exv10w32



 





Exhibit 10.32




Contract with Eligible Medicare Advantage (MA) Organization Pursuant to

Sections 1851 through 1859 of the Social Security Act for the Operation

of a Medicare Advantage Coordinated Care Plan(s)




CONTRACT
(#                     )




Between




Centers for Medicare & Medicaid Services (hereinafter referred to as CMS)




and




(hereinafter referred to as the MA Organization)




CMS and the MA Organization, an entity which has been determined to be an eligible Medicare
Advantage Organization by the Administrator of the Centers for Medicare & Medicaid Services under
42 CFR 422.503, agree to the following for the purposes of sections 1851 through 1859 of the Social
Security Act (hereinafter referred to as the Act):



(NOTE: Citations indicated in brackets are placed in the text of this contract to note the
regulatory authority for certain contract provisions. All references to Part 422 are to 42 CFR Part
422.)








You must check off AND initial each required Addendum type to reflect the coverage
offered under the H (or R) number associated with this contract




	 	 	 	 	 
	Addendum Type	Initials
	 

	 	Part D Addendum	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Employer-Only MA-PD Addendum (800 Series)	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Employer-Only MA Only Addendum (800 Series)	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Variances/Waivers (Provided directly to
Demonstration Organizations by CMS)	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Regional Preferred Provider Organization Addendum (Provided
directly to RPPOs by CMS)	 	 
	 

	 	 	 	 









 









 





Article I




Term of Contract




The term of this contract shall be from the date of signature by CMS’ authorized representative
through December 31, 2007, after which this contract may be renewed for successive one-year periods
in accordance with 42 CFR 422.505(c) and as discussed in Paragraph A in Article VII below.
[422.505]



This contract governs the respective rights and obligations of the parties as of the effective date
set forth above, and supersedes any prior agreements between the MA Organization and CMS as of such
date. MA organizations offering Part D also must execute an Addendum to the Medicare Managed Care
Contract Pursuant to Sections 1860D-1 through 1860D-42 of the Social Security Act for the Operation
of a Voluntary Medicare Prescription Drug Plan (hereafter the “Part D Addendum”). For MA
Organizations offering MA-PD plans, the Part D Addendum governs the rights and obligations of the
parties relating to the provision of Part D benefits, in accordance with its terms, as of its
effective date.



Article II




Coordinated Care Plan




A. The Medicare Advantage Organization agrees to operate one or more coordinated care plans
as defined in 42 CFR 422.4(a)(1)(iii)), including at least one MA-PD plan as required under 42
CFR 422.4(c), as described in its final Plan Benefit Package (PBP) bid submission (benefit and
price bid) proposal as approved by CMS and as attested to in the Medicare Advantage
Attestation of Benefit Plan and Price, and in compliance with the requirements of this contract
and applicable Federal statutes, regulations, and policies.


B. Except as provided in paragraph (C) of this Article, this contract is deemed to incorporate any
changes that are required by statute to be implemented during the term of the contract and any
regulations or policies implementing or interpreting such statutory
provisions.


C. CMS will not implement, other than at the beginning of a calendar year, requirements under
42 CFR Part 422 that impose a new significant cost or burden on MA organizations or plans,
unless a different effective date is required by statute. [422.521]



Article III




Functions To Be Performed By Medicare Advantage Organization




A. PROVISION OF BENEFITS




1. The MA Organization agrees to provide enrollees in each of its MA plans the basic benefits as
required under §422.101 and, to the extent applicable, supplemental benefits under §422.102 and as
established in the MA Organization’s final benefit and price bid proposal as approved by CMS and
listed in the MA Organization Plan Attestation of Benefit Plan and Price, which is attached to this
contract. The MA Organization agrees to provide access to such benefits as



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required under subpart C in a manner consistent with professionally recognized standards of health
care and according to the access standards stated in §422.112.



