Through the RFP process, a Contractor may be selected to work with AHCCCS and take the leadership role increating medical homes in conjunction with the Acute Care program. The selected Contractor will be paid anadministrative fee for the development of the medical home model. The administrative fee will only be paid untilthe project is completed, as determined by AHCCCS. The Contractor will be expected to participate in all phasesof this project. The Contractor shall deploy best practices in medical home concepts as identified and selected forimplementation.

***KidsShare:***KidsShare is a health insurance buy-in program for children, that is currently being proposed.KidsShare would allow families below 350% of the FPL to purchase health insurance coverage from the Statebased on the KidsCare model. Eligible children would also be required to meet other challenges, such as:being priced out of the private insurance market; having pre-existing conditions that make obtaining privateinsurance extremely difficult; or not having access to employer based insurance because either it is not offeredat their parents' work or their parents' employer does not extend coverage to dependents. Unlike KidsCare, theprogram would not be subsidized by the State. Benefit packages and premium levels would be designed tomake the program affordable yet self sustaining. KidsShare would be administered through KidsCare healthplans; these plans would have to go through a bidding process in order to participate.

***SSDI-TMC:***Due to limited funding and the high cost of the population, the covered services array is beingevaluated and may be changed.

***HIFA:***The state statute authorizing AHCCCS to provide services to HIFA eligible individuals expires on June30, 2008, and will require new legislation to continue.

***Enrollment Guarantees:***AHCCCS intends to modify the rule requiring a 6 month enrollment guarantee asdescribed in R9-22 Article 17.

***Eligibility Privatization:***AHCCCS is currently conducting an RFP process to evaluate the potential ofawarding a contract to a private vendor for the determination of eligibility for KidsCare and HIFA Parents. Asimilar RFP process will be conducted for the Title XIX eligibility determination process as well.

***Coordination of Benefits:***Based on the Deficit Reduction Act of 2006, there may be changes to Coordination ofBenefits requirements.

**76. SUPPORT OF ARIZONA BASED TRANSLATIONAL AND CLINICAL RESEARCH**

AHCCCS is collaborating with the University of Arizona Medical School, Arizona State University, TGen,and other Arizona based research programs to encourage greater participation of the community in Arizonabased translation and clinical research. The Contractor is encouraged to support AHCCCS-approved volunteeropportunities for member participation in community based clinical studies and translation research. As part ofthis collaboration AHCCCS providers will have the opportunity to be community research associates. TheArizona Translational Research and Education Consortium will provide statewide governance and oversight ofthe community engagement in Arizona translational and clinical research. The Consortium is expecting toreceive a grant from the National Institutes of Health to support the infrastructure for this communityinvolvement in beneficially translation research trials and studies.

**77.****RESERVED**

**78.****RESERVED**

[END OF SECTION D]

**SECTION E: CONTRACT CLAUSES**

**1) APPLICABLE LAW*Arizona Law***- The law of Arizona applies to this contract including, where applicable, the UniformCommercial Code, as adopted in the State of Arizona.

***Implied Contract Terms***- Each provision of law and any terms required by law to be in this contract are a partof this contract as if fully stated in it.

**2) AUTHORITY**This contract is issued under the authority of the Contracting Officer who signed this contract. Changes to thecontract, including the addition of work or materials, the revision of payment terms, or the substitution of workor materials, directed by an unauthorized state employee or made unilaterally by the Contractor are violationsof the contract and of applicable law. Such changes, including unauthorized written contract amendments, shallbe void and without effect, and the Contractor shall not be entitled to any claim under this contract based onthose changes.

**3) ORDER OF PRECEDENCE**The parties to this contract shall be bound by all terms and conditions contained herein. For interpreting suchterms and conditions the following sources shall have precedence in descending order: The Constitution andlaws of the United States and applicable Federal regulations; the terms of the CMS 1115 waiver for the Stateof Arizona; the Constitution and laws of Arizona, and applicable State rules; the terms of this contract,including any attachments and executed amendments and modifications; and AHCCCS policies andprocedures.

**4) CONTRACT INTERPRETATION AND AMENDMENT*No Parol Evidence***- This contract is intended by the parties as a final and complete expression of theiragreement. No course of prior dealings between the parties and no usage of the trade shall supplement orexplain any term used in this contract.

***No Waiver*****-**Either party's failure to insist on strict performance of any term or condition of the contract shallnot be deemed a waiver of that term or condition even if the party accepting or acquiescing in the nonconformingperformance knows of the nature of the performance and fails to object to it.

***Written Contract Amendments***- The contract shall be modified only through a written contract amendmentwithin the scope of the contract signed by the procurement officer on behalf of the State.

**5) SEVERABILITY**The provisions of this contract are severable to the extent that any provision or application held to be invalidshall not affect any other provision or application of the contract, which may remain in effect without theinvalid provision, or application.

**6) RELATIONSHIP OF PARTIES**The Contractor under this contract is an independent contractor. Neither party to this contract shall be deemedto be the employee or agent of the other party to the contract.

**7) ASSIGNMENT AND DELEGATION**The Contractor shall not assign any right nor delegate any duty under this contract without prior writtenapproval of the Contracting Officer, who will not unreasonably withhold such approval.

**8) INDEMNIFICATIONContractor/Vendor Indemnification (Not Public Agency)**The parties to this contract agree that the State of Arizona, its departments, agencies, boards and commissionsshall be indemnified and held harmless by the Contractor for the vicarious liability of the State as a result ofentering into this contract. The Contractor agrees to indemnify, defend, and hold harmless the State from andagainst any and all claims, losses, liability, costs, and expenses, including attorney’s fees and costs, arising outof litigation against the AHCCCS Administration including, but not limited to, class action lawsuitschallenging actions by the Contractor. The requirement for indemnification applies irrespective of whether ornot the Contractor is a party to the lawsuit. Each Contractor shall indemnify the State, on a pro rata basis basedon population, attorney’s fees and costs awarded against the State as well as the attorney’s fees and costsincurred by the State in defending the lawsuit. The Contractor shall also indemnify the AHCCCSAdministration, on a pro rata basis based on population, the administrative expenses incurred by the AHCCCSAdministration to address Contractor deficiencies arising out of the litigation. The parties further agree that theState of Arizona, its departments, agencies, boards and commissions shall be responsible for its ownnegligence. Each party to this contract is responsible for its own negligence.

**Contractor/Vendor Indemnification (Public Agency)**Each party (“as indemnitor”) agrees to indemnify, defend, and hold harmless the other party (“as indemnitee”)from and against any and all claims, losses, liability, costs, or expenses (including reasonable attorney’s fees)(hereinafter collectively referred to as ‘claims’) arising out of bodily injury of any person (including death) orproperty damage but only to the extent that such claims which result in vicarious/derivative liability to theindemnitee, are caused by the act, omission, negligence, misconduct, or other fault of the indemnitor, itsofficers, officials, agents, employees, or volunteers.

**9) INDEMNIFICATION -- PATENT AND COPYRIGHT**To the extent permitted by applicable law, the Contractor shall defend, indemnify and hold harmless the Stateagainst any liability including costs and expenses for infringement of any patent, trademark or copyrightarising out of contract performance or use by the State of materials furnished or work performed under thiscontract. The State shall reasonably notify the Contractor of any claim for which it may be liable under thisparagraph.

**10) COMPLIANCE WITH APPLICABLE LAWS, RULES AND REGULATIONS**The Contractor shall comply with all applicable Federal and State laws and regulations including Title VI ofthe Civil Rights Act of 1964; Title IX of the Education Amendments of 1972 (regarding education programsand activities); the Age Discrimination Act of 1975; the Rehabilitation Act of 1973 (regarding educationprograms and activities), and the Americans with Disabilities Act; EEO provisions; Copeland Anti-KickbackAct; Davis-Bacon Act; Contract Work Hours and Safety Standards; Rights to Inventions Made Under aContract or Agreement; Clean Air Act and Federal Water Pollution Control Act; Byrd Anti-LobbyingAmendment. The Contractor shall maintain all applicable licenses and permits.

**11) ADVERTISING AND PROMOTION OF CONTRACT**The Contractor shall not advertise or publish information for commercial benefit concerning this contractwithout the prior written approval of the Contracting Officer.

**12) PROPERTY OF THE STATE**Except as otherwise provided in this contract, any materials, including reports, computer programs and otherdeliverables, created under this contract are the sole property of AHCCCS. The Contractor is not entitled tomaintain any rights on those materials and may not transfer any rights to anyone else. The Contractor shall notuse or release these materials without the prior written consent of AHCCCS.

If a Contractor declares information to be confidential, AHCCCS will maintain the information as confidentialand will not disclose it unless it is required by law or court order.

**13) THIRD PARTY ANTITRUST VIOLATIONS**The Contractor assigns to the State any claim for overcharges resulting from antitrust violations to the extentthat those violations concern materials or services supplied by third parties to the Contractor toward fulfillmentof this contract.

**14) RIGHT TO ASSURANCE**If AHCCCS, in good faith, has reason to believe that the Contractor does not intend to perform or continueperforming this contract, the procurement officer may demand in writing that the Contractor give a writtenassurance of intent to perform. The demand shall be sent to the Contractor by certified mail, return receiptrequired. Failure by the Contractor to provide written assurance within the number of days specified in thedemand may, at the State's option, be the basis for terminating the contract.

**15) TERMINATION FOR CONFLICT OF INTEREST**AHCCCS may cancel this contract without penalty or further obligation if any person significantly involved ininitiating, negotiating, securing, drafting or creating the contract on behalf of AHCCCS is, or becomes at anytime while the contract or any extension of the contract is in effect, an employee of, or a consultant to, anyother party to this contract with respect to the subject matter of the contract. The cancellation shall be effectivewhen the Contractor receives written notice of the cancellation unless the notice specifies a later time.

If the Contractor is a political subdivision of the State, it may also cancel this contract as provided by A.R. S.38-511.

**16) GRATUITIES**AHCCCS may, by written notice to the Contractor, immediately terminate this contract if it determines thatemployment or a gratuity was offered or made by the Contractor or a representative of the Contractor to anyofficer or employee of the State for the purpose of influencing the outcome of the procurement or securing thecontract, an amendment to the contract, or favorable treatment concerning the contract, including the makingof any determination or decision about contract performance. AHCCCS, in addition to any other rights orremedies, shall be entitled to recover exemplary damages in the amount of three times the value of the gratuityoffered by the Contractor.

**17) SUSPENSION OR DEBARMENT**The Contractor shall not employ, consult, subcontract or enter into any agreement for Title XIX services withany person or entity who is debarred, suspended or otherwise excluded from Federal procurement activity orfrom participating in non-procurement activities under regulations issued under Executive Order No. 12549 orunder guidelines implementing Executive Order 12549 [42 CFR 438.610(a) and (b)]. This prohibition extendsto any entity which employs, consults, subcontracts with or otherwise reimburses for services any personsubstantially involved in the management of another entity which is debarred, suspended or otherwiseexcluded from Federal procurement activity.

The Contractor shall not retain as a director, officer, partner or owner of 5% or more of the Contractor entity,any person, or affiliate of such a person, who is debarred, suspended or otherwise excluded from Federalprocurement activity.

AHCCCS may, by written notice to the Contractor, immediately terminate this contract if it determines that theContractor has been debarred, suspended or otherwise lawfully prohibited from participating in any publicprocurement activity.

**18) TERMINATION FOR CONVENIENCE**AHCCCS reserves the right to terminate the contract in whole or in part at any time for the convenience of theState without penalty or recourse. The Contracting Officer shall give written notice by certified mail, returnreceipt requested, to the Contractor of the termination at least 90 days before the effective date of the

termination. In the event of termination under this paragraph, all documents, data and reports prepared by theContractor under the contract shall become the property of and be delivered to AHCCCS. The Contractor shallbe entitled to receive just and equitable compensation for work in progress, work completed and materialsaccepted before the effective date of the termination.

**19) TEMPORARY MANAGEMENT/OPERATION OF A CONTRACTOR AND TERMINATION*Temporary Management and Operation of a Contractor:***Pursuant to the Balanced Budget Act of 1997, 42CFR 438.700 et seq. and State Law ARS §36-2903, AHCCCSA is authorized to impose temporarymanagement for a Contractor under certain conditions. Under federal law, temporary management may beimposed if AHCCCS determines that there is continued egregious behavior by the Contractor, including butnot limited to the following: substantial failure to provide medically necessary services the Contractor isrequired to provide; imposition on enrollees premiums or charges that exceed those permitted by AHCCCSA,discrimination among enrollees on the basis of health status or need for health care services; misrepresentationor falsification of information to AHCCCSA or CMS; misrepresentation or falsification of informationfurnished to an enrollee or provider; distribution of marketing materials that have not been approved byAHCCCS or that are false or misleading; or behavior contrary to any requirements of Sections 1903(m) or1932 of the Social Security Act. Temporary management may also be imposed if AHCCCSA determines thatthere is substantial risk to enrollees’ health or that temporary management is necessary to ensure the health ofenrollees while the Contractor is correcting the deficiencies noted above or until there is an orderly transitionor reorganization of the Contractor. Under federal law, temporary management is mandatory if AHCCCSAdetermines that the Contractor has repeatedly failed to meet substantive requirements in Sections 1903(m) or1932 of the Social Security Act. In these situations, AHCCCSA shall not delay imposition of temporarymanagement to provide a hearing before imposing this sanction.

State law ARS §36-2903 authorizes AHCCCSA to operate a Contractor as specified in this contract. Inaddition to the bases specified in 42 CFR 438.700 et seq., AHCCCSA may directly operate the Contractor if,in the judgment of AHCCCSA, the Contractor's performance is in material breach of the contract or theContractor is insolvent. Under these circumstances, AHCCCSA may directly operate the Contractor to assuredelivery of care to members enrolled with the Contractor until cure by the Contractor of its breach, bydemonstrated financial solvency or until the successful transition of those members to other Contractors. Priorto operation of the Contractor by AHCCCSA pursuant to state statute, the Contractor shall have theopportunity for a hearing. If AHCCCSA determines that emergency action is required, operation of theContractor may take place prior to hearing. Operation by AHCCCSA shall occur only as long as it is necessaryto assure delivery of uninterrupted care to members, to accomplish orderly transition of those members to otherContractors, or until the Contractor reorganizes or otherwise corrects contract performance failure.

If AHCCCS undertakes direct operation of the Contractor, AHCCCS, through designees appointed by theDirector, shall be vested with full and exclusive power of management and control of the Contractor asnecessary to ensure the uninterrupted care to persons and accomplish the orderly transition of persons to a newor existing Contractor, or until the Contractor corrects the Contract Performance failure to the satisfaction ofAHCCCS. AHCCCS shall have the power to employ any necessary assistants, to execute any instrument in thename of the Contractor, to commence, defend and conduct in its name any action or proceeding in which theContractor may be a party.

All reasonable expenses of AHCCCS related to the direct operation of the Contractor, including attorney fees,cost of preliminary or other audits of the Contractor and expenses related to the management of any office orother assets of the Contractor, shall be paid by the Contractor or withheld from payment due from AHCCCS tothe Contractor.

Termination: AHCCCSA reserves the right to terminate this contract in whole or in part due to the failure ofthe Contractor to comply with any term or condition of the contract and as authorized by the Balanced BudgetAct of 1997 and 42 CFR 438.708. If the Contractor is providing services under more than one contract withAHCCCSA, AHCCCSA may deem unsatisfactory performance under one contract to be cause to require theContractor to provide assurance of performance under any and all other contracts. In such situations,AHCCCSA reserves the right to seek remedies under both actual and anticipatory breaches of contract ifadequate assurance of performance is not received. The Contracting Officer shall mail written notice of thetermination and the reason(s) for it to the Contractor by certified mail, return receipt requested. Pursuant to theBalanced Budget Act of 1997 and 42 CFR 438.708, AHCCCSA shall provide the contractor with a pre-determination hearing before termination of the contract.

Upon termination, all documents, data, and reports prepared by the Contractor under the contract shall becomethe property of and be delivered to AHCCCSA on demand.

AHCCCSA may, upon termination of this contract, procure on terms and in the manner that it deemsappropriate, materials or services to replace those under this contract. The Contractor shall be liable for anyexcess costs incurred by AHCCCSA in re-procuring the materials or services.

**20) TERMINATION - AVAILABILITY OF FUNDS**Funds are not presently available for performance under this contract beyond the current fiscal year. No legalliability on the part of AHCCCS for any payment may arise under this contract until funds are made availablefor performance of this contract.

Notwithstanding any other provision in the Agreement, this Agreement may be terminated by AHCCCS, if, forany reason, there are not sufficient appropriated and available monies for the purpose of maintaining thisAgreement. In the event of such termination, the Contractor shall have no further obligation to AHCCCS,except as otherwise provided in this contract.

**21) RIGHT OF OFFSET**AHCCCS shall be entitled to offset against any amounts due the Contractor any expenses or costs incurred byAHCCCS concerning the Contractor's non-conforming performance or failure to perform the contract.

**22) NON-EXCLUSIVE REMEDIES**The rights and the remedies of AHCCCS under this contract are not exclusive.

**23) NON-DISCRIMINATION**The Contractor shall comply with State Executive Order No. 99-4, which mandates that all persons, regardlessof race, color, religion, gender, national origin or political affiliation, shall have equal access to employmentopportunities, and all other applicable Federal and state laws, rules and regulations, including the Americanswith Disabilities Act and Title VI. The Contractor shall take positive action to ensure that applicants foremployment, employees, and persons to whom it provides service are not discriminated against due to race,creed, color, religion, gender, national origin or disability.

**24) EFFECTIVE DATE**The effective date of this contract shall be the date referenced on page 1 of this contract.

**25) INSURANCE**A certificate of insurance naming the State of Arizona and AHCCCS as the "additional insured" must besubmitted to AHCCCS within 10 days of notification of contract award and prior to commencement of anyservices under this contract. This insurance shall be provided by carriers rated as "A+" or higher by the A.M.Best Rating Service. The following types and levels of insurance coverage are required for this contract:

a. Commercial General Liability: Provides coverage of at least $1,000,000 for each occurrence for bodily   injury and property damage to others as a result of accidents on the premises of or as the result of   operations of the Contractor.b. Commercial Automobile Liability: Provides coverage of at least $1,000,000 for each occurrence for bodily   injury and property damage to others resulting from accidents caused by vehicles operated by the   Contractor.c. Workers Compensation: Provides coverage to employees of the Contractor for injuries sustained in the   course of their employment. Coverage must meet the obligations imposed by Federal and State statutes   and must also include Employer's Liability minimum coverage of $100,000. Evidence of qualified self-insured   status will also be considered.d. Professional Liability (if applicable): Provides coverage for alleged professional misconduct or lack of   ordinary skills in the performance of a professional act of service.

*The above coverages may be evidenced by either one of the following:*

a. The State of Arizona Certificate of Insurance: This is a form with the special conditions required by the   contract already pre-printed on the form. The Contractor's agent or broker must fill in the pertinent policy   information and ensure the required special conditions are included in the Contractor's policy.b. The Accord form: This standard insurance industry certificate of insurance does not contain the preprinted   special conditions required by this contract. These conditions must be entered on the certificate by   the agent or broker and read as follows:

The State of Arizona and Arizona Health Care Cost Containment System are hereby added asadditional insureds. Coverage afforded under this Certificate shall be primary and any insurancecarried by the State or any of its agencies, boards, departments or commissions shall be in excess ofthat provided by the insured Contractor. No policy shall expire, be canceled or materially changedwithout 30 days written notice to the State. This Certificate is not valid unless countersigned by anauthorized representative of the insurance company.c. If the Contractor is insured pursuant to A.R.S. § 11-981, the Insurance provisions required by the Contract   are satisfied.

**26) DISPUTES**Contract claims and disputes shall be adjudicated in accordance with State Law, AHCCCS Rules and thiscontract.

Except as provided by 9 A.A.C. Chapter 28, Article 6, the exclusive manner for the Contractor to assert anydispute against AHCCCS shall be in accordance with the process outlined in 9 A.A.C. Chapter 34, Article 4and ARS §36-2903.01. All disputes except as provided under 9 A.A.C. Chapter 22, Article 6 shall be filed inwriting and be received by AHCCCS no later than 60 days from the date of the disputed notice. All disputesshall state the factual and legal basis for the dispute. Pending the final resolution of any disputes involving thiscontract, the Contractor shall proceed with performance of this contract in accordance with AHCCCS'sinstructions, unless AHCCCS specifically, in writing, requests termination or a temporary suspension ofperformance.

