**Exhibit 10.45**

 

**SPECIALTYPHARMACY AGREEMENT**

 

This Agreement made andeffective March 1, 2006 (the Effective Date”), by and between Blue CrossBlue Shield of Michigan, a Michigan nonprofit healthcare corporation (“BCBSM”),whose address is 600 Lafayette East, Detroit, Michigan 48226, Blue Care Networkof Michigan, a Michigan nonprofit corporation and health maintenanceorganization, with offices at 20500 Civic Center Drive, Southfield, Ml 48076 (“BCN”),collectively referred to as “BCBSM and BCN,” and Option Care, Inc. a forprofit corporation with offices at 485 Half Day Road, Suit 300, Buffalo Grove,IL 60089 (“Provider”).

 

**WHEREAS,**BCBSM, BCN and Provider recognize as a mutualobjective continuing efforts toward the goal of cost containment and the deliveryof high quality specialty pharmacy mail order services;

 

**WHEREAS,**Provider is in the business of providing highquality specialty pharmacy mail order services at discounted prices;

 

**WHEREAS,**Provider’s specialty pharmacy service programincludes the provision of specialty pharmacy medications, ancillary productsand focused therapy management to individuals and to employees or members ofcompanies, labor unions, municipalities, associations, and others;

 

**WHEREAS,**BCBSM and BCN desire to offer such productsand services to their customers;

 

**WHEREAS,**Provider’s specialty pharmacy service programincludes the provision of specialty pharmacy medications and ancillary productsto health plan physicians;

 

**WHEREAS,**BCBSM and BCN desire to offer such products to physicians, at a date tobe determined by BCBSM and BCN;

 

**WHEREAS,**the parties desire to enter into this Agreement;

 

**NOW, THEREFORE,**in consideration of the mutual covenantshereinafter set forth, the parties agree as follows:

 

**ARTICLE I**

**DEFINITIONS**

 

1.1                                 “Agreement” means this Agreement, as updatedor amended from time to time, and all Addenda attached hereto and made part ofthis Agreement by reference.

 

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1.2                                 “Ancillary Products” means products,equipment and supplies necessary to administer a Specialty Medication (needles,syringes, alcohol swabs, sharps containers, infusion related supplies, othermedical supplies, etc.).

 

1.3                                 “ASP” means [ * ]

 

1.4                                 “AWP” means [ * ]

 

1.5                                 “BCBSM and BCN Rebates” mean rebates directlyor indirectly attributable to the purchase or utilization of any CoveredService by a Member.

 

1.6                                 “Brand Drug” means a prescribed drugdesignated as brand according to the First Data Bank, or another mutuallyagreed upon nationally recognized source, Generic Price Indicator with valuesof “0” for non-drug, “2” for prescribed drugs priced as a brand name, “3” forprescribed drugs that are patent protected and cross licensed products, and “4”for repackaged products. In addition, as requested by BCBSM and/or BCN andmutually agreed upon by Option Care, the Provider will provide a claim linereconciliation and explanation of products that have been modified no morefrequently than once per month.

 

1.7                                 “Certificate” means benefit plan descriptionsunder the sponsorship of BCBSM; or certificates and riders issued by BCBSM, BCNor BCBSM’s sponsorship, or benefits provided pursuant to contracts issued byother Blue Cross or Blue Shield Plans, administered through reciprocity ofbenefit agreements or other Inter-Plan Arrangements. “Certificate” does notinclude benefits provided pursuant to automobile no fault or worker’scompensation insurance coverage.

 

1.8                                 “Cost” means Provider’s acquisition cost asreflected in Provider’s invoices for Specialty Medications that are Brand Drugswith new Generic Code Numbers (GCNs).

 

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1.9                                 “Covered Services” means prescription onlySpecialty Medications and Ancillary Products listed or provided in Certificatesor other benefit documents.

 

1.10.                        “Exclusive Provider” refers to the Provider’sselection as the sole specialty pharmacy mail order provider for BCBSM and BCN’sSpecialty Pharmacy program. This term does not mean that BCBSM and BCN, Membersor Physicians must obtain these products and services exclusively from theProvider.

 

1.11                           “Formulary” means a continually updated listor lists of prescription medications developed by BCBSM and BCN, whichrepresent the current clinical judgment of providers and experts in the diagnosisand treatment of disease.

 

1.12                           “Generic Drug” means a drug designated asgeneric according to First Data Bank Generic Price Indicator values, or anothermutually agreed upon nationally recognized source, of “1” - priced as generics.

 

1.13                           “Group” means a corporation, association,governmental unit, BCBSM subsidiary or other entity or group of individuals who’sMembers are entitled to receive Covered Services.

 

1.14                           “Maximum Allowable Cost” or “MAC” **[ * ]**

 

1.15                           “Member” means a person entitled by contracton the date the Covered Service was dispensed, to receive Covered Services.

 

1.16                           “Physician” means a physician licensed toprovide health care services to BCBSM and BCN’s Members or the Members of anyother Blues’ plan.

 

1.17                           “Pharmacist Professional Judgment” means adetermination made by the pharmacist that Covered Services are dispensed inaccordance with all ethical and professional standards prevailing in thepharmacy community and with Members’ Certificates.

 

1.18                           “Plan Design” means the Covered Services,exclusions, co-payment, formulary (including formulary drug selection costindications, and formulary compliance programs), and other specificationsapplicable to each Group.

 

1.19                           “Prescriber” means a health care professionalauthorized by law to prescribe Specialty Medications.

 

1.20                           “Program Requirements” mean those criteriaand specifications, established by BCBSM and BCN which are used to determine aspecialty pharmacy’s eligibility

 

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to become and remain a specialty pharmacy participating Provider as setforth on Addendum C.

 

1.21                           “Provider” means a mail order pharmacy havingin effect a Specialty Pharmacy Agreement.

 

1.22                           “Rebates” mean any and all upfront,concurrent, or retrospective reimbursement or discount (other than a purchaseprice discount) received from a pharmaceutical manufacturer, distributor,wholesaler, or other entity, including, but not limited to, monetary amountsassociated with (i) formulary, (ii) market share, (iii) utilization,(iv) clinical allocations, (v) formation and administration of rebatecontracts with pharmaceutical manufacturers, distributors, wholesalers, or otherentities (vi) any other administrative or data fees, (vii) fundingfor targeted purposes, and/or (ix) royalties and bonuses.

 

1.23                           “Specialty Medications” means biotech drugs,including high cost infused medications, oral and self-injectable drugs andother drugs related to specialty disease categories or other categories, asagreed upon between BCBSM and BCN and Provider. The term “Specialty Medications”includes vaccines, but excludes injectable insulin.

 

1.24                           “Specialty Pharmacy” refers to specializeddrug distribution service and focused therapy management conducted with respectto Specialty Medications and Ancillary Products.

 

**ARTICLE IIPROVIDERRESPONSIBILITIES**

 

2.1                                 *Compliance With Legal,Program, and Other Administrative Requirements*

 

A.                                   Provider shall comply with all ProgramRequirements established by BCBSM and BCN and further agrees that BCBSM and BCNhave sole discretion to amend and modify the Program Requirements from time totime upon sixty (60) days written notice to Provider. Notice to Provider shallbe provided in accordance with section 3.1 (F).

 

B.                                     Provider shall comply with such otherpolicies, procedures and administrative requirements (including, withoutlimitation, Quality Management and Utilization Management Programs) as BCBSMand BCN may set forth from time to time in administrative manuals or inother provider communications. Changes to such policies, procedures andadministrative requirements shall be effective with notice.

 

C.                                     Provider shall observe and comply with, andwill require that its employees and subcontractors comply with, all applicablelocal, state and federal laws, regulations, ordinances and rules ofprofessional ethics, that in any manner affect

 

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the conduct of its work, including but not limited to those relating tothe procurement and dispensing of prescription drugs and other pharmaceuticalproducts, fraud and abuse, discrimination, disabilities, confidentialityincluding but not limited to the Health Insurance Portability andAccountability Act of 1996 and its implementing regulations, and P.A. 350,self-referral, false claims and prohibition of kickbacks. Provider shall holdand will require its employees and subcontractors to hold all licenses and/orpermits required by local, state, or federal authorities applicable toSpecialty Pharmacy, including but not limited to those required by Michigan law(including certain controlled medications) as well as wholesale / distributionlicenses (or registrations) to service BCBSM/BCN Physicians. BCBSM and BCNrequire that Provider have and maintain Drug Enforcement Agency (DEA)registration number(s). Provider shall certify annually in writing, on orbefore December 31, to BCBSM and BCN that Provider, its employees andsubcontractors complied with all applicable legal requirements and shallpromptly disclose to BCBSM and BCN in writing any non-compliance for the yearat issue. Provider will submit copies of such documents upon request.

 

D. Provider certifies that Provider and its officers and directors donot have and will not have, during the term of this Agreement, any felonyconvictions.

 

2.2                                 *Credentialing Standards*

 

A.                                   Provider shall require that: a) Allpharmacists employed or contracted by Provider will maintain a current/validState Board of Pharmacy License that contains no restrictions; b) all personnelemployed by, associated or contracted with Provider are licensed or certifiedand supervised (when and as required by state law), and qualified by education,training and experienced to perform their professional duties, c) actwithin the scope of their licensure or certification as the case may be;d) are not on the List Of Excluded Individuals/Entities or List of DebarredContractors published by the General Service Administration; e) that all prescriptiondrugs are dispensed by licensed pharmacists; and f) periodic re- verificationof pharmacist and other licensed personnel (technician, RN, LPN, etc.)licensure will be maintained by Provider.

 

B.                                     Provider shall maintain a pharmacist totechnician ratio consistent with good pharmacy practice standards as approved byBCBSM and BCN or as specified by the applicable State Board(s) of Pharmacy.

 

C.                                     Provider shall obtain and maintainAccreditation in Pharmacy from a nationally recognized accrediting body asdetermined by BCBSM and BCN. BCBSM and BCN have determined that accreditationin specialty pharmacy from ACHC is acceptable accreditation.

 

2.3                                 *Insurance -*The minimum amount of comprehensive generalliability coverage that Provider shall have and maintain is one million dollars($1,000,000) per

 

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occurrence and five million dollars ($5,000,000) aggregate. Providershall maintain valid professional liability (druggist) and product liabilityinsurance at a minimum of ($10,000,000) per occurrence. Evidence thereof shallbe furnished to BCBSM and BCN upon request. All insurance shall be held withcarriers having at least an “A” rating and, with respect to comprehensivegeneral liability coverage, include BCBSM and BCN as additional named insured’s.If Provider fails to provide coverage in a continuous manner, BCBSM and BCNwill charge back to Provider any expense incurred by BCBSM and BCN, or areasonable estimate of the expense, in purchasing like protection, plus thevalue of any claims that would not have been paid by BCBSM and BCN had Providerobtained proper insurance coverage.

 

2.4                                 *Notification and Reporting*

 

A.                                   Provider shall notify BCBSM and BCN inwriting: 1) immediately upon Provider learning of any circumstances that may havean adverse impact on the quality of care, or Provider’s ability to provideCovered Services under this Agreement; 2) immediately upon Provider learning ofany loss or threatened loss of license or accreditation; 3) immediately uponProvider learning of any proposed acquisition, or sale or other transfer ofProvider’s business, including but not limited to Provider’s mail orderpharmacy, 3) immediately upon Provider learning of any litigation broughtagainst Provider; 4) immediately upon Provider learning of any actions taken orinvestigations initiated by any government agency involving Provider or anyhealth care entity in which Provider holds more than five percent (5%)interest; 5) immediately upon Provider learning of any claim relating to fraud,abuse, self-referral, false claims or kickbacks or any claims involvingMedicare, Medicaid, FEP or other health care programs or insurance carriers.

 

B.                                     Provider shall immediately notify BCBSM andBCN of any changes in Provider’s business which may have an adverse impacton the quality of, or Provider’s ability to provide, Covered Services underthis Agreement, including, but not limited to, the transfer of at least half ofthe Provider’s pharmacy assets. Prior notification of adverse circumstances orof changes in Provider’s business does not guarantee continued participation asa BCBSM/BCN Provider. Business changes include change in ownership, name,business structure, range of services offered, bankruptcy proceedings orpharmacy business termination.

 

C.                                     Provider shall, within fifteen (15) daysafter receipt of information, notify BCBSM and BCN in writing of any lapse,restriction, suspension or revocation of Pharmacy’s license, DEA registrationnumber(s), Medicare or Medicaid participation status; any conviction orsettlement that relates to performance of Covered Services or the provision ofhealth care; any cancellation of required insurance; placement of Provider orany employee on the LEIE or GSA exclusion list; and any other matters whichmaterially affect performance under this

 

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Agreement, including, without limitation, any impairment of pharmacist’sprofessional license.

 

2.5                                 *Education and Training*

 

A.                                   Provider shall provide Members withcustomized educational materials explaining the services available throughProvider. Provider shall obtain BCBSM and BCN’s approval prior to distributingany written materials developed.

 

B.                                     Provider shall provide such sales support andtraining as BCBSM and BCN deem appropriate to assist BCBSM and BCN in marketingand administering the Specialty Pharmacy program.

 

C.                                     Provider shall comply with the trainingstandards contained in Addendum E and incorporated herein by reference.

 

2.6                                 *Customer ServiceRequirements*

 

A.                                   Provider will provide an experienced anddedicated account management team.

 

B.                                     Provider will provide a Client Service Teamwhich will respond to BCBSM and BCN questions, including but not limited toMembers and their concerns, claim payments, and daily interaction between theparties.

 

C.                                     Provider will establish a customer businessunit (CBU) appropriately staffed to handle the enrolled BCBSM / BCN population.

 

D.                                    Provider shall respond to all inquiries fromPhysicians and Members and shall maintain a toll free telephone line

 

E.                                      Provider shall comply with the customerservice requirements and standards contained in Addendum E.

 

F.                                      Provider must demonstrate an ability tocooperate with BCBSM and BCN, their Members and Groups and Physicians.

 

2.7                                 *Operational ServiceRequirements and Standards*

 

A. Provider shall comply with the operational service requirements andstandards contained in Addendum E.

 

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2.8                                 *Contractual ServiceRequirements*

 

A. Provider shall comply with the contractual service requirements containedin Addendum E and the requirements contained in the Statement(s) of Work, whichis incorporated herein by reference.

 

2.9                                 *Disease Management*

 

A.                                   Disease management services are included inProvider’s service program and shall be provided to BCBSM and BCN.

 

B.                                     The parties’ statement of work shall addressthe following, if applicable:

 

1                  A              description of the disease managementprogram—the disease states/medications covered (as agreed upon by Provider,BCBSM and/or BCN);

 

2.                                       The objective of the program—the goals, whatwill be measured;

 

3.                                       The program specifications—an explanation ofhow the program will work. This section shall also specify the partyresponsible for any action that needs to be taken as part of the program;

 

4.                                       Program reporting—what will be measured, howit will be measured, the frequency and timeliness of the reporting;

 

5.                                       Expectations—Group specific expectations ofthe results of the program. The templates from the reporting section shouldbe used to demonstrate expected results based on past history of the client modeledagainst the provider’s book of business, with appropriate demographicweighting;

 

6.                                       Performance guarantees associated with theprogram, if applicable; and

 

7.                                       Implementation timeline.

 

C.                                     Provider will educate patients about theirdisease state (including long term and short term effects if treated anduntreated) and their medication (including benefits, side effects and druginteractions);

 

D.                                    Provider will coordinate patient educationand management with BCBSM’s and/or BCN’s Case Management departments.