2. The MA Organization agrees to provide post-hospital extended care services, should an MA
enrollee elect such coverage, through a skilled nursing home facility according to the requirements
of section 1852(1) of the Act and §422.133. A skilled nursing home facility is a facility in which
an MA enrollee resided at the time of admission to the hospital, a facility that provides services
through a continuing care retirement community, a facility in which the spouse of the enrollee is
residing at the time of the enrollee’s discharge from the hospital, or hospital, or wherever the
enrollee resides immediately before admission for extended care services. [422.133; 422.504(a)(3)]



B. ENROLLMENT REQUIREMENTS




1. The MA Organization agrees to accept new enrollments, make enrollments effective, process
voluntary disenrollments, and limit involuntary disenrollments, as provided in subpart B of
part 422,



2. The MA Organization shall comply with the provisions of §422.110 concerning prohibitions
against discrimination in beneficiary enrollment, other than in enrolling eligible beneficiaries in
a
CMA-approved special needs plan that exclusively enrolls special needs individuals as consistent
with §§422.2,422.4(a)(l)(iv) and 422.52.
[422.504(a)(2)]



C. BENEFICIARY PROTECTIONS




1. The MA Organization agrees to comply with all requirements in subpart M of part 422,
governing coverage determinations, grievances, and appeals. [422.504(a)(7)]



2. The MA Organization agrees to comply with the confidentiality and enrollee record accuracy
requirements in §422.118.



3. Beneficiary Financial Protections. The MA Organization agrees to comply with the
following
requirements:



     (a) Each MA Organization must adopt and maintain arrangements satisfactory to CMS to
protect its enrollees from incurring liability for payment of any fees that are the legal
obligation
of the MA Organization, To meet this requirement the MA Organization must—



     (i) Ensure that all contractual or other written arrangements with providers prohibit the
Organization’s providers from holding any beneficiary enrollee liable for payment of any fees that
are the legal obligation of the MA Organization; and



     (ii) Indemnify the beneficiary enrollee for payment of any fees that are the legal obligation
of the MA Organization for services furnished by providers that do not contract, or that have not
otherwise entered into an agreement with the MA Organization, to provide services to the
organization’s beneficiary enrollees.
[422.504(g)(1)]



     (b) The MA Organization must provide for continuation of enrollee health care benefits-



     (i) For all enrollees, for the duration of the contract period for which CMS payments have
been made; and



     (ii) For enrollees who are hospitalized on the date its contract with CMS terminates, or, in
the event of the MA Organization’s insolvency, through the date of discharge. [422.504(g)(2)]



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     (c) In meeting the requirements of this section (C), other than the provider contract requirements
specified in paragraph (C)(3)(a) of this Article, the MA Organization may use—



     (i) Contractual
arrangements;



     (ii) Insurance acceptable to CMS;



     (iii) Financial reserves acceptable to CMS; or



     (iv)
Any other arrangement acceptable to CMS. [422.504(g)(3)]



D. PROVIDER PROTECTIONS




1. The MA Organization agrees to comply with all applicable provider requirements in 42 CFR
Part 422 Subpart E, including provider certification requirements, anti-discrimination
requirements, provider participation and consultation requirements, the prohibition on
interference with provider advice, limits on provider indemnification, rules governing payments
to providers, and limits on physician incentive plans.
[422.504(a)(6)]



2. Prompt Payment.




     (a) The MA Organization must pay 95 percent of “clean claims” within 30 days of receipt
if they are claims for covered services that are not furnished under a written agreement
between
the organization and the provider.



     (i) The MA Organization must pay interest on clean claims that are not paid within 30 days
in accordance with sections 1816(c)(2) and 1842(c)(2) of the Act.



     (ii) All other claims from non-contracted providers must be paid or denied within 60
calendar days from the date of the request [422.520(a)]



     (b) Contracts or other written agreements between the MA Organization and its providers
must contain a prompt payment provision, the terms of which are developed and agreed to by
both the MA Organization and the relevant provider. [422.520(b)]



     (c) If CMS determines, after giving notice and opportunity for hearing, that the MA
Organization has failed to make payments in accordance with subparagraph (2)(a) of this
section,
CMS may provide—



     (i) For direct payment of the sums owed to providers; and



(ii) For appropriate reduction in the amounts that would otherwise be paid to the MA
Organization, to reflect the amounts of the direct payments and the cost of making those
payments. [422.520(c)]



E. QUALITY IMPROVEMENT PROGRAM




1. The MA Organization agrees to operate, for each plan that it offers, an ongoing quality
improvement program as stated in accordance with Section 1852(e) of the Social Security Act
and 42 CFR 422.152.