**27) RIGHT TO INSPECT PLANT OR PLACE OF BUSINESS**AHCCCS may, at reasonable times, inspect the part of the plant or place of business of the Contractor orsubcontractor that is related to the performance of this contract, in accordance with A.R.S. §41-2547.

**28) INCORPORATION BY REFERENCE**This solicitation and all attachments and amendments, the Contractor's proposal, best and final offer acceptedby AHCCCS, and any approved subcontracts are hereby incorporated by reference into the contract.

**29) COVENANT AGAINST CONTINGENT FEES**The Contractor warrants that no person or agency has been employed or retained to solicit or secure thiscontract upon an agreement or understanding for a commission, percentage, brokerage or contingent fee. Forviolation of this warranty, AHCCCS shall have the right to annul this contract without liability.

**30) CHANGES**AHCCCS may at any time, by written notice to the Contractor, make changes within the general scope of thiscontract. If any such change causes an increase or decrease in the cost of, or the time required for,performance of any part of the work under this contract, the Contractor may assert its right to an adjustment incompensation paid under this contract. The Contractor must assert its right to such adjustment within 30 daysfrom the date of receipt of the change notice. Any dispute or disagreement caused by such notice shallconstitute a dispute within the meaning of Section E, Paragraph 26, Disputes, and be administered accordingly.

When AHCCCS issues an amendment to modify the contract, the provisions of such amendment will bedeemed to have been accepted 60 days after the date of mailing by AHCCCS, even if the amendment has notbeen signed by the Contractor, unless within that time the Contractor notifies AHCCCS in writing that itrefuses to sign the amendment. If the Contractor provides such notification, AHCCCS will initiate terminationproceedings.

**31) TYPE OF CONTRACT**Firm Fixed-Price stated as capitated per member per month, except as otherwise provided

**32) AMERICANS WITH DISABILITIES ACT**People with disabilities may request special accommodations such as interpreters, alternative formats orassistance with physical accessibility. Requests for special accommodations must be made with at least threedays prior notice by contacting the Solicitation Contact person.

**33) WARRANTY OF SERVICES**The Contractor warrants that all services provided under this contract will conform to the requirements statedherein. AHCCCS's acceptance of services provided by the Contractor shall not relieve the Contractor from itsobligations under this warranty. In addition to its other remedies, AHCCCS may, at the Contractor's expense,require prompt correction of any services failing to meet the Contractor's warranty herein. Services correctedby the Contractor shall be subject to all of the provisions of this contract in the manner and to the same extentas the services originally furnished.

**34) NO GUARANTEED QUANTITIES**AHCCCS does not guarantee the Contractor any minimum or maximum quantity of services or goods to beprovided under this contract.

**35) CONFLICT OF INTEREST**The Contractor shall not undertake any work that represents a potential conflict of interest, or which is not inthe best interest of AHCCCS or the State without prior written approval by AHCCCS. The Contractor shallfully and completely disclose any situation that may present a conflict of interest. If the Contractor is nowperforming or elects to perform during the term of this contract any services for any AHCCCS contractor,provider or Contractor or an entity owning or controlling same, the Contractor shall disclose this relationshipprior to accepting any assignment involving such party.

**36) CONFIDENTIALITY AND DISCLOSURE OF CONFIDENTIAL INFORMATION**The Contrator shall safeguard confidential information in accordance with Federal and State laws andregulations, including but not limited to, 42 CFR 431.300 et seq., 45 CFR parts 160 and 164, and AHCCCSRegulation A.A.C. R9-22-512.

The Contractor shall establish and maintain procedures and controls that are acceptable to AHCCCS for thepurpose of assuring that no information contained in its records or obtained from AHCCCS or others carryingout its functions under the contract shall be used or disclosed by its agents, officers or employees, except asrequired to efficiently perform duties under the contract. Except as required or permitted by law, the contractoralso agrees that any information pertaining to individual persons shall not be divulged other than to employeesor officers of the contractor as needed for the performance of duties under the contract, unless otherwiseagreed to, in writing, by AHCCCS.

The Contractor shall not, without prior written approval from AHCCCS, either during or after the performanceof the services required by this contract, use, other than for such performance, or disclose to any person otherthan AHCCCS personnel with a need to know, any information, data, material, or exhibits created, developed,produced, or otherwise obtained during the course of the work required by this contract. This nondisclosurerequirement shall also pertain to any information contained in reports, documents, or other records furnished tothe Contractor by AHCCCS.

**37) COOPERATION WITH OTHER CONTRACTORS**AHCCCS may award other contracts for additional work related to this contract and Contractor shall fullycooperate with such other contractors and AHCCCS employees or designated agents, and carefully fit its ownwork to such other contractors' work. The Contractor shall not commit or permit any act which will interferewith the performance of work by any other contractor or by AHCCCS employees.

**38) ASSIGNMENT OF CONTRACT AND BANKRUPTCY**This contract is voidable and subject to immediate cancellation by AHCCCS upon the Contractor becominginsolvent or filing proceedings in bankruptcy or reorganization under the United States Code, or assigningrights or obligations under this contract without the prior written consent of AHCCCS.

**39) OWNERSHIP OF INFORMATION AND DATA**Any data or information system, including all software, documentation and manuals, developed by theContractor pursuant to this contract, shall be deemed to be owned by AHCCCS. The Federal governmentreserves a royalty-free, nonexclusive, and irrevocable license to reproduce, publish, or otherwise use and toauthorize others to use for Federal government purposes, such data or information system, software,documentation and manuals. Proprietary software which is provided at established catalog or market pricesand sold or leased to the general public shall not be subject to the ownership or licensing provisions of thissection.

Data, information and reports collected or prepared by the Contractor in the course of performing its duties andobligations under this contract shall be deemed to be owned by AHCCCS. The ownership provision is inconsideration of the Contractor's use of public funds in collecting or preparing such data, information andreports. These items shall not be used by the Contractor for any independent project of the Contractor orpublicized by the Contractor without the prior written permission of AHCCCS. Subject to applicable state andFederal laws and regulations, AHCCCS shall have full and complete rights to reproduce, duplicate, discloseand otherwise use all such information. At the termination of the contract, the Contractor shall make availableall such data to AHCCCS within 30 days following termination of the contract or such longer period asapproved by AHCCCS, Office of the Director. For purposes of this subsection, the term "data" shall notinclude member medical records.

Except as otherwise provided in this section, if any copyrightable or patentable material is developed by theContractor in the course of performance of this contract, the Federal government, AHCCCS and the State ofArizona shall have a royalty-free, nonexclusive, and irrevocable right to reproduce, publish, or otherwise use,and to authorize others to use, the work for state or Federal government purposes. The Contractor shalladditionally be subject to the applicable provisions of 45 CFR Part 74 and 45 CFR Parts 6 and 8.

**40) AUDITS AND INSPECTIONS**The Contractor shall comply with all provisions specified in applicable AHCCCS Rule R9-22-521 andAHCCCS policies and procedures relating to the audit of the Contractor's records and the inspection of theContractor's facilities. The Contractor shall fully cooperate with AHCCCS staff and allow them reasonableaccess to the Contractor's staff, subcontractors, members, and records [42 CFR 438.6(g)].

At any time during the term of this contract, the Contractor's or any subcontractor's books and records shall besubject to audit by AHCCCS and, where applicable, the Federal government, to the extent that the books andrecords relate to the performance of the contract or subcontracts [42 CFR 438.242(b)(3)].

AHCCCS, or its duly authorized agents, and the Federal government may evaluate through on-site inspectionor other means, the quality, appropriateness and timeliness of services performed under this contract.

**41) LOBBYING**No funds paid to the Contractor by AHCCCS, or interest earned thereon, shall be used for the purpose ofinfluencing or attempting to influence an officer or employee of any Federal or State agency, a member of theUnited States Congress or State Legislature, an officer or employee of a member of the United States Congressor State Legislature in connection with awarding of any Federal or State contract, the making of any Federal orState grant, the making of any Federal or State loan, the entering into of any cooperative agreement, and theextension, continuation, renewal, amendment or modification of any Federal or State contract, grant, loan, orcooperative agreement. The Contractor shall disclose if any funds, other than those paid to the Contractor byAHCCCS, have been used or will be used to influence the persons and entities indicated above and will assistAHCCCS in making such disclosures to CMS.

**42) CHOICE OF FORUM**The parties agree that jurisdiction over any action arising out of or relating to this contract shall be brought orfiled in a court of competent jurisdiction located in the State of Arizona.

**43) DATA CERTIFICATION**The Contractor shall certify that financial and encounter data submitted to AHCCCS is complete, accurate andtruthful. Certification of financial and encounter data must be submitted concurrently with the data.Certification may be provided by the Contractor CEO, CFO or an individual who is delegated authority to signfor, and who report directly to the CEO or CFO [42 CFR 438.604 et seq.].

**44) OFF SHORE PERFORMANCE OF WORK PROHIBITED**Due to security and identity protection concerns, direct services under this contract shall be performed withinthe borders of the United States. Any services that are described in the specifications or scope of work thatdirectly serve the State of Arizona or its clients and may involve access to secure or sensitive data or personalclient data or development or modification of software for the State shall be performed within the borders ofthe United States. Unless specifically stated otherwise in the specifications, this definition does not apply toindirect or “overhead” services, redundant back-up services or services that are incidental to the performanceof the contract. This provision applies to work performed by subcontractors at all tiers.

**45) FEDERAL IMMIGRATION AND NATIONALITY ACT**The Contractor shall comply with all federal, state and local immigration laws and regulations relating to theimmigration status of their employees during the term of the contract. Further, the Contractor shall flow downthis requirement to all subcontractors utilized during the term of the contract. The State shall retain the right toperform random audits of Contractor and subcontractor records or to inspect papers of any employee thereof toensure compliance. Should the State determine that the Contractor and/or any subcontractors be foundnoncompliant, the State may pursue all remedies allowed by law, including, but not limited to; suspension ofwork, termination of the contract for default and suspension and/or debarment of the Contractor.

**46) IRS W-9 FORM**In order to receive payment under any resulting contract, the Contractor shall have a current IRS W-9 Form onfile with the State of Arizona.

**47)****CONTINUATION OF PERFORMANCE THROUGH TERMINATION**The Contractor shall continue to perform, in accordance with the requirements of the contract, up to the date oftermination and as directed in the termination notice.

[END OF SECTION E]

**SECTION F: RESERVED**

**SECTION G: REPRESENTATIONS and CERTIFICATIONS of OFFEROR**

***The Offeror must complete all information requested below.***

1. **CERTIFICATION OF ACCURACY OF INFORMATION PROVIDED**

By signing this offer, the Offeror certifies, under penalty of law, that the information provided herein is true,correct and complete to the best of the Offeror's knowledge and belief. The Offeror also acknowledges that,should investigation at any time disclose any misrepresentation or falsification, any subsequent contract may beterminated by AHCCCS without penalty to or further obligation by AHCCCS.

**2. CERTIFICATION OF NON-COERCION**

By signing this offer, the Offeror certifies, under penalty of law, that it has not made any requests or inducementsto any provider not to contract with another potential program contractor in relation to this solicitation.

**3. CERTIFICATION OF COMPLIANCE - ANTI-KICKBACK / LABORATORY TESTING**

By signing this offer, the Offeror certifies that it has not engaged and will not engage in any violation of theMedicare Anti-Kickback or the “Stark I” and “Stark II” laws governing related-entity and compensationtherefrom. If the Offeror provides laboratory testing, it certifies that it has complied with, and has sent toAHCCCS, simultaneous copies of the information required to be sent to the Centers for Medicare and MedicaidServices (see 42 USC §1320a-7b, P.L. 101-239 and 42 CFR §411.361).

**4. AUTHORIZED SIGNATORY**

Authorized Signatory for _________________________________________________________                                                                               [OFFEROR’S Name]_____________________________________ ___________________________________                [INDIVIDUAL'S Name]                                                     [Title]

is the person authorized to sign this contract on behalf of the Offeror.

**5. OFFEROR'S MAILING ADDRESS**

AHCCCS should address all notices relative to this offer to the attention of:

________________________________________________________________________Name                                                                    Title

________________________________________________________________________Address                                                               Telephone Number

________________________________________________________________________Fax Number                                                         Email Address

________________________________________________________________________City                                                                       State                                       ZIP

***OFFEROR GENERAL INFORMATION***(Page 1 of 2)

**1. If other than a governmental agency, when was your organization formed? _______________________**

**2. License/Certification:**Attach a list of all licenses and certifications (e.g. federal HMO status or statecertifications) your organization maintains. Use a separate sheet of paper listing the license requirement and therenewal dates.

Have any licenses been denied, revoked or suspended within the past 10 years? Yes _____ No _____If yes, please explain.

____________________________________________________________________________________________________________________________________________________________________________________

**3. Civil Rights Compliance Data:**Has any federal or state agency ever made a finding of noncompliance withany civil rights requirements with respect to your program? Yes _____ No_____ If yes, please explain.____________________________________________________________________________________________________________________________________________________________________________________

**4. Accessibility Assurance:**Does your organization provide assurance that no qualified person with adisability will be denied benefits of, or excluded from, participation in a program or activity because the Offeror'sfacilities (including subcontractors) are inaccessible to, or unusable by, persons with disabilities? (Note: Checklocal zoning ordinances for accessibility requirements). Yes____ No____ If yes, describe how such assuranceis provided or how your organization is taking affirmative steps to provide assurance.**____________________________________________________________________________________________________________________________________________________________________________________**

**5. Prior Convictions:**List all felony convictions within the past 15 years of any key personnel (i.e.,Administrator, Medical Director, financial officers, major stockholders or those with controlling interest, etc.).Failure to make full and complete disclosure shall result in the rejection of your proposal.**____________________________________________________________________________________________________________________________________________________________________________________**

**6. Compliance Agreements/Criminal or Civil Judgments:**List any compliance agreements the organizationhas entered into within the last 10 years with any regulatory body (include name of regulator and summary ofagreement). Additionally, list any criminal or civil judgments against the organization within the last 10 years(provide a summary of the judgment).**____________________________________________________________________________________________________________________________________________________________________________________**

**7. Federal Government Suspension/Exclusion:**Has the Offeror been suspended or excluded from anyfederal government programs for any reason? Yes_____ No_____ If yes, please explain.**__________________________________________________________________________________________________________________________________________________________________________________**

**8. Did a firm or organization provide the Offeror with any assistance in making this offer (to includedeveloping capitation rates or providing any other technical assistance)?**Yes_____ No_____ If yes, whatis the name of this firm or organization?__________________________________________________________________________________________Name__________________________________________________________________________________________Address                                                                                               City                                                       State

***FINANCIAL DISCLOSURE STATEMENT*****(Page 1 of 2)**

The Offeror must provide the following information as required by 42 CFR 455.103. This Financial DisclosureStatement shall be prepared as of 12/31/07 or as specified below. However, continuing Offerors who have filedthe required Financial Disclosure Statement within the last 12 months need not complete this section if nosignificant changes have occurred since the last filing.

**1. Ownership:**List the name and address of each person with an ownership or controlling interest, as definedby 42 CFR 455.101, in the entity submitting this offer:

                                                                                                                                               Percent ofName                                                                    Address                                               Ownership or Control________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

**2. Subcontractor Ownership:**List the name and address of each person with an ownership or control interestin any subcontractor in which the Offeror has direct or indirect ownership of 5% or more:                                                                                                                                               Percent ofName                                                                    Address                                               Ownership or Control**________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________**

Names of above persons who are related to one another as spouse, parent, child or sibling:**__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________**

**3. Ownership in Other Entities**: List the name of any other entity in which a person with an ownership orcontrolling interest in the Offeror entity also has an ownership or controlling interest:**________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________**

***FINANCIAL DISCLOSURE STATEMENT*****(Page 2 of 2)**

**4. Long-Term Business Transactions:**List any significant business transactions, as defined in 42 CFR455.101, between the Offeror and any wholly-owned provider or supplier during the five-year period ending onthe Contractor’s most recent fiscal year end:

Describe Ownership                            Type of Business                                               Dollar Amountof Wholly Owned Provider                Transaction with Provider                                 of Transaction**________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________**

**5. Criminal Offenses:**List the name of any person who has ownership or control interest in the Offeror, or isan agent or managing employee of the Offeror and has been convicted of a criminal offense related to thatperson’s involvement in any program under Medicare, Medicaid or the Title XIX or Title XXI services programsince the inception of those programs:

Name                                                                    Address                                               Title**________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________**

**6. Creditors:**List the name and address of each creditor whose loans or mortgages exceed 5% of total Offerorequity and are secured by assets of the Offeror’s company.

                                                                                                               Description           AmountName                                                                    Address                 of Debt                   of Security**________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________**

***RELATED PARTY TRANSACTIONS*****(Page 1 of 1)**

**1. Board of Directors:**List the names and addresses of the Board of Directors of the Offeror.

Name/Title                                                           Address**______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________**

**2. Related Party Transactions**: Describe transactions between the Offeror and any related party in which atransaction or series of transactions during any one fiscal year exceeds the lesser of $50,000 or 2% of the totaloperating expenses of the Offeror. The Offeror must list property, goods, services and facilities in detail noting,the dollar amounts or other consideration for each transaction and the date thereof. Include a justification as to(1) the reasonableness of the transaction, (2) its potential adverse impact on the fiscal soundness of the Offeror,and (3) that the transaction is without conflict of interest:

**a) Describe all transactions between Offeror and any related party which includes advances of money,the lending of money, extensions of credit or any investment in a related party.**

Description of                                      Name of Related Party                        Dollar Amount forTransaction                                           andRelationship                                  Reporting Period**______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________**

Justification:______________________________________________________________________________________**__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________**

**b) List the name and address of any individual who owns or controls more than 10% of stock or that hasa controlling interest (i.e., formulates, determines or vetoes business policy decisions):                                                                                                                                                               **Has Controlling                                                                                                               Owner or                                Interest?Name                                                                    Address                 Controller                             Yes / No**_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________**

[END OF SECTION G]

**SECTION H: EVALUATION FACTORS AND SELECTION PROCESS**

AHCCCS has established a scoring methodology that is designed to evaluate fairly an Offeror’s ability to providecost-effective, high-quality contract services in a managed care setting in accordance with the AHCCCS overallmission and goals. The following evaluation factors will be weighted in the order listed:

                1. Capitation                2. Program                3. Organization                4. Network

Capitation and the Network Development portion of the Network section will be scored by Geographic ServiceArea. The remaining submission areas; the Network Management portion of Network, Program andOrganization, are anticipated to be scored statewide, except as otherwise specified in the submission requirementslisted in Section I, Instructions to Offerors. The scores received for each of the four required components will beweighted separately and combined to derive a final score for the Offeror by GSA. A contract will be awarded toa qualified Offeror whose proposal is deemed to be advantageous to the State in accordance with Section I,Paragraph 10, Award of Contract.

In the case of negligible differences between two or more competing proposals for a particular GSA, in thebest interest of the State, AHCCCS may consider one or all of the following factors in awarding the contract:

            •an Offeror who is an incumbent Contractor and has performed in an adequate manner (in the interest                   of continuity of care);

            •an Offeror who participates satisfactorily in other lines of AHCCCS business;

            •an Offeror’s past performance with AHCCCS;

            •an Offeror is a Medicare Advantage Plan, or has developed formal relationships with a Medicare                   Advantage Plan that allow the Contractor to provide coordinated care for dual eligible members;

            •an award of contract would enhance the diversity of the AHCCCS Contractor network.;

            •the nature, frequency and significance of any compliance agreements with any regulatory authority;

            •any convictions or civil judgments entered against the organization.

Offerors are encouraged to submit a bid for more than one GSA and/or for more than just urban GSAs.

AHCCCS reserves the right to waive immaterial defects or omissions in this solicitation or submitted proposals.The Offeror should note that, if successful, it must meet all AHCCCS requirements, irrespective of what isrequested and evaluated through this solicitation. The proposal provided by the Offeror will become part of thecontract with AHCCCS.