 

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2.10                           *Prior Authorization*

 

A.                                   Provider’s service program includes priorauthorization services. If BCBSM and BCN elect to use Provider’s priorauthorization services, Provider shall utilize BCBSM’s and BCN’s existing priorauthorization standards and criteria (the Existing Prior AuthorizationStandards). In addition, BCBSM and BCN will work with Provider to develop thecriteria to be applied by Provider in determining whether to designate certainBCBSM and/or BCN Covered Services as requiring prior approval before dispensing(“the Prior Authorization List”). BCBSM and BCN will have final approval of thePrior Authorization List.

 

B.                                     BCBSM and BCN will work with Provider todevelop additional prior authorization criteria and standards to be applied byProvider to all or select BCBSM and/or BCN Covered Services in determiningwhether to grant prior authorization (“the Prior Authorization Standards”). BCBSMand BCN will have final approval of the Prior Authorization Standards.

 

C.                                     Provider agrees to dispense Covered Servicesin accordance with the Prior Authorization List, Existing Prior AuthorizationStandards, and additional Prior Authorization Standards, including Provider’sreview of physician supplied documentation, Provider’s follow up with physicianand return of prescriptions to Members with appropriate explanations when priorauthorization for dispensing is denied by Provider. In addition, Provider willfollow up with the physician when a prescription is not legible or complete.

 

D.                                    Provider shall not return unfilled anyprescription to a Member unless Provider provides a written explanation to theMember stating the reason for the return of the prescription and advises theMember and the Member’s Physician of the Member’s right to appeal the coveragedenial. The appeal should be directed to BCBSM at the following address:

 

Blue Cross Blue Shield of MichiganPharmacy Department 27000 West 11Mile Mail Code B. 780 Southfield, Ml48024

 

Orto BCN at the following address or phone:

 

**Provider**

Blue Care Network

Appeals/Care Management—Mail Code C336

PO Box 5043

Southfield, Ml 48086-5043

Phone (248) 799-6312

Fax (248) 223-5474

 

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**Member**

Appeals and Grievance Unit - Mail Code C248

Blue Care Network

P.O. Box 248

Southfield, Ml 48086

Phone 1-800-662-6667

Fax 1-888-458-0716

 

E.                                      BCBSM and BCN will respond to the first andsecond level appeals of the coverage denials.

 

F                                         Provider will comply with the BCBSM and BCN memberappeals procedure and abide by decisions reached through that procedure.

 

2.11                           *Dispensing and DeliveryProcedures*

 

A.                                   Provider agrees to dispense Covered Servicesin a manner that conforms to all applicable federal, state and local laws, rules andregulations including but not limited to those relating to the procurement anddispensing of prescription drugs and other pharmaceutical products, fraud andabuse, discrimination, disabilities, confidentiality, self-referral, falseclaims and prohibition of kickbacks; with Pharmacist Professional Judgment;with the ethical standards and standards of professional conduct and practiceprevailing in the pharmacy community; with provider manuals guidelines andother provider communications, all BCBSM and BCN requirements; and the termsand conditions of this Agreement.

 

B.                                     Provider shall dispense the quantity ofprescription drugs indicated on the prescription order, up to a maximum of aninety (90) day supply per prescription or refill, or as otherwise permittedunder the Member’s Certificate and Program Requirements, subject to theprofessional judgment of the dispensing pharmacist, any legal limitationsimposed on the dispensing of controlled substances, and the manufacturer’s recommendations.Prescription orders may be refilled provided the prescription order sostates. Prescription orders will not be filled (i) more than twelve (12)months after issuance for non-controlled substances, (ii) more than six (6) monthsafter issuance for controlled substances or (iii) if prohibited byapplicable law or regulation.

 

C.                                     Provider agrees to provide Covered Servicesto Members with the same quality and in the same manner as to Provider’s otherpatients and without any prohibited discrimination.

 

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D.                                    Provider will use Pharmacist ProfessionalJudgment in determining whether drug contra-indications/adverse reactions may existand whether the drug therapy prescribed exceeds acceptable norms. In suchsituations, Provider must contact the Prescriber to verify the prescriptioninformation prior to dispensing and document the results of the Prescriberinteraction in terms of the necessity and appropriateness for dispensing theprescription as written. This documentation must be maintained for auditpurposes and shall be provided to BCBSM and BCN upon request.

 

E.                                      Provider shall dispense generic equivalentprescription drugs unless “Dispense as Written” is required by the physician,or unless the Member requests brand name prescription drugs. If a Memberrequests a brand name prescription drug when a generic drug is available, theMember will be responsible for paying the difference in cost between the brandand generic drugs, as well as the Member co-payment and deductible if required byapplicable Plan Design.

 

F.                                      Except as otherwise provided in 2.11 B. andC, all matters pertaining to the dispensing of prescription drugs or to thepractice of pharmacy in general are subject to the dispensing PharmacistProfessional Judgment.

 

G.                                     Provider shall supply stamped, preaddressed envelopesfor use by Members in mailing their orders to Provider at Provider’s expense.

 

H.                                    Covered Services will be shipped to Members “signaturerequired,” at Provider’s expense. In cases when the patient cannot sign for thepackage, the courier/carrier may leave the package without receiving asignature, provided that the patient signs and returns the enclosed deliverydocument to Option Care. The package shall be deemed delivered when thecourier/carrier confirms delivery. All prescriptions will be sent in a mannerto assure the integrity of the prescriptions per manufacturer specifications,including temperature controls.

 

I.                                         Where appropriate, Provider will dispenseAncillary Products to Members with Specialty Medication orders.

 

J.                                        Provider shall support next-day delivery.

 

K.                                    Provider shall support same-day (stat)delivery directly (or in partnership with a Michigan based pharmacy).

 

L.                                      Where a Member does not receive an item dueto provider error, including but not limited to Provider’s shipment of thewrong item, damaged items, or items that are shipped but not received, Providershall immediately correct the error via overnight shipping.

 

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M.                                 If Provider makes an error in dispensing aCovered Service, Provider shall issue a credit to the Member for the amount theMember was charged for the Covered Service along with a written explanation ofthe reason for the credit. If there is no activity on the account for 60 days,Provider will issue a refund to the Member. Provider will dispense and ship thecorrect Covered Service immediately upon notification of the mistake and willcover the cost of shipping. Provider shall also credit BCBSM/ BCN, asappropriate, for the error and send written notice to BCBSM identifying theMember by name and I.D., the Specialty Medication and Ancillary Products atissue, the error, the cost of the Specialty Medication, the amount of thecredit provided to BCBSM/BCN, and the amount credited/refunded to the Member.Provider shall provide any additional the information requested by BCBSM andBCN. Notice shall be sent pursuant to section 15.1.

 

N.                                    Provider will implement appropriate qualitycontrols to prevent the dispensing of counterfeit prescription drugs and drugsillegally imported from foreign countries.

 

O.                                    In the event of an over-payment by a Memberor Physician, Provider will issue a credit to the Member or Physician, alongwith a written explanation for the reason for the credit. Provider shall applycredits to open receivables as applicable. If there is no activity on theMember’s or Physician’s account sixty (60) days after the credit is issued andno open receivable exists, Provider shall issue a refund to the Member orPhysician in the amount of the overpayment.

 

In the event of an under-payment by a Member or Physician, the Providershall nevertheless dispense the drug as indicated and invoice the Member orPhysician for the underpayment.

 

In the event of an overpayment to BCBSM/BCN, Provider shall issue acredit to BCBSM/BCN. In the event of an underpayment to BCBSM/BCN, Providershall issue an invoice in the amount of the underpayment to BCBSM/BCN. In theevent of an overpayment or underpayment to or by BCBSM or BCN, Provider shallsend BCBSM/BCN written notice of such over/under payment along with a writtenexplanation of how the overpayment/underpayment occurred, the amount of same,and the amount of over/under payment attributable to individual BCBSM/BCNmembers.

 

Provider will reconcile overpayments (i.e. credits), underpayments, andany amount owing to or by BCBSM and/or BCN due to errors in dispensing,monthly, on the last day of the month, and will provide a monthly report toBCBSM and BCN regarding the same. If BCBSM and/or BCN owe Provider additionalfunds due to underpayments, Provider will invoice BCBSM and/or BCN and willexplain the reason for the underpayment on the invoice. BCBSM and BCN have theright to deny recovery of underpayments incorrectly made. If Provider owes

 

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BCBSM and/or BCN money due to overpayments, Provider will issue a checkto BCBSM/BCN with a voucher describing the reason for the check.

 

P. Provider will accept personal checks, cashier checks, money ordersand credit cards as well as other methods of payment for Covered Services. Inthe event that Members are not able to afford their lump sum out-of-pocketexpense, Provider may provide payment plans to assist affordability ofcare.

 

Q.                                    Delivery is guaranteed by Provider. Providerwill respond promptly to all claims by Members for non-delivery or of deliveryof less than the full amount. In the event of a claim of non-delivery ordelivery of less than the full amount and Provider cannot prove that deliveryoccurred, Provider shall immediately replace the order (or the amount shorted)without charge and shall ship the order via overnight mail.

 

R.                                     Provider will reverse claims for shipmentsthat are lost or damaged within two weeks of discovery of such loss or damage.Or, alternatively, Provider shall reship at no additional charge (no bill isissued). If a claim cannot be reversed or reshipped at no charge, it will behandled in the same manner as a dispensing error.

 

S.                                      In the event that it becomes impracticable,for reasons of a force majeure or otherwise, for Provider to dispense CoveredServices to Members, Provider shall notify BCBSM, BCN and use reasonableefforts to have these items dispensed from an affiliated mail servicespharmacy, subject to BCBSM/BCN approval and applicable laws and regulations.

 

T.                                     Sections 2.11 M, O, Q and R shall survivetermination or expiration of this Agreement.

 

2.12                           *Performance Guarantees*

 

A.                                   Provider agrees to the performance guaranteesas stated in Addendum F. Failure to meet one or more of the performanceguarantees shall subject provider to the associated penalties. Provider’sobligations under this section shall survive termination or expiration ofthis Agreement.

 

B.            Provider, BCBSM andBCN may negotiate additional performance guarantees with defined financialrisk as part of the RFP process. In that event, those performanceguarantees and associated penalties will be reflected in a separate document,signed by the parties and incorporated herein by reference. Provider must meetthe negotiated performance guarantees and will be subject to the financialpenalties for failure to meet the guarantees.

 

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C.                                     Provider shall monitor and track eachperformance guarantee on a monthly basis which shall include trend analysis;provide a written report on each performance guarantee on a calendar quarterbasis within thirty (30) days following the end of each calendar quarter; andreconcile any penalties on a calendar year basis, any applicable penalties orother amounts due to be paid out by April 1st following the endof each calendar year (e.g., any applicable penalties or other amounts due forperformance during 2006 shall be paid by April 1, 2007). During the firstyear of the Agreement, Provider shall track performance beginning on theEffective Date but performance guarantees shall only be evaluated beginning January 1,2007. Written reports and reconciliations shall be in the form and containthe information requested by BCBSM and BCN. Provider’s obligations under this section shallsurvive termination or expiration of this Agreement.

 

D.                                    Provider shall provide an annualreconciliation report in the form and containing the content requested by BCBSMand BCN, by the following April 1st whether or not any penalties or otheramounts are due under the terms of this Agreement. BCBSM and/or BCN reserve theright to conduct its own verification of any performance analysis or, if noanalysis is provided, of any guarantee, at its expense by utilizing the dataprovided by Provider. If such data is insufficient or inaccurate, BCBSM and/orBCN may, at its sole discretion, designate parties to conduct independentaudits, or utilize other means. Unless otherwise indicated below, Providershall monitor, track report and reconcile each performance guarantee separatelyfor each of BCBSM and BCN. Provider’s obligations under this section shallsurvive termination or expiration of this Agreement.

 

E.                                      If BCBSM and BCN receive and validatecomplaints from patients, pharmacists, or physicians that Provider has violatedthese standards (which complaints have not been accounted for in Provider’sreports) BCBSM and/or BCN may impose additional penalties consistent withthose penalties referenced in Addendum F.

 

F.                                      BCBSM and BCN may audit Provider attheir convenience and expense to ensure compliance and/or validate compliancewith standards, and may recover amounts owed pursuant to Article VII.Provider’s obligations under this section shall survive termination orexpiration of this Agreement.

 

2.13                           *Claims*

 

A.                                   Provider shall establish technicalconnections necessary to submit claims using BCBSM’s/BCN’s designatedprocessors, and Provider agrees to comply with BCBSM’s/BCN’s administrativerequirements governing the use of these systems. Provider shall pay the cost ofall system modifications, line charges

 

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and other communication costs associated with the installation and useof these systems as well as all fees charged by BCBSM’s/BCN’s claimsprocessors.

 

B.                                     Provider agrees not to turn off edits at thefacility level and to respond appropriately to on-line messages, including butnot limited to edits that may impact the member’s medical status orcoverage. Provider will provide instruction to the patient on use ofmedications, information received in on-line drug messages (e.g., DUR), and inaccordance with state and federal law.

 

C.                                     Provider shall submit claims for Covered Services,including claims for Covered Services where the co-payment is equal to orgreater than BCBSM/BCN’s reimbursement, and any documentation requested inrelation to such claims.

 

D.                                    Provider will not waive or discount theapplicable co-payment/deductible under any circumstance unless authorized byBCBSM and BCN.

 

E.                                      For Specialty Medications dispensed toMembers for self-administration, Provider will submit claims on-line utilizingthe most current NCPDP format or other designated form as required by BCBSMand BCN. For Specialty Medications dispensed to physicians for in-officeadministration, Provider will submit claims in electronic format using theprofessional 837 HIPAA format, or other designated form as required byBCBSM and BCN. Provider will be able to accept edits according to the mostcurrent NCPDP Telecommunication Standard for on-line claim submissions.

 

F.                                      Provider will submit claims within 60 days ofdate of service; otherwise BCBSM and BCN are under no obligation to pay forservices rendered.

 

G.                                     To be reimbursed, all claims must be completeand accurate, including without limitation, reporting the National Drug Codewhich correctly indicates the package size from which the prescription wasdispensed, the prescription must be signed or called in by the Prescriber andreceived by the Member, and no charge for submission may be made to BCBSM,BCN or the Member.

 

H.                                    BCBSM/BCN will be permitted to deductoverpayments (whether discovered by Provider or BCBSM/BCN) from futureBCBSM/BCN payments along with an explanation of the credit action taken. Inaudit refund recovery situations, where Provider appeals the BCBSM/BCNdetermination, BCBSM/BCN will defer deduction of overpayments until the lastunappealed determination. Audit refund recoveries and other overpaymentobligations which cannot be fully repaid over the course of one month, willbear interest at the BCBSM/BCN prevailing rate, until fully repaid.

 

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I.                                         Provider will reconcile its reimbursementsand appeal any disputed claims within a maximum of 180 days from date paymentis made. All actions to be initiated against BCBSM must be initiated within 180days from the date payment is made.

 

2.14                           *Provider ResponsibilitiesRelated To Payment*

 

A.                                   Except in the event that Member has primarycoverage with another carrier or third party payer, where Covered Services arepurchased by a Physician, and except for applicable co-payments or deductibles,Provider agrees to look solely to BCBSM and BCN for payment for CoveredServices rendered to Members under this Agreement and to accept payment made inaccordance with this Agreement as payment in full. Provider will in no event, includingbut not limited to nonpayment by BCBSM and BCN, insolvency or breach of thisAgreement, bill, charge, collect a deposit from, seek payment from, maintainany action at law or in equity or have any other recourse against a Member orperson (other than BCBSM and BCN) acting on behalf of Member for CoveredServices provided pursuant to this Agreement. This provision does not prohibitProvider from collecting charges for supplemental benefits or Co- payments orDeductibles, where appropriate, or for non-Covered Services provided to Memberson a fee-for-service basis. This provision shall survive termination orexpiration of this Agreement for Covered Services rendered to a Member prior totermination or expiration regardless of the cause giving rise to suchtermination or expiration and shall be construed to be for the benefit of the Member.This provision is not intended to apply to services provided after terminationor expiration of the Agreement. This provision supersedes any oral or writtenagreement to the contrary now existing or hereafter entered into betweenProvider and Member or person acting on Member’s behalf, insofar as suchcontrary agreement relates to liability for payment of Covered Services providedto a Member under this Agreement.