2. Chronic Care Improvement Program



     (a) Each MA organization (other than MA private-fee-for-service plans) must have a
chronic care improvement program and must establish criteria for participation in the program.
The CCIP must have a method for identifying enrollees with multiple or sufficiently severe
chronic conditions who meet the criteria for participation in the program and a mechanism for
monitoring enrollees’ participation in the program.



     (b) Plans have flexibility to choose the design of their program; however, in addition to
meeting the requirements specified above, the CCIP selected must be relevant to the plan’s MA



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population. MA organizations are required to submit annual reports on their CCIP program to CMS.



3. Performance Measurement and Reporting: The MA Organization shall measure performance
under its MA plans using standard measures required by CMS, and report (at the organization
level) its performance to CMS. The standard measures required by CMS during the term of this
contract will be uniform data collection and reporting instruments, to include the Health Plan and
Employer Data Information Set (HEDIS), Consumer Assessment of Health Plan Satisfaction
(CAHPS) survey, and Health Outcomes Survey (HOS). These measures will address clinical
areas, including effectiveness of care, enrollee perception of care and use of services; and non-clinical areas including access to and availability of services, appeals and grievances, and
organizational characteristics. [422.152(b)(1), (e)]



4. Utilization Review:



     (a) An MA Organization for an MA coordinated care plan must use written protocols for
utilization review and policies and procedures must reflect current standards of medical
practice
in processing requests for initial or continued authorization of services and have in effect

mechanisms to detect both underutilization and over utilization of
services. [422.152(b)]



     (b) For MA regional preferred provider organizations (RPPOs) and MA local preferred
provider organizations (PPOs) that are offered by an organization that is not licensed or
organized under State law as an HMOs, if the MA Organization uses written protocols for
utilization review, those policies and procedures must reflect current standards of medical
practice in processing requests for initial or continued authorization of services and include
mechanisms to evaluate utilization of services and to inform enrollees and providers of
services
of the results of the evaluation. [422.152(e)]



5. Information Systems:




     (a) The MA Organization must:



     (i) Maintain a health information system that collects, analyzes and integrates the data
necessary to implement its quality improvement program;



     (ii) Ensure that the information entered into the system (particularly that received from
providers) is reliable and complete;



     (iii) Make
all collected information available to CMS. [422.152(f)(1)]



6. External Review




The MA Organization will comply with any requests by Quality Improvement Organizations to review
the MA Organization’s medical records in connection with appeals of discharges from hospitals,
skilled nursing facilities, and home health agencies.



F. COMPLIANCE PLAN




The MA Organization agrees to implement a compliance plan in accordance with the
requirements of §422.503(b)(4)(vi). [422.503(b)(4)(vi)]



G. COMPLIANCE DEEMED ON THE BASIS OF ACCREDITATION




CMS may deem the MA Organization to have met the quality improvement requirements of §1852(e) of
the Act and §422.152, the confidentiality and accuracy of
enrollee records requirements of §1852(h)
of the Act and §422.118, the anti-discrimination requirements of §1852(b) of the Act and §422.110,
the access to services requirements of §1852(d) of the Act and §422.112, and the advance directives
requirements of §1852(i) of the Act and §422.128, the



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provider participation requirements of § 1852(j) of the Act and 42 CFR Part 422, Subpart F, and the
applicable requirements described in §423.165, if the MA Organization is fully accredited (and
periodically reaccredited) by a private, national accreditation organization approved by CMS and
the accreditation organization used the standards approved by CMS for the purposes of assessing the
MA Organization’s compliance with Medicare requirements. The provisions of §422.156 shall govern
the MA Organization’s use of deemed status to meet MA program requirements.



H. PROGRAM INTEGRITY




1. The MA Organization agrees to provide notice based on best knowledge, information, and
belief to CMS of any integrity items related to payments from governmental entities, both federal
and state, for healthcare or prescription drug services. These items include any investigations,
legal actions or matters subject to arbitration brought involving the MA Organization (or MA
Organization’s firm if applicable) and its subcontractors (excluding contracted network
providers), including any key management or executive staff, or any major shareholders (5% or
more), by a government agency (state or federal) on matters relating to payments from
governmental entities, both federal and state, for healthcare and/or prescription drug services. In
providing the notice, the sponsor shall keep the government informed of when the integrity item
is initiated and when it is closed. Notice should be provided of the details concerning any
resolution and monetary payments as well as any settlement agreements or corporate integrity
agreements.