__________________________________________________________________________________________*All of the components listed below will be evaluated against relevant statutes, AHCCCS Rules and policies andthe requirements contained in this RFP. The Offeror’s Checklist (Attachment J) contains RFP references foreach of these items:*

**1. CAPITATION**

The Offeror shall submit initial capitation bids by risk group within a GSA. These initial bids will be evaluatedand scored. The lowest bid within each GSA and risk group will receive the maximum allowable points. If a bidis below the actuarial rate range, the bid will be evaluated as if it were at the bottom of the actuarial rate range.No additional points will be given for bids below the actuarial rate range. Conversely, the highest bid (within orabove the actuarial rate range) will receive the least number of points.

If AHCCCS requests best and final offers, these offers will be scored using the same methodology as was used toscore the initial bids. The initial bid will be weighted 60% and the final bid 40%.

Offerors should note that AHCCCS may not offer the opportunity to submit best and final offers.

**2. PROGRAM**

Program refers to the Offeror’s policies and procedures supporting the provision of all covered services. Inparticular, the Offeror's proposal will be evaluated on the following:

                a. Quality Management                b. Medical Management                c. EPSDT/Maternal and Child Health                d. Behavioral Health

**3. ORGANIZATION**

Organization refers to the Offeror's ability to perform the administrative tasks necessary to support therequirements identified in this solicitation. The following areas will be evaluated:

                a. Organization and Staffing                b. Information Systems                c. Claims                d. Corporate Compliance                e. Encounters                f. Member Services                g. Grievance and Appeals                h. Finance

**4. NETWORK**

Network refers to the Offeror’s capacity to develop and manage a provider network sufficient for the provision ofall covered services. A signed Letter of Intent will receive the same weight and consideration as a signed contract.The following areas will be evaluated:

                a. Network Development                b. Network Management

[END OF SECTION H]

**SECTION I: INSTRUCTIONS TO OFFERORS**

**1. PROSPECTIVE OFFEROR’S INQUIRIES**

Any questions related to this solicitation must be directed to the Solicitation Contact Person listed in SectionA. Offerors shall not contact or ask questions of other AHCCCS staff unless authorized by the ContractingSolicitation Contact Person. Questions shall be e-mailed, hand delivered or mailed to the Solicitation ContactPerson in the prescribed MS Word format available in the Bidder’s Library. In addition, questions handdelivered or mailed must also be submitted on a Compact Disk (CD) and saved in the specified format. Theenvelope must be marked "RFP Questions- ACUTE CARE". All questions are due to AHCCCS by the datesfound in Paragraph 11 of this section. AHCCCS will respond, in writing, to all questions submitted throughthis process. Written responses will be posted in the Bidder’s Library in accordance with the schedule ofmilestone dates found in Paragraph 11 of this section.

**2. PROSPECTIVE OFFEROR’S CONFERENCE AND TECHNICAL INTERFACE MEETING**

An Offeror’s Conference will be held on February 11, 2008, from 8:30 a.m. until 5:00 p.m., at AHCCCS, 701 E.Jefferson St., Phoenix, Arizona, in the third floor Gold Room. The purpose of this conference will be to: 1) orientnew Offerors to AHCCCS, 2) clarify the contents of this solicitation, and 3) clarify the AHCCCS PMMIS Systemand interface requirements. Any doubt as to the contents and requirements of this solicitation or any apparentomission or discrepancy should be presented at this conference. Questions posed during the Prospective Offeror’sConference must also be submitted as specified in Paragraph 1 of this section. Verbal responses provided duringthe Conference are not binding.

**3. PROPOSAL OPENING**

Proposals will be opened publicly immediately following the proposal due date and time. The name of eachOfferor will be read aloud and recorded, but no other information contained in the proposals will be disclosed.Proposals will not be available for public inspection until after contract award.

**4. LATE PROPOSALS**

Late proposals will not be considered.

**5. WITHDRAWAL OF PROPOSAL**

At any time prior to the proposal due date and time, the Offeror (or designated representative) may withdraw itsproposal. Withdrawals must be provided in writing and submitted to the Solicitation Contact Person listed inSection A.

**6. AMENDMENTS TO RFP**

Amendments may be issued subsequent to the issue date of this solicitation. Receipt of solicitation amendmentsmust be acknowledged by signing and returning the signature page of the amendment to the Solicitation ContactPerson listed in Section A.

**7. ON-SITE REVIEW**

Prior to or as part of a contract award, all Offerors may be subject to on-site review(s) to determine that aninfrastructure is in place that will support the provision of services to the Acute population within the GSAs bid.

**8. BEST AND FINAL OFFERS**

AHCCCS reserves the right to accept any or all initial offers without further negotiation and may choose not torequest a best and final offer (BFO). Offerors are therefore advised to submit their most competitive offers atthe outset. However, if it is considered in the best interest of the State, AHCCCS may issue a written requestto submit a BFO in a particular GSA. The purpose of a BFO request is to allow Offerors an opportunity toresubmit bids for rates not previously accepted by AHCCCS. This request will notify the Offeror of the date,time and place for the resubmission of the capitation rate bid. In addition, AHCCCS will disclose to eachOfferor which of its bid rates are acceptable (within or below actuarial rate range), and which are notacceptable (above the actuarial rate range). Final bid rates that fall below the bottom of the actuarial rate rangewill be increased to the bottom of that rate range after the final BFO. If an Offeror does not submit a notice ofwithdrawal or participate in a requested BFO, its immediate previous offer will be considered its best and finaloffer.

All BFOs must be submitted via the AHCCCS website. AHCCCS will limit the number of BFO rounds if it is inthe best interest of the State. Offerors will be permitted, within the restrictions and limitations defined below, toadjust a capitation rate upward for a risk group that was previously accepted to offset the reduction of a capitationrate in another risk group in the first BFO round only. These restrictions and limitations include, but are notlimited to:

                a. An Offeror will be allowed to adjust upward a previously accepted rate only during the first BFO round;

                b. The weighted amount of BFO increase cannot exceed the weighted amount of BFO reduction.                   AHCCCS will furnish the Offeror, in the Data Supplement, the enrollment percentages, by risk group,                   by GSA, to be used in determining the weighted amount. Should the weighted amount of the                   adjustment exceed the weighted amount of the BFO reduction, AHCCCS shall reject the first BFO                   and the adjustment (costing the Offeror the loss of the first BFO round in that GSA). Since a risk                   group can only be adjusted during the first BFO round, the Offeror will lose the opportunity to make                   an upward capitation adjustment to previously accepted risk group bids in that GSA.

                For example, assume that SSI w/o Medicare was the risk group where a BFO was needed and the                Offeror reduced this rate by $10 PMPM. Also assume the SSI w/o Medicare risk group accounted for                9% of the members in the GSA.

                Weighted Average Capitation Reduction - 9% X $10.00 = $.90

                Assume the risk group adjusted upward was TANF and this risk group was increased by $2.00 PMPM.                Also assume this risk group accounted for 50% of the members in the GSA.

                Weighted Average Capitation Increase - 50% X $2.00 = $1.00

                Therefore, the BFO would be rejected because the weighted amount of the BFO upward adjustment                exceeded the weighted amount of the BFO reduction.

                c. Offerors will not be allowed to decrease a bid in a BFO round if the initial bid was below the bottom of                   the rate range. If such a BFO is submitted it will be rejected.

                d. If an adjustment during the initial BFO round causes the Offeror to exceed the upper range of any risk                   group, AHCCCS will reject the adjustment and return the (adjusted) risk group to the initial capitation                   rate bid by the Offeror. Since a previously accepted risk group bid can only be adjusted during the first                   BFO round, the Offeror will lose the opportunity to make an upward capitation adjustment for this risk                   group.

                e. AHCCCS reserves the sole right to accept or reject any adjustment. By submitting an adjustment to a                   risk group, the Offeror is requesting approval by AHCCCS; such approval shall not be automatic. If                   an initial bid is below the bottom of a rate range, it cannot be adjusted downward by the Offeror in a                   BFO round.

***Capitation Rates Offered after the BFOs:***As stated above, AHCCCS may limit the number of BFO rounds.After the final BFO round is complete, provided it is in the best interest of the State, AHCCCS will cease issuingBFO requests. At this point, should the Offeror have a risk group without an accepted capitation rate, AHCCCSshall offer a capitation rate to the Offeror. The capitation rate offered should be somewhere in the bottom half ofthe rate range (specific placement to be determined by AHCCCS and its actuaries). Note that all rates offered inthis manner shall be identical for all offerors in the same GSA and risk group.

**9. AWARD OF CONTRACT**

AHCCCS has determined that the provision of covered services to eligible populations in the GSAs as describedbelow will stabilize risk sharing. The Offeror must therefore bid on at least one entire GSA in order to beconsidered for a contract award. Although AHCCCS encourages Offerors to bid on multiple GSAs, AHCCCSmay limit the number of GSAs awarded to any one Offeror, if deemed in the best interest of the State.

Notwithstanding any other provision of this solicitation, AHCCCS expressly reserves the right to:

                a. Waive any immaterial mistake or informality;                b. Reject any or all proposals, or portions thereof; and/or                c. Reissue a Request for Proposal

AHCCCS will not make an award in a single GSA to any single organization that owns or manages more thanone contract, or to two Contractors that utilize the same management service company.

If there are significant compliance issues with a current Contractor, or a Contractor’s contract in a particular GSAhas been previously terminated, AHCCCS retains the right to address that compliance or termination issue on anindividual basis, according to what is deemed in the best interest of the State. A new bid proposal may not beaccepted until it has been determined that the reason for the significant compliance or termination issue has beenresolved and there is a reasonable assurance that it will not recur.If there are significant compliance issues with a new Offeror’s performance in another state or with anothergovernmental entity, AHCCCS retains the right to address that compliance or termination issue on an individualbasis according to what is deemed in the best interest of the State.

Subsequent to the award of contracts, in the event of significant non-compliance issues with a Contractor in aparticular GSA, AHCCCS may refer back to the results of the evaluation of this solicitation and select anotherContractor for a particular GSA that is considered to be in the best interest of the State.

A response to this Request for Proposals is an offer to contract with AHCCCS based upon the terms, conditions,scope of work and specifications of the RFP. All of the terms and conditions of the contract are contained in thissolicitation, solicitation amendments and subsequent contract amendments, if any, signed by the ContractingOfficer. Proposals do not become contracts unless and until they are accepted by the Contracting Officer. Theproposal provided by the Offeror will become part of the contract with AHCCCS. A contract is formed when theAHCCCS Contracting Officer signs the award page and provides written notice of the award(s) to the successfulOfferor(s), and the Offeror accepts any special provisions to the contract and the final rates awarded. AHCCCSmay also, at its sole option, modify any requirements described herein. All Offerors will be promptly notified ofaward.

AHCCCS reserves the right to specify and/or modify the number of contracts to be awarded in any GSA.AHCCCS anticipates awarding contracts as follows:

*GSA#:*

** **

*County or Counties*

** **

*Number of Awards*

2 4 6 8 10 12 14

 

Yuma, La Paz Apache, Coconino, Mohave, and Navajo Yavapai Gila, Pinal Pima, Santa Cruz* Maricopa Graham, Greenlee, Cochise

Maximum of 2 Maximum of 2 Maximum of 2 Maximum of 2 Maximum of 5 Maximum of 6 Maximum of 2

Note: *AHCCCS anticipates awarding up to five contracts in the Pima County portion of the Pima/Santa CruzGSA. Contracts will be awarded in Santa Cruz County to only two of the five Pima contract awardees.

An existing contractor in Maricopa or Pima County who is not awarded a CYE 09 contract may request to haveits enrollment capped and to continue providing services under the terms and conditions of this new Contract.AHCCCS may, at its sole option, grant or deny such a request. If AHCCCS approves such an enrollment cap, theContractor would continue to serve its existing members but would not receive any new members and theirmembership will not be included in the Conversion Group described below. The enrollment cap will not be liftedduring the term of this or any subsequent contract period unless one of the following conditions exists:

                a. Another contractor is terminated and increased member capacity is needed, or                b. Legislative action creates a sudden and substantial increase in the overall AHCCCS population, or                c. Extraordinary and unforeseen circumstances make such an action necessary and in the best interest of the State.

If an existing contractor is not awarded a new or capped (as mentioned above) contract, AHCCCS will assign themembership as follows:

**Conversion Group**On June 30, 2008, AHCCCS will identify all members that are currently enrolled in a plan that is exiting anyGSA effective September 30, 2008, and will classify those members as the Conversion Group. TheConversion Group members will be auto-assigned to select Contractors as described in Attachment G *Auto-Assignment Algorithm*.

On July 1, 2008, the Conversion Group will be mailed a letter indicating that the Contractor with which theyare currently enrolled will no longer be available, and will be provided with the name of the Contractor thatthey will be assigned to as of October 1, 2008. From July, 1, 2008, to August 31, 2008, and again fromOctober 1, 2008 to November 30, 2008, the Conversion Group will be provided with an opportunity to changeplans by selecting from the Contractors that have been awarded CYE09 contracts in their GSA.

AHCCCS will provide all Contractors with a potential membership files on July 1, 2008 that contains theConversion Group Contractor assignments that will be effective October 1, 2008 as well as any regular AnnualEnrollment Choice plan changes. Contractors will receive additional membership files on or about August 15,September 1, and September 15, 2008. These additional files will identify the members that have elected tochange Contractors.

Beginning on September 2, 2008, Relinquishing Contractors (Contractors who are exiting a GSA) willprovide electronic files containing member transition information, in the format established by AHCCCS, tothe Receiving Contractors (those Contractors to which Conversion Group members are assigned). Thisinformation exchange must be completed by September 5, 2008.

Based on the importance of continuity of care during the transition period, the Receiving Contractor isexpected to honor the Relinquishing Contractor’s previously issued prior authorizations or waive its own priorauthorization requirements for any previously scheduled outpatient services and/or prescribed pharmaceuticalsuntil November 30, 2008. The Contractor is also expected to waive any requirement for Conversion Groupmembers to use the Contractor’s provider network until October 31, 2008. The Receiving Contractor shouldapply medical necessity criteria when paying for services.The Contractor will receive an official enrollmentfile for October enrollment prior to October 1, 2008. Receiving Contractors are expected to secure anappropriate network for the membership identified in the transition files in order to address any potentialservice gaps by November 30, 2008. Receiving Contractors must attempt to contract with Primary CarePhysicians historically utilized by the transitioning members for both continuity of care and to maintain itsmembership.

**New Members after Contract Awards**Members who become eligible and enrolled between May 1, 2008 and July 31, 2008 will have the opportunityto choose from all of the Contractors currently contracted with AHCCCS. AHCCCS will continue to autoassign members to all Contractors currently contracted with AHCCCS until July 31, 2008. Starting August 1,2008, new members will only be offered choice of Continuing Contractors (currently an AHCCCS Contractorin the GSA and awarded a CYE 09 Contract). Members who do not make a choice will be auto assigned to aContinuing Contractor.

If none of the current Contractors in a GSA are awarded a CYE09 contract, members will have the ability tochoose Contractors in their GSA that are currently contracted with AHCCCS in that GSA. Members that donot make a choice will be auto assigned to one of the Contractors in their GSA that are currently contractedwith AHCCCS in that GSA.

Members who have chosen or have been assigned to an Exiting Contractor (a Contractor not awarded a CYE09 contract) between May 1, 2008 and June 30, 2008 will be included in the Conversion Group, assigned to anew Contractor, and their transition must be managed as indicated in the Conversion Group section.Members who have chosen or have been assigned to an Exiting Contractor after June 30, 2008, through andincluding July 31, 2008 will be auto assigned by the process described in Attachment G *Auto-AssignmentAlgorithm* and included in the October official enrollment file.

Although choice of an Exiting Contractor ends July 31, 2008, there are limited instances (family continuity,newborn enrollment or 90-day re-enrollment) when assignment to an Exiting Contractor will occur throughSeptember 30, 2008. Members assigned under these circumstances will be moved via the process described inAttachment G *Auto-Assignment Algorithm* and included in the October official enrollment file*.*

All of the members who became eligible and enrolled after contracts have been awarded but before October 1,2008, that are not transitioned into the Conversion Group, will also be provided with the opportunity to selectany of the Contractors available in their GSA from October 1, 2008 to November 30, 2008. The Contractor isencouraged to execute contracts with the providers utilized by the transitioning members, in an attempt tomaintain its membership.

**Annual Enrollment Choice**AHCCCS will suspend Annual Enrollment Choice for all members who would have been notified of theirAEC opportunity for the months of May, June and July 2008. The affected members will be afforded anopportunity to choose from the Contractors awarded CYE09 contracts in their GSA starting in August, 2008for an October 1, 2008 effective date.

**10. FEDERAL DEADLINE FOR SIGNING CONTRACT**

The Center for Medicare and Medicaid Services (CMS) has imposed strict deadlines for finalization ofcontracts in order to qualify for federal financial participation. This contract, and all subsequent amendments,must be completed and signed by both parties, and must be available for submission to CMS prior to thebeginning date for the contract term (October 1, 2008). All public entity Offerors must ensure that theapproval of this contract is placed on appropriate agendas well in advance to ensure compliance with thisdeadline. Any withholding of federal funds caused by the Offeror’s failure to comply with this requirementshall be borne in full by the Offeror.

**11. RFP MILESTONE DATES**

The following is the schedule of events regarding the solicitation process. These dates are subject to changebased on the best interest of the State:

**Activity**

** **

**Date                                                       **

RFP Issued

** **

February 1, 2008

Prospective Offerors Conference and Technical Assistance Session

** **

February 11, 2008 - AM

Information Technology (IT) PMMIS Technical Interface Meeting

** **

February 11, 2008 – PM

Technical Assistance and RFP Questions Due by 5:00 P.M. MST

** **

February 15, 2008

RFP Amendment, if necessary, and Formal Response to Questions

** **

February 29, 2008

Second Set of Technical Assistance and RFP Questions Due Due by 5:00 P.M. MST

** **

March 7, 2008

Second RFP Amendment Issued, if necessary, and Formal Response to Second Set of Questions

** **

March 14, 2008

Proposals Due by 3:00 P.M. MST

** **

March 28, 2008

Contracts Awarded

** **

May 1, 2008

Readiness Reviews Begin

** **

July 1, 2008

New Contracts Effective

** **

October 1, 2008

**12. AHCCCS BIDDER’S LIBRARY**

The Bidder’s Library contains critical reference material including, but not limited to, AHCCCS policies;utilization; member data; and performance requirements to assist the Offeror in preparing a thorough and realisticresponse to this solicitation. References are made throughout this solicitation to material in the Bidder’s Libraryand on the AHCCCS website. Offerors are responsible for reviewing the contents of the Bidder’s Library materialas if they were printed in full herein. All such material is incorporated into the contract by reference. TheBidder’s Library is located on the AHCCCS website at http://www.azahcccs.gov/Contracting/BidderLib.asp

**13. OFFEROR’S INABILITY TO MEET REQUIREMENTS**

If a potential offeror cannot meet the minimum capitalization requirements, the performance bond requirements,or the minimum network standards described herein, AHCCCS requests that the potential offeror not submit abid.

*Minimum Capitalization Requirements:*

The Offeror must meet a minimum capitalization requirement for each GSA bid in order for the bid to bescored. The capitalization requirement must be met within 30 days after contract award.

Minimum capitalization requirements by GSA are as follows:

**Geographic Service Area (GSA)      Capitalization Requirement**

Mohave/Coconino/Apache/Navajo $4,400,000La Paz/Yuma                                         $3,000,000Maricopa                                             $5,000,000Pima/Santa Cruz                                   $4,500,000Cochise/Graham/ Greenlee                 $2,150,000Pinal/Gila                                             $2,400,000Yavapai                                                $1,600,000

***New Offerors (any Offeror that is not currently an Acute Care Contractor with AHCCCS)****:*To beconsidered for a contract award in a given GSA or group of GSAs, a new Offeror must meet the minimumcapitalization requirements listed above. The capitalization requirement is subject to a $10,000,000 ceilingregardless of the number of GSAs awarded. This requirement is in addition to the Performance Bondrequirements defined in Section D, Paragraphs 46, Performance Bond or Bond Substitute, and 47, Amount ofPerformance Bond, and must be met with cash with no encumbrances, such as a loan subject to repayment.The capitalization requirement may be applied toward meeting the equity per member requirement (seeSection D, Paragraph 50, Financial Viability Standards) and is intended for use in operations of the Contractor.