 

B.                                     *Co-payments and Deductibles*Provider shall not bill orcollect from a Member for Covered Services or Non-Reimbursable CoveredServices, except Provider may bill or collect from a Member for any one ormore of the following:

 

1. Provider shall collect from Members payment forthe full amount of any co-payments and deductibles relating to Covered Servicesexcept where the Member share is greater than the cost of the Covered Service,in which case Provider will credit the Member the difference between the Member’sshare and the cost of the Covered Service provided in Addendum A, or unlessauthorized by BCBSM and BCN. However, in no case will a Member be required topay any amounts denied or recovered due to overpayment, audit, sanctions or anyother reason as a result of an error by Provider.

 

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C.                                     Nothing in this Agreement shall be construedto prohibit or otherwise restrict Provider from advising or advocating on behalfof Member about Member’s health status, medical care, or treatment options; therisks, benefits and consequences of treatment or non-treatment; or futuretreatment decision, regardless of BCBSM or BCN benefit coverage limitations. Itis recognized that Members may consent to receive services that are notCovered Services or, where authorization is required, have not been authorizedby BCBSM or BCN and therefore may be payable by Member. When Provider isaware that certain proposed services are not Covered Services or payable byBCBSM or BCN, Provider must inform Member in advance that such servicesare not payable by BCBSM or BCN and must obtain Member’s signed consent to bebilled.

 

D.                                    Provider shall hold BCBSM and BCN harmlessfrom any responsibility for Member co-payments and deductibles.

 

E.                                      If required by applicable Plan Design,Provider will collect from all Members the difference in cost between the BrandDrug and BCBSM’s/BCN’s Multi-source Drug Products List (MAC List) if the Memberrefuses substitution of a lower cost generic equivalent drug and the physiciandid not require “Dispense as Written.”

 

2.15                           *Identification Number*- Provider agrees that Provider’s BCBSM andBCN identification number is the exclusive property of BCBSM and BCN and may notbe sold or transferred.

 

2.16                           *Publication*- Provider shall permit BCBSM and BCN topublish Provider’s name and appropriate identifying information in connectionwith Provider’s participation in BCBSM’s/BCN’s Specialty Pharmacy program. Providers’name and identifying information will be and remain its exclusive property.

 

2.17                           *Reports*- Provider shall compile and send to BCBSMand BCN such reports as BCBSM and BCN shall from time to time request,including, but not limited to:

 

A.                                   At least monthly, a comprehensive package ofreports that detail utilization by type (Pharmacy / Medical), Billing report,detail by prescriber, detail by patient, etc.

 

B.                                     Ad hoc reporting as requested.

 

2.18                           *Coordination Of Benefits -*Provider shall assist BCBSM and BCN incoordinating benefits and subrogation rights by obtaining Member’s specificinformation regarding third party liability.

 

2.19                           *Formulary*- Provider shall make reasonable efforts toeducate members and prescribers on the benefits of following BCBSM’s and BCN’sformulary(s).

 

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2.20                           *Cooperation*- Provider shall cooperate with all claimssubmission requests, pharmacy reviews, quality assurance audits and teams, andutilization review audits and comply with BCBSM and BCN determinations andcorrective action plans.

 

2.21                           *Grace Period -*In connection with direct to providerservices, Provider will offer physicians an extended grace period of no lessthan **[ * ]** days before assessing finance charges. However,if Physician consolidates the Physician’s orders to once **[ * ]**,Provider shall offer an extended grace period of **[ * ]** daysto the Physician before assessing finance charges.

 

2.22                           *Prompt-Pay Discounts -*Provider will offer prompt pay discounts to physicians.

 

**ARTICLE IIIBCBSM AND BCN**

**RESPONSIBILITIES**

 

3.1 A.                 BCBSM and BCN shall promptly furnisheligibility data; benefit information, including Covered Services, exclusions,deductible and co-payment amount, as well as drug risk analysis information,such as drug to drug interactions, ingredient duplications, therapeuticduplications, early refills, and disease alerts.

 

B.                                     BCBSM and BCN shall provide provider manualsand any other communications that affect Provider’s participation in theSpecialty Pharmacy program.

 

C.                                     BCBSM and BCN shall give Provider sixty (60)days prior written notice of substantial modifications to the Specialty Pharmacyprogram in accordance with section 3.1 (F). Other changes will beeffective with notice.

 

D.                                    BCBSM and BCN shall provide a mechanism toreceive input from Provider regarding the Specialty Pharmacy program.

 

E.                                      BCBSM and BCN agree to use their best effortsto maintain and provide access to benefit and eligibility data for each Member;provided, however, that the data will be subject to retroactive correction asnecessary and access does not guarantee payment for any Covered Servicesdispensed.

 

F.                                      Notice of substantial modifications to thisAgreement required to be provided to Provider by BCBSM and BCN will be providedin writing, sent by first class mail, postage pre-paid, to the addressstated in Section 15.1

 

3.2                                 *Payment to Pro vider*

 

A.                                   Covered *ServicesProvided to Members —* BCBSM and BCN’s reimbursement obligation forCovered Services provided to Members is governed by Addendum A.

 

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B.                                     *Covered Services ProvidedTo Physicians*- When BCBSMand BCN invoke their option to include Covered Services provided to Physiciansin the pricing offered under this Agreement, then at a date to be determined byBCBSM and BCN, Provider will provide, through mail order, Covered Services, insuch quantities as Physicians may request from time to time, toPhysicians.

 

1.                                       *Covered Services ProvidedTo Physicians And Billed To BCBSM/BCN By Provider.*Covered Services provided to Physicians andbilled to BCBSM/BCN by Provider will be reimbursed according to Addendum A.

 

2.                                       *Covered Services ProvidedAnd Billed To Physicians.*CoveredServices provided and billed to Physicians will be billed to Physicians at therates set forth in Addendum A. Provider will look solely to the Physician forpayment for such Covered Services. The remaining terms and conditions of suchorders (including, without limitation, payment and credit) are subject tonegotiation between Provider and Physician.

 

**ARTICLE IVMUTUAL**

**RESPONSIBILITIES**

 

As participating Provider under BCBSM’s and BCN’s Specialty Pharmacy Program,Provider and BCBSM/BCN will assume the following mutual responsibilities:

 

4.1                                 *Independent Contractor*- Provider, BCBSM and BCN shall perform asindependent contractors. Nothing in this Agreement shall be construed or be deemedto create a relationship of employer and employee, or principal and agent, orany relationship other than that of independent parties contracting with eachother for the sole purpose of carrying out this Agreement.

 

4.2                                 *Independent Status.*This Agreement is between Provider, BCN andBCBSM, an independent corporation licensed by the Blue Cross Blue ShieldAssociation (BCBSA) to use the Blue Cross and Blue Shield names and servicemarks in Michigan. However, BCBSM is not the agent of BCBSA and, by acceptingthis Agreement, Provider agrees that it made this Agreement based only on whatit was told by BCBSM, BCN or their agents. Only BCN and BCBSM have an obligationto Provider under this Agreement and no other obligations are created orimplied by this language.

 

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4.3                                 *Confidential Information -*Provider acknowledges that all information,written or oral, acquired from BCBSM and BCN is the sole property of BCBSM andBCN and is considered confidential (Confidential Information). Provider may disclosethis Confidential Information to third parties only with BCBSM’s and BCN’swritten consent. All files or other documents, including but not limited to,photocopies, microfiche, microfilm and electronic data, supplied to Provider byBCBSM and BCN will remain BCBSM’s and BCN’s property and will promptly bereturned to BCBSM and BCN at the conclusion of the work. At the conclusion ofthe work, Provider will also deliver a written statement that a diligent searchand inquiry has been made for any BCBSM and BCN documents delivered tocontractor during its engagement and that all BCBSM and BCN documents arereturned. Provider has no right to keep or use any BCBSM or BCN documents or informationafter the engagement is completed, except to the extent required to documentits compliance with professional work standards.

 

4.4                                 *Proprietary Information -*BCBSM and BCN have proprietary rights tovarious systems and databases and data contained in those systems anddatabases, pertaining to its business matters. BCBSM’s and BCN’s proprietaryrights include ownership rights in all claims, Member, provider, and customerdata in all forms, including but not limited to raw data as well as statisticalcompilations, both electronic and hard copy; trade secrets; patents;copyrights; trademarks; algorithms; tables; documentation; processes; andtechniques currently existing or subsequently upgraded or modified (ProprietaryInformation). Provider may use BCBSM’s and BCN’s Proprietary Informationduring the course of this Agreement only as permitted under this Agreement. Providermay not keep or use Proprietary Information, including paid claims data,belonging to a Group shared with BCBSM and BCN for the purpose of having theGroup’s pharmacy benefit administered under this Agreement. Notwithstanding theforegoing, Provider may use non-BCBSM/BCN or non-patient identifiable datafor statistical compilation purposes. Provider may not use, sell ordisclose this information to any third party without BCBSM’s/BCN’s written consent.Upon BCBSM’s/BCN’s request, no more than annually, Provider will warrant inwriting its compliance with this provision.

 

4.5                                 Subject to the other terms of this Agreement,BCBSM and BCN will have the right to access and use and share with BCBSM andBCN Groups, all Provider data as reasonably necessary to administer theAgreement.

 

4.6                                 *Individually IdentifiableHealth Information*

 

A. The parties acknowledge that certain member-specific information,reports and data generated under this Agreement are subject to state andfederal confidentiality laws and regulations. The parties agree to comply inall material respects with these laws regulations.

 

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B.                                     Provider will maintain as confidentialmedical records or any of the information contained therein, as well asaggregate data that could implicitly identify an individual, to third parties. Providerwill obtain appropriate consent from members for release of medical records orany information contained therein, to third parties.

 

C.                                     Additional requirements regarding the partiesobligations with respect to the handling of Individually Identifiable HealthInformation (IIHI) are set forth in the terms attached and made part ofthis Agreement as Addendum B (the Business Associate Addendum).

 

4.7                                 *Publication*- Neither party may use informationidentifying the other party without prior written consent, except as otherwiseprovided in this Agreement. Upon termination or expiration of this Agreement,all use of identifying information will cease.

 

4.8                                 *Fraud and Abuse*- Provider and BCBSM/BCN shall mutually agreeon actions to be taken to prevent and detect fraud and abuse in the operationof the Specialty Pharmacy program.

 

**ARTICLE VRECORDKEEPING**

**AND AUDITS**

 

5.1                                 *Records*

 

A.                                   Provider shall maintain accurate records, ina current, detailed, organized and comprehensive manner, of all mattersrelating to Provider’s obligations under this Agreement. These records must bekept for seven (7) years from the date of performance of the last CoveredService, be in writing, comply with applicable state and federal laws,generally accepted business and customary pharmacy practice, this Agreement,and be available for examination and audit without charge. Provider’sobligations under this section shall survive termination or expiration ofthis Agreement.

 

5.2                                 *Audit*

 

A.                                   Provider will permit BCBSM and BCN or, atBCBSM’s/BCN’s discretion, BCBSM’s and BCN’s duly authorized representatives, toaudit review and duplicate these records and any other records in Provider’spossession which relate to Provider’s obligations under this Agreement, uponreasonable notice and during regular business hours.

 

B.                                     Audits include standard BCBSM and BCN reviewof Provider’s records relating to Members, facilities and billing of CoveredServices. Provider shall provide BCBSM and BCN with documentation of provider’slast inspection by its State Board of Pharmacy and all other inspections (e.g.,flow hood inspection,

 

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etc.). Continued participation may be affected by Provider’sperformance, including quality and utilization reviews conducted under allBCBSM and BCN programs

 

C.                                     Audits will be conducted pursuant to BCBSM’sand BCN’s standard business practices. BCBSM and BCN have the right to auditProvider’s records up to 4 years after termination or expiration of thisAgreement. Once audits are complete, that audit is considered closed and is nolonger eligible for further audits. However, this shall not prevent BCBSM andBCN or Provider from complying with requests for audit from external sources(such as customer groups, government agencies, etc.).

 

D.                                    BCBSM/BCN Group Audits. Provider acknowledgesthat BCBSM’s/BCN’s groups have the right to audit prescription drug claims.BCBSM and BCN shall use reasonable efforts to contractually limit the scope ofa BCBSM/BCN Group audit. Upon notice from BCBSM/BCN, Provider will fullycooperate with any such audit request and shall provide the necessary data anddocuments.

 

5.3                                 *Access*

 

A.                                   In accordance with applicable laws and inparticular HIPAA record access standards, Provider shall provide BCBSM and BCNrepresentatives’ reasonable access to the pharmacist, the premises, and memberpharmacy records to: inspect equipment and space related to the provision ofCovered Services; to perform utilization and quality management;facilitate the adjudication of claims; perform peer review activities;handle member complaints; conduct financial audits; and duplicate records.Access to the premises is without charge.

 

B.                                     Provider shall make Member records andrelated information available as BCBSM and BCN deem necessary to administerthis Agreement. Records must also be promptly available when a member transfersto another Provider.

 

C.                                     Upon reasonable request by BCBSM and BCN or aBCN Member’s primary care physician, Provider shall provide copies of theMember’s pharmacy records and Member encounter data to BCBSM and BCN or the BCNprimary care physician, as applicable, without additional charge.

 

D.                                    Provider agrees to allow the Michigan Officeof Financial and Insurance Services, NCQA or their authorized representativesto access: (1) Provider’s premises for the purpose of inspecting theequipment and space used to provide services to Members, (2) the pharmacyrecords of those Members as permitted or required under applicable state andfederal law, and (3) financial records as they pertain to prescriptiondrug coverage.

 

E.                                      This Article shall survive terminationor expiration of this Agreement.

 

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**ARTICLE VI**

**INDEMNIFICATION**

 

6.1                                 Provider agrees to defend, indemnify and holdBCBSM, BCN and their officers, directors, employees, Groups and Members (“BCBSMand BCN Indemnities”) harmless from and against all claims, liabilities,damages, causes of action, losses, injury, demands, costs and expenses,including legal fees, that arise out of or result from, or allege to arise outof or result from, the acts or omissions of Provider, its officers, directors,employees, subcontractors, other agents, and/or anyone for whose acts theProvider, and not BCBSM/BCN, may be liable, including claims bypharmaceutical manufacturers arising out of, or relating to, or allegedlyarising out of or relating to, Provider’s contracts with such manufacturers.

 

6.2                                 In furtherance of the foregoing indemnity andnot in limitation therefore, Provider agrees that BCBSM and BCN are entitled toall incidental and consequential damages resulting from a breach of Section 6.1of this Agreement by Provider, including but not limited to, expenses incurredto recover from the breach. Vouchers or other evidence showing payment amountsto be paid to BCBSM and BCN of any loss, damage or expense resulting frombreach of the Agreement shall be conclusive evidence against Provider of thefact and amount of Provider’s liability.