2. The MA Organization agrees to provide notice based on best knowledge, information, and
belief to CMS in the event the MA Organization or any of its subcontractors is criminally
convicted or has a civil judgment entered against it for fraudulent activities or is sanctioned
under any Federal program involving the provision of health care or prescription drug services.



I. MARKETING




1. The MA Organization may not distribute any marketing materials, as defined in 42 CFR
422.80(b) and in the Marketing Materials Guidelines for Medicare Advantage-Prescription Drug
Plans and Prescription Drug Plans (Medicare Marketing Guidelines), unless they have been filed
with and not disapproved by CMS in accordance with §422.80. The file and use process set out
at §422.80(a)(2) must be used, unless the MA organization notifies CMS that it will not use this
process.



2. CMS and the MA Organization shall agree upon language setting forth the benefits,
exclusions and other language of the Plan. The MA Organization bears full responsibility for the
accuracy of its marketing materials. CMS, in its sole discretion, may order the MA Organization
to print and distribute the agreed upon marketing materials, in a format approved by CMS. The
MA Organization must disclose the information to each enrollee electing a plan as outlined in 42
CFR 422.111.



3. The MA Organization agrees that any advertising material, including that labeled promotional
material, marketing materials, or supplemental literature, shall be truthful and not misleading.
All marketing materials must include the Contract number. All membership identification cards
must include the Contract number on the front of the card.



4. The MA Organization must comply with the Medicare Marketing Guidelines, as well as all
applicable statutes and regulations, including and without limitation Section 1851(h) of the Act



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and 42 CFR §§422.80, 422.111 and 423.50. Failure to comply may result in sanctions as provided
in 42 CFR Part 422 Subpart O.



Article IV




CMS Payment to MA Organization




A. The MA Organization agrees to develop its annual benefit and price bid proposal and submit
to CMS all required information on premiums, benefits, and cost sharing, as required under 42
CFR Part 422 Subpart F. [422.504(a)(10)]



B. Methodology. CMS agrees to pay the MA Organization under this contract in accordance
with the provisions of section 1853 of the Act and 42 CFR
Part 422 Subpart G. [422.504(a)(9)]



C. Attestation of payment data (Attachments A, B, and C).




As a condition for receiving a monthly payment under paragraph B of this article, and 42 CFR Part
422 Subpart G, the MA Organization agrees that its chief executive officer (CEO), chief financial
officer (CFO), or an individual delegated with the authority to sign on behalf of one of these
officers, and who reports directly to such officer, must request payment under the contract on the
forms attached hereto as Attachment A (enrollment attestation) and Attachment B (risk adjustment
data) which attest to (based on best knowledge, information and belief, as of the date specified on
the attestation form) the accuracy, completeness, and truthfulness of the data identified on these
attachments. The Medicare Advantage Plan Attestation of Benefit Plan and Price must be signed and
attached to the executed version of this contract.



1. Attachment A requires that the CEO, CFO, or
an individual delegated with the authority to sign on behalf of one of these officers, and who
reports directly to such officer, must attest based on best knowledge, information, and belief that
each enrollee for whom the MA Organization is requesting payment is validiy enrolled, or was
validly enrolled during the period for which payment is requested, in an MA plan offered by the MA
Organization. The MA Organization shall submit completed enrollment attestation forms to CMS, or
its contractor, on a monthly basis. (NOTE: The forms included as attachments to this contract are
for reference only. CMS will provide instructions for the completion and submission of the forms in
separate documents. MA Organizations should not take any action on the forms until appropriate CMS
instructions become available.)



2. Attachment B requires that the CEO, CFO, or an individual delegated with the authority to sign
on behalf of one of these officers, and who reports directly to such officer, must attest to (based
on best knowledge, information and belief, as of the date specified on the attestation form) that
the risk adjustment data it submits to CMS under §422.310 are accurate, complete, and truthful. The
MA Organization shall make annual attestations to this effect for risk adjustment data on
Attachment B and according to a schedule to be published by CMS. If such risk adjustment data are
generated by a related entity, contractor, or subcontractor of an MA Organization, such entity,
contractor, or subcontractor must similarly attest to (based on best knowledge, information, and belief, as of the date specified on the attestation form) the accuracy, completeness, and
truthfulness of the data. [422.504(1)]