***Continuing Offerors:***Continuing Offerors that are bidding a county or GSA in which they currently have acontract must meet the equity per member standard (see Section D, Paragraph 50, Financial ViabilityStandards) for their current membership. Continuing Offerors that do not meet the equity standard must fund,through capital contribution, the necessary amount to meet the minimum capitalization requirement.Continuing Offerors that are bidding a new GSA must provide the additional capitalization for the new GSAthey are bidding. The amount of the required capitalization for continuing Offerors may differ from that fornew Offerors due to size of the continuing Offeror’s current enrollment. Continuing Offerors will not berequired to provide additional capitalization for new GSAs if they currently meet the equity per memberstandard with their existing membership and their excess equity is sufficient to cover the proposed additionalmembers, or they have at least $10,000,000 in equity.

**14. CONTENTS OF OFFEROR'S PROPOSAL**All proposals (original and seven copies) shall be organized with strict adherence to the Offeror’s Checklist(Attachment J) as described in this section and submitted using the forms and specifications provided in this RFP.All pages of the Offeror's proposal must be numbered sequentially with documents placed in sturdy 3-inch, 3-ringbinders. All responses shall be in 11 point font or larger with borders no less than 1⁄2”. Unless otherwisespecified, responses to each submission requirement must be limited to three (3) 81⁄2” x 11” one sided, singlespaced, type written pages. Erasures, interlineations or other modifications in the proposal must be initialed inoriginal ink by the authorized person signing the offer. A policy, brochure, or reference to a policy or manualdoes not constitute an adequate response. AHCCCS will not reimburse the Offeror the cost of proposalpreparation.

It is the responsibility of the Offeror to examine the entire RFP, seek clarification of any requirement that may notbe clear, and check all responses for accuracy before submitting its proposal. The proposal becomes a part of thecontract; thus, what is stated in the proposal may be evaluated either during the proposal evaluation process orduring other reviews. Proposals may not be withdrawn after the published due date and time.

All proposals will become the property of AHCCCS. The Offeror may designate certain information to beproprietary in nature by typing the word "proprietary" on top of every page for which nondisclosure is requested.Final determinations of nondisclosure, however, rest with the AHCCCS Director. Regardless of suchdeterminations, all portions of the Offeror's proposal, even pages that are proprietary, will be provided to CMS.

All proposals shall be organized according to the following major categories:

                I. General Matters                II. Network                III. Capitation                IV. Program                V. Organization                VI. Other

Each section shall be separated by a divider and contain all information requested in this solicitation. Numberingof pages should continue in sequence through each separate section. For example, "Provider Network" wouldbegin with the page number following the last page number in "Program”. Each section shall begin with a tableof contents.

Proposals that are not submitted in conformance with the guidelines described herein will not be considered.References to various sections of the RFP document in Section I are intended to be of assistance and are notintended to represent all requirements. Other possible resources may be found in the Bidder’s Library.

All responses incorporating examples of past performance and/or outcome data must comply with the followingrequirements:

            •Incumbents must submit based on their AHCCCS Acute line of business               •New Offerors currently operating as Managed Care Organizations (MCO), must submit all historical                  information from the same MCO/line of business

The following specifies the submission requirements.

**I. General Matters**

See the Offeror’s Checklist (Attachment J) for information to be submitted under this section.

**II. Network**

The Offeror shall have in place an adequate network of providers capable of meeting contract requirements.Attachment B lists minimum geographic network requirements by GSA. The following specifies the submissionrequirements.

**Required Submissions: Network**

***Network Questions***

1. The Offeror must provide the:

                a. Network Attestation Statement and attachments, located in the Bidder’s Library, listing the                   number of providers by provider type in each community listed within for each GSA bid.

                b. The Offeror must also submit 3 CDs containing the Offeror’s complete network by GSA on the                   CYE ‘09 RFP Minimum Network Standards Excel Spreadsheet located in the Bidder’s                   Library.

*References: Section D, Paragraph 27, Attachment B; Network Attestation Statement; Minimum NetworkStandards Excel Spreadsheet; Minimum Network Standards Instructions*

2. The Offeror must submit a Network Development and Management plan. The submission may   exceed the three (3) page maximum.   *References: Section D, Paragraphs 27, Network Development, and 29, Network Management; ACOM*   *415, Provider Network Development and Management Plan Policy*

3. Any Offeror that is new to a GSA or is a Continuing Offeror with less than 50,000 members in the   Maricopa GSA, or 30,000 members in Pima County, or less than 50% of the members in a rural GSA,   must submit a description of how it will launch a network capable of supporting this minimum   membership by October 1, 2008. (Current Contractors that are not bidding on a new GSA and have a   membership higher than those listed above in the GSAs in which they are currently operating, will not   be evaluated on this Submission Requirement)   *References: Section D, Paragraph 6, Auto Assignment Algorithm, 27, Network Development, and 29,*   *Network Management; ACOM 415, Provider Network Development and Management Plan Policy,*   *and 416, Provider Information Policy*

4. Describe the methodologies and interventions used by the Offeror that are considered to be innovative   and proactive for reducing unnecessary ER utilization. Include the reason(s) why these are felt to be   innovative and proactive.   *References: Section D, Paragraph 27, Network Development; ACOM 415, Provider Network*   *Information Policy; AMPM Chapter 400.*

5. Describe the contents of the initial PCP training offered to providers that are new to the network.   *References: Section D, Paragraph 29, Network Management; ACOM 416, Provider Information Policy;*   *AMPM Chapter 400*

6. Describe how the organization will communicate with its provider network regarding program standards,   changes in laws and regulations and changes in subcontract requirements.   *References: Section D, Paragraph, 29, Network Management; ACOM 416, Provider Information Policy*

7. Describe the process for accepting and managing provider inquiries, complaints, and requests for   information that are received outside of the Claim Dispute process.   *References: Section D, Paragraph 29, Network Management*

8. Describe how the results obtained through various types of provider and network monitoring (i.e.,   Provider Relations, Quality Management, Case Management, Grievance System, Medical Management   etc.) are used to manage and improve the network. Identify how provider issues are communicated   within the organization.   *References: Section D, Paragraph 27, Network Development, and 29, Network Management; ACOM*   *415, Provider Network Development and Management Plan Policy*

9. Describe how the organization will monitor the potential for and handle the loss (i.e., contract   termination, closure or natural disaster) in a GSA of a) hospital/hospital system and/or b) a large   provider group. The response must address how the Offeror will ensure that members receive   medically necessary services if such a situation occurs.   *References: Section D, Paragraphs 27, Network Development, and 29, Network Management;*   *ACOM 104, Business Continuity and Recovery Plan*

10. Describe how feedback (turnover, complaints, survey results etc.) from the contracted network is used to     drive changes and/or improvements to the Offeror’s Operations.     *References: Section D, Paragraphs 19, Surveys, 27, Network Development, and 29, Network*     *Management;*

11.Describe the process to identify and reduce the member no-show rate for appointments across the     spectrum of care (e.g. oral heath, physician, transportation, Children’s Rehabilitative Services,     etc.). Describe no-show identification methods, interventions, best practices, member and     provider outreach approaches, and how outcomes of the processes implemented to reduce the noshow     rate are or will be evaluated for effectiveness. Submission requirement can be a maximum     of five (5) pages.     *References: Section D, Paragraph 33, Appointment Standards; ACOM 417, Appointment*     *Availability Monitoring and Reporting Policy*

**III. Capitation**

Capitation is a fixed (per-member) monthly payment to a Contractor for the provision of covered services tomembers. It is an actuarially sound amount to cover expected utilization and costs for the individual risk groupsin a risk-sharing, managed care environment. The Offeror must demonstrate that the capitation rates proposedare actuarially sound. In general terms, this means that the Offeror that is awarded a contract should be able tokeep utilization at or near its proposed levels and should be able to contract for unit costs that average at or nearthe amounts shown on the CCFR. This requirement also applies to bids submitted in best and final offer rounds.Prior Period Coverage (PPC), Delivery Supplement, SOBRA Family Planning, SSDI-TMC and State OnlyTransplant rates will be set by the AHCCCS actuaries and not bid by the Contractor. See Section D, Paragraph53, Compensation, for information regarding risk sharing for the PPC time period and the SSDI-TMC members.All other risk groups will be subject to competitive bidding.

To facilitate the preparation of capitation proposals, a Data Supplement is provided in the Bidder’s Library. Thisdata source should not be used as the sole source of information in making decisions concerning the capitationproposal. Each Offeror is solely responsible for research, preparation and documentation of its capitationproposal.

**Required Submission: Capitation**

***Capitation***

12. Submit a capitation proposal using the AHCCCS bid web tool. Instructions for accessing and using     the web tool will be issued on or about February 15, 2008. The Offeror must have an actuary who is a     member of the American Academy of Actuaries certify that the bid submission is actuarially sound.     This certification is also required with subsequent submissions in Best and Final Offer rounds (if     applicable). The Offeror must also submit hard copy print outs of the web tool. Refer to Attachment E     for more details.

     The Offeror should assume that all AHCCCS-covered medical services are included in the capitation     rates. The Offeror must prepare and submit its capitation proposal assuming a $20,000 deductible     level for regular reinsurance, for all risk groups, in all GSAs. AHCCCS will provide the reinsurance     offset amounts via the bid web tool and Section N of the data supplement for each risk group, for each     GSA. Prior to the contract award AHCCCS will provide a table of per-member per-month reinsurance     adjustments to be made to capitation rates for the Contractor whose actual deductible level exceeds     $20,000.

**IV. Program**

**Required Submissions: Program**

***Program Questions***

13. Describe how the Offeror identifies quality improvement opportunities. Describe the process to select     a performance improvement project, and the process to develop multi-departmental interventions to     improve care or services. Describe the process for evaluating the effectiveness of the interventions. In     addition to the three-page submission the Offeror must include a two-page sample Performance     Improvement methodology for a relevant topic.     *References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapter 900*

14. Describe how the results of the Offeror’s monitoring and evaluation of overall performance is     incorporated into the Quality Management/Quality Improvement Program structure.     *References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapter 900*

15. Describe how peer review is utilized by Offeror and incorporated into quality management processes.     *References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapter 900*

16. Describe how quality of care and service complaints are identified, researched, resolved and the     resolution will be communicated to the member.     *References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapter 900*

17. Describe the qualifications of the staff that will perform the quality management and quality     improvement functions for the Offeror. Note if these persons are solely responsible for quality     management functions.     *References: Section D, Paragraph 16, Staff Requirements and Support Services; AMPM, Chapter 900*

18. Describe the process for provisional credentialing, initial credentialing, recredentialing and     organizational credentialing for all provider types specified in the AMPM. Please include a     description of the Quality Management Unit and the Medical Director’s role in the Offeror’s process.     *References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapter 900*

19. Describe the process utilized to train Offeror’s staff, other than Quality Management staff, regarding     identification and appropriate referral of quality of care concerns.     *References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapter 900*

20. Describe the process utilized to coordinate care or provide additional assistance to members identified     as having difficulties with accessing care. Include processes for assisting challenging members     identified through the quality of care process and those members that may be referred by AHCCCS.     *References: Section D, Paragraphs 23, Quality Management (QM), and 24, Medical Management;*     *AMPM, Chapters 400, 900, and 1000*

21. Describe the Offeror’s experience and commitment to improving quality of care and performance in     specific measures of health care services, and how this commitment is spread throughout the     organization.     *References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapter 900.*

22. Provide results/rates for any HEDIS or HEDIS-like measure from a state in which the Offeror     participates in the Medicaid line of business and in which the Offeror has experienced sustained,     statistically significant improvement within the last three years. Include a minimum of three years of     results, including numerators and denominators for the measure and statistical significance of change      (e.g. chi-square test).     *References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapter 900.*

23. Describe how the Offeror gathers and analyzes utilization data. In addition to no more than three     pages of narrative, the Offeror must include three pages of example utilization reports.     *References: Section D, Paragraph 24, Medical Management (MM); AMPM, Chapter 1000*

24. Provide an example of when the Offeror’s analysis of data resulted in changes to medical management     programs.     *References: Section D, Paragraph 24, Medical Management (MM); AMPM, Chapter 1000*

25. Describe the Offeror’s existing or planned disease/chronic care management programs that are     designed to improve care for members with one or more chronic illnesses.     *References: Section D, Paragraph 24, Medical Management (MM); AMPM, Chapter 1000*

26. Describe the staff and processes utilized by the Offeror to conduct concurrent and retrospective review     of hospital stays.     *References: Section D, Paragraph 24, Medical Management (MM); AMPM, Chapter 1000*

27. Describe the staff and processes utilized by the Offeror to review requests for prior authorization.     *References: Section D, Paragraph 24, Medical Management (MM); AMPM, Chapter 1000*

28. Describe existing or planned relationships with Medicare plans (MA, PDP or PDP) that will allow for     coordination of care between Medicare and Medicaid services.     *References: Section D, Paragraphs 10, Scope of Services, and 60, Medicare Services and Cost*     *Sharing; Section H, Evaluation Factors and Selection Process*

29. Describe how the Offeror identifies members needing assistance navigating the health care delivery     system. Describe what assistance is provided, and how the effectiveness of the assistance is evaluated.     *References: Section D, Paragraphs 11, Special Health Care Needs, 23, Quality Management (QM),*     *and 24, Medical Management (MM); AMPM, Chapters 900 and 1000*

30. Describe planned health promotion, outreach, and monitoring of adult preventive/early detection     services including well woman, well man, adult immunizations and chronic disease.     *References: Section D, Paragraph 10, Scope of Services; AMPM, Chapters 400, 900 and 1000*

31. Describe planned health promotion, outreach, and monitoring for Early and Periodic Screening,     Diagnosis and Treatment (EPSDT) and explain how the EPSDT program is integrated within the     organization. Describe how EPSDT Tracking Forms are utilized to identify specific member needs     such as AzEIP referral, PEDS tool, behavioral health, oral health, and CRS conditions.     *References: Section D, Paragraph 10, Scope of Services - EPSDT; AMPM, Chapters 400 and 900*

32. Describe planned outreach and care coordination processes for populations of children with special     health care needs and other hard-to-reach populations such as those identified through the use of the     PEDS tool and eligible or enrolled in the AzEIP, CRS and/or a Regional Behavioral Health Authority      (RBHA).     *References: Section D, Paragraph 11, Special Health Care Needs; AMPM, Chapters 400 and 900*

33. Describe planned health promotion, outreach, and monitoring strategies for maternity care, including     post partum care. Include a description of how care will be coordinated for physical and behavioral     care needs. Describe process to increase provider participation in Baby Arizona.     *References: Section D, Paragraphs 10, Scope of Services, and 30, Primary Care Provider Standards;*     *AMPM, Chapters 400, 900 and 1000*

34. Describe how intervention activities to improve access to adult preventive health/early detection,     EPSDT and maternity care will be evaluated for effectiveness. Describe what the Offeror will do if     interventions are not effective.     *References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapters 400 and 900*

35. Describe the Offeror’s EPSDT and Maternal (MCH) organizational structure. Describe the staff     functions within the organizational structure to ensure care needs are met. The Offeror must note if     staff persons are dedicated solely to EPSDT and/or MCH functions.     *References: Section D, Paragraph 16, Staff Requirements and Support Services; AMPM, Chapters*     *400 and 900*

36. Describe strategies, both implemented and planned, to improve utilization of EPSDT oral health     services to ensure increased member participation beginning at age 1 and continuing through age 20.     *References: Section D, Paragraph 10, Scope of Services; AMPM, Chapter 400*

37. Describe how members are educated on the availability of family planning services and how to access     those services. Describe the process to be used to facilitate access to primary care services (a noncovered     benefit) by SOBRA Family Planning Extension participants, as well as no- or low-cost family     planning services when these members lose eligibility.     *References: Section D, Paragraphs 10, Scope of Services, and 32, Referral Management Procedures*     *and Standards; AMPM, Chapter 400; AHCCCS 1115 Waiver, Special Terms and Conditions #39*

38. Describe Offeror’s participation and/or planned participation in the Arizona Quality Improvement     Organization’s initiatives such as, but not limited to: diabetes management, hospital quality     improvement, and activities/initiatives of other Arizona community organizations.     *References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapters 400 and 900*

39. Describe how the Offeror identifies members with Behavioral Health needs.     *References: Section D, Paragraph 12, Behavioral Health Services; AMPM, Chapters 400, 500, 900*     *and 1000*

40. Describe the Offeror’s process for referring members with behavioral health care needs to the RBHA,     and for assisting members in accessing services in the RBHA system.     *References: Section D, Paragraph 12, Behavioral Health Services; AMPM, Chapters 400, 500, 900*     *and 1000*

41. Describe the Offeror’s process for coordinating care between the RBHA/treating provider and the     PCP.     *References: Section D, Paragraph 12, Behavioral Health Services; AMPM, Chapters 400, 500, 900*     *and 1000*

42. Describe how PCPs are educated on their ability to treat attention deficit/hyperactivity disorder      (ADHD), depression and anxiety behavioral health conditions, and monitors PCPs to ensure     appropriate care is provided.     *References: Section D, Paragraph 12, Behavioral Health Services; AMPM, Chapters 400, 500, and*     *900*

43. Essay – Describe how the Offeror envisions Medical Homes to be developed and integrated as a     service for members with special health care needs and for members with chronic illnesses who     would benefit from the assistance a Medical Home would provide. Please include in the     description what services would be provided and by what type of staff (provider or health plan),     how providers would be involved in and participate in the Medical Home model, and how     reimbursement would be modified to appropriately reimburse for a true Medical Home.     Consideration should also be given to how outcomes of the Medical Home, including utilization     patterns, would be evaluated.

               –Please include a description of how Offeror will staff/resourcethis project if                selected as the successful Offeror, with additional funding anticipated to be paid                until the project is completed as determined by AHCCCS (prorated if less than a                complete year).

               –The response submitted for this submission requirement will not beused to                consider contract award for the RFP. The response will be evaluated to                determine the potential award of additional administrative funds for one to two                Offerors awarded contracts in this RFP. The AHCCCS Administration reserves                the right to request additional information before making final awards in the                development of a Medical Home model program.                *References: Section D Paragraph 75, Pending Legislative/Other Issues; AMPM Chapters 400,                900 and 1000*

**V. Organization**

Organization refers to the Offeror's ability to perform the administrative tasks necessary to support therequirements identified throughout this RFP. The following identifies the submission requirements.

**Required Submissions: Organization**

***Organization Questions***

44. Submit resumes of key personnel. Include information on how long the personnel have been in these     positions. If personnel are not in place, submit job descriptions outlining the minimum qualifications of     the position(s). Each resume or job description is limited to three pages.     *References: Section D, Paragraph 16, Staff Requirements and Support Services*

45. Submit an organizational chart down to the supervisor level that includes the number of employees     under the supervisor for the following functional areas: Member Services, Provider Services, Medical     Management, Grievance System, Finance, Claims, Encounters, Information Systems, EPSDT and     Quality Management.

               –The chart must identify the functions that have been subcontractedin a Delegated                Agreement, Management Service Agreement and or Service Level Agreement.

               –Provide the number of full-time equivalent employees who are orwill be devoted to                the program by functional area.                *References: Section D, Paragraphs 16, Staff Requirements and Support Services, and 37,                Subcontracts*

46. Describe the Offeror’s initial and ongoing employee training program. In addition to the three page     submission the Offeror must include a syllabus of the Offeror’s initial and ongoing trainings.     *References: Section D, Paragraph 16, Staff Requirements and Support Services*

47. Describe the Offeror’s experience as a managed care contractor in a publicly funded program and or as a     managed care organization in a non-publicly funded program. Include a table showing current Medicare     and Medicaid risk contracts and other risk contracts to include date started and enrollees by risk group.     In addition, include a table of Medicare and Medicaid contracts discontinued within the past five years      (January 1, 2003) and the reason(s) for the termination.

48. Please provide the information listed below for a minimum of three governmental entities with     which the Offeror or a related organization (e.g. parent company) holds a managed care risk     agreement. If the Offeror does not have three separate contracts with governmental entities, the     Offeror must specify this fact and submit the information below for all governmental entities with     which it holds a contract.