 

6.3                                 This Article shall survive terminationor expiration of this Agreement.

 

**ARTICLE VIIRIGHT**

**OF RECOVERY**

 

7.1                                 BCBSM and BCN reserve the right to andProvider agrees that BCBSM and BCN may recover for amounts paid forCovered Services not meeting applicable benefit criteria, Program Requirements,performance guarantees, legal, contractual, quality management, utilization managementor administrative requirements. BCBSM and BCN may also recover anyoverpayments for Covered Services that were incorrectly made, or are: notverified through Provider’s records; not received by the Member; furnished whenlicense(s) was lapsed, restricted or revoked, or suspended; or that do not meetthe standards of professional conduct prevailing in community.

 

7.2                                 BCBSM and BCN will not utilize statisticalsampling methodologies to extrapolate refund requests on medical necessityissues identified through sampling. BCBSM and BCN may extrapolate refundrecoveries from statistically valid samples involving issues other than medicalnecessity, including, but not limited to, procedure code billing errors.

 

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7.3                                 BCBSM and BCN may offset any amountsowed by Provider against any amounts BCBSM and/or BCN owe Provider under anyBCBSM or BCN program.

 

7.4                                 Recovery and offset related to billing codeerrors and other business matters confirmed by audit may be based onstatistical sampling methodology.

 

7.5                                 BCBSM and BCN will have the right to initiaterecovery or offset of amounts paid up to **[ * ]** from the date ofpayment; however there is no time limitation on recovery or offset in instancesof fraud and the right to recover or offset shall survive termination orexpiration of this Agreement.

 

**ARTICLE VIII**

**ASSIGNMENT**

 

8.1                                 *Assignment*- Any assignment of this Agreement by eitherParty without the prior written consent of the other shall be void, except thatBCBSM and BCN may assign to any affiliate or subsidiary upon notice.

 

8.2                                 *Successor In Interest*- Provider agrees that upon transfer of atlease one-half of Provider’s pharmacy business assets, Provider will provide asigned agreement from the successor stating that successor assumes liabilityfor any amounts for which Provider may owe but has not paid to BCBSM andBCN under this Agreement, and upon determination by BCBSM and BCN thatreasonable grounds exist to question pharmacy’s ability to pay any amounts it may oweunder this Agreement, Pharmacy will establish an escrow account or Letter of Creditin an amount satisfactory to BCBSM and BCN. Such assumption of liability shallbe one of the conditions for BCBSM and BCN approval of any successor in interestas a participating provider. Such assumption of liability shall not release Providerfrom the indebtedness unless an agreement to that effect is entered into betweenBCBSM, BCN and Provider.

 

8.3                                 *Successor Participation*- Upon sale or other transfer of Provider’sspecialty pharmacy business, Provider must inform the successor pharmacyin writing that there in no guarantee that BCBSM and BCN will accept successoras a participant under this agreement.

 

**ARTICLE IXAMENDMENT**

**AND WAIVER**

 

This Agreement may be amended by BCBSM and BCN at any time with sixty(60) days prior written notice for any substantial modifications to Agreementin accordance with section 3.1 (F), except that BCBSM and BCN may notamend Addendum A without the written consent of Provider. All other amendmentsby BCBSM and BCN shall be effective with thirty (30) days notice to Provider.This Agreement may also be amended by written agreement executed by theparties thereto. No waiver of any of the provisions of this Agreement shall bevalid

 

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unless in writing and signed by the appropriate representatives ofBCBSM, BCN and Provider, against whom such a waiver is being sought. No waiverof one or more of the provisions of this Agreement or failure to enforce theAgreement by either of the Parties hereto shall be construed as a waiver of anysubsequent breach of the Agreement or any of its provisions.

 

**ARTICLE XTERM, RENEWAL AND**

**EXPIRATION**

 

10.1                           This Agreement shall remain in force for aTerm of three and one half (3 1/2) years from the Effective Date, until September 30,2009, and shall automatically renew thereafter for one (1) year termunless written notice is given pursuant to Article XV.

 

10.2                           This Agreement may be terminated byBCBSM and BCN, without cause, on ninety (90) days written notice to Provider,which notice shall be provided pursuant to Article XV.

 

10.3                           Provider shall provide prompt written noticeto BCBSM and BCN of any of the following, and BCBSM and BCN may terminatethis Agreement immediately if: 1) Provider’s license, DEA registration orMedicare or Medicaid participation status is lapsed, restricted, suspended orrevoked or Provider is placed on the List if Excluded Individuals/Entities orList of Debarred Contractors as published by the General ServicesAdministration; 2) If any formal action or investigation is initiated by anygovernment agency involving Provider or any health care entity in whichProvider holds more than 5% interest, or any claim is made against Providerrelating to fraud, abuse, self-referral, false claims, kickbacks, or any claimsinvolving Medicare, Medicaid, FEP or other health care programs or insurancecarriers; 3) if Provider or any officer/director/owner of Provider pleads guiltyto or is convicted of fraud or a felony relating the provision of health care; 4)if Provider ceases to offer mail order services; 5) bankruptcy proceedings are initiatedby or against Provider; 6) if Provider’s liability insurance is reduced belowrequire amounts or terminated or 7) in the event of a Change in Control of Provider.“Change in Control” shall be defined as (1) consolidation or merger of Providerwith or into any entity, (2) sale, transfer or other disposition of all orsubstantially all of the assets of Provider or (3) acquisition by anyentity, or group of entities acting in concert, of beneficial ownership oftwenty (20%) percent or more of the outstanding voting securities of theProvider.

 

10.4                           This Agreement may be terminatedimmediately by BCBSM, BCN or Provider where there is a material breach in theAgreement by the other Party that remains uncured thirty (30) days afterwritten notice of the breach specifying the nature of the breach, which noticeis provided pursuant to Article XV.

 

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10.5                           This Agreement may be terminatedimmediately by BCBSM and BCN if, during the term of this Agreement BCBSM and/orBCN lose two (2) or more existing Groups of over 100,000 lives each to anindependent relationship with Provider.

 

10.6                           Upon termination or expiration of thisAgreement, BCBSM and BCN shall be obligated to pay claims to the Provider onlyfor Covered Services dispensed through the date of termination or expiration.

 

10.7                           The expiration or termination of thisAgreement or any changes as provided in the Agreement shall not terminate orotherwise limit BCBSM’s and BCN’s right of recovery from Provider as set forthin Article VII of this Agreement, which right shall survive thisAgreement.

 

10.8                           *Obligation to Cooperate.*Upon notice of termination of this Agreement,Provider shall cooperate fully with BCBSM and BCN and comply with BCBSM and BCNprocedures, if any, in the transfer of Members to other Providers.

 

10.9                           *Material breach.*A material breach of this Agreement includesbut is not limited to: (i) termination of this Agreement by any party forany reason not permitted in Article X, including termination of thisAgreement by Provider as a result of financial losses or the inability tosatisfy the financial guarantees or (ii) material failure of any party tocomply with the provisions of Article XIV of this Agreement. The Provideracknowledges and agrees that a material breach described in (i) and (ii) willcause BCBSM and BCN great economic damage as well as other associated damage,including loss of reputation and credibility with customers and others. Theparties agree that the precise amount of damages for these non-economic losseswould be difficult or impossible to ascertain. Therefore, the parties agreethat (i) in the case of a material breach based on a wrongful terminationof this Agreement by Provider, Provider will pay BCBSM and BCN liquidated damagesin the amount of **[ * ]** Dollars to compensate them for non-economiclosses. The parties agree that this liquidated sum is reasonable and is not apenalty. Payment of liquidated damages under this provision will not prejudiceBCBSM and BCN’s right to pursue other available remedies including recovery ofactual contract damages arising out of the material breach.

 

10.10                     When this Agreement terminates or expires:

 

A.                                   The liability of the parties for obligationsincurred prior to the termination or expiration date will survive terminationor expiration;

 

B.                                     BCBSM and BCN may, at their election, extendthis Agreement for a maximum of six (6) months as necessary for the orderlytransfer of administration;

 

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C. In connection with the transition, upon termination or expiration,Provider will cooperate by forwarding to the entity or entities designated byBCBSM and BCN-

 

1)                                      A minimum of twelve (12) months utilizationhistory;

 

2)                                      Unprocessed Provider and Member submittedhard copy claims;

 

3)                                      Unfilled mail order prescription and openrefill files;

 

4)                                      Open prior authorizations and supportdocumentation;

 

5)                                      Any other information the parties mutuallyagree is necessary for the transition.

 

**ARTICLE XIDISPUTES**

**AND APPEALS**

 

Disputes arising under this Agreement must first be appealed throughthe BCBSM and BCN appeals process. This requires that, within thirty (30) days ofan adverse determination or breach of this Agreement, Provider file a writtenresponse documenting Provider’s position. Within thirty (30) days of receipt ofsufficient documentation, BCBSM and BCN will schedule an informalconference with the Provider in an effort to resolve the dispute. If theconference fails to resolve the dispute, Provider may pursue independentreview or remedies.

 

**ARTICLE XIIBUSINESS CONTINUITY AND DISASTER**

**RECOVERY**

 

12.1                           *Business Continuity Plan.*Provider shall institute a businesscontinuity plan that includes prudent executive succession planning andexecutive travel policies consistent with industry standards.

 

12.2                           *Disaster Recovery Plan.*

 

A.                                   Provider shall maintain and document acomprehensive Disaster Recovery program for all technical systems (computer,telephone, fax, etc.).

 

B.                                     Provider’s disaster recovery plan shallprovide for the backup, storage and restoration of data and information usedand generated as a result of this Agreement.

 

C.                                     Provider’s disaster recovery plan shallenable Provider to perform its duties, obligations and services under thisAgreement within forth-eight (48) hours of a disaster.

 

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D.                                    Disaster means any occurrence, natural orotherwise, that materially affects Provider’s ability to perform its dutiesand obligations under this Agreement.

 

E.                                      Provider’s disaster recovery plan shallcomply with HIPAA regulations and good business practices.

 

**ARTICLE XIII**

**SERVICEMARKS**

 

13.1                           It is understood by the parties that the BlueCross and Blue Shield Trademarks (the Blue Cross and Blue Shield names andsymbols) are owned by the Blue Cross and Blue Shield Association and licensedby the Association to Local Blue Cross and/or Blue Shield Plans and theiraffiliates for their respective licensed geographical areas. Accordingly,Provider will not obtain under this Agreement any rights to these Marks andwill not conduct any activity or make any statement, written or oral, that may constitutean infringement upon the use of these marks by the Blue Cross and Blue ShieldAssociation or any licensed Blue Cross and/or Blue Shield plan. Provider willindemnify and hold harmless BCBSA and any licensed Plan against any action,claim or loss arising from any infringement by Provider including all costs andreasonable attorneys’ fees.

 

13.2                           It is also understood by the parties that anytrademarks owned by either party are its exclusive property and may onlybe used as permitted by or licensed by it. Accordingly, no party will obtainany rights to the other’s marks and will not conduct any activity or make anystatement, written or oral, which in any manner may constitute aninfringement upon the other party’s use of its marks. Each party will holdharmless and indemnify the other against any action, claim or loss arising fromany infringement of its marks, including all costs and reasonable attorneys’fees.

 

13.3                           This Article survives termination orexpiration of this Agreement.

 

**ARTICLE XIV**

**MARKETINGPROTOCOL**

 

14.1                           Each party to this Agreement has considerablecomplementary expertise in various aspects of the marketing and provision ofSpecialty Pharmacy services. The parties shall coordinate their efforts in ateaming arrangement to more effectively and efficiently promote theirrespective services to existing and potential BCBSM and BCN customers byestablishing the following marketing arrangement. Any limitations are based onthe fact that BCBSM, BCN and Provider have shared and will be sharingconfidential information with respect to certain groups such as utilizationdata or prescribing patterns of physicians within BCBSM’s and BCN’s servicearea, which would provide Provider with a

 

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competitive advantage in submitting an independent competing bid forany BCBSM and BCN group or potential group.

 

14.2                           BCBSM and BCN shall have the soleresponsibility for marketing specialty pharmacy drug plans to Michiganheadquartered groups. However, the provisions of this Article do not applyto any federal government group plan; to any group that is headquarteredoutside the State of Michigan but has a division, subsidiary or affiliatelocated in the State of Michigan; or third party administrators, health plancarriers (e.g. health maintenance organizations, preferred providerorganizations etc.) or other insurance companies.

 

14.3                           In recognition of this teaming arrangement,with respect to existing and potential groups, BCBSM, BCN and Provider shallcoordinate with and convey to them the specialty pharmacy program offered bythem as a team under this Agreement. However, the parties recognize that fromtime to time a potential group may directly approach a party to obtain aseparate bid or to otherwise discuss establishing an independent relationshipwith such party relative to one or more of the services that are intended to bejointly offered by the parties under this Agreement. Under such circumstances,the party that is approached by the potential group shall immediately notifythe other party that it has been contacted and shall advise the potential groupthat a teaming arrangement is place which requires the parties to submit ajoint response to the bid for the services that are contemplated by thisAgreement.

 

The party shall also describe to the potential group the value of theteaming arrangement and request that the potential group allow a joint responseto the bid. If the potential group declines the request for a joint response tothe bid and instead insists on receiving a separate bid or having independentdiscussions with a party, then before such bid or discussions may occur,the party will notify the other party that it believes it has fulfilled therequirements of this paragraph and intends to proceed with a separate bid ordiscussions. The party not bidding or having such discussions may neverthelesshave contacts with a potential group that is otherwise permissible.Furthermore, following the Group’s decision, the parties will discuss thecircumstances surrounding the decision; the parties shall discuss thecircumstances surrounding the decision and devise ways to strengthen theirteaming arrangement.

 

14.4                           This Section shall not apply if apotential group (a) expressly excludes a party from bidding on itsbusiness after being notified of the relationship between the parties; (b) requestsseparate bids from any of the parties; or (c) specifies that it no longerdesires to have its specialty pharmacy drug program administered by the partiespursuant to the terms of this Agreement; or d) is an existing Provider accountthat includes retail prescription drug services. In such cases, the parties may separatelymarket their services to the group. However, based on the substantial volume ofBCBSM’s and BCN’s business and the resulting increased efficiencies andfinancial benefits that accrue to all parties, during the term of this

 

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Agreement, Provider agrees that the pricing in Addendum A shall be noless favorable than the pricing Provider offers to any third party forcomparable volume, services and prescription drug plans. Upon BCBSM’s or BCN’srequest, Provider shall warrant that it has complied with this Section.

 

14.5                           The provisions of this Article will notprohibit Provider from providing similar specialty pharmacy services to otherBlue Cross Blue Shield Plans, carriers, HMO’s, third party administrators, orother similar entities (whether or not these entities are competitors of BCBSMand/or BCN). BCBSM and BCN reserve no rights with respect to Provider’s otherbusiness, except to the extent that any activity may be reasonablyconstrued as in conflict with BCBSM’s and BCN’s rights as set forth herein. Incase of such conflict, provider shall not provide such other services. Financialinterest in a competing organization consisting of ownership of publicly tradedsecurities is not considered a conflict of interest for the purposes of thisparagraph.

 

14.6                           During the term of this Agreement and for oneyear after, Provider agrees that no Provider personnel working on BCBSM and BCNbusiness will have any financial interest in any person or organization thatcompetes with BCBSM without BCBSM’s prior written consent. This provision doesnot require disclosure if the financial interest in a competing organizationconsists of ownership of publicly traded securities.

 

14.7                           This Article will not prevent BCBSM andBCN from entering into other marketing arrangements with otherproviders/vendors or PBM’s relating to specialty, retail or mail order pharmacybusiness.

 

14.8                           This Article will not prevent BCBSM andBCN from contracting with other providers/vendors or PBM’s with respect tospecialty, retail or mail order pharmacy business.