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3. The Medicare Advantage Plan Attestation of Benefit Plan and Price (which is attached hereto)
requires that the CEO, CFO, or an individual delegated with the authority to sign on behalf of one
of these officers, and who reports directly to such officer, must attest (based on best knowledge,
information and belief, as of the date specified on the attestation form) that the information and
documentation comprising the bid submission proposal is accurate, complete, and truthful and fully
conforms to the Bid Form and Plan Benefit Package requirements; and that the benefits described in
the CMS-approved proposal bid submission agree with the benefit package the MA Organization will
offer during the period covered by the proposal bid submission. This document is being sent
separately to the MA Organization and must be signed and attached to the executed version of this
contract, and is incorporated herein by reference. [422.502(1)]



Article V




MA Organization Relationship with Related Entities, Contractors, and Subcontractors




A. Notwithstanding any relationship(s) that the MA Organization may have with related
entities, contractors, or subcontractors, the MA Organization maintains full responsibility for
adhering to and otherwise fully complying with all terms and conditions of its contract with
CMS. [422.504(i)(1)]



B. The MA Organization agrees to require all related entities, contractors, or subcontractors to
agree that—



     (1) HHS, the Comptroller General, or their designees have the right to inspect, evaluate,
and audit any pertinent contracts, books, documents, papers, and records of the related
entity(s),
contractor(s), or subcontractor(s) involving transactions related to this contract; and



     (2) HHS, the Comptroller General, or their designees have the right to inspect, evaluate,
and audit any pertinent information for any particular contract period for 10 years from the
final
date of the contract period or from the date of completion of any audit, whichever is later.

[422.504(i)(2)]



C. The MA Organization agrees that all contracts or written arrangements into which the MA
Organization enters with providers, related entities, contractors, or subcontractors (first tier
and
downstream entities) shall contain the following elements:



     (1) Enrollee protection provisions that provide—



     (a) Consistent with Article III(C), arrangements that prohibit providers from holding an
enrollee liable for payment of any fees that are the legal obligation of the MA Organization;
and



     (b) Consistent with Article III(C), provision for the continuation of benefits.



     (2) Accountability provisions that indicate that the MA Organization may only delegate
activities or functions to a provider, related entity, contractor, or subcontractor in a
manner
consistent with requirements set forth at paragraph D of this article.



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     (3) A provision requiring that any services or other activity performed by a related entity,
contractor or subcontractor in accordance with a contract or written agreement between the related
entity, contractor, or subcontractor and the MA Organization will be consistent and comply with the
MA Organization’s contractual obligations to CMS. [422.504(i)(3)]



D. If any of the MA Organization’s activities or responsibilities under this contract with CMS is
delegated to other parties, the following requirements apply to any related entity, contractor,
subcontractor, or provider:



     (1) Written arrangements must specify delegated activities and reporting responsibilities.



     (2) Written arrangements must either provide for revocation of the delegation activities
and reporting requirements or specify other remedies in instances where CMS or the MA
Organization determine that such parties have not performed satisfactorily.



     (3) Written arrangements must specify that the performance of the parties is monitored by
the MA Organization on an ongoing basis.



     (4) Written arrangements must specify that either—



     (a) The credentials of medical professionals affiliated with the party or parties will be
either reviewed by the MA Organization; or



     (b) The credentialing process will be reviewed and approved by the MA Organization
and the MA Organization must audit the credentialing process on an ongoing basis.



     (5) All contracts or written arrangements must specify that the related entity, contractor,
or subcontractor must comply with all applicable Medicare laws, regulations, and CMS
instructions.[422.504(i)(4)]



E. If the MA Organization delegates selection of the providers, contractors, or subcontractors to
another organization, the MA Organization’s written arrangements with that organization must
state that the MA Organization retains the right to approve, suspend, or terminate any such
arrangement. [422.504(i)(5)]



F. As of the date of this contract and throughout its term, the MA Organization




     (1) Agrees that any physician incentive plan it operates meets the requirements of
§422.208, and



     (2) Has assured that all physicians and physician groups that the MA Organization’s
physician incentive plan places at substantial financial risk have adequate stop-loss
protection in
accordance with §422.208(f). [422.208]





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Article VI




Records Requirements




A. MAINTENANCE OF RECORDS




1. The MA Organization agrees to maintain for 10 years books, records, documents, and other
evidence of accounting procedures and practices that—



     (a) Are sufficient to do the following:



     (i) Accommodate periodic auditing of the financial records (including data related to Medicare
utilization, costs, and computation of the benefit and price bid) of the MA Organization.