               –Contact information must include: name of governmental entity,type of contract                and relevant contract number(s), contact person, telephone number and address.

               –Submissions must include, and identify, at least one reference(other than                Arizona) for an entity with which the Offeror has received a performance                sanction (does not have to be monetary). Not applicable if no sanctions have                been levied.

49. Describe the Offeror’s process to select and monitor subcontracted entities (Delegated Agreement,     Management Service Agreement and or Service Level Agreement) providing services in any or all of     the following functional areas: health plan Administration, Member Services, Provider Services,     Medical Management, Grievance System, Finance, Claims, Encounters, Information Systems, EPSDT     and Quality Management. Describe the authority the Offeror’s CEO (as identified on the Organization     Chart, not the CEO of the subcontractor) has to effectuate change over each subcontracted functional     area.     *References: Section D, Paragraph 37, Subcontracting*

50. Describe any sanctions levied against the Offeror, its parent corporation or any legally related     corporate entity since January 1, 2005 that have been imposed by AHCCCS, Medicaid programs in     other states, Medicare or any state insurance regulatory body. Include the description of the sanction,     the specific reason for the sanction and the timeline to resolve or correct the deficiency. Sanctions are     defined as any monetary and non-monetary punitive actions taken by regulatory bodies.

51. Describe the Offeror’s information services organization, and the hardware and software that will     support the AHCCCS line of business, including a diagram of the information system and data     processing flow with all existing or planned interfaces. If not a current Contractor, the Offeror must     include a detailed plan for ensuring that all IS requirements will be met prior to the contract start date.      (Submission requirement not to exceed 10 pages, plus flowcharts)     *References: Section D, Paragraphs 38, Claims Payment/Health Information System, and 64, Data*     *Exchange Requirements*

52. Describe the Offeror’s information system change order or software modification processes, the date     of the last major version update, and indicate if there is a planned system conversion within the     contract period (five years). If yes, indicate which subsystems will be affected and describe the     planning and system implementation process.

     **System conversion** is defined as a significant modification to the managed care system used     by the Offeror. Significant modification would include migration from one software product     or vendor to another, or a major version upgrade to the product from its current vendor. This     would also include any significant changes or enhancements in functionality to the system for     enrollment of members, maintenance of member benefits, premium/capitation payment     posting, provider contracts, prior authorization of claims, and payment/encounter reporting.     *References: Section D, Paragraphs 38, Claims Payment/Health Information System, and 64, Data*     *Exchange Requirements*

53. When was the last IT-specific external operational audit or external performance review of the     Offeror’s system/division? Provide the contact information for the external organization if applicable.     *References: Section D, Paragraphs 38, Claims Payment/Health Information System, and 64, Data*     *Exchange Requirements*

54. Describe Offeror’s HIPAA version migration plans, ability to support future HIPAA mandates, and     the system’s ability to support E-health connectivity (i.e., electronic health records)     *References: Section D, Paragraphs 38, Claims Payment/Health Information System, and 64, Data*     *Exchange Requirements, and 74, Technology Advancements*

55. Indicate how many years the Offeror’s IT organization or software vendor has supported the     information system, and whether or the not the software version currently operated by the Offeror is     supported by the software vendor. If Offeror’s software is vendor supported, include vendor name(s),     address, contact person and version(s) being used.     *References: Section D, Paragraphs 38, Claims Payment/Health Information System, and 64, Data*     *Exchange Requirements*

56. Provide a detailed flowchart and narrative description of the claims adjudication process, addressing both     paper and electronic claims submissions. Include processing timeliness standards, coordination of benefit     activities and how claim inquiries are handled. The submission requirement should not exceed three     pages of narrative and an additional three pages of flowcharts.     *References: Section D, Paragraphs 38, Claims Payment/Health Information System, and 58,*     *Coordination of Benefits*

57. Provide a description of the monitoring process for accurate and timely claim adjudication and how     identified deficiencies are resolved.     *References: Section D, Paragraph 38, Claims Payment/Health Information System*

58. Provide a description of the clinical edits and data related edits included in the claims adjudication     process.     *References: Section D, Paragraph 38, Claims Payment/Health Information System*

59. Describe the Offeror’s Corporate Compliance Program.     *References: Section D, Paragraph 62, Corporate Compliance*

60. Describe the Compliance Officer’s level of authority and reporting relationships.     *References: Section D, Paragraph 62, Corporate Compliance*

61. Submit a description of the Offeror’s encounter submissions process including, but not limited to, how     accuracy, timeliness and completeness are ensured and the remediation process when AHCCCS     standards are not met.     *References: Section D, Paragraph 65, Encounter Data Reporting; Encounter Reporting User Manual*

62. Describe the Member Grievance process from identification to resolution. Include the communication     process with other departments, internal benchmarks for timely resolution and average time of     resolution.     *References: Section D, Paragraph 26, Grievance System; Attachment H(1); ACOM Enrollee*     *Grievance Policy*

63. Describe how the organization monitors the operational effectiveness of the Member Services     Department.     *References: Section D, Paragraph 25, Administrative Performance Standards*

64. Describe the Offeror’s member orientation and on-going education regarding how to access benefits.     *References: Section D, Paragraphs 8, Mainstreaming of AHCCCS Members, 18, Member Information,*     *20, Cultural Competency; ACOM 404, Member Information Policy*

65. Describe how feedback (disenrollment, complaints, survey results etc.) from members is used to drive     changes and/or improvements to the Offeror’s operations.     *References: Section D, Paragraph 26, Grievance System; Attachments H(1), Enrollee Grievance System*     *Standards and Policy; ACOM, 406 Enrollee Grievance Policy*

66. Provide a flowchart and written description of the Offeror’s grievance system. At a minimum, the     description should include the member grievance and appeal process, and the provider and     subcontractor claim dispute process. The submission requirement should not excced five pages of     narrative with a maximum of three pages of flowcharts.     *References: Section D, Paragraph 26, Grievance System; Attachments H(1), Enrollee Grievance System*     *Standards and Policy, and H(2), Provider Claim Dispute Standards and Policy*

67. Describe how data resulting from the grievance system is used to improve the operational     performance of the Offeror.     *References: Section D, Paragraph 26, Grievance System; Attachments H(1), Enrollee Grievance System*     *Standards and Policy, and H(2), Provider Claim Dispute Standards and Policy*

68. Submit the Offeror’s plan for meeting the Performance Bond or Bond Substitute requirement     including the type of bond to be posted, source of funding and timeline for meeting the requirement.     *References: Section D, Paragraphs 46, Performance Bond or Bond Substitute, and 47, Amount of*     *Performance Bond*

69. Submit a plan for meeting the minimum capitalization requirement.     *References: Section I, Paragraph 13, Minimum Capitalization Requirements*

70. Provide the Offeror’s two most recent audited financial statements, including enrollment and member     month amounts. Include the parent company’s two most recent audited statements as well, if     applicable. There is no page limit on this requirement. Current Acute Care Contractors who have met     this requirement through deliverable submission do not need to resubmit.

**                The Offeror**refers to the separate corporation established for the purposes of this contract. If no                separate corporation exists, the Offeror should submit audited financial statements for the line of                business most like the services provided under this contract. If no other financial information is                available, AHCCCS will accept the Offeror’s corporate financial statement, with an explanation                of why other data is not available.

     *References: AHCCCS Reporting Guide for Acute Health Care Contractors*

71. Provide the organization’s most recent quarterly financial statements, including year-to-date     information where applicable and including enrollment and member month amounts. There is no page     limit on this requirement. Current Acute Care Contractors who have met this requirement through     deliverable submission do not need to resubmit.     *References: AHCCCS Reporting Guide for Acute Health Care Contractors*

72. Submit prospective time period financial forecasts by GSA and statewide totals for the first three years     of the contract starting with October 1, 2008, including a balance sheet and a statement of revenues,     expenses and changes in equity in at least the level of detail specified for annual audited financial     statements as outlined in the *AHCCCS Reporting Guide for Acute Health Care Contractors*. Balance     sheet and changes in equity statements should be statewide. Income statements should be by GSA and     statewide. Include all assumptions used for the forecasts, including enrollment and member months.     There is no page limit to this requirement. For the purposes of this question, “Statewide” should be     understood to mean all of the GSAs for which the Offeror is submitting a bid combined.     *References: AHCCCS Reporting Guide for Acute Health Care Contractors*

73. Submit financial viability calculations for the three-year financial projections.     *References: Section D, Paragraph 50, Financial Viability Standards; AHCCCS Reporting Guide for*     *Acute Health Care Contractors*

74. Describe the Offeror’s process for monitoring the appropriateness of the Total Medical Claims     liability including the frequency of internal and external reviews; the individuals or entity that will     conduct the review; and the method for necessary adjustments resulting from such reviews.     *References: AHCCCS Reporting Guide for Acute Health Care Contractors*

75. Describe the Offeror’s methodology for recording reinsurance revenue and reinsurance receivables     and the process for monitoring the appropriateness of reinsurance revenue and reinsurance     receivables. The description should include the frequency of review and adjustment.     *References: Section D, Paragraph 57, Reinsurance; AHCCCS Reporting Guide for Acute Health Care*     *Contractors*

**VI. Other**

This submission requirement will not be scored or used to determine contract awards for AHCCCS Acute orKidsCare business pursuant to this request for proposals.

**Required Submissions: Other**

***Other Question***

76. As described in Section D, Paragraph 75, KidsShare is a health insurance program being considered in     the 2008 Legislative Session. Should the program be enacted, it is currently structured as follows:

                Program Design:                               •A full riskprogram for children only (under 19 years of age)                               •AHCCCS wouldset a capitation rate range; Offerors awarded contracts under this RFP will                                   be afforded an opportunity to bid a capitation rate andpotentially be offered a KidsShare                                   contract.                               •Benefit wouldbe designed based on an affordable premium

                Eligibility Criteria including but not limited to:                               •Resident ofArizona, citizen of the US, or a legal resident                               •Family incomeabove 200% not to exceed 350% of the Federal Poverty Level                               •Parent/guardian employer does not offer insurance, or coverage is not extended to dependents                               •Employersponsored coverage or private commercial coverage is unaffordable for the family,                                   i.e. greater than 10% of the family income or exceeding 150%of the premium(s) for KidsShare.                               •Child orfamily member has preexisting conditions that precludes coverage under commercial coverage.

                Eligibility and Enrollment:                               •AHCCCS woulddetermine eligibility                               •Family wouldchoose a Contractor

                Please indicate if Offeror is interested in participating in this program. Identify any additional issues                for consideration in the development or design of the program. Response must be limited to one page.

[END OF SECTION I]

**SECTION J: LIST OF ATTACHMENTS**

Attachment A: Minimum Subcontract ProvisionsAttachment B: Geographic Service Area; Minimum Network RequirementsAttachment C: RESERVEDAttachment D: Sample Letter of Intent: Network Submission RequirementsAttachment E: Instructions for Preparing Capitation ProposalAttachment F: Periodic Reporting RequirementsAttachment G: Auto-Assignment AlgorithmAttachment H: Grievance System Standards and PolicyAttachment I: RESERVEDAttachment J: Offeror’s ChecklistAttachment K: Cost Sharing Copayments

**ATTACHMENT A: MINIMUM SUBCONTRACT PROVISIONS**

For the sole purpose of this Attachment, the following definitions apply:

“*Subcontract*” means any contract between the Contractor and a third party for the performance of any or allservices or requirements specified under the Contractor’s contract with AHCCCS.

“*Subcontractor*” means any third party with a contract with the Contractor for the provision of any or allservices or requirements specified under the Contractor’s contract with AHCCCS.

Subcontractors who provide services under the AHCCCS ALTCS and or the Acute Care Program mustcomply with the following applicable rules and statutes:

            •Rules for the ALTCS are found in Arizona Administrative Code (AAC) Title 9, Chapter 28.                AHCCCS statutes for long term care are generally found in Arizona Revised Statue (ARS) 36,                Chapter 29, Article 2.

            •Rules for the Acute Care Program are found in AAC Title 9, Chapter 22. AHCCCS statutes for the                Acute Care Program are generally found in ARS 36, Chapter 29, Article 1. Rules for the KidsCare                Program are found in AAC Title 9, Chapter 31 and the statutes for KidsCare Program may be found in                ARS 36, Chapter 29, Article 4.

All statutes, rules and regulations cited in this attachment are listed for reference purposes only and are notintended to be all inclusive.

*[The following provisions must be included verbatim in every contract.]*

**1.****ASSIGNMENT AND DELEGATION OF RIGHTS AND RESPONSIBILITIES**

No payment due the Subcontractor under this subcontract may be assigned without the prior approval of theContractor. No assignment or delegation of the duties of this subcontract shall be valid unless prior writtenapproval is received from the Contractor. (AAC R2-7-305)

**2.****AWARDS OF OTHER SUBCONTRACTS**

AHCCCS and/or the Contractor may undertake or award other contracts for additional or related work to thework performed by the Subcontractor and the Subcontractor shall fully cooperate with such other contractors,subcontractors or state employees. The Subcontractor shall not commit or permit any act which will interferewith the performance of work by any other contractor, subcontractor or state employee. (AAC R2-7-308)

**3.****CERTIFICATION OF COMPLIANCE – ANTI-KICKBACK AND LABORATORY TESTING**

By signing this subcontract, the Subcontractor certifies that it has not engaged in any violation of the MedicareAnti-Kickback statute (42 USC §§1320a-7b) or the “Stark I” and “Stark II” laws governing related-entityreferrals (PL 101-239 and PL 101-432) and compensation there from. If the Subcontractor provides laboratorytesting, it certifies that it has complied with 42 CFR §411.361 and has sent to AHCCCS simultaneous copies ofthe information required by that rule to be sent to the Centers for Medicare and Medicaid Services. (42 USC§§1320a-7b; PL 101-239 and PL 101-432; 42 CFR §411.361)

**4.****CERTIFICATION OF TRUTHFULNESS OF REPRESENTATION**

By signing this subcontract, the Subcontractor certifies that all representations set forth herein are true to the bestof its knowledge.

**5.****CLINICAL LABORATORY IMPROVEMENT AMENDMENTS OF 1988**

The Clinical Laboratory Improvement Amendment (CLIA) of 1988 requires laboratories and other facilities thattest human specimens to obtain either a CLIA Waiver or CLIA Certificate in order to obtain reimbursement fromthe Medicare and Medicaid (AHCCCS) programs. In addition, they must meet all the requirements of 42 CFR493, Subpart A.

To comply with these requirements, AHCCCS requires all clinical laboratories to provide verification of CLIALicensure or Certificate of Waiver during the provider registration process. Failure to do so shall result in either atermination of an active provider ID number or denial of initial registration. These requirements apply to allclinical laboratories.

Pass-through billing or other similar activities with the intent of avoiding the above requirements are prohibited.The Contractor may not reimburse providers who do not comply with the above requirements (CLIA of 1988; 42CFR 493, Subpart A).

**6.****COMPLIANCE WITH AHCCCS RULES RELATING TO AUDIT AND INSPECTION**

The Subcontractor shall comply with all applicable AHCCCS Rules and Audit Guide relating to the audit of theSubcontractor's records and the inspection of the Subcontractor's facilities. If the Subcontractor is an inpatientfacility, the Subcontractor shall file uniform reports and Title XVIII and Title XIX cost reports with AHCCCS(ARS 41-2548; 45 CFR 74.48 (d)).

**7.****COMPLIANCE WITH LAWS AND OTHER REQUIREMENTS**

The Subcontractor shall comply with all federal, State and local laws, rules, regulations, standards and executiveorders governing performance of duties under this subcontract, without limitation to those designated within thissubcontract [42 CFR 434.70 and 42 CFR 438.6(l)].

**8.****CONFIDENTIALITY REQUIREMENT**

Confidential information shall be safeguarded pursuant to 42 CFR Part 431, Subpart F, ARS §36-107, 36-2932,41-1959 and 46-135, AHCCCS Rules and the Health Insurance Portability and Accountability Act (CFR 164).

**9.****CONFLICT IN INTERPRETATION OF PROVISIONS**

In the event of any conflict in interpretation between provisions of this subcontract and the AHCCCS MinimumSubcontract Provisions, the latter shall take precedence.

**10.****CONTRACT CLAIMS AND DISPUTES**

Contract claims and disputes shall be adjudicated in accordance with AHCCCS Rules.

**11.****ENCOUNTER DATA REQUIREMENT**

If the Subcontractor does not bill the Contractor (e.g., Subcontractor is capitated), the Subcontractor shall submitencounter data to the Contractor in a form acceptable to AHCCCS.

**12.****EVALUATION OF QUALITY, APPROPRIATENESS, OR TIMELINESS OF SERVICES**

AHCCCS or the U.S. Department of Health and Human Services may evaluate, through inspection or othermeans, the quality, appropriateness or timeliness of services performed under this subcontract.

**13.****FRAUD AND ABUSE**

If the Subcontractor discovers, or is made aware, that an incident of suspected fraud or abuse has occurred, theSubcontractor shall report the incident to the prime Contractor as well as to AHCCCS, Office of ProgramIntegrity. All incidents of potential fraud should be reported to AHCCCS, Office of the Director, Office ofProgram Integrity.

**14.****GENERAL INDEMNIFICATION**

The parties to this contract agree that AHCCCS shall be indemnified and held harmless by the Contractor andSubcontractor for the vicarious liability of AHCCCS as a result of entering into this contract. However, theparties further agree that AHCCCS shall be responsible for its own negligence. Each party to this contract isresponsible for its own negligence.

**15.****INSURANCE**

****

*[This provision applies only if the Subcontractor provides services directly to AHCCCS members]*

The Subcontractor shall maintain for the duration of this subcontract a policy or policies of professional liabilityinsurance, comprehensive general liability insurance and automobile liability insurance in amounts that meetContractor’s requirements. The Subcontractor agrees that any insurance protection required by this subcontract,or otherwise obtained by the Subcontractor, shall not limit the responsibility of Subcontractor to indemnify, keepand save harmless and defend the State and AHCCCS, their agents, officers and employees as provided herein.Furthermore, the Subcontractor shall be fully responsible for all tax obligations, Worker's CompensationInsurance, and all other applicable insurance coverage, for itself and its employees, and AHCCCS shall have noresponsibility or liability for any such taxes or insurance coverage. (45 CFR Part 74) The requirement forWorker’s Compensation Insurance does not apply when a Subcontractor is exempt under ARS 23-901, andwhen such Subcontractor executes the appropriate waiver (Sole Proprietor/Independent Contractor) form.

**16.****LIMITATIONS ON BILLING AND COLLECTION PRACTICES**

Except as provided in federal and state law and regulations, the Subcontractor shall not bill, or attempt to collectpayment from a person who was AHCCCS eligible at the time the covered service(s) were rendered, or from thefinancially responsible relative or representative for covered services that were paid or could have been paid bythe System.

**17.****MAINTENANCE OF REQUIREMENTS TO DO BUSINESS AND PROVIDE SERVICES**

The Subcontractor shall be registered with AHCCCS and shall obtain and maintain all licenses, permits andauthority necessary to do business and render service under this subcontract and, where applicable, shall complywith all laws regarding safety, unemployment insurance, disability insurance and worker's compensation.

**18.****NON-DISCRIMINATION REQUIREMENTS**

The Subcontractor shall comply with State Executive Order No. 99-4, which mandates that all persons,regardless of race, color, religion, gender, national origin or political affiliation, shall have equal access toemployment opportunities, and all other applicable Federal and state laws, rules and regulations, including theAmericans with Disabilities Act and Title VI. The Subcontractor shall take positive action to ensure thatapplicants for employment, employees, and persons to whom it provides service are not discriminated againstdue to race, creed, color, religion, sex, national origin or disability. (Federal regulations, State Executive order# 99-4)

**19.****PRIOR AUTHORIZATION AND UTILIZATION MANAGEMENT**

The Contractor and Subcontractor shall develop, maintain and use a system for Prior Authorization andUtilization Review that is consistent with AHCCCS Rules and the Contractor’s policies.

**20.****RECORDS RETENTION**

The Subcontractor shall maintain books and records relating to covered services and expenditures includingreports to AHCCCS and working papers used in the preparation of reports to AHCCCS. The Subcontractor shallcomply with all specifications for record keeping established by AHCCCS. All books and records shall bemaintained to the extent and in such detail as required by AHCCCS Rules and policies. Records shall includebut not be limited to financial statements, records relating to the quality of care, medical records, dental records,prescription files and other records specified by AHCCCS.