 

**ARTICLE XV**

**MISCELLANEOUS**

 

15.1                           *Notices*- Unless otherwise permitted by theAgreement, all notices required under this Agreement shall be in writing andsent by First Class mail, postage paid, addressed as follows:

 

If to BCBSM:

 

Blue Cross Blue Shield of Michigan

C/o Pharmacy Services

MC B774

27000 W. 11 Mile Road.

Southfield Michigan 48034

Attention: Director Pharmacy Services

 

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If to BCN:

 

Blue Care Network of Michigan C/o Pharmacy Services MC C303

20500 Civic Center Drive Southfield, Ml 48076 Attention: Director of Pharmacy

 

If Care Management for BCN

Blue Care Network of Michigan

C/o Pharmacy Services

MC C336

20500 Civic Center Drive

Southfield, Ml 48076

Attention: Director of Care Management

 

If Provider Appeals to BCN:

**Provider**

Blue Care Network of Michigan

Appeals/Care Management - MC C336

P.O. Box 5043

Southfield, Ml 48086-5043

Phone (248) 799-6312

Fax (248) 223-5474

 

If Member Appeals to BCN:

**Member**

Blue Care Network of Michigan

Appeals and Grievance Unit- MC C248

P.O. Box 248

Southfield, Ml 48086-5043

Phone 1-800-662-6667

Fax 1-800-458-0716

 

 

If to Provider:

Corporate

Option Care, Inc.

Attn: General Counsel

485 Half Day Road

Suite 300

Buffalo Grove, IL 60089

 

Copy to:

Corporate

Option Care, Inc.

Attn: CEO

485 Half Day Road

Suite 300

Buffalo Grove, IL 60089

 

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Copyto:

 

OptionCare, Inc.

Attn:EVP of Specialty Operations

1350Highland Dr.

SuiteD

AnnArbor, Ml 48108

 

15.2                           *Governing Law and Venue*- This Agreement shall be construed andgoverned in accordance with the laws of the State of Michigan, without regardto any conflicts of law principles applied in that State. Any suit orproceeding relating to this Agreement shall be brought only in Oakland County,Michigan. Each party consents to the exclusive personal jurisdiction and venueof the courts, state and federal, located in Oakland County, Michigan. Providerwill, nevertheless, comply with all applicable laws and regulations governingits operations, including but not limited to Michigan law and the law in theState in which Provider’s specialty pharmacy is located.

 

15.3                           *Enforceability*- The invalidity or unenforceability of anyof the terms or provisions hereof shall not affect the validity orenforceability of any other term or provision.

 

15.4                           *Section Headings*- Section headings are inserted for convenienceonly and shall not be used in any way to construe the terms of this Agreement.

 

15.5                           *Entire Agreement*- This Agreement, together with the Addendahereto, embodies the entire understanding of the parties in relation to thesubject matter hereof, superseding any prior agreements, understandings ornegotiations, whether written or oral, and shall be binding upon theirsuccessors and assigns.

 

15.6                           *Illegal Provisions*- If a court determines that any provision ofthis Agreement is illegal, the remainder of the Agreement will remain in fullforce.

 

15.7                           *Subcontract/Delegation  —*Provider may not delegate or subcontract this Agreement without theprior written consent of BCBSM and BCN and the express consent of the assigneeto be bound by all of the terms and conditions of the Agreement. If BCBSM andBCN consent and Provider subcontracts or delegates any responsibilities underthis Agreement, such responsibilities must

 

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beperformed under Provider’s guidance and Provider remains fully responsible forthe performance of such responsibilities.

 

15.8                           *Outsourcing*- Provider may not outsource any work underoutside the United States this Agreement without the written consent of BCBSMand BCN.

 

15.9                           *Exclusive Provider -*Provider is the sole Specialty Pharmacy mailorder provider for BCBSM’s and BCN’s Specialty Pharmacy program. This does notmean, however, that BCBSM and BCN must obtain Specialty Pharmacy exclusively fromProvider.

 

15.10                     *Preferred Customer Status*- Provider will treat BCBSM and BCN as apreferred customer to any BCBSM/BCN requests for enhancements or productchanges.

 

15.11                     *Conflicts of Interest*- Provider will, at all times, act in, andprotect BCBSM’s and BCN’s, their Groups’ and Members’ best interests whenproviding services under this Agreement. Provider will not engage in anyactivity that could be reasonably perceived as being directly or indirectly asin conflict with its obligations to BCBSM, BCN, their Groups or members.

 

15.12                     *Non-discrimination -*Pharmacy shall provide Covered Services toMembers without regard to health status or health care needs of such Members. Pharmacyshall not differentiate or discriminate in the provision of Covered Services toMembers on the basis of race, gender, creed, ancestry, lawful occupation, age,religion, marital status, sexual orientation, mental or physical disabilitycolor, national origin, place of residence, health status, source of paymentfor services, cost or extent of Covered Services required, status as Members,or any other grounds prohibited by law or this Agreement. Pharmacy shallprovide Covered Services to Members: (a) in no less than the same manner and inaccordance with at least the same standards as offered to Provider’s patientswho are not Members; and (b) in accordance with at least the same standard ofpractice, care, skill and diligence customarily used by similarly situatedpharmacies at the time at which such services are rendered.

 

15.13                     *No Third Party Rights -*This Agreement is intended solely for thebenefit of the parties hereto and there is no intention, express or otherwise,to create rights or interests for any party or persons other than BCBSM, BCNand Provider. This Agreement shall be enforceable only by the parties hereto andno other person shall have the right to enforcement of the provisions containedherein, including, without limitation, any BCBSM/BCN customer, member or anyother individual.

 

15.14                     *Advertisement -*Provider will not, in any manner advertise orpublish the fact that it has furnished, or contracted to furnish, services toBCBSM or BCN without BCBSM’s and BCN’s prior written consent.

 

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15.15                     *Changes In Corporate Status*- Subject to applicable law,Provider will provide BCBSM and BCN advance written notice of any changes orprojected changes in its corporate status, including changes in existingshareholders, mergers, consolidations, and sale of all or substantially all ofits assets. Provider will provide at least five months’ notice of such changes.

 

15.16                     *Contact with Groups*- The parties will agree on how contacts withgroups will be handled. In general, however, Provider will not initiatecommunication with any BCBSM or BCN Group without the prior written consent ofBCBSM’s and BCN’s Director of Pharmacy Services Administration. Once consent isgiven, BCBSM and BCN will be afforded the opportunity to participate in allcontacts between Provider and Group.

 

15.17                     *Force Majeure*- Subject to Section 2.11(s), none of theparties will be liable, in any manner, for failure to meet its obligationsunder this Agreement if that failure is directly or indirectly caused bymatters which are beyond the party’s reasonable control, including any delay orfailure due to strikes or labor disputes; earthquakes, storms, floods or otherextreme weather or acts of God; riots, fires, explosions, embargoes, war orother outbreak of hostilities; delay of carriers, suppliers ortelecommunication providers; or government acts or regulations, including anychange in law. “Law” means any federal, state, or local constitution, charter,act, statute, law, ordinance, code, rule, regulation, or order, or any otherbinding legislative, executive, judicial or administrative action.

 

15.18                     *Signature -*Signature on this page binds the parties tothe entire Agreement as defined in Article I, and warrants that signatory isauthorized to sign this Agreement.

 

IN WITNESS WHEREOF, and intending to belegally bound, the parties have executed this Agreement on the date set forthbelow:

 
| PROVIDER          |   | BLUE CROSS BLUE SHIELD |
|-------------------|--------|------------------------|
|              |   | OF MICHIGAN            |
|              |   |                   |
| BY:               |   |                   | BY: |   |
|              |   |                   |   |   |
| TITLE:            |   |                   | TITLE: |   |
|              |   |                   |   |   |
| DATE:             |   |                   | DATE: |   |
|              |   |                   |
|              |   |                   |
|              |   |                   |
| BLUE CARE NETWORK |   | BLUE CROSS BLUE SHIELD |
| OF MICHIGAN       |   | OF MICHIGAN            |
|              |   |                   |
|              |   |                   |
| BY:               |   |                   | BY: |   |
|              |   |                   |   |   |
| TITLE:            |   |                   | TITLE: |   |
|              |   |                   |   |   |
| DATE:             |   |                   | DATE: |   |

 

 

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ADDENDUM A

 

SPECIALTY PHARMACY PROGRAM

REIMBURSEMENT/RATES

 

A.Covered Services Provided To Members. Under the Specialty Pharmacyprogram, reimbursement for Covered Services provided to Members will be basedon the following formula: Drug Product Cost minus Member co-payment anddeductible equals the reimbursement to Provider.

 

DrugProduct Cost

 

1.             Price List. Reimbursementfor Specialty Medications listed on Addendum A-1 (the Price List) is [ * ]as described in the Provider’sresponse to the RFP and mutually agreed upon by the parties in writing(Addendum A-1*).

 

2.             Generics Drugs not on the PriceList.

 

A.            Reimbursement forSpecialty Medications is **[ * ]**for drugs: 1) approved as Generic Drugsbeginning when the drug comes to market as a **[ * ]**and ending when the drug is placed on the**[ * ]** list; or 2) the drug is not referenced on the Price List and is placedon the **[ * ]** list.

 

B.            When the drug isplaced on the **[ * ]**list, the **[ * ]**list price applies.

 

C.            Immediately upon thedrug being placed on the **[ * ]**list the parties agree to negotiate an **[ * ]** within60 days (or until such agreement is reached) for the Specialty Medication forplacement on the Price List. Such negotiated price will replace the **[ * ]** at thattime. The target reference for the **[ * ]** will be the **[ * ]**.

 

D.            Dispense As Written(DAW) requests will be processed and paid according the Member’s Plan Design.

 

3.             New Brand Drugs. Reimbursementfor Specialty Medications that are Brand Drugs with new GCNs is **[ * ]**. Within sixty (60) days of introduction of the productand the **[ * ]**is established (or as soon as an agreementcan be reached), the parties will negotiate an **[ * ]**for the Specialty Medication forplacement on the Price List.

 

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*Addendum A-1 lists the **[ * ]**for Specialty Medications byNDC. In the event that an NDC becomes obsolete, Provider shall use thereplacement NDC upon the date that the previous NDC becomes obsolete asindicated by First Data Bank, the FDA or any other mutually agreed upon source.Provider shall immediately

 

35

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notify BCBSM and BCN of thenew NDC. The **[ * ]**on the obsolete NDC will apply to anyreplacement NDC.

 

MemberCo-payment

 

Theco-payment level for Members under the Specialty Pharmacy program will bedetermined by each Group (or in the case of individual coverage, individual)purchasing the Specialty Medication under this Agreement and will vary perGroup (or individual in the case of individual coverage).

 

Deductible

 

Thedeductible for Members under the Specialty Pharmacy program will be determinedby each Group (or individual in the case of individual coverage) purchasing theSpecialty Medication under this Agreement and will vary per Group (orindividual in the case of individual coverage).

 

DispensingFee

 

**[ * ]**

 

PharmacyIncentive

 

**[ * ]**

 

Ancillary Products

 

Providershall dispense Ancillary Products to Members with Specialty Medications. TheDrug Product Cost includes the cost of Ancillary Products. BCBSM and BCN willnot provide additional reimbursement to Provider for Ancillary Product costs.

 

Programsand Services

 

TheDrug Product Cost includes the costs of all programs and services included inthe Provider’s service program and/or provided to the Member by the Provider,including but not limited to focused therapy management. Additionalreimbursement will not be made to the Provider for these costs unless otherwiseagreed to by the parties in writing.

 

B. Covered ServicesProvided To Physicians And Billed To BCBSM/BCN. When BCBSM and BCN invokethe option to include Covered Services provided to Physicians under the thisAgreement, at a date to be determined by BCBSM and BCN, reimbursement forCovered Services provided to Physicians and billed by Provider to BCBSM/BCNwill equal the Drug Product Cost as set forth below:

 

36

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DrugProduct Cost

 

Reimbursementfor Specialty Medications is **[ * ]**

 

Reimbursementfor Specialty Medications **[ * ]**is **[ * ]**. Once an **[ * ]** isestablished, pricing shall change to **[ * ]****.**

 

Dispensing/OtherFees

 

**[ * ]**

 

PharmacyIncentive

 

**[ * ]**

 

AncillaryProducts

 

IfProvider dispenses Ancillary Products to Physicians, Provider may bill Physiciansdirectly for these costs but BCBSM and BCN will not reimburse Provider forthese costs.

 

C. Covered ServicesProvided And Billed To Physicians. When BCBSM and BCN invoke the option toinclude Covered Services provided to Physicians under the pricing provided inthis Agreement, at a date to be determined by BCBSM and BCN, reimbursement forCovered Services provided to Physicians and billed by Provider to Physicianswill equal the Drug Product Cost as set forth below:

 

DrugProduct Cost

 

Reimbursementfor Specialty Medications is**[ * ]**.

 

Reimbursementfor Specialty Medications **[ * ]**is **[ * ]**. Once an **[ * ]** isestablished, pricing shall change to **[ * ]**.

 

Dispensing/OtherFees

 

**[ * ]**.

 

PharmacyIncentive

 

**[ * ]**

 

37

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AncillaryProducts

 

IfProvider dispenses Ancillary Products to Physicians, Provider may, billPhysicians directly for these costs but BCBSM and BCN will not reimburseProvider for these costs.

 

D.                                    No Other Remuneration

 

No other remuneration of anykind will be paid to Provider in connection with this Agreement by BCBSM or BCNor others, including but not limited to administrative fees, service fees,shipping and handling costs, or sales tax, unless otherwise agreed to by theparties in writing.

 

E.                                      **[ * ]**

 

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ADDENDUMA-1

 

**[ * ]  — NOTE: Addendum A-1 has been deleted as itis a confidential drug pricing schedule.**

 
|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

 

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|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

 

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|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

 

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|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

 

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ADDENDUM B BUSINESS

ASSOCIATE ADDENDUM

 

1.             **Applicable Law and Policy.**Provider acknowledges thatpursuant to this Agreement, it performs services or assists BCBSM and BCN inthe performance of a function or service that involves the use or disclosure ofa BCBSM/BCN member’s individually identifiable health information (IIHI). Consequently,the Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”),and stricter state laws, as applicable, require that the IIHI be protected frominappropriate uses or disclosures.

 

2.             **Use or Disclosure of IIHI.**IIHI, in electronic form orotherwise, may be used or disclosed only when required by law or as otherwiseprovided in this Agreement, unless the prior and specific informed writtenconsent of the person to whom the data or information pertains has beenobtained. Provider shall not, and shall ensure that its directors, officers,employees, contractors and agents, do not, use or disclose IIHI received fromBCBSM or BCN in any manner that would constitute a violation of applicable law.

 

Provider shall not and shallensure that its directors, officers, employees, contractors, and agents do notdisclose IIHI received from BCBSM or BCN in any manner that would constitute aviolation of applicable law if disclosed by BCBSM or BCN, except that Providermay disclose IIHI in a manner permitted pursuant to this Agreement or asrequired by law. To the extent Provider discloses IIHI to a third party,Provider must obtain, prior to making any such disclosure: (i) reasonableassurances from such third party that such IIHI will be held confidential asprovided pursuant to this Agreement, and only disclosed as required by law orfor the purposes for which it was disclosed to such third party; and (ii) anagreement from such third party to immediately notify Provider of any breachesof the confidentiality of the IIHI, to the extent it has obtained knowledge ofsuch breach. Provider agrees to indemnify and hold BCBSM and BCN harmless fromany and all liability, damages, costs (including reasonable attorney fees andcosts) and expenses imposed upon or asserted against BCBSM and/or BCN arisingout of any claims, demands, awards, settlements or judgments relating toProvider’s use or disclosure of IIHI contrary to the provisions of thisAgreement.