     (ii) Enable CMS to inspect or otherwise evaluate the quality, appropriateness and timeliness
of services performed under the contract, and the facilities of the
MA Organization.



     (iii) Enable CMS to audit and inspect any books and records of the MA Organization that
pertain to the ability of the organization to bear the risk of potential financial losses, or to
services performed or determinations of amounts payable under the contract.



     (iv) Properly reflect all direct and indirect costs claimed to have been incurred and used in
the preparation of the benefit and price bid proposal.



     (v) Establish component rates of the benefit and price bid for determining additional and
supplementary benefits.



     (vi) Determine the rates utilized in setting premiums for State insurance agency purposes and
for other government and private purchasers; and



     (b) Include at least records of the following:



     (i) Ownership and operation of the MA Organization’s financial, medical, and other
record keeping systems.



     (ii) Financial statements for the current contract period and six prior periods.



     (iii) Federal income tax or informational returns for the current contract period and six
prior periods.



     (iv) Asset acquisition, lease, sale, or other action.



     (v) Agreements,
contracts (including, but not limited to, with related or unrelated prescription drug benefit managers) and subcontracts.



     (vi) Franchise, marketing, and management agreements.



     (vii) Schedules of charges for the MA Organization’s fee-for-service patients.



     (viii) Matters pertaining to costs of operations.



     (ix) Amounts of income received, by source and payment.



     (x) Cash flow statements.



     (xi) Any financial reports filed with other Federal programs or State authorities.[422.504(d)]



2. Access to facilities and records. The MA Organization
agrees to the following:



     (a) The Department of Health and Human Services (HHS), the Comptroller General, or their
designee may evaluate, through inspection or other means—



     (i) The quality, appropriateness, and timeliness of services furnished to Medicare
enrollees under the contract;



     (ii) The facilities of the MA Organization; and




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     (iii) The enrollment and disenrollment records for the current contract period and ten prior
periods.



     (b) HHS, the Comptroller General, or their designees may audit, evaluate, or inspect any
books, contracts, medical records, documents, papers, patient care documentation, and other
records of the MA Organization, related entity, contractor, subcontractor, or its transferee
that pertain to any aspect of services performed, reconciliation of benefit liabilities, and
determination of amounts payable under the contract, or as the Secretary may deem necessary to
enforce the contract.



     (c) The MA Organization agrees to make available, for the purposes specified in section
(A) of this article, its premises, physical facilities and equipment, records relating to its
Medicare enrollees, and any additional relevant information that CMS may require, in a manner that
meets CMS record maintenance requirements.



     (d) HHS, the Comptroller General, or their designee’s right to inspect, evaluate, and audit
extends through 10 years from the final date of the contract period or completion of audit,
whichever is later unless-



     (i) CMS determines there is a special need to retain a particular record or group of records
for a longer period and notifies the MA Organization at least 30 days before the normal disposition
date;



     (ii) There has been a termination, dispute, or fraud or similar fault by the MA
Organization, in which case the retention may be extended to 10 years from the date of any
resulting final resolution of the termination, dispute, or fraud or similar fault; or



     (iii) HHS, the Comptroller General, or their designee determines that there is a reasonable
possibility of fraud, in which case they may inspect, evaluate, and audit the MA Organization at
any time. [422.504(e)]



B. REPORTING REQUIREMENTS



1. The MA Organization shall have an effective procedure to develop, compile, evaluate, and
report to CMS, to its enrollees, and to the general public, at the times and in the manner that
CMS requires, and while safeguarding the confidentiality of the doctor-patient relationship,
statistics and other information as described in the remainder of this section (B). [422.516(a)]



2. The MA Organization agrees to submit to CMS certified financial information that must
include the following:




     (a) Such information as CMS may require demonstrating that the organization has a
fiscally sound operation, including:



     (i) The cost of its operations;



     (ii) A description, submitted to CMS annually and within 120 days of the end of the fiscal
year, of significant business transactions (as defined in §422.500) between the MA Organization and
a party in interest showing that the costs of the transactions listed in paragraph (2)(a)(v) of
this section do not exceed the costs that would be incurred if these transactions were with someone
who is not a party in interest; or



     (iii) If they do exceed, a justification that the higher costs are consistent with
prudent management and fiscal soundness requirements.