The Subcontractor agrees to make available at its office at all reasonable times during the term of this contractand the period set forth in the following paragraphs, any of its records for inspection, audit or reproduction by anyauthorized representative of AHCCCS, State or Federal government.

The Subcontractor shall preserve and make available all records for a period of five years from the date of finalpayment under this contract unless a longer period of time is required by law.

If this contract is completely or partially terminated, the records relating to the work terminated shall be preservedand made available for a period of five years from the date of any such termination. Records which relate togrievances, disputes, litigation or the settlement of claims arising out of the performance of this contract, or costsand expenses of this contract to which exception has been taken by AHCCCS, shall be retained by theSubcontractor for a period of five years after the date of final disposition or resolution thereof unless a longerperiod of time is required by law. (45 CFR 74.53; 42 CFR 431.17; ARS 41-2548)

**21.****SEVERABILITY**

If any provision of these standard subcontract terms and conditions is held invalid or unenforceable, theremaining provisions shall continue valid and enforceable to the full extent permitted by law.

**22.****SUBJECTION OF SUBCONTRACT**

The terms of this subcontract shall be subject to the applicable material terms and conditions of the contractexisting between the Contractor and AHCCCS for the provision of covered services.

**23.****TERMINATION OF SUBCONTRACT**

AHCCCS may, by written notice to the Subcontractor, terminate this subcontract if it is found, after notice andhearing by the State, that gratuities in the form of entertainment, gifts, or otherwise were offered or given by theSubcontractor, or any agent or representative of the Subcontractor, to any officer or employee of the State with aview towards securing a contract or securing favorable treatment with respect to the awarding, amending or themaking of any determinations with respect to the performance of the Subcontractor; provided, that the existenceof the facts upon which the state makes such findings shall be in issue and may be reviewed in any competentcourt. If the subcontract is terminated under this section, unless the Contractor is a governmental agency,instrumentality or subdivision thereof, AHCCCS shall be entitled to a penalty, in addition to any other damagesto which it may be entitled by law, and to exemplary damages in the amount of three times the cost incurred bythe Subcontractor in providing any such gratuities to any such officer or employee. (AAC R2-5-501; ARS 41-2616 C.; 42 CFR 434.6, a. (6))

**24.****VOIDABILITY OF SUBCONTRACT**

This subcontract is voidable and subject to immediate termination by AHCCCS upon the Subcontractorbecoming insolvent or filing proceedings in bankruptcy or reorganization under the United States Code, or uponassignment or delegation of the subcontract without AHCCCS’s prior written approval.

**25.****WARRANTY OF SERVICES**

The Subcontractor, by execution of this subcontract, warrants that it has the ability, authority, skill, expertise andcapacity to perform the services specified in this contract.

**26.****OFF-SHORE PERFORMANCE OF WORK PROHIBITED**

Due to security and identity protection concerns, direct services under this contract shall be performed within theborders of the United States. Any services that are described in the specifications or scope of work that directlyserve the State of Arizona or its clients and may involve access to secure or sensitive data or personal client dataor development or modification of software for the State shall be performed within the borders of the UnitedStates. Unless specifically stated otherwise in specifications, this definition does not apply to indirect or“overhead” services, redundant back-up services or services that are incidental to the performance of the contract.This provision applies to work performed by subcontractors at all tiers.

**27.****FEDERAL IMMIGRATION AND NATIONALITY ACT**

The Subcontractor shall comply with all federal, state and local immigration laws and regulations relating to theimmigration status of their employees during the term of the contract. Further, the Subcontractor shall flow down this requirement to all subcontractors utilized during the term of the contract. The State shall retain the right toperform random audits of Contractor and subcontractor records or to inspect papers of any employee thereof toensure compliance. Should the State determine that the Contractor and/or any subcontractors be foundnoncompliant, the State may pursue all remedies allowed by law, including, but not limited to; suspension ofwork, termination of the contract for default and suspension and/or debarment of the Contractor.

**ATTACHMENT B: MINIMUM NETWORK STANDARDS***(By Geographic Service Area)*

*INSTRUCTIONS:*

Contractors shall have in place an adequate network of providers capable of meeting contract requirements. Theinformation that follows describes the minimum network requirements by Geographic Service Area (GSA).

In some GSAs there are required service sites located outside of the geographical boundary of a GSA. Thereason for this relates to practical access to care. In certain instances, a member must travel a much greaterdistance to receive services within their assigned GSA, than if the member were not allowed to receive services inan adjoining Border Community.

Split zip codes occur in some counties. Split zip codes are those which straddle two different counties.Enrollment for members residing in these zip codes is based upon the county and GSA to which the entire zipcode has been assigned by AHCCCS. The Contractor shall be responsible for providing services to membersresiding in the entire zip code that is assigned to the GSA for which the Contractor has agreed to provide services.The split zip codes GSA assignments are as follows:

ZIP CODE

 

SPLIT BETWEEN THESE COUNTIES

 

COUNTY ASSIGNED TO

 

ASSIGNED GSA

85220

Pinal and Maricopa

Maricopa

12

85242

Pinal and Maricopa

Maricopa

12

85292

Gila and Pinal

Gila

12

85342

Yavapai and Maricopa

Maricopa

12

85358

Yavapai and Maricopa

Maricopa

12

85390

Yavapai and Maricopa

Maricopa

12

85643

Graham and Cochise

Cochise

14

85645

Pima and Santa Cruz

Santa Cruz

10

85943

Apache and Navajo

Navajo

4

86336

Coconino and Yavapai

Yavapai

6

86351

Coconino and Yavapai

Coconino

4

86434

Mohave and Yavapai

Yavapai

6

86340

Coconino and Yavapai

Yavapai

6

If outpatient specialty services (OB, family planning, and pediatrics) are not included in the primary care providercontract, at least one subcontract is required for each of these specialties in the service sites specified.

In Tucson (GSA 10) and Metropolitan Phoenix (GSA 12), the Contractor must have a network that is able toprovide PCP, dental and pharmacy services so that members do not need to travel more than 5 miles from theirresidence. The Contractor must also obtain at least one hospital contract in each service district listed on the*Hospitals in Phoenix and Tucson Metropolitan* area pages within this section, respectively. MetropolitanPhoenix is further defined on the Minimum Network Standard page specific to GSA # 12.

At a minimum, the Contractor shall have contracts with physicians with admitting and treatment privileges ateach hospital in its network.

For the remaining GSAs and areas not included in the Phoenix or Tucson Metropolitan Areas, the Contractor isrequired to obtain contracts with Physician(s) with admission and treatment privileges in the communitiesidentified under *Hospitals on the Minimum Network Standard* page specific to each GSA. The Contractor musthave a network that is able to provide PCP, dental and pharmacy services in each of the communities identifiedon the Minimum Network Standard Page specific to each GSA.

Provider categories required at various service delivery sites included in the Service Area Minimum NetworkStandards are indicated as follows:

**H**Hospitals**P** Primary Care Providers (physicians, certified nurse practitioners and physician assistants)**D** Dentists**Ph** Pharmacies

HOSPITALS IN PHOENIX METROPOLITAIN AREA (By service district, by zip code)

DISTRICT 1

85006 Banner Good Samaritan Medical Center85281 St. Luke’s Medical Center85008 Maricopa Medical Center85013 St. Joseph’s Hospital & Medical Center85020 John C. Lincoln Hospital – North Mountain

DISTRICT 2

85015 Phoenix Baptist Hospital & Medical Center85027 John C. Lincoln Hospital – Deer Valley85037 Banner Estrella Medical Center85306 Banner Thunderbird Medical Center85308 Arrowhead Community Hospital & Medical Center85338 West Valley Hospital85351 Walter O. Boswell Memorial Hospital85375 Del E. Webb Memorial Hospital85031 Maryvale Hospital Medical Center

DISTRICT 3

85031 Paradise Valley Hospital85054 Mayo Clinic Hospital85251 Scottsdale Healthcare – Osborn85261 Scottsdale Healthcare – Shea85255 Scottsdale Healthcare – Thompson Peak

DISTRICT 4

85201 Mesa General Hospital Medical Center85201 Mesa Lutheran Hospital85202 Banner Desert Medical Center85206 Valley Lutheran Hospital85224 Chandler Regional Hospital85281 Tempe St. Luke’s Hospital85296 Mercy Gilbert85234 Banner Gateway85209 Mountain Vista

***HOSPITALS IN TUCSON METROPOLITAN AREA (By service district, by zip code)***

**DISTRICT 1**

85719 University Medical Center85741 Northwest Hospital85745 Carondelet St. Mary’s Hospital85775 Northwest Medical Center Oro Valley

**DISTRICT 2**

85711 Carondelet St. Joseph’s Hospital85712 El Dorado Hospital85717 Tucson Medical Center85713 University Physicians Hospital at Kino Campus

**COUNTIES:****LA PAZ AND YUMA – Geographic Service Area 2**

**Hospitals**Physician(s) w/admit andtreatment privileges requiredin the following communitiesBlythe, CALake Havasu CityParkerYuma

**Primary Care Providers**Blythe, CALake Havasu CityParkerSan LuisSomertonWelltonYuma

**Dentists**Blythe, CALake Havasu CityParkerSan LuisYuma

**Pharmacies**Blythe, CALake Havasu CityParkerSomertonSan LuisYuma

H=Hospital P=Primary Care Physician D=Dentist Ph=Pharmacy

**COUNTIES:****APACHE, COCONINO, MOHAVE, AND NAVAJO – Geographic Service Area 4**

**Hospitals******Physician(s) w/admitand treatment privileges requiredin the following communitiesBullhead CityFlagstaffGallup, NMKanab, UTKingmanLake Havasu CityNeedles, CAPagePaysonShow LowSpringervilleSt. George, UTWinslow

**Primary Care Providers**Ash Fork/SeligmanBullhead CityColorado City or Hilldale or Kanab, UTFlagstaffFort MohaveGallup, NMHolbrookKingmanLake Havasu CityPagePaysonSedonaShow Low or Pinetop or LakesideSnowflake or TaylorSpringerville or EagerSt. George, UT or Mesquite, NVSt. JohnsWilliamsWinslow

**Dentists**SAME AS PRIMARYCARE PROVIDERS(except for Fort Mohave,no dentist required)

**Pharmacies**SAME AS PRIMARYCARE PROVIDERS

H=Hospital P=Primary Care Physician D=Dentist Ph=Pharmacy

**COUNTY: YAVAPA – Geographic Service Area 6**

**Hospitals******Physician(s) w/admitand treatment privileges requiredin the following communitiesCottonwoodFlagstaffMaricopa CountyPrescott

**Primary Care Providers**Ash Fork or SeligmanCamp VerdeCottonwoodMaricopa County or WickenburgPrescottPrescott ValleySedona

**Dentists**SAME AS PRIMARY CAREPROVIDERS

**Pharmacies**SAME AS PRIMARY CAREPROVIDERS(except for Ash Fork/Seligman,no pharmacy required)

H=Hospital P=Primary Care Physician D=Dentist Ph=Pharmacy

**COUNTIES: PINAL AND GILA – Geographic Service Area 8**

**Hospitals******Physician(s) w/admitand treatment privileges requiredin the following communitiesCasa GrandeGlobeMaricopa County District 4Payson

**Primary Care Providers**Apache JunctionCasa GrandeCoolidge or FlorenceEloyGlobe or Miami or ClaypoolKearneyMammoth or San Manuel orOracleMesa or Gilbert or Queen CreekPayson

**Dentists**Apache JunctionCasa GrandeCoolidge or FlorenceEloyGlobe or Miami or ClaypoolKearneyMammoth or San Manuel orOracleMesa or Gilbert or Queen CreekPayson

**Pharmacies**Apache JunctionCasa GrandeCoolidge or FlorenceGlobe or Miami or ClaypoolKearneyMammoth or San Manuel orOracleMesa or Gilbert or Queen CreekPayson

H=Hospital P=Primary Care Physician D=Dentist Ph=Pharmacy

**COUNTY: PIMA AND SANTA CRUZ – Geographic Service Area 10**

**Hospital**TucsonDistrict 1Contract RequiredDistrict 2Contract RequiredNogalesPhysician(s) w/admit andtreatment privileges required

**Primary Care Providers**AjoGreen ValleyMaranaNogalesOro ValleyTucson

**Dentists**SAME AS PRIMARY CAREPROVIDERS

**Pharmacies**SAME AS PRIMARY CAREPROVIDERS

H=Hospital P=Primary Care Physician D=Dentist Ph=Pharmacy

**COUNTY: MARICOPA – Geographic Service Area 12**

**Hospital**Metropolitan Phoenix*   District 1Contract Required   District 2Contract Required   District 3Contract Required   District 4Contract Required

**Primary Care Providers**BuckeyeCave Creek or CarefreeGila BendGoodyear or Litchfield ParkMetropolitan Phoenix*Queen CreekWickenburg

**Dentists**Buckeye or Goodyear or Litchfield ParkMetropolitan Phoenix*Wickenburg

**Pharmacies**BuckeyeCave Creek or CarefreeGoodyear or Litchfield ParkMetropolitan Phoenix*Wickenburg

*For Purposes of this RFP, Metropolitan Phoenix encompasses the following: Apache Junction, Avondale, Chandler, El Mirage, Fountain Hills, Gilbert, Glendale, Mesa, Paradise Valley, Peoria, Phoenix, Scottsdale, Sun City/SunCity West, Surprise, Tempe, Tolleson, and Youngtown. Within this area, distance standards must be met as specified in Attachment B.

H=Hospital P=Primary Care Physician D=Dentist Ph=Pharmacy

**COUNTIES: COCHISE, GRAHAM AND GREENLEE – Geographic Service Area 14**

**Hospitals******Physician(s) w/admit and treatment privileges required in the following communitiesBensonBisbeeDouglasSaffordSierra VistaTucsonWillcox

**Primary Care Providers**BensonBisbeeDouglasMorenci or CliftonSaffordSierra VistaWillcox

**Dentists**Benson or WillcoxBisbeeDouglasMorenci or CliftonSaffordSierra Vista

**Pharmacies**BensonBisbeeDouglasMorenci or CliftonSafford or ThatcherSierra VistaWillcox

H=Hospital P=Primary Care Physician D=Dentist Ph=Pharmacy

**ATTACHMENT C: RESERVED**

**ATTACHMENT D: SAMPLE LETTER OF INTENT**

The following information is provided as early notification for Offerors’ benefit. However, completeinstructions regarding this Letter of Intent will be provided when the RFP is released. Only instructionsincluded in the RFP are considered official. Do not send completed Letter of Intent to AHCCCS at this time.

**Letter of Intent Instructions**

The following is the mandated format for the Arizona Health Care Cost Containment System, Contract YearEnding 2007 Letter of Intent (LOI). It is to be used to show a provider’s intention to enter into a contract withan Offeror. No alterations or changes are permitted, except for shaded areas which identify the Offeror. TheOfferor may print the form on its letterhead or insert its name or logo in the box at the top of the forms. Thecompleted LOI or an executed contract will be acceptable evidence of an Offeror’s proposed network.

If a provider has multiple sites that offer identical services, only one LOI should be signed, with additionalservice site information (items 1 to 6) attached to the LOI. If services differ between sites, a separate LOI mustbe obtained for each service site.

If a representative signs an LOI on behalf of a provider, evidence of authority for the representative must beavailable upon request.

**[OFFEROR’S LOGO]**

Please do not sign this Letter of Intent unless you seriously intend to enter into negotiations with the Offeror mentioned below and understand that the Arizona Health Care Cost Containment System Administration (AHCCCS)requires all contracts to include Minimum Subcontract Provisions as listed at **http://www.azahcccs.gov/Contracting/BidderLib_Acute.asp**.

*No alterations or changes are permitted, except for shaded areas which identify the Offeror. This letter is subject to verification by AHCCCS.*

The provider signing below is willing to enter into contract negotiations with (Offeror’s name), for provision of covered services to AHCCCS members enrolled with (Offeror’s name). This provider intends to sign acontract with (Offeror’s name) if (Offeror’s name) is awarded an AHCCCS contract beginning October 1, 2008 in the provider’s service area and an acceptable agreement can be reached between the provider and (Offeror’s name). Signing this Letterof Intent does not obligate the provider to sign a contract with (Offeror’s name) however, please do not sign this Letter of Intent unless you seriously intend to enter into negotiations with the above mentioned health plan.

The following information is furnished by the provider:

1. NATIONAL PROVIDER IDENTIFICATION NUMBER (NPI) or AHCCCS PROVIDER IDENTIFICATION NUMBER_____________________________________________________________

2. PROVIDER’S PRINTED NAME ____________________________________________________________

3. ADDRESS (where services will be provided) ____________________________________________________________________________________________________ZIP CODE________________________________

4. COUNTY ________________ 5. TELEPHONE ________________ 6. FAX _________________________

___ Please check here if additional service site information is attached to the Letter of Intent

7. CHECK ALL THAT APPLY

___ A. Primary Care Physician                          ___ Family Practice                                                                               ___ General Practice                                                                               ___ Pediatrics                                                                               ___ Internal Medicine

                                               Services:                ___ EPSDT                                                                               ___ OB

___ B. Primary Care Nurse Practitioner            ___ Family Practice                                                                               ___ Adult                                                                               ___ Pediatrics                                                                               ___ Midwife

                                               Services:                ___ EPSDT                                                                               ___ OB

___ C. Primary Care Physician’s Assistant

                                               Services:                ___ EPSDT                                                                               ___ OB

___ D. Physician – Specialist – (Specify)_____________________________________________________

___ E. Hospital___ F. Urgent Care Facility___ G. Pharmacy___ H. Laboratory___ I. Medical Imaging___ J. Medically Necessary Transportation___ K. Nursing Facility___ L. Dentist___ M. Therapy (Specify Physical Therapy, Occupational Therapy, Speech, Respiratory) ________________________________________________________________________________________________ N. Behavioral Health Provider (Specify) _____________________________________________________ O. Durable Medical Equipment___ P. Home Health Agency___ Q. Other (Please Specify)______________________________________________________________

8. LANGUAGES SPOKEN BY THE PROVIDER (OTHER THAN ENGLISH) _____________________

______________________________________________________________________________________

9. NAME OF HOSPITAL(S) WHERE PHYSICIAN HAS ADMITTING PRIVILEGES ______________

______________________________________________________________________________________

*NOTICE TO PROVIDERS*: This Letter of Intent will be used by AHCCCS in its bid evaluation and contract award process. You should only sign this Letter of Intent if you intend to enter into contractnegotiations with (Offeror’s name) should they receive a contract award. If you are signing on behalf of a physician, please provide evidence of your authority to do so.

Do not return completed Letter of Intent to AHCCCS. Completed Letter of Intent needs to be returned to (Offeror’s name).

10. PROVIDER’S SIGNATURE ____________________________________DATE _______________

11. PRINTED NAME OF SIGNER _________________________________TITLE _______________

**[OFFEROR’S LOGO]**

**ADDITIONAL SERVICE SITES:**

1. NATIONAL PROVIDER IDENTIFICATION NUMBER (NPI) or AHCCCS PROVIDER IDENTIFICATION NUMBER

_____________________________________________________________

2. PROVIDER’S PRINTED NAME ____________________________________________________________

3. ADDRESS (where services will be provided) ___________________________________________________

_________________________________________________ZIP CODE________________________________

4. COUNTY ________________ 5. TELEPHONE ________________ 6. FAX _________________________

3. ADDRESS (where services will be provided) ___________________________________________________

_________________________________________________ZIP CODE________________________________

4. COUNTY ________________ 5. TELEPHONE ________________ 6. FAX _________________________

3. ADDRESS (where services will be provided) ___________________________________________________

_________________________________________________ZIP CODE________________________________

4. COUNTY ________________ 5. TELEPHONE ________________ 6. FAX _________________________

3. ADDRESS (where services will be provided) ___________________________________________________

_________________________________________________ZIP CODE________________________________

4. COUNTY ________________ 5. TELEPHONE ________________ 6. FAX _________________________

3. ADDRESS (where services will be provided) ___________________________________________________

_________________________________________________ZIP CODE________________________________

4. COUNTY ________________ 5. TELEPHONE ________________ 6. FAX _________________________

3. ADDRESS (where services will be provided) ___________________________________________________

_________________________________________________ZIP CODE________________________________

4. COUNTY ________________ 5. TELEPHONE ________________ 6. FAX _________________________

**ATTACHMENT E: INSTRUCTIONS FOR PREPARING CAPITATION PROPOSAL**

All capitation rate bid proposals (including best and final offers, if applicable) must be submitted to AHCCCSvia the AHCCCS Web Based Capitation Rate Proposal application. A CCFR must be completed for every riskgroup in each Geographic Service Area (GSA) in which the Offeror bids.