 

3.             **Safeguards Against Misuse of Information.**Provider agreesthat it will implement all appropriate safeguards to prevent the use ordisclosure of IIHI other than pursuant to the terms and conditions of thisAgreement. Such safeguards include administrative, physical, and technicalsafeguards that reasonably and appropriately protect the Confidentiality, Integrity,and Availability (as those terms are defined in 45 CFR §164.304) of theelectronic IIHI that it creates, receives, maintains, or transmits on behalf ofBCBSM and/or BCN as required by 45 CFR Part 160 and Subparts A and C of Part164 (“Security Rule”).

 

43

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**4.             Reportingof Disclosures of I1HI.**Provider shall, within five (5) days of becoming aware of a SecurityIncident (as defined in 45 CFR §164.304) or of a disclosure of IIHI inviolation of this Agreement by Provider, its officers, directors, employees,contractors, or agents, or by a third party to which Provider disclosed IIHI pursuantto Section 2 (Use or Disclosure of IIHI), report any such disclosure to BCBSM andBCN.

 

5.             **Agreements by ThirdParties.**Provider shall enter into an agreement with any agentor subcontractor that will have access to IIHI that is received from, orcreated or received by Provider on behalf of, BCBSM and BCN pursuant to whichsuch agent or subcontractor agrees to be bound by the same restrictions, terms,and conditions that apply to Provider pursuant to this Agreement with respectto such IIHI, including that such agent or subcontractor implement reasonableand appropriate safeguards to protect it as described in Section 3 (SafeguardsAgainst Misuse of Information).

 

6.             **Access toInformation.**Within five (5) days of a request by BCBSM or BCNfor access to IIHI about a member, Provider shall make available to BCBSM orsuch IIHI for so long as such information is maintained by Provider. In theevent any individual requests access to IIHI directly from Provider, Providershall within two (2) days forward such request to BCBSM or BCN. Any denials ofaccess to the IIHI requested shall be the responsibility of BCBSM or BCN.

 

7.             **Availability ofI1HI for Amendment.**Within ten (10) days of receipt of a requestfrom BCBSM or BCN for the amendment of an individual’s IIHI, Provider shallprovide such information to BCBSM or BCN for amendment and incorporate any suchamendments in the IIHI as required by 45 CFR § 164.526.

 

8.             **Accounting ofDisclosures.**Within ten (10) days of notice by BCBSM or BCN toProvider that it has received a request for an accounting of disclosures ofIIHI regarding an individual during the six (6) years prior to the date onwhich the accounting was requested, Provider shall make available to BCBSM orBCN such information as is in Provider’s possession and is required for BCBSMand BCN to make the accounting required by 45 CFR §164.528. At a minimum,Provider shall provide BCBSM and BCN with the following information: (i) thedate of the disclosure; (ii) the name of the entity or person who received theIIHI, and if known, the address of such entity or person; (iii) a briefdescription of the IIHI disclosed; and (iv) a brief statement of the purpose ofsuch disclosure which includes an explanation of the basis for such disclosure.In the event the request for an accounting is delivered directly to Provider,Provider shall within two (2) days forward such request to BCBSM and BCN. Itshall be BCBSM’s and BCN’s responsibility to prepare and deliver any suchaccounting requested. Provider hereby agrees to implement an appropriaterecordkeeping process to enable it to comply with the requirements of thisSection 8.

 

9.             **Availability ofBooks and Records.**Provider hereby agrees to make its internalpractices, books, and records relating to the use and disclosure of IIHIreceived from, or created or received by Provider on behalf of, BCBSM and/orBCN available to

 

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theSecretary of the Department of Health and Human Services for purposes ofdetermining BCBSM’s and/or BCN’s and Provider’s compliance with the Standardfor Privacy of Individually Identifiable Health Information, 45 CFR Parts 160and 164 (“Privacy Standards”).

 

10.           **Compliance withTransaction Standards.**If Provider conducts in whole or part electronicTransactions on behalf of Organization for which Department of Health and HumanServices (DHHS) has established Standards, Provider will comply, and will requireany subcontractor or agent it involves with the conduct of such Transactions tocomply, with each applicable requirement of the Transaction Rule, 45 CFR Part162. Provider will not enter into, or permit its subcontractors or agents toenter into, any Trading Partner Agreement in connection with the conduct ofStandard Transactions on behalf of Organization that:

 

•                                         Changes the definition, data condition, oruse of a data element or segment in a Standard Transaction;

•                                         Adds any data element or segment to themaximum defined data set;

•                                         Uses any code or data element that is marked “notused” in the Standard Transaction’s implementation specification or is not in theStandard Transaction’s implementation specification; or

•                                         Changes the meaning or intent of the StandardTransaction’s implementation specification.

 

11.           **Amendment toAgreement.**Upon the effective date of any amendment to the PrivacyStandards or the Security Rule or the effective date of any other final regulationswith respect to IIHI, this Section 11 and the Agreement of which it is partwill automatically be amended so that the obligations they impose on Providershall remain in compliance with such regulations.

 

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ADDENDUM C SPECIALTY PHARMACY PROGRAM

REQUIREMENTS

 

Program applicants will berequired to initially meet and continue to meet the following standards andBCBSM’s/BCN’s policies and procedures, which are subject to change from time totime, in addition to the Specialty Pharmacy Agreement.

 

**Note:**Headingsin this document are for illustrative purposes only. Standards are not limitedto the headings under which they appear. Most standards listed are applicableto multiple headings.

 

**I.             STANDARDSFOR MAINTAINING QUALITY HEALTH CARE**

 

**A.            Dispensingand Delivery**

 

1.                                       Agreeto dispense the quantity of prescription drugs indicated on the prescription,up to a maximum of a ninety **[ * ]** daysupply per prescription or refill, or as otherwise permitted under the Member’sCertificate and Program Requirements.

 

2.                                       Agreeto dispense all prescription drugs in a manner that conforms to all applicable federal,state and local laws, standards of professional conduct and practice prevailingin the community, all BCBSM and BCN reimbursement policies and requirements,and the terms and conditions of the Specialty Pharmacy Agreement.

 

3.                                       Agreeto dispense all prescription drugs according to manufacturer’s recommendation.All prescriptions will be sent in a manner to assure the integrity of theprescriptions per manufacturer specifications, including temperature controls.

 

4.                                       Provideunit dose preparations of prescriptions for those injectable medications where stabilityis not an issue

 

5.                                       Agreeto dispense covered services in accordance with BCBSM’s and BCN’s prior authorizationrequirements.

 

6.                                      Agreeto provide BCBSM and BCN with documentation of dispensing and non-dispensing errorsand how each of these errors was corrected.

 

**B.****                                   ****Quality Assurance**

 

1.                                       Agreeto obtain and maintain accreditation in pharmacy from a nationally recognized accreditingbody, as determined by BCBSM and BCN (e.g., JCAHO, ACHC, etc.). BCBSM and BCNhaving determined that ACHC is acceptable accreditation. Provider shall obtainand maintain their Accreditation Commission of Health Care (ACHC) accreditationin Specialty Pharmacy.

 

2.                                       Havea comprehensive Quality Assurance/Quality Improvement (QA/QI) program and committo the following requirements and standards:

 

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a.                                       UseBest efforts to obtain a clean and legible prescription. Contact physician’s officeif script is not legible.

 

b.                                      Guaranteea non-dispensing error rate of [ * ] or less, which includes but is not limitedto clerical errors, incorrect address, incorrect co-pays, physician informationand errors which impact the delivery and claim processing of orders.

 

c.                                       Guaranteea dispensing error rate of [ * ] or less, which includes, but is not limited toincorrect medication, incorrect dosage, incorrect dosing information and any medicationerrors.

 

3.                                       Haveformal prescription quality assurance and error prevention policies, proceduresand protocols, and maintain documentation of utilization review activities. Inaddition, provide copies to BCBSM and BCN of protocols used to ensure membersafety for specialty medication dispensed to members; maintain comprehensivemember profiling (medical histories) for all enrolled members; requestmedication histories from each new member and maintain adequate drug riskanalysis procedures.

 

4.                                       Supporta comprehensive Hemophilia Care Management program, including the provision ofnursing services.

 

5.                                       Supporta comprehensive Compounding Management program, and upon request by BCBSM andBCN, support a comprehensive program for IVIG Distribution Management, and/orChemotherapy Care Management.

 

6.                                       Uponrequest by BCBSM and/or BCN, provide customize services to meet the unique clinicaland psycho-social-economic needs of patients.

 

7.                                       Havea reliable product recall policy and procedures.

 

8.                                       Acquireall products and supplies from reputable manufacturers.

 

9.                                       Pro-activelycontact prescribing physicians to confirm prescriptions, dosing, regimen, etc. asappropriate.

 

10.                                 Demonstratehow automation is used and have acceptable quality control policies and proceduresto assure quality care.

 

C.                                     Member Education/Assistance and Monitoring

 

1.                                       Educatemembers about their disease state (including long-term and short-term effectsif treated and untreated) and their medication, including benefits, sideeffects and drug interactions.

 

2.                                       Coordinatemember education and management with BCBSM’s and/or BCN’s case managementdepartments.

 

3.                                       Includehigh-quality educational materials as necessary, subject to BCBSM and BCN priorreview and written approval.

 

4.                                       DocumentBCBSM and BCN member compliance and other applicable clinical and quality oflife data as applicable to members’ therapy regimens.

 

5.                                       Provideinstructions to members on use of medications and information received in on linedrug messages (e.g., DUR).

 

6.                                       Providemember issue triage and resolution process for program inquiries.

 

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D.                                    Credentialing

 

1.                                       Haveall licenses and permits required by local, state and federal authoritiesapplicable to dispensing specialty medications (including certain controlledmedications) as well as wholesale / distribution licenses (and registrations)to service BCBSM and BCN physicians.

 

2.                                       Complywith all state and federal requirements applicable to dispensing and mailing prescriptions.

 

3.                                       ProvideBCBSM and BCN with documentation of provider’s last inspection by its State Boardof Pharmacy and all other inspections (e.g., flow hood inspection, etc.)

 

E.                                      Staffing

 

1                                          Employor contract with pharmacists that have and maintain current/valid State Boardof Pharmacy Licenses that contain no restrictions.

 

2.             Re-verify pharmacist, technician, RN, LPN, etc.licensure annually.

 

3.                                       Maintaina pharmacist-to-technician ratio consistent with good pharmacy practice standardsas approved by BCBSM and BCN or as specified by the applicable State Board ofPharmacy.

 

4.                                       Maintainrigorous initial training and ongoing training for all clinicians.

 

5.                                       Provideall (non-clinician) associates who will service members, with comprehensive trainingregarding the standards for triaging clinical issues to a clinician.

 

6.                                       Providecomprehensive training for all associates (clinicians and non-clinicians) whowill service prescribing physicians or physician’s office staff.

 

II.                                     STANDARDS FOR CONTROLLING HEALTH CARE COSTS 

A.                                   Dispensing

 

1                                          Dispensegeneric equivalent prescription drugs unless “Dispense as Written” is required bythe physician or unless the member requests a brand name prescription drug. Ifa member requests a brand name prescription drug when a generic drug isavailable, the member is responsible for paying the difference in cost betweenthe brand and generic drugs, as well as the member co-payment and deductible ifrequired by applicable Plan Design.

 

2.                                       Shipdispensed specialty medication and ancillary products to members at provider’s expense.

 

3.                                       Administera prior authorization program for all or select products covered by BCBSM and/orBCN, at BCBSM’s and/or BCN’s discretion, subject to existing standards and criteriaand standards developed by BCBSM, BCN and provider. BCBSM and BCN will havefinal approval of criteria and standards.

 

4.                                       Pro-activelysupport the use of generic drugs whenever available.

 

5.                                       Possessspecific programs, protocols, tools, etc., to manage or prevent waste.

 

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6.                                       Agreeto comply with BCBSM and BCN formulary, clinical programs and drug policies.

 

B.                                     Pricing

 

[ * ]

 

C.                                     Payments

 

1.                                       Agreeto issue a credit to the account of BCBSM, BCN, a physician or the member,pursuant to procedures outlined by BCBSM and BCN, if there is an overpayment byone of these parties. In the event of an under-payment by BCBSM, BCN, aphysician or a member, agree to obtain payment pursuant to BCBSM and BCNpolicies. In addition, Provider agrees to reconcile overpayments andunderpayments and provide reports to BCBSM and BCN pursuant to theirrequirements.

 

2.                                       Agreeto cooperate with the BCBSM’s and BCN’s Audit and Compliance Units, andrecovery of any overages identified as a result of an audit.

 

III.                                 STANDARDS FOR ASSURING APPROPRIATE UTILIZATIONOF HEALTH CARE SERVICES

 

1                                          Providebest-in-class utilization management programs to improve therapy adherence, appropriateutilization management standards and patient outcomes

 

2.                                       Complywith periodic audits of claims and verification of performance standards. Once auditsare complete, that audit is considered closed and is no longer eligible forfurther audits. However, this shall not prevent BCBSM and BCN or Provider from complyingwith requests for audit from external sources (such as customer groups,government agencies, etc.).

 

3.                                       ProvideBCBSM and BCN with a comprehensive package of reports, at least monthly, thatdetail utilization by type (Pharmacy / Medical), billing report, prescriber,patient and other factors determined by BCBSM and BCN.

 

**IV.****                               ****STANDARDS FOR ASSURINGREASONABLE LEVELS OF ACCESS TO HEALTH CARE SERVICES**

 

1                                          Haveacceptable hours of operation, as determined by BCBSM and BCN.

 

2.                                       Shipdispensed prescription drugs to members at provider’s expense and guarantee delivery.In the event of a claim of non-delivery and provider cannot prove that deliveryoccurred, provider must immediately replace the order without charge and shipthe order via overnight mail.

 

3.                                       Havean established infrastructure to fill prescriptions at a rate sufficient tomeet the needs of BCBSM and BCN member population

 

4.                                       Havesufficient capacity and experience in the specialty pharmacy business and the infrastructureto support the dispensing of at least 50,000 specialty pharmacy prescriptionsper year.

 

5.                                       Agreeto dispense administration supplies to Members, as appropriate, with injectableorders at all inclusive pricing.

 

6.                                       Guaranteea [ * ] or less out-of-stock rate, excluding manufacturer backorders.

 

7.                                       Havethe ability to provide all specialty medications and ancillary products coveredby BCBSM and BCN.

 

8.                                       Supporta next-day delivery capability.

 

9.                                       Providesame-day (stat) delivery capabilities directly (or in partnership with a Michiganbased pharmacy capable of meeting this service requirement).

 

10.                                 Agreenot to return unfilled any prescription to a member unless provider provides a writtenexplanation to the member stating the reason for the return of the prescriptionand advising the member and the member’s physician of the member’s rights toappeal the coverage denial.

 

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11.                                 Guaranteethat [ * ] of prescriptions requiring no intervention (including out-of-stock) willbe sent or scheduled to be sent within an average of 5 calendar days from thedate the prescription is received, but none shall exceed 10 calendar days,excluding manufacturer back order without notification to BCBSN and BCN. Ordersreceived after normal business hours will be considered to have been receivedon the next business day.

 

12.                                 Guaranteethat [ * ] of prescriptions requiring intervention (including out-of-stock)will be sent or scheduled to be sent within [ * ] calendar days from the datethe prescription is received, but none shall exceed [ * ] calendar days withoutnotification to BCBSM and BCN, excluding manufacturer back order. Ordersreceived after normal business hours will be considered to have been receivedon the next business day.