     (iv) A combined financial statement for the MA Organization and a party in interest if either
of the following conditions is met:



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     (aa) Thirty-five percent or more of the costs of operation of the MA Organization go to a
party in interest.



     (bb) Thirty-five percent or more of the revenue of a party in interest is from the MA
Organization. [422.516(b)]



     (v) Requirements for combined financial statements.



     (aa) The combined financial statements required by paragraph (2)(a)(iv) must display in
separate columns the financial information for the MA Organization and each of the parties in
interest.



     (bb) Inter-entity transactions must be eliminated in the consolidated column.



     (cc) The statements must have been examined by an independent auditor in accordance with
generally accepted accounting principles and must include appropriate opinions and notes.



     (dd) Upon written request from the MA Organization showing good cause, CMS may waive the
requirement that the organization’s combined financial statement include the financial information
required in paragraph (2)(a)(v) with respect to a particular entity. [422.516(c)]



     (vi) A description of any loans or other special financial arrangements the MA
Organization makes with contractors, subcontractors, and related entities.



     (b) Such information as CMS may require pertaining to the disclosure of ownership and
control of the MA Organization. [422.504(f)(1)(ii)]



     (c) Patterns of utilization of the MA Organization’s services.


3. The MA Organization agrees to participate in surveys required by CMS and to submit to CMS all
information that is necessary for CMS to administer and evaluate the program and to simultaneously
establish and facilitate a process for current and prospective beneficiaries to exercise choice in
obtaining Medicare services. This information includes, but is not limited to:




     (a) The benefits covered under the MA plan;



     (b) The MA monthly basic beneficiary premium and MA monthly supplemental
beneficiary premium, if any, for the plan.



     (c) The service area and continuation area, if any, of each plan and the enrollment
capacity of each plan;



     (d) Plan quality and performance indicators for the benefits under the plan including —




     (i) Disenrollment rates for Medicare enrollees electing to receive benefits through the
plan for the previous 2 years;



     (ii) Information on Medicare enrollee satisfaction;



     (iii) The patterns of utilization of plan services;



     (iv) The availability, accessibility, and acceptability of the plan’s services;



     (v) Information on health outcomes and other performance measures required by CMS;



     (vi) The recent record regarding compliance of the plan with requirements of this part, as
determined by CMS; and



     (vii) Other information determined by CMS to be necessary to assist beneficiaries in
making an informed choice among MA plans and traditional Medicare;



     (e) Information about beneficiary appeals and their disposition;



     (f) Information regarding all formal actions, reviews, findings, or other similar actions by
States, other regulatory bodies, or any other certifying or accrediting organization;



     (g) Any other information deemed necessary by CMS for the administration or evaluation
of the Medicare program. [422.504(f)(2)]



12









 




4. The MA Organization agrees to provide to its enrollees and upon request, to any individual
eligible to elect an MA plan, all informational requirements under §422.64 and, upon an
enrollee’s, request, the financial disclosure information required under §422.516. [422.504(f)(3)]



5. Reporting and disclosure under ERISA.




     (a) For any employees’ health benefits plan that includes an MA Organization in its
offerings, the MA Organization must furnish, upon request, the information the plan needs to
fulfill its reporting and disclosure obligations (with respect to the MA Organization) under
the Employee Retirement Income Security Act of 1974 (ERISA).



     (b) The MA Organization must furnish the information to the employer or the employer’s
designee, or to the plan administrator, as the term “administrator” is defined in ERISA.
[422.516(d)]


6. Electronic communication. The MA Organization must have the capacity to communicate
with CMS electronically. [422.504(b)]



7. Risk Adjustment data. The MA Organization agrees to comply with the requirements
in §422.310 for submitting risk adjustment data to CMS. [422.504(a)(8)]




Article VII




Renewal of the MA Contract



A. Renewal of contract: In accordance with §422.505, following the initial contract period,
this contract is renewable annually only if-




     (1) The MA Organization has not provided CMS with a notice of intention not to renew;
[422.506(a)]



     (2) CMS and the MA Organization reach agreement on the bid under 42 CFR Part 422,
Subpart F; and [422.505(d)]



     (3) CMS informs the MA Organization that it authorizes a renewal.