The Offeror must also use the Web Tool to print and submit Section B, Capitation Rates, of the Request forProposal (RFP). In the event that the Web Tool bid submission differs from the bid submission included withSection B of the RFP, the bid submitted via the Web Tool will prevail. The first page of Section B should be thecertification that the capitation rates are actuarially sound, signed by an actuary who is a member of the AmericanAcademy of Actuaries.

The Web Tool will present the CCFR bid screens by GSA and Risk Group.

The following is a list of the GSAs and the counties associated to each GSA that will be effective 10/1/08.

*GSA #     County or Counties*2              Yuma, La Paz4              Apache, Coconino, Mohave, and Navajo6              Yavapai8              Gila, Pinal10            Pima, Santa Cruz12            Maricopa14            Graham, Greenlee, Cochise

The following is a listing of the risk groups for which capitation rates need to be bid. All risk groups apply toeach GSA.

1. TANF <12. TANF 1-133. TANF 14-44 Female4. TANF 14-44 Male5. TANF 45+6. SSI with Medicare7. SSI without Medicare8. MED9. AHCCCS Care (Non-MED)

Note: 1931s, KidsCare, HIFA Parents, SOBRA Children, SOBRA Mothers, and Breast and Cervical CancerTreatment Program populations are included in TANF risk groups. See the Data Supplement for the roll up ofrate codes in the risk groups.

Detailed instructions for the Web tool will be included within the Data Supplement. These instructions willinclude general guidelines for the usage of the Web tool as well as the following items:

            •Process to receive a unique ID and password for the Web Tool               •Application software requirements               •Customer technical support desk phone number

**ATTACHMENT F: PERIODIC REPORT REQUIREMENTS**

The following table is a summary of the periodic reporting requirements for the Contractor and is subject tochange at any time during the term of the contract. The table is presented for convenience only and should notbe construed to limit the Contractor’s responsibilities in any manner. Content for all deliverables is subject toreview; AHCCCS may assess sanctions if it is determined that inaccurate or incomplete data is submitted.

The deliverables listed below are due by 5:00 PM on the due date indicated, if the due date falls on a weekendor a State Holiday the due date is 5:00 PM on the next business day.

***REPORT***

***WHEN DUE***

***SOURCE/REFERENCE***

***SEND TO:***

DHCM Finance

 

 

 

Monthly Financial Reporting Package

30 days after the end of the month, only when required by AHCCCS

Reporting Guide For Acute Health Care Contractors

Finance Manager

Quarterly Financial Reporting Package

60 days after the end of each quarter

Reporting Guide For Acute Health Care Contractors

Finance Manager

FQHC Member Information

60 days after the end of each quarter

Reporting Guide For Acute Health Care Contractors; Section D, Paragraph 34

Finance Manager

Draft Annual Financial Reporting Package

90 days after the end of each fiscal year

Reporting Guide For Acute Health Care Contractors

Finance Manager

Final Annual Financial Reporting Package

120 days after the end of each fiscal year

Reporting Guide For Acute Health Care Contractors

Finance Manager

Advances/Loans/Equity Distributions

Submit for approval prior to effective date

Section D, Paragraph 49;

Finance Manager

Premium Tax Reporting

March 15th, June 15th, September 15th and December 15th

ACOM Premium Tax Reporting Policy

Finance Manager

 

 

 

 

***REPORT***

***WHEN DUE***

***SOURCE/REFERENCE***

***SEND TO:***

DHCM Data Analysis and Research

 

 

 

Corrected Pended Encounter Data

Monthly, according to established schedule

Encounter Reporting User Manual

Encounter Administrator

New Day Encounter

Monthly, according to established schedule

Encounter Reporting User Manual

Encounter Administrator

Medical Records for Data Validation

90 days after the request received from AHCCCS

Data Validation User Manual

Encounter Administrator

 

 

 

 

***REPORT***

***WHEN DUE***

***SOURCE/REFERENCE***

***SEND TO:***

Office of Program Integrity

 

 

 

Provider Fraud/Abuse Report

Within 10 days of discovery

 Section D, Paragraph 62

Office of Program Integrity Manager

Eligible Person Fraud/Abuse Report

Within 10 days of discovery

 Section D, Paragraph 62

Office of Program Integrity Manager

AHCCCS will assess the following sanctions on the deliverables listed below, under DHCM Acute CareOperations, Clinical Quality Management and Medical Management that are not received by 5:00 PM on thedue date indicated, if the due date falls on a weekend or a State Holiday, sanctions will be assessed ondeliverables not received by 5:00 PM on the next business day.

**Late Deliverables**1sttime “late” sanction/ 1-10 days:                  $5,0001sttime “late” sanction/ 11-20 days:                $10,0001sttime “late” sanction/ over 21 days:             $15,000

2ndtime “late” sanction/ 1-10 days: $10,0002ndtime “late” sanction/ 11-20 days:               $20,0002ndtime “late” sanction/over 21 days:            $30,000

3rdtime “late” sanction/ 1-10 days:                  $20,0003rdtime “late” sanction/ 11-20 days:                $40,0003rdtime “late” sanction/over 21 days:             $60,000

The sanctions outlined above are deliverable specific. For example, if the Contractor submits its claimsdashboard 5 days late in January, a $5,000 sanction will be assessed. The next month, if the Contractorsubmits its administrative measures 5 days late, it will be assessed a 1sttime late sanction of $5,000. Howeverif the Contractor submits the claims dashboard 5 days late again in March AHCCCS will asses a 2ndtime latesanction of $10,000.

***REPORT***

***WHEN DUE***

***SOURCE/REFERENCE***

***SEND TO:***

DHCM Acute Care Operations

 

 

 

 Annual Subcontractor Assignment  and Evaluation Report

90 days after the beginning of the contract year

Section D, Paragraph 37; Section D, Paragraph 43

Operations and Compliance Officer

Provider Affiliation Transmission

15 days after the end of each quarter

Provider Affiliation Transmission Manual, submitted to PMMIS Provider-to- Contractor FTP

 

Operations and Compliance Officer

Claims Dashboard

15th day of each month following the reporting period

Section D, Paragraph 38; Claims Dashboard Reporting Guide

Operations and Compliance Officer

Subcontracts

As required by Contract

Section D, Paragraph 37;  ACOM Templates Policy

Operations and Compliance Officer

Third Party Administrator subcontracts

30 days prior to the effective date of the subcontract

Section D, Paragraph 37; ACOM Templates Policy

Operations and Compliance Officer

Provider Advances

As required by Policy

ACOM Provider and Affiliate Advance Request Policy

Operations and Compliance Officer

Claim recoupments >$50,000

Upon identification by Contractor

Section D, Paragraph 38; ACOM Recoupment Request Policy

Operations and Compliance Officer

Administrative Measures

15th day of each month following the reporting period

Section D, Paragraph 25

Operations and Compliance Officer

Grievance System Report

See Grievance System Reporting Guide for frequency

Section D, Paragraph 26; Grievance System Reporting Guide

Operations and Compliance Officer

Provider Network Development and Management Plan

45 days after the first day of a new contract year

Section D, Paragraph 27; ACOM Provider Network Development and Management Plan Policy

Operations and Compliance Officer

Cultural Competency Plan

45 days after the first day of a new contract year

ACOM Cultural Competency Policy

Operations and Compliance Officer

Business Continuity and Recovery Plan

15 days after the beginning of each contract year

ACOM Business Continuity and Recovery Plan Policy

Operations and Compliance Officer

Marketing Attestation Statement

45 days after the beginning of each contract year

ACOM Marketing Outreach and Incentives Policy

Operations and Compliance Officer

Marketing and Outreach Materials

30 days prior to dissemination

ACOM Marketing Outreach and Incentives Policy

Marketing Committee Chairperson

Member Handbook

By August 15th of contract year, or within 4 weeks of receiving annual amendment, whichever is later.

Section D, Paragraph 18; ACOM Member Information Policy

Operations and Compliance Officer

Provider Network – Material Change

Submit change for approval prior to effective date

Section D, Paragraph 29; ACOM Provider Network Information Policy

Operations and Compliance Officer

Provider Network – Unexpected change

Within one business day

Section D, Paragraph 29

Operations and Compliance Officer

System Change Plan

Six months prior to implementation

Section D, Paragraph 38

Operations and Compliance Officer

Key Position Change

Within 7 days after an employee leaves and as soon as new hire has taken place

Section D, Paragraph 16 

Operations and Compliance Officer

Listing of Local Presence

Within 45 days of the beginning of the Contract Year

Section D, Paragraph 16

Operations and Compliance Officer

***REPORT***

***WHEN DUE***

***SOURCE/REFERENCE***

***SEND TO:***

DHCM Clinical Quality Management

 

 

 

EPSDT Quarterly Monitoring Report

Annually on December 15th

Section D, Paragraph 10, *Scope of Services*, *AMPM*, Chapter 400

DHCM/CQM

EPSDT Improvement and Adult Quarterly Monitoring Report (Template must be used)

15 days after the end of each quarter

Section D, Paragraph 10, *Scope of Services*,*AMPM*, Chapter 400

DHCM/CQM

Quality Assessment/Performance Improvement Plan and Evaluation (Checklist to be submitted with Document)

Annually on December 15th

*AMPM*, Chapter 900

DHCM/CQM

Credentialing Quarterly Report

30 days after the end of each quarter

*Section D, Paragraph 25*

DHCM/CQM

Monthly Pregnancy Termination Report

End of the month following the pregnancy termination

*AMPM*, Chapter 400

DHCM/CQM

Maternity Care Plan

Annually on December 15th

*AMPM*, Chapter 400

DHCM/CQM

Sterilization Report

Immediately following procedure

*AMPM*, Chapter 400

DHCM/CQM

Stillbirth Report

Immediately following procedure

*AMPM,*Chapter 400

DHCM/CQM

Semi-annual report of number of pregnant women who are HIV/AIDS positive

30 days after the end of the 2nd and 4th quarter of each contract year

*AMPM,*Chapter 400

DHCM/CQM

Performance Improvement Project Baseline Report (Standardized format to be utilized)

 

Annually on December 15th

*AMPM*, Chapter 900

DHCM/CQM

 

Performance Improvement Project Re-measurement Report (Standardized format to be utilized)

Annually on December 15th

*AMPM,*Chapter 900

DHCM/CQM

Performance Improvement Project Final Report (Standardized format to be utilized)

Within 180 days of the end of the project, as defined in the project proposal approved by AHCCCS DHCM

*AMPM,*Chapter 900

DHCM/CQM

QM Quarterly Report

30 Days after the end of each quarter

 Section D, Paragraph 23

DHCM/CQM

Pediatric Immunization Audit

As requested

Section D, Paragraph 23

DHCM/CQM

***REPORT***

***WHEN DUE***

***SOURCE/REFERENCE***

***SEND TO:***

DHCM Medical Management

 

 

 

Quarterly Inpatient Hospital Showing

15 days after the end of each quarter

State Medicaid Manual and the*AMPM*, Chapter 1000

DHCM/MM

Utilization Management Plan and Evaluation

Annually on December 15th

*AMPM*, Chapter 900

DHCM/MM

UM Quarterly Report

60 Days after the end of each quarter

 Section D, Paragraph 24

DHCM/MM

HIV Specialty Provider List

Annually, on December 15th

*AMPM,*Chapter 300

DHCM/MM

Transplant Report

15 days after the end of each month

*AMPM,*Chapter 1000

DHCM/MM

Non-Transplant Catastrophic Reinsurance covered Diseases

Annually, within 30 days of the beginning of the contract year, enrollment to the plan, and when newly diagnosed.

Section D, Paragraph 57

DHCM/MM

**ATTACHMENT G: AUTO-ASSIGNMENT ALGORITHM**

Members who have the right to choose, but do not exercise this right, will be assigned to a Contractor through anauto-assignment algorithm. The algorithm is a mathematical formula used to distribute members to the variousContractors in a manner that is consistent with AHCCCS goals.

With the exception of an enhanced auto-assignment algorithm that may be in effect at the start of a new contractcycle (October 1, 2008) for a three to six month period, the auto-assignment algorithm calculation details are asfollows:

The algorithm employs a data table and a formula to assign cases (a case may be a member or a household ofmembers) to Contractors using the target percentages developed. The algorithm data table consists of all thegeographic service areas (GSA) in the state, all Contractors serving each GSA, and the target percentages by riskgroup within each GSA.

The Contractor farthest away from its target percentage within a GSA and risk group, the largest negativedifference, is assigned the next case for that GSA. The equation used is:

                (t/T) – P = d

t = The total members assigned to the GSA, per risk group category, for the ContractorT = The total members assigned to the GSA, per risk group category, all Contractors combinedP = The target percentage of members per risk group for the Contractord = The difference

The algorithm is calculated after each assignment to give a new difference for each Contractor. When more thanone Contractor has the same difference, and their differences are greater than all other Contractors, the Contractorwith the lowest Health Plan I.D. Number will be assigned the case.

Assignment by the algorithm applies to:

                1.             Members who are newly eligible to the AHCCCS program thatdid not choose a Contractor within                                 the prescribed time limits.

                2.             Members whose assigned health plan is no longer availableafter the member moves to a new                                 GSA and did not choose a new Contractor within the prescribed timelimits.

All Contractors, within a given geographic service area (GSA) and for each risk group, will have a placement inthe algorithm and will receive members accordingly. A Contractor with a more favorable target percentage in thealgorithm will receive proportionally more members. Conversely, a Contractor with a lower target percentage inthe algorithm will receive proportionally fewer members. The initial algorithm formula favors Contractors withboth lower awarded capitation rates and higher scores on the Program Component of the proposal.

In future contract years, AHCCCS may adjust the auto-assignment algorithm in consideration of Contractors’clinical performance measure results when calculating target percentages. Ranking in the algorithm may beweighted based on the number of Performance Measures for which a Contractor is meeting the current AHCCCSMinimum Performance Standard (MPS) as a percentage of the total number of measures utilized in thecalculation. AHCCCS will determine the Performance Measures used to evaluate Contractor performance andapply the criterion universally when making the adjustment.

**Development of the Target Percentages**

Beginning in CYE ’09, the algorithm target percentages will be developed using the methodology describedbelow, subject to the enhanced algorithm described below, if applicable. However, for subsequent years,AHCCCS reserves the right to change the algorithm methodology to assure assignments are made in the bestinterest of the AHCCCS program and the State.

A Contractor’s placement in the algorithm is based upon the following two factors, which are weighted asfollows:

**#**

**Factor**

**Weighting**

1

                The Contractor’s final awarded capitation rate from AHCCCS.

50%

2

                The Contractor’s score on the Program component of the proposal.

50%

Points will be assigned to each Contractor by risk group by GSA. Based on the rankings of the final awardedcapitation rates and the final Program component scores, each Contractor will be assigned a number of points foreach of these two components **separately** using the table below:

**TABLE OF POINTS FOR FACTORS #1 (LOWEST CAPITATION RATE) AND #2 (HIGHESTPROGRAM SCORE)**

**Number of Awards in GSA**

**1st Place**

**2nd Place**

**3rd Place**

**4th Place**

**5th Place**

**6th Place**

2

60

40

 

 

 

 

3

44

32

24

 

 

 

4

35

28

22

15

 

 

5

30

25

20

15

10

 

6

26

23

19

15

11

6

Two or more Contractors that have equal final awarded capitation rates or Program component scores in a GSAfor the same risk group will be given an equal percentage of the points for all of the positions held by the tiedContractors combined.

The points awarded for the two components will be combined as follows to give the target percentage for eachContractor by GSA by risk group:

Final Awarded Capitation Rate (.50) + Program Component Score (.50)= TARGET PERCENTAGE

***Enrollment Considerations***

AHCCCS will favor new and small Contractors in each GSA with increased auto-assignment. A new Contractoris defined as a Contractor new to the AHCCCS program or an incumbent Contractor that is new to a GSA. SmallContractors will be determined based on enrollment as of May 1, 2008. A small Contractor is defined by GSAand has a membership level as delineated in the following table:

County/GSA

GSA-specific Enrollment Threshold

Maricopa – GSA 12   

<50,000

Pima County Only

<30,000

Rural GSAs (including Santa Cruz County)                    

less than or equal to 45% of enrollment in the entire GSA as of May 1, 2008

**Conversion Group Auto-Assignment**

Members who are enrolled as of June 30, 2008 in an Exiting Contractor (Conversion Group) will be assigned tonew and small Contractors within their GSA, effective October 1, 2008 via the coversion auto-assignmentalgorithm. These members will be allowed to remain with the Contractor to which they were auto-assigned or tochoose a different Contractor by August 31, 2008 from any of the incumbent or new Contractors in the GSA thatare effective October 1, 2008. These members will again have an opportunity to change Contractors fromOctober 1, 2008 until November 30, 2008 in order to provide them with the choice of any incumbent or newContractors.

If the number of members in the Conversion Group in a GSA is enough to bring all new and small Contractorswithin the GSA above the thresholds listed in the table above, the conversion auto-assignment algorithm will beapplied until all of the new and small Contractors reach the thresholds. The remaining members of theConversion Group will be auto-assigned to all Contractors in the GSA according to the initial algorithmmethodology based on awarded capitation rates and Program Component scores.

If the number of Conversion Group members in a GSA is not enough to bring all new and small Contractorswithin the GSA above the thresholds listed in the table above, an enhanced auto-assignment will be utilized tobring all new and small Contractors as close to equal as possible, without reducing any Contractor size.

In a rural GSA, if both Contractors are new to AHCCCS, the Conversion Group members will be auto-assignedapproximately equally between the two Contractors.

For details on member choice of Contractors for the months of July, August and September 2008, see SectionI. For members being auto-assigned in July 2008, the algorithm will be based on the CYE 08 Contract. Formembers auto-assigned during August and September 2008, the algorithm will be based on the CYE 08Contract with exiting Contractors in each GSA excluded, except in family continuity, newborn enrollment, and90-day re-enrollment situations. For GSAs in which all Contractors are exiting, the CYE 08 algorithm willremain in effect through September 30, 2008.

**Post-Conversion Auto-Assignment**

For purposes of determining the enhanced algorithm, new Contractors and Continuing Contractors still belowthe thresholds on September 1, 2008 will receive members under the enhanced auto-assign algorithmbeginning October 1, 2008. The enhanced algorithm will continue to favor those Contractors below thethreshold, for at least three months but no longer than six months, regardless of their membership level duringor at the end of the time period. **In this situation, the plans not qualifying for the enhanced autoassignmentalgorithm will not receive any members via auto-assignment for the time period.** After thethree to six month time period, the algorithm will revert to the initial methodology based on final awardedcapitation and Program Component score and all Contractors will again be included in the algorithm.

All efforts will be made to auto-assign members based on the methodology and thresholds above, howeveramounts may not be exact due to issues such as family continuity, newborns, 90-day re-enrollment etc.

**ATTACHMENT H(1): ENROLLEE GRIEVANCE SYSTEM STANDARDS AND POLICY**

The Contractor shall have a written policy delineating its Grievance System which shall be in accordance withapplicable Federal and State laws, regulations and policies, including, but not limited to 42 CFR Part 438Subpart F. The Contractor shall provide the ACOM *Enrollee Grievance Policy* to all providers andsubcontractors at the time of contract. The Contractor shall also furnish this information to enrollees within areasonable time after the Contractor receives notice of the enrollment. Additionally, the Contractor shallprovide written notification of any significant change in this policy at least 30 days before the intendedeffective date of the change.