 

13.                                 Havean owned and operated Michigan- based dispensing facility to support BCBSM’s andBCN’s member population or agree to provide specialty medications inassociation with a local pharmacy in emergency and ‘stat’ of medication withinthe same day to any geographic location within Michigan or in locations wheresignificant BCBSM or BCN population resides outside of Michigan.

 

14.                                 Havean established disaster recovery plan that enables provider to perform itsduties, obligations and services under this program within forty-eight (48)hours of a disaster.

 

15.                                 Provideeasy access to BCBSM and BCN members for order requests, refill requests, documentation,etc.

 

V.            OTHER STANDARDS

 

A.                                   Telephone, Written and InternetCommunications

 

1.                                       Providededicated Toll-free telephone access for use by members, BCBSM and BCN and physiciansand a dedicated customer service center to handle BCBSM and BCN member calls. ProvideTDD-TTY services for hearing impaired to access Customer Service Department.

 

2.                                       Locatecall center within the continental US and agree to no outsourcing withoutwritten permission from BCBSM and BCN.

 

3.                                       Guaranteethat less than [ * ]% of calls will be abandoned; less than [ * ] % of callswill be blocked and that the average time to answer a call is less than [ * ].

 

4.                                       Maintaina website that contains updated information regarding, among other things: on lineorder and status, prescription pricing information, coverage and benefit plan information,health news information and health assessment tools and resources.

 

5.                                       Clearlyoffer the ability to speak with a pharmacist, nurse and administrative support associatein all communications with members (telephone, writing, publications, etc.) andprovide a client service team which will respond to BCBSM’s and BCN’s questions,including but not limited to member concerns, claim payments, and dailyinteraction between the parties.

 

6.                                       Prepareand distribute group and member communications on program use and access toservices.

 

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B.                                     Claims Submission

 

1.                                       Guaranteethat claims will be submitted to the claims processor(s) in accordance with BCBSMand BCN policies and requirements.

 

2.                                       Forspecialty medications dispensed to Members for self-administration, submitclaims on-line utilizing the most current NCPDP format, to BCBSM’s and BCN’spreferred claims processor(s) (or via a mutually agreeable format andsubmission method.) For specialty medications dispensed to physicians for in-officeadministration, submit claims electronically using the professional 837 HIPAAformat or other designated form as required by BCBSM or BCN. Accept editsaccording to the most current NCPDP Telecommunication Standard for on-lineclaim submissions. Agree to not turn off edits at the facility level andrespond appropriately to on-line messages.

 

3.                                       Agreeto reconcile [ * ]% of Provider’s reimbursements and appeal any disputed claimswithin a maximum of [ * ] days from date payment is made.

 

4.                                       Reactappropriately to on-line edits which may adversely affect the member’s medical statusor coverage.

 

5.                                       Reverseclaims for shipments that are lost or damaged, or reship at no additionalcharge. If a claim cannot be reversed or reshipped at no charge, handle as adispensing error.

 

6.                                       Establishtechnical connections necessary to submit claims transactions for members usingBCBSM’s and BCN’s preferred claims processors and agree to comply with BCBSM’sand BCN’s administrative requirements governing the use of these systems. Providermust pay the cost of all system modifications, line charges and other communicationcosts associated with changes to provider’s systems as well as all fees chargedby the Blues claims processor(s).

 

7.                                       Agreeto submit [ * ]% of initial claims within [ * ] days of the date of service,otherwise BCBSM and BCN will be under no obligation to pay the claims.

 

8.                                       Guaranteethat [ * ]% of all claims submitted by Provider to the claims processor(s) willhave no errors.

 

C.                                     Complaint Resolution

 

1                                          Maintaina formal procedure to assure complaint resolution within 5 calendar days of receipt.Provider will provide BCBSM and BCN with reports regarding complaints,including the number and types of complaints.

 

2.                                       Maintainpolicies and procedures to address member problems, complaints and timely resolution.

 

3.                                       Meetwith BCBSM and BCN monthly to review implementation, performance, resolve member and ordering physician issuesand complaints, review reports, billing issues, payment issues, audit issues,discuss areas for improvement, etc.

 

D.                                    Disaster Recovery

 

1.                                       Maintainand document a comprehensive disaster recovery program for all technicalsystems (computer, telephone,fax, etc.). The plan must provide for the backup, storage

 

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and restoration of dataand information used and generated as a result of this program and must complywith HIPAA.

 

E.                                      Information Technology

 

I                                            Providecomprehensive informationtechnology capabilities required to service the proposed program and providethe operational capabilities comparable to nationally recognized, best-in-classspecialty pharmacies.

 

F.                                      Miscellaneous

 

1.                                       Bein the business of distributingspecialty medications to physicians for office administration.

 

2.                                       Provideacceptable references.

 

3.                                       Agreeto not outsource any work under this program outside the United States without thewritten consent of the BCBSM and BCN.

 

4.                                       Befully HIPAA compliant, which includes Identifiers, Privacy, Security, andElectronic Transactions/Code Sets.

 

5.                                       Haveno felony convictions of provider, provider’s officers or directors.

 

6.                                       Providean experienced and dedicatedaccount management team and establish a dedicated and branded (as defined byBCBSM and BCN) customer business unit (CBU) appropriately staffed to handle theenrolled BCBCM/ BCN population.

 

7.                                       Submitall pertinent clinicalinformation on new drugs to BCBSM and BCN for drug coverage and policydecisions.

 

8.                                       Providea comprehensive implementation plan for all services (or select services as maybe awarded) to BCBSM and BCN to assure a smooth program launch on a datespecified by BCBSM and BCN.

 

9.                                       Agreeto not assess any implementation charges to BCBSM and BCN for any services performedin connection with implementation(s).

 

10.                                 Adhereto Omnibus Budget ReconciliationAct requirements in the dispensing process.

 

I1                                      Agreeto accept personal checks, cashier checks, money orders and credit cards aswell as other methods of payment for covered services. In the event thatMembers are not able to afford their lump sum out-of-pocket expense, Providermay provide payment plans to assist affordability of care.

 

12.                                 Maintainvalid general liability insurance for all facilities in minimum amounts of $1,000,000per occurrence and $5,000,000 aggregate coverage. Maintain valid professionalliability (druggist) and product liability in minimum amount of $10,000,000 peroccurrence.

 

13.                                 Beable to meet all state andfederal requirements pertaining to this program.

 

14.                                 Agreeto not utilize BCBSM’s and BCN’s corporate names or logos in any way or form withoutthe written approval of BCBSM and BCN.

 

15.                                 Agreeto accept all terms and conditions of the Specialty Pharmacy Agreement.

 

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16.                                 Havethe ability to effectively manage unique benefit designs, eligibility criteria,reimbursement variations, etc. by line of business / product / account.

 

17.                                 Demonstratethe ability to support the full book of BCBSM’s and BCN’s specialty pharmacybusiness to bid as an ‘exclusive provider(1), or similarly as a ‘semi-exclusive’provider as those terms are defined in the Request for Proposal.

 

18.                                 Befree of conflicts of interest relative to BCBSM and BCN, their groups andmembers during the term of the Specialty Pharmacy Agreement.

 

19.                                 Recognizethat BCBSM will consider any other matters that materially affect the provider’sperformance in the selection process.

 

20.                                 Recognizethat customer preference maybe considered in the selection process.

 

21.                                 Demonstratean ability to cooperate with BCBSM and BCN, their members, groups and providers.

 

22.                                 Recognizethat BCBSM and BCN have the right to exercise business judgment in the selectionprocess.

 

23.                                 Agreethat the Request for Proposal must be completed in it’s entirely at the time ofsubmission.

 

24.                                 Befinancially stable as defined by BCBSM and BCN at all relevant times.

 

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ADDENDUM D REBATE / DISCLOSURE

REQUIREMENTS

 

1.             Provider shall not apply for or receive any Rebates,including BCBSM and BCN Rebates (other than purchase price discounts), from anypharmaceutical manufacturer or other person or entity, in connection with thisAgreement, unless BCBSM and BCN otherwise agree in writing. Provider warrantsthis to BCBSM and BCN. BCBSM and BCN, or their representative, may apply forand receive Rebates, including BCBSM and BCN Rebates, related to this Agreement.Provider will cooperate with BCBSM and BCN and/or their representatives, andwill provide data to support application for the various Rebates upon requestby BCBSM and BCN.

 

2.             Provider shall certify annually in writing on or beforeDecember 31 to BCBSM and BCN that Provider, its officers, directors, employeesand subcontractors did not apply for or receive any Rebates in connection withthis Agreement, including BCBSM and BCN Rebates.

 

3.             Provider shall provide BCBSM and BCN with quarterly andannual reports disclosing Provider funding and any clinical consultant orphysician education program in which BCBSM and BCN participate, unless BCBSMand BCN otherwise agree in writing.

 

4.             If requested by BCBSM and/or BCN, Provider agrees toprovide the terms of its manufacturer contracts and will provide copies of itscontracts to a third party auditor, subject to a confidentiality agreement, sothat compliance with this Addendum can be verified.

 

5.             Provider’s obligations under this Addendum D shallsurvive termination or expiration of this Agreement.

 

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ADDENDUM E

 

ADDITIONAL SERVICE REQUIREMENTS AND STANDARDS **1.**

 

**Customer (Patient / Provider) Service Requirements &Standards**

 

A.                                   *Hours of Operation:*

 

Provider’shours of operation will be as follows:

 

CustomerService: Monday thru Friday-8:00 AM - 8:00 PM (Eastern) Saturdays-8:00 AM -8:00 PM (Eastern) Sundays- 8:00 AM-1:00 PM (Eastern)

 

PharmacyDepartment: Monday thru Friday-8:00 AM - 8:00 PM (Eastern) Billing /Reimbursement: Monday thru Friday-8:00 AM - 8:00 PM (Eastern) Emergency Access/ Clinical Support:             24 / 7 /365

 

B.                                      *Telephone AccessRequirements, & Standards:*

 

1.              Provider shall provide dedicatedtoll-free telephone access to Customer Service for the Specialty PharmacyProgram for use by Members, BCBSM/BCN and physicians.

 

2.              Provider shall provide 24 houraccess to a pharmacist and registered nurse via dedicated toll-free telephoneservice.

 

3.              Provider shall provide Memberissue triage and resolution process between BCBSM, BCN and Provider forSpecialty Pharmacy Program inquiries.

 

4.              Provider will provide dedicatedcustomer service center to handle BCBSM and BCN member calls.

 

5.              Provider shall provide TDD-TTYservices for hearing impaired to access Customer Service Department.

 

C.                                      *Web Access Requirements:*

 

Provider’s standard website capabilities mustinclude: 

Onlineprescription ordering and status Prescription pricing information Coverage and benefit plan information

 

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Healthnews information

 

Healthassessment tools and resources

 

**2. Operational Service Requirements & Standards**

 

A.            *FulfillmentCapabilities Requirements:*

 

1.             Direct to patient

 

a.              Provider must have infrastructureto fill prescriptions at a rate sufficient to meet the needs of the BCBSM andBCN patient population.

 

b.             Provider shall have sufficientinfrastructure and capacity to support at least 50,000 specialty pharmacyprescriptions per year.

 

2.                                       Direct to provider. Provider must meet thefollowing direct to provider requirements:

 

a.Provider shall have sufficient infrastructure to support distribution toBCBSM/BCN Physicians.

 

B.                                    *Hemophilia Care Management*—*as partof the service program, Provider shall provide a Hemophilia Care ManagementProgram if requested by BCBSM and/or BCN as follows:*

 

1.             Provider shall support acomprehensive Hemophilia management program.

 

2.             Provider shall provide tailoredservices unique to the clinical, psycho-social-economic needs of individualswith Hemophilia or other bleeding disorders.

 

3.             Provider shall provide utilization managementprograms that promote excellent patient care and appropriate utilization (cost)management standards.

 

4.             Provider shall provide nursingservices as part of the Hemophilia management program.

 

C.                                    Other Care Management Programs—*Provider shall provide a Compounding ManagementProgram as follows and, if requested by BCBSM and/or BCN, Provider shallprovide IVIG Distribution Management and Chemotherapy Care Management Programsas follows:*

 

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1.             Provider shall support acomprehensive therapy management program for a Compounding Management Programand, if requested by BCBSM and/or BCN, for an IVIG Distribution ManagementProgram and Chemotherapy Care Management Program.

 

2.             Provider shall customize servicesto meet the unique clinical and psycho-social-economic needs of patients.

 

3.             Provider shall provide utilization managementprograms that promote excellent patient care and appropriate utilization (cost)management standards.

 

D.            *Quality Assurance andUtilization*

 

1              Provider shall provide best inclass utilization management programs to improve therapy adherence, complianceand patient outcomes.

 

2.             Provider shall have a comprehensiveQuality Assurance / Quality Improvement (QA/QI) program and shall meet thefollowing requirements and standards:

 

a.              Provider shall provide BCBSM andBCN with documentation of dispensing and non-dispensing errors and how each ofthese errors was corrected.

 

b.             Provider will contact physician’soffice and clarify any part of a script that is not legible.

 

c.              Provider must have formalprescription quality assurance and error prevention policies, procedures andprotocols - and shall maintain documentation of utilization review activities. Copiesof these documents must be provided to BCBSM and BCN upon request.

 

d.             Provider shall provide BCBSM andBCN with copies of protocols used to ensure patient safety for productsdispensed to BCBSM and BCN members.

 

e.              Provider shall provide best inclass utilization management programs to improve therapy adherence, complianceand patient outcomes.

 

f.              Provider shall have a reliableproduct recall policy and procedures.

 

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g.Provider shall maintain comprehensive patient profiles (medical histories) forall enrolled patients and shall request medication histories from each newpatient.

 

h.Provider shall acquire all products and supplies from reputable manufacturers.

 

i.Provider (Pharmacists) will pro-actively contact prescribing physicians toconfirm prescriptions, dosing, regimen, etc.

 

j.Provider shall demonstrate how automation is used and have acceptable qualitycontrol policies and procedures to assure quality care.

 

k.Provider shall maintain adequate drug risk analysis procedures.

 

I.Provider will maintain a formal procedure to assure complaint resolution within5 calendar days of receipt of complaint, and will immediately forward themember complaint to BCBSM or BCN, as applicable, when the member or his/herrepresentative indicates the member wishes the matter to be handled as anexpedited grievance. Provider will provide reporting on complaints with numberand types of complaints in the form required by BCBSM/BCN.

 

m.Provider will adhere to the Ominbus Budget Reconciliation Act requirements inthe dispensing process.

 

nProvider will possess specific programs, protocols, tools, etc., to manage orprevent waste.

 

o.Provider will comply with BCBSM’s and BCN’s formulary, clinical programs anddrug policies.

 

E.             *Patient Education andAssistance and Monitoring*

 

1              Provider shall send high-qualityeducational materials with all filled prescriptions, subject to BCBSM’s and BCN’sprior written approval.

 

2.             Provider shall prepare and distributegroup and member communications on program use and access to services, subjectto BCBSM and BCN prior approval.

 

3.             Provider shall make a Nurse, Pharmacistand administrative support associates easily accessible to answer Memberquestions.

 

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4.             Provider shall provide easy accessto patients for order requests, refill requests, documentation, etc.

 

5.             Provider shall maintain policiesand procedures to address patient problems, complaints and timely resolution.

 

6.             Provider shall clearly offer theability to speak with a Pharmacist or Nurse in all communications with patients(telephone, writing, publications, etc.).

 

7.             Provider shall document patientcompliance and other applicable clinical and quality of life data as applicableto patients’ therapy regimen.

 

3.             Training

 

1.             Provider shall maintain rigorousinitial and ongoing training for all clinicians.

 

2.             Provider shall providecomprehensive training for all non-clinician associates who will serviceMembers with respect to the triage of clinical issues.

 

3.             Provider shall providecomprehensive training for all associates (clinicians and non-clinicians) whowill service prescribing physicians (or office staff)

 

**4.             ContractualService Requirements**

 

A.            *Capabilities*- *General/IT Systems/Eligibility& Membership/Reporting*

 

1.             Provider will effectively manageunique benefit designs, eligibility criteria, reimbursement variations, etc. byline of business / product / account.

 

2.             Provider agrees to -

 

a.             Provide an owned and operatedMichigan based dispensing facility to support the BCBSM and BCN population, or

 

b.             Provide Specialty Medications inassociation with a local pharmacy in emergency and ‘stat’ situations. Emergency/statsituations require delivery of medication within the same day to any geographiclocation within Michigan or in locations where significant BCBSM or BCNpopulation resides outside of Michigan.

 

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3.Provider will provide comprehensive Information Technology capabilitiesrequired to service the proposed program and provide the operationalcapabilities comparable to nationally recognized, best-in-ciass specialtypharmacies.

 

B.            *Account Service andSpecialty Pharmacy Program Implementation*

 

1.              Provider will submit all pertinentclinical information on new drugs to BCBSM and BCN for drug coverage and policydecisions.

 

2.              Provider will provide acomprehensive Implementation Plan for all services (or select services as maybe awarded) to BCBSM and BCN to assure a smooth Specialty Pharmacy programlaunch.

 

3.              Provider will not assess anyImplementation charges to BCBSM or BCN for any services performed in connectionwith the implementation(s).

 

4.              Provider will meet with BCBSM andBCN monthly to review implementation, performance, resolve patient and orderingphysician issues and complaints, review reports, billing issues, paymentissues, audit issues, to discuss areas for improvement, etc.

 

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ADDENDUM FPERFORMANCE GUARANTEES

 
| **Item  #** | ** ** | **Performance  Guarantee:**                                                                                                                                        | ** ** | **Service  Standard:**                                                                                                                                                                                                                                                                                                                | ** ** | **Penalty:** |
|-------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------|
| 1           |       | Provider guarantees that  less than [ * ]%of callswillbe abandoned.                                                                                                |       | Forthepurposesofthis  Agreement, “abandoned” means that Provider did not answer the incoming call  within 20 seconds and the customer disconnected after placing the call but  before thecallwasansweredby Provider.                                                                                                        | ** ** | **[ * ]**    |
|        |       |                                                                                                                                                               |       |                                                                                                                                                                                                                                                                                                                                  | ** ** | ** **   |
| 2           |       | Provider guarantees that  less than [ * ]% of calls will be blocked.                                                                                               |       | For the purposes of this  Agreement, “blocked” calls are incoming phone calls that, due to volume, can  not be completed. They are calls that are initially received by the Provider  telephonic system, but are not received by either a live representative or  the Interactive Voice Response (IVR) system. D            | ** ** | **[ * ]**    |
|        |       |                                                                                                                                                               |       |                                                                                                                                                                                                                                                                                                                                  | ** ** | ** **   |
| 3           |       | Provider guarantees an  average speed to answer of less than [ * ].                                                                                                |       | Forthepurposesofthis  Agreement, “answer” means by a live representative or Interactive Voice  Response (IVR) system.                                                                                                                                                                                                       | ** ** | **[ * ]**    |
|        |       |                                                                                                                                                               |       |                                                                                                                                                                                                                                                                                                                                  | ** ** | ** **   |
| 4           |       | Provider guarantees that [  * ]% of written inquiries will be responded to within [ * ] calendar days.                                                             |       | Forthepurposesofthe  Agreement,“respondedto” means by a letter sent within 5 calendar days of  receipt of written inquiry. “Written Inquiries” include inquiries received by  fax, U.S. mailorprivatecarrier,or electronic mail. It is understood that  calendar days shall exclude recognized national holidays. | ** ** | **[ * ]**    |
|        |       |                                                                                                                                                               |       |                                                                                                                                                                                                                                                                                                                                  | ** ** | ** **   |
| 5           |       | Provider guarantees that [  * ]% of claims will be submitted in accordance with BCBSM and BCN policies,  procedures and administrative requirements, which include |       | a TBD                                                                                                                                                                                                                                                                                                                                 |       | N/A*         |

 

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| **Item****#** | ** ** | **Performance  Guarantee:**                                                                                                                                                                        | ** ** | **Service  Standard:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | ** ** | **Penalty:** |
|---------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------|
|          |       | the requirements contained  in 2.13 of the Specialty Pharmacy Agreement.                                                                                                                           |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |       |         |
|          |       |                                                                                                                                                                                               |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |       |         |
| **6**         |       | Provider guarantees that [  * ]% of all claims processed will have no financial errors.                                                                                                            |       | For purposes of this  Agreement, “no financial error” means a complete and accurate claim for  payment of Covered Services, free of outstanding subrogation, coordination of  benefits, or other secondary payer issues, filed in the correct electronic  format and containing all pertinent information as may be required in  applicable statutory and regulatory guidelines and in compliance with  applicable BCBSM/BCN policies, procedures and administrative requirements.                                       |       | N/A*         |
| ** **    |       |                                                                                                                                                                                               |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |       |         |
| **7**         |       | Provider guarantees that [  * ]% of all claims submitted by Provider to the claims processor will have no  errors.                                                                                 |       | For purposes of this  Agreement, “no errors” means a complete and accurate claim for payment of  Covered Services, free of outstanding subrogation, coordination of benefits,  or other secondary payer issues, filed in the correct electronic format and  according to the applicable fee schedule, free of incorrect patient, charge,  dosage, or quantity information, in compliance with applicable BCBSM/BCN  policies, procedures and administrative requirements, excluding incorrect  price for medical claims. |       | N/A*         |
| ** **    |       |                                                                                                                                                                                               |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |       |         |
| **8**         |       | Provider guarantees that [  * ]% of initial claims will be submitted within [ * ] days of the date of  service; otherwise BCBSM and BCN will be under no obligation to pay for  services rendered. |       | For the purposes for this  agreement, “initial claim” does not include any resubmitted claim for claims  already submitted or processed.                                                                                                                                                                                                                                                                                                                                                                                 |       | N/A*         |
| ** **    |       |                                                                                                                                                                                               |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |       |         |
| **9**         |       | Provider guarantees that  Provider will reconcile [ * ]% of reimbursements and appeal any disputed  claims                                                                                         |       | N/A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | ** ** | **[ * ]**    |

 

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| **Item****#** | ** ** | **Performance  Guarantee:**                                                                                                                                                                                                                                                                                                                      | ** ** | **Service  Standard:**                                                                                                                                                                                                                                   | ** ** | **Penalty:** |
|---------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------|
|          |       | within a maximum of [ * ]  days from date the payment is made.                                                                                                                                                                                                                                                                                   |       |                                                                                                                                                                                                                                                     |       |         |
|          |       |                                                                                                                                                                                                                                                                                                                                             |       |                                                                                                                                                                                                                                                     | ** ** | ** **   |
| 10            |       | Provider guarantees that [  * ]% of prescriptions requiring no intervention (including out of stock) will  be sent or scheduled to be sent within average of [ * ] calendar days from  the date the prescription is received, but none shall exceed [ * ] calendar  days, excluding manufacturer back order.                                     |       | For purposes of this  Agreement, orders received after normal business hours will be considered to  have been received on the next business day.                                                                                                         | ** ** | **[ * ]**    |
|          |       |                                                                                                                                                                                                                                                                                                                                             |       |                                                                                                                                                                                                                                                     | ** ** | ** **   |
| 11            |       | Provider guarantees that [  * ]% of prescriptions requiring intervention (including out of stock) will be  sent or scheduled to be sent within average of [ * ] calendar days from the  date the prescription is received, but none shall exceed [ * ] calendar days,  excluding manufacturer back order, without notification to BCBSM and BCN. |       | For purposes of this  Agreement, orders received after normal business hours will be considered to  have been received on the next business day.                                                                                                         | ** ** | **[ * ]**    |
| ** **    |       |                                                                                                                                                                                                                                                                                                                                             |       |                                                                                                                                                                                                                                                     | ** ** | ** **   |
| **12**        |       | Provider guarantees a  non-disoensinq error rate of [ * ]% or less.                                                                                                                                                                                                                                                                              |       | For the purposes of this  Agreement, “non-dispensing error” includes but is not limited to clerical  errors, incorrect address, incorrect co-pays, physician information and  errors which impact the delivery and claim processing of orders. | ** ** | **[ * ]**    |
| ** **    |       |                                                                                                                                                                                                                                                                                                                                             |       |                                                                                                                                                                                                                                                     | ** ** | ** **   |
| **13**        |       | Provider guarantees a  dispensing error rate of [ * ]% or less.                                                                                                                                                                                                                                                                                  |       | For the purpose of this  Agreement, “dispensing error” includes, but is not limited to incorrect  medication, incorrect dosage, incorrect dosing information and any medication  errors.                                                       | ** ** | **[ * ]**    |

 

63

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| **Item****#** | ** ** | **Performance  Guarantee:**                                                                     | ** ** | **Service  Standard:** | ** ** | **Penalty:** |
|---------------|------------|-------------------------------------------------------------------------------------------------|------------|------------------------|------------|--------------|
| **14**        |       | Provider guarantees an  out-of-stock rate of [ * ]% or less, excluding manufacturer backorders. | ** ** | **N/A**                | ** ** | **[ * ]**    |

 

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*Each$**[ * ]**penalty will fluctuate in direct proportionto Provider’s Specialty Medication sales through the BCBSM and BCN SpecialtyPharmacy program (self-administered and Physician office) relative to sales of$**[ * ]**. Thus, each $**[ * ]** penaltywill fluctuate as follows:

 
| **Sales Volume** | ** ** | **Impact  on $[ * ]********Penalty** | ** ** | **Resulting****Penalty** |
|------------------|------------|--------------------------------------|------------|--------------------------|
|             |       |                                 |       |                     |
| $**[ * ]**       |       | Cut  in half No                      |       | $**[ * ]**               |
| $**[ * ]**       |       | impact  One and                      |       | $**[ * ]**               |
| $**[ * ]**       |       | a  half Double                       |       | $**[ * ]**               |
| $**[ * ]**       |       |                                 |       | $**[*]**                 |

 

Provider’sobligations under this Addendum F shall survive termination or expiration ofthis Agreement.

 

64

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**Addendum GMedicare Attestation**

 

1.             Provideracknowledges to the best of its knowledge, information and belief, there are nopast or pending investigations, legal actions, or matters subject toarbitration involving Provider or any key management, executive staff, or anymajor shareholders (5% or more) of Provider on matters relating to paymentsfrom governmental entities, both federal and state, for healthcare and/orprescription drug services.

 

2.             Provideracknowledges to the best of its knowledge, information, and belief that Providerhas not been criminally convicted nor has a civil judgment been entered againstit for fraudulent activities nor is it sanctioned under any Federal programinvolving the provision of health care or prescription drug services.

 

3.             Provider acknowledges to the bestof its knowledge, information and belief, neither Provider nor any keymanagement, executive staff, or any major shareholders (5% or more) of Providerappear in the List of Excluded Individuals/Entities as published by theDepartment of Health and Human Services Office of the Inspector General, nor inthe List of Debarred Contractors as published by the General ServicesAdministration.

 

The List of Excluded Individuals/Entities published by the Departmentof Health and Human Services Office of the Inspector General can be found athttp://oiq.hhs.gov/fraud/exclusions/database.html. The List of DebarredContractors published by the General Services Administration can be found athttp://epls.arnet.gov/.

 

4.             Provider is obligated to notifyBCBSM immediately to the best of its knowledge, information and belief of anychange in circumstances occurring after the Effective Date of this MedicareAmendment which would require the Provider or its key management, executivestaff, or any major shareholders (5% or more) to then respond affirmatively toany of the questions posed in paragraphs 1, 2 and 3 of this MedicareAttestation.

 

65

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**Statement of  Work #1**

**to**

**SPECIALTYPHARMACY AGREEMENT**

 

 

BLUE CROSS AND BLUE SHIELD OF MICHIGAN,

 

BLUE CARE NETWORK OF MICHIGAN

 

and OPTION

 

CARE, INC.

 

 

----

[ * ] = THIS STATEMENT OF WORK IS CONFIDENTIAL INFORMATION AND HAS BEENOMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSIONPURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATIONCONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

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TABLE OF CONTENTS

 
| ** **                                | **PAGE** |
|-------------------------------------------|----------|
| ARTICLE I                            |     |
| DEFINITIONS                               | 1        |
|                                      |     |
| ARTICLE II                           |     |
| PROVIDER RESPONSIBILITIES                 | 4        |
|                                      |     |
| ARTICLE III                          |     |
| BCBSM AND BCN RESPONSIBILITIES            | 18       |
|                                      |     |
| ARTICLE IV                           |     |
| MUTUAL RESPONSIBILITIES                   | 19       |
|                                      |     |
| ARTICLE V                            |     |
| RECORDKEEPING AND AUDITS                  | 21       |
|                                      |     |
| ARTICLE VI                           |     |
| INDEMNIFICATION                           | 23       |
|                                      |     |
| ARTICLE VII                          |     |
| RIGHT OF RECOVERY                         | 23       |
|                                      |     |
| ARTICLE VIII                         |     |
| ASSIGNMENT                                | 24       |
|                                      |     |
| ARTICLE IX                           |     |
| AMENDMENT AND WAIVER                      | 24       |
|                                      |     |
| ARTICLE X                            |     |
| TERM, RENEWAL AND EXPIRATION              | 25       |
|                                      |     |
| ARTICLE XI                           |     |
| DISPUTES AND APPEALS                      | 27       |
|                                      |     |
| ARTICLE XII                          |     |
| BUSINESS CONTINUITY AND DISASTER RECOVERY | 27       |
|                                      |     |
| ARTICLE XIII                         |     |
| SERVICE MARKS                             | 28       |
|                                      |     |
| ARTICLE XIV                          |     |
| MARKETING PROTOCOL                        | 28       |

 

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| ARTICLE XV                                         |   |
|---------------------------------------------------------|--------|
| MISCELLANEOUS                                           | 30     |
|                                                    |   |
| ADDENDUM  A                                             |   |
| SPECIALTY PHARMACY PROGRAM REIMBURSEMENT RATES          | 36     |
|                                                    |   |
| ADDENDUM  A-1                                           |   |
| NEGOTIATED AWP DISCOUNT FOR SPECIALTY MEDICATIONS BYNDC | 41     |
|                                                    |   |
| ADDENDUM B                                              |   |
| BUSINESS  ASSOCIATE AGREEMENT                           | 48     |
|                                                    |   |
| ADDENDUM C                                              |   |
| SPECIALTY  PHARMACY PROGRAM REQUIREMENTS                | 51     |
|                                                    |   |
| ADDENDUM D                                              |   |
| REBATE/DISCLOSURE  REQUIREMENTS                         | 60     |
|                                                    |   |
| ADDENDUM E                                              |   |
| ADDITIONAL  SERVICE REQUIREMENTS AND STANDARDS          | 61     |
|                                                    |   |
| ADDENDUM F                                              |   |
| PERFORMANCE  GUARANTEES                                 | 67     |
|                                                    |   |
| ADDENDUM G                                              |   |
| MEDICARE  ATTESTATION                                   | 71     |

 

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