The written information provided to enrollees describing the Grievance System including the grievance process,the appeals process, enrollee rights, the grievance system requirements and timeframes, shall be in each prevalentnon-English language occurring within the Contractor’s service area and in an easily understood language andformat. The Contractor shall inform enrollees that oral interpretation services are available in any language, thatadditional information is available in prevalent non-English languages upon request and how enrollees mayobtain this information.

Written documents, including but not limited to the Notice of Action, the Notice of Appeal Resolution, Notice ofExtension for Resolution, and Notice of Extension of Notice of Action shall be translated in the enrollee’slanguage if information is received by the Contractor, orally or in writing, indicating that the enrollee has alimited English proficiency. Otherwise, these documents shall be translated in the prevalent non-Englishlanguage(s) or shall contain information in the prevalent non-English language(s) advising the enrollee that theinformation is available in the prevalent non-English language(s) and in alternative formats along with anexplanation of how enrollees may obtain this information. This information must be in large, bold printappearing in a prominent location on the first page of the document.

At a minimum, the Contractor’s Grievance System Standards and Policy shall specify:

1. That the Contractor shall maintain records of all grievances and appeals and requests for hearing.

2. Information explaining the grievance, appeal, and fair hearing procedures and timeframes. This   information shall include a description of the circumstances when there is a right to a hearing, the method   for obtaining a hearing, the requirements which govern representation at the hearing, the right to file   grievance and appeals and the requirements and timeframes for filing a grievance, appeal, or request for   hearing.

3. The availability of assistance in the filing process and the Contractor’s toll-free numbers that an enrollee   can use to file a grievance or appeal by phone if requested by the enrollee.

4. That the Contractor shall acknowledge receipt of each grievance and appeal. For Appeals, the Contractor   shall acknowledge receipt of standard appeals in writing within five business days of receipt and within   one business day of receipt of expedited appeals.

5. That the Contractor shall permit both oral and written appeals and grievances and that oral inquiries   appealing an action are treated as appeals.

6. That the Contractor shall ensure that individuals who make decisions regarding grievances and appeals are   individuals not involved in any previous level of review or decision making and that individuals who make   decisions regarding: 1) appeals of denials based on lack of medical necessity, 2) a grievance regarding   denial of expedited resolution of an appeal or 3) grievances or appeals involving clinical issues are health   care professionals as defined in 42 CFR 438.2 with the appropriate clinical expertise in treating the   enrollee’s condition or disease.

7. The resolution timeframes for standard appeals and expedited appeals may be extended up to 14 days if   the enrollee requests the extension or if the Contractor establishes a need for additional information and   that the delay is in the enrollee’s interest.

8. That if the Contractor extends the timeframe for resolution of an appeal when not requested by the   enrollee, the Contractor shall provide the enrollee with written notice of the reason for the delay.

9. The definition of grievance as a member’s expression of dissatisfaction with any aspect of their care, other   than the appeal of actions.

10. That an enrollee must file a grievance with the Contractor and that the enrollee is not permitted to file a   grievance directly with the AHCCCS Administration.

11. That the Contractor must dispose of each grievance in accordance with the ACOM *Enrollee Grievance*   *Policy*, but in no case shall the timeframe exceed 90 days.

12. The definition of action as the [42 CFR 438.400(b)]:                a. Denial or limited authorization of a requested service, including the type or level of service;                b. Reduction, suspension, or termination of a previously authorized service;                c. Denial, in whole or in part, of payment for a service;                d. Failure to provide services in a timely manner;                e. Failure to act within the timeframes required for standard and expedited resolution of appeals                   and standard disposition of grievances; or                f. Denial of a rural enrollee’s request to obtain services outside the Contractor’s network under                   42 CFR 438.52(b)(2)(ii), when the contractor is the only Contractor in the rural area.

13. The definition of a service authorization request as an enrollee’s request for the provision of a service [42   CFR 431.201].

14. The definition of appeal as the request for review of an action, as defined above.

15. Information explaining that a provider acting on behalf of an enrollee and with the enrollee’s written   consent, may file an appeal.

16. That an enrollee may file an appeal of: 1) the denial or limited authorization of a requested service

   including the type or level of service, 2) the reduction, suspension or termination of a previously   authorized service, 3) the denial in whole or in part of payment for service, 4) the failure to provide   services in a timely manner, 5) the failure of the Contractor to comply with the timeframes for dispositions   of grievances and appeals and 6) the denial of a rural enrollee’s request to obtain services outside the   Contractor’s network under 42 CFR 438.52(b)(2)(ii) when the Contractor is the only Contractor in the rural   area.

17. The definition of a standard authorization request. For standard authorization decisions, the Contractor   must provide a Notice of Action to the enrollee as expeditiously as the enrollee’s health condition requires,   but not later than 14 days following the receipt of the authorization request with a possible extension of up   to 14 days if the enrollee or provider requests an extension or if the Contractor establishes a need for   additional information and delay is in the enrollee’s best interest [42 CFR 438.210(d)(1)]. The Notice of   Action must comply with the advance notice requirements when there is a termination or reduction of a   previously authorized service OR when there is a denial of an authorization request and the physician   asserts that the requested service/treatment is a necessary continuation of a previously authorized service.

18. The definition of an expedited authorization request. For expedited authorization decisions, the Contractor   must provide a Notice of Action to the enrollee as expeditiously as the enrollee’s health condition requires,

   but not later than 3 business days following the receipt of the authorization request with a possible   extension of up to 14 days if the enrollee or provider requests an extension or if the Contractor establishes   a need for additional information and delay is in the enrollee’s interest [42 CFR 438.210(d)(2)].

19. That the Notice of Action for a service authorization decision not made within the standard or expedited   timeframes, whichever is applicable, will be made on the date that the timeframes expire. If the Contractor   extends the timeframe to make a standard or expedited authorization decision, the contractor must give the   enrollee written notice of the reason to extend the timeframe and inform the enrollee of the right to file a   grievance if the enrollee disagrees with the decision. The Contractor must issue and carry out its decision   as expeditiously as the enrollee’s health condition requires and no later than the date the extension expires.

20. That the Contractor shall notify the requesting provider of the decision to deny or reduce a service   authorization request. The notice to the provider must be written.

21. The definition of a standard appeal and that the Contractor shall resolve standard appeals no later than 30   days from the date of receipt of the appeal unless an extension is in effect. If a Notice of Appeal   Resolution is not completed when the timeframe expires, the member’s appeal shall be considered to be   denied by the Contractor, and the member can file a request for hearing.

22. The definition of an expedited appeal and that the Contractor shall resolve all expedited appeals not later   than three business days from the date the Contractor receives the appeal (unless an extension is in effect)   where the Contractor determines (for a request from the enrollee), or the provider (in making the request   on the enrollee’s behalf indicates) that the standard resolution timeframe could seriously jeopardize the   enrollee’s life or health or ability to attain, maintain or regain maximum function. The Contractor shall   make reasonable efforts to provide oral notice to an enrollee regarding an expedited resolution appeal. If a   Notice of Appeal Resolution is not completed when the timeframe expires, the member’s appeal shall be   considered to be denied by the Contractor, and the member can file a request for hearing.

23. That if the Contractor denies a request for expedited resolution, it must transfer the appeal to the 30-day   timeframe for a standard appeal. The Contractor must make reasonable efforts to give the enrollee prompt   oral notice and follow-up within two days with a written notice of the denial of expedited resolution.

24. That an enrollee shall be given 60 days from the date of the Contractor’s Notice of Action to file an appeal.

25. That the Contractor shall mail a Notice of Action: 1) at least 10 days before the date of a termination,   suspension or reduction of previously authorized AHCCCS services, except as provided in (a)-(e) below;   2) at least 5 days before the date of action in the case of suspected fraud; 3) at the time of any action   affecting the claim when there has been a denial of payment for a service, in whole or in part; 4) within 14   days from receipt of a standard service authorization request and within three business days from receipt   of an expedited service authorization request, unless an extension is in effect. For service authorization   decisions, the Contractor shall also ensure that the Notice of Action provides the enrollee with advance   notice and the right to request continued benefits for all terminations and reductions of a previously   authorized service and for denials when the physician asserts that the requested service/treatment which   has been denied is a necessary continuation of a previously authorized service. As described below, the   Contractor may elect to mail a Notice of Action no later than the date of action when:                a. The Contractor receives notification of the death of an enrollee;                b. The enrollee signs a written statement requesting service termination or gives information                requiring termination or reduction of services (which indicates understanding that the                termination or reduction will be the result of supplying that information);                c. The enrollee is admitted to an institution where he is ineligible for further services;                d. The enrollee’s address is unknown and mail directed to the enrollee has no forwarding                address;                e. The enrollee has been accepted for Medicaid in another local jurisdiction;

26. That the Contractor include, as parties to the appeal, the enrollee, the enrollee’s legal representative, or the   legal representative of a deceased enrollee’s estate.

27. That the Notice of Action must explain: 1) the action the Contractor has taken or intends to take, 2) the   reasons for the action, 3) the enrollee’s right to file an appeal with the Contractor, 4) the procedures for   exercising these rights, 5) circumstances when expedited resolution is available and how to request it and   6) the enrollee’s right to receive continued benefits pending resolution of the appeal, how to request   continued benefits and the circumstances under which the enrollee may be required to pay for the cost of   these services. The Notice of Action shall comply with ACOM Policy 414.

28. That benefits shall continue until a hearing decision is rendered if: 1) the enrollee files an appeal before   the later of a) 10 days from the mailing of the Notice of Action or b) the intended date of the Contractor’s   action, 2) a) the appeal involves the termination, suspension, or reduction of a previously authorized   course of treatment or b) the appeal involves a denial and the physician asserts that the requested   service/treatment is a necessary continuation of a previously authorized service, 3) the services were   ordered by an authorized provider and 4) the enrollee requests a continuation of benefits.

   For purposes of this paragraph, benefits shall be continued based on the authorization which was in place   prior to the denial, termination, reduction, or suspension which has been appealed.

29. That for appeals, the Contractor provides the enrollee a reasonable opportunity to present evidence and   allegations of fact or law in person and in writing and that the Contractor informs the enrollee of the   limited time available in cases involving expedited resolution.

   

30. That for appeals, the Contractor provides the enrollee and his representative the opportunity before and   during the appeals process to examine the enrollee’s case file including medical records and other   documents considered during the appeals process.

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

32. That the Contractor shall provide written Notice of Appeal Resolution to the enrollee and the enrollee’s   representative or the representative of the deceased enrollee’s estate which must contain: 1) the results of   the resolution process, including the legal citations or authorities supporting the determination, and the   date it was completed, and 2) for appeals not resolved wholly in favor of enrollees: a) the enrollee’s right   to request a State fair hearing (including the requirement that the enrollee must file the request for a   hearing in writing) no later than 30 days after the date the enrollee receives the Contractor’s notice of   appeal resolution and how to do so, b) the right to receive continued benefits pending the hearing and how   to request continuation of benefits and c) information explaining that the enrollee may be held liable for   the cost of benefits if the hearing decision upholds the Contractor.

33. That the Contractor continues extended benefits originally provided to the enrollee until any of the   following occurs: 1) the enrollee withdraws appeal, 2) the enrollee has not specifically requested   continued benefits pending a hearing decision within 10 days of the Contractor mailing of the appeal   resolution notice, or 3) the AHCCCS Administration issues a state fair hearing decision adverse to the   enrollee.

34. That if the enrollee files a request for hearing the Contractor must ensure that the case file and all   supporting documentation is received by the AHCCCS Office of Administrative Legal Services (OALS)   as specified by OALS. The file provided by the Contractor must contain a cover letter that includes:

                a. Enrollee’s name                b. Enrollee’s AHCCCS I.D. number

                c. Enrollee’s address                d. Enrollee’s phone number (if applicable)                e. date of receipt of the appeal                f. summary of the Contractor’s actions undertaken to resolve the appeal and summary of the                   appeal resolution

35. The following material shall be included in the file sent by the Contractor:

                a. the Enrollee’s written request for hearing                b. copies of the entire appeal file which includes all supporting documentation including                    pertinent findings and medical records;                c. the Contractor’s Notice of Appeal Resolution                d. other information relevant to the resolution of the appeal

36. That if the Contractor or the State fair hearing decision reverses a decision to deny, limit or delay services   not furnished during the appeal or the pendency of the hearing process, the Contractor shall authorize or   provide the services promptly and as expeditiously as the enrollee's health condition requires irrespective   of whether the Contractor contests the decision..

37. That if the Contractor or State fair hearing decision reverses a decision to deny authorization of services   and the disputed services were received pending appeal, the Contractor shall pay for those services, as   specified in policy and/or regulation.

38. That if the Contractor or State fair hearing decision upholds a decision to deny authorization of services   and the disputed services were received pending appeal, the Contractor may recover the cost of those   services from the enrollee.

**ATTACHMENT H(2): PROVIDER CLAIM DISPUTE STANDARDS AND POLICY**

The Contractor shall have in place a written claim dispute policy for providers. The policy shall be inaccordance with applicable Federal and State laws, regulations and policies. The claim dispute policy shallinclude the following provisions:

1. The Provider Claim Dispute Policy shall be provided to all subcontractors at the time of contract. For   providers without a contract, the claim dispute policy may be mailed with a remittance advice,   provided the remittance is sent within 45 days of receipt of a claim.

2. The Provider Claim Dispute Policy must specify that all claim disputes challenging claim payments,   denials or recoupments must be filed in writing with the Contractor no later than 12 months from the   date of service, 12 months after the date of eligibility posting or within 60 days after the payment,   denial or recoupment of a timely claim submission, whichever is later.

3. Specific individuals are appointed with authority to require corrective action and with requisite   experience to administer the claim dispute process.

4. A log is maintained for all claim disputes containing sufficient information to identify the   Complainant, date of receipt, nature of the claim dispute and the date the claim dispute is resolved.   Separate logs must be maintained for provider and behavioral health recipient claim disputes.

5. Within five business days of receipt, the Complainant is informed by letter that the claim dispute has   been received.

6. Each claim dispute is thoroughly investigated using the applicable statutory, regulatory, contractual   and policy provisions, ensuring that facts are obtained from all parties.

7. All documentation received by the Contractor during the claim dispute process is dated upon receipt.

8. All claim disputes are filed in a secure designated area and are retained for five years following the   Contractor’s decision, the Administration’s decision, judicial appeal or close of the claim dispute,   whichever is later, unless otherwise provided by law.

9. A copy of the Contractor’s Notice of Decision (hereafter referred to as Decision) shall be mailed to   all parties no later than 30 days after the provider files a claim dispute with the Contractor, unless the   provider and Contractor agree to a longer period. The Decision must include and describe in detail,   the following:

                a. the nature of the claim dispute                b. the issues involved                c. the reasons supporting the Contractor’s Decision, including references to applicable statute,                   rule, applicable contractual provisions, policy and procedure                d. the Provider’s right to request a hearing by filing a written request for hearing to the                   Contractor no later than 30 days after the date the Provider receives the Contractor’s decision.                e. If the claim dispute is overturned, the requirement that the Contractor shall reprocess and pay                the claim(s) in a manner consistent with the decision within 15 business days of the date of                the Decision.

10. If the Provider files a written request for hearing, the Contractor must ensure that all supporting   documentation is received by the AHCCCS Office Administrative Legal Services (OALS), no later   than five business days from the date the Contractor receives the provider’s written hearing request.   The file sent by the Contractor must contain a cover letter that includes:

                a. Provider’s name                b. Provider’s AHCCCS ID number                c. Provider’s address                d. Provider’s phone number (if applicable)                e. the date of receipt of claim dispute                f. a summary of the Contractor’s actions undertaken to resolve the claim dispute and basis of the                   determination

11. The following material shall be included in the file sent by the Contractor:

                a. written request for hearing filed by the Provider                b. copies of the entire file which includes pertinent records; and the Contractor’s Decision                c. other information relevant to the Notice of Decision of the claim dispute

12. If the Contractor’s decision regarding a claim dispute is reversed through the appeal process, the   Contractor shall reprocess and pay the claim (s) in a manner consistent with the decision within 15   business days of the date of the Decision.

**ATTACHMENT I: RESERVED**

**ATTACHMENT J: OFFEROR’S CHECKLIST**

Offerors must submit all items below, unless otherwise noted. In the column titled “Offeror’s Page #”, theOfferor must enter the appropriate page number(s) from its proposal where the AHCCCS Evaluation Panelmay find the Offeror’s response to the specified requirement.

***I. GENERAL MATTERS***

***Subject***

***Reference***

***Offeror’s Page #***

Offeror’s signature page

(Front Page)

N/A

Solicitation Amendment #1 signature page

(Front Page of Amendment)

 

Solicitation Amendment #2 signature page

(Front Page of Amendment)

 

Offeror’s Checklist (this attachment)

N/A

 

Completion of all items in Section G of the RFP

Section G

 

***II. PROVIDER NETWORK***

***Subject***

***Reqmt. #               ***

***Offeror’s Page #***

Provider Network Management

 

 

 

1

 

Provider Network Development

 

 

 

2

 

 

3

 

 

4

 

 

5

 

 

6

 

 

7

 

 

8

 

 

9

 

 

10

 

 

11

 

***III. CAPITATION***

***Subject                 ***

***Reqmt. #               ***

***Offeror’s Page #***

Capitation

12

 

***IV. PROGRAM***

***Subject***

***Reqmt. #               ***

***Offeror’s Page #***

Quality Management

 

 

 

13

 

 

14

 

 

15

 

 

16

 

 

17

 

 

18

 

 

19

 

 

20

 

 

21

 

 

22

 

Medical Management

 

 

 

23

 

 

24

 

 

25

 

 

26

 

 

27

 

 

28

 

 

29

 

EPSDT/Maternal Health

 

 

 

30

 

 

31

 

 

32

 

 

33

 

 

34

 

 

35

 

 

36

 

 

37

 

 

38

 

Behavioral Health

 

 

 

39

 

 

40

 

 

41

 

 

42

 

Medical Homes

 

 

 

43

 

***V. ORGANIZATION***

***Subject***

***Reqmt. #               ***

***Offeror’s Page #***

Organization and Staffing

 

 

 

44

 

 

45

 

 

46

 

 

47

 

 

48

 

 

49

 

 

50

 

Information Systems

 

 

 

51

 

 

52

 

 

53

 

 

54

 

 

55

 

Claims

 

 

 

56

 

 

57

 

 

58

 

Corporate Compliance

 

 

 

59

 

 

60

 

Encounters

 

 

 

61

 

Member Services

 

 

 

62

 

 

63

 

 

64

 

 

65

 

Grievance and Appeals

 

 

 

66

 

 

67

 

Finance

 

 

 

68

 

 

69

 

 

70

 

 

71

 

 

72

 

 

73

 

 

74

 

 

75

 

***VI. OTHER***

***Subject                 ***

***Reqmt. #               ***

***Offeror’s Page #***

KidsShare

 

 

 

76

 
******ATTACHMENT K: COST SHARING COPAYMENTS**
**I.              EXEMPT POPULATIONS (REGARDLESS OF RATE CODE)**                The following populations are **exempt from copayments for ALL services ($0 copay):               **•All members under the age of 19, including all KidsCare members               •All Pregnant Women               •All ALTCS enrolled members               •All persons with Serious Mental Illness receiving RBHA services               •All members who are receiving CRS services               •SOBRA Family Planning Services Only members

                Additionally, **no member** may be asked to make a copayment for family planning services or                supplies.

**II.            STANDARD COPAYMENTS APPLY TO THE TITLE XIX WAIVER GROUP**                ***Services to this population may not be denied for failure to pay copayment.***

                The standard copayments apply to the Title XIX Waiver Group, including RBHA General Mental                Health and Substance Abuse service members. The standard copayments are as follows:

***Service***

***Copayment***

Generic Prescriptions or Brand Name if generic not available

$  0

Brand Name Prescriptions when generic is available

$ 0

Non Emergency Use of ER

$ 1

Physician Office Visits

$ 1

**III.           STANDARD COPAYMENTS APPLY TO THE FOLLOWING POPULATIONS                *Services to this population may not be denied for failure to pay copayment.***

            •AHCCCS for Families with Children               •Supplemental Security Income with and without Medicare

***Service***

***Copayment***

Generic Prescriptions or Brand Name if generic not available

$  0

Brand Name Prescriptions when generic is available

$  0

Non Emergency Use of ER

$  1

Physician Office Visits

$  0**