B. Nonrenewal of contract




     (1) Nonrenewal by the Organization.



     (a) In accordance with §422.506, the MA Organization may elect not to renew its
contract with CMS as of the end of the term of the contract for any reason, provided it meets
the time frames for doing so set forth in subparagraphs (b) and (c) of this paragraph.



     (b) If the MA Organization does not intend to renew its contract, it must notify—



     (i) CMS, in writing, by the first Monday in June of the year in which the contract would
end, pursuant to §422.506



     (ii) Each Medicare enrollee, at least 90 days before the date on which the nonrenewal is
effective. This notice must include a written description of all alternatives available for
obtaining Medicare services within the service area including alternative MA plans, Medigap
options, and original Medicare and prescription drug plans and must receive CMS approval prior to
issuance.



     (iii) The general public, at least 90 days before the end of the current calendar year, by
publishing a CMS-approved notice in one or more newspapers of general circulation in each community
located in the MA Organization’s service area.



13









 





     (c) CMS may accept a nonrenewal notice submitted after the applicable annual non-
renewal notice deadline if —



     (i) The MA Organization notifies its Medicare enrollees and the public in accordance
with subparagraph (l)(b)(ii) and (l)(b)(iii) of this section; and



     (ii) Acceptance is not inconsistent with the effective and efficient administration of the
Medicare program.



     (d) If the MA Organization does not renew a contract under subparagraph (1), CMS will
not enter into a contract with the Organization for 2 years from the date of contract
separation unless there are special circumstances that warrant special consideration, as determined by
CMS. [422.506(a)]



     (2) CMS decision not to renew.



     (a) CMS may elect not to authorize renewal of a contract for any of the following
reasons:



     (i) The MA Organization’s level of enrollment, growth in enrollment, or insufficient number of
contracted providers is determined by CMS to threaten the viability of the organization under the
MA program and or be an indicator of beneficiary dissatisfaction with the MA plan(s) offered by the
organization.



     (ii) For any of the reasons listed in §422.510(a) [Article VIII, section (B)(l)(a) of this
contract], which would also permit CMS to terminate the contract.



     (iii) The MA Organization has committed any of the acts in §422.752(a) that would support the
imposition of intermediate sanctions or civil money penalties under 42 CFR Part 422 Subpart O.



     (iv) The MA Organization did not submit a benefit and price bid or the benefit and price bid
was not acceptable [422.505(d)]



     (b) Notice. CMS shall provide notice of its decision whether to authorize renewal of
the contract as follows:



     (i) To the MA Organization by May 1 of the contract year, except in the event of
(2)(a)(iv) above, for which notice will be sent by September 1.



     (ii) To the MA Organization’s Medicare enrollees by mail at least 90 days before the end of
the current calendar year.



     (iii) To the general public at least 90 days before the end of the current calendar year, by
publishing a notice in one or more newspapers of general circulation in each community or county
located in the MA Organization’s service area.



     (c) Notice of appeal rights. CMS shall give the MA Organization written notice of its
right to reconsideration of the decision not to renew in accordance with § 422.644. [422.506(b)]



14









 





Article VIII




Modification or Termination of the Contract




A. Modification or Termination of Contract by Mutual Consent



1. This contract may be modified or terminated at any time by written mutual consent.




     (a) If the contract is modified by written mutual consent, the MA Organization must
notify its Medicare enrollees of any changes that CMS determines are appropriate for
notification within time frames specified by CMS. [422.508(a)(2)]



     (b) If the contract is terminated by written mutual consent, except as provided in section
(A)(2) of this Article, the MA Organization must provide notice to its Medicare enrollees and
the general public as provided in section B(2)(b)(ii) and B(2)(b)(iii) of this Article.
[422.508(a)(1)]


2. If this contract is terminated by written mutual consent and replaced the day following such
termination by a new MA contract, the MA Organization is not required to provide the notice
specified in section B of this article. [422.508(b)]




B. Termination of the Contract by CMS or the MA Organization



1. Termination by CMS.




     (a) CMS may terminate a contract for any of the following reasons:



     (i) The MA Organization has failed substantially to carry out the terms of its contract with
CMS.



     (ii) The MA Organization is carrying out its contract with CMS in a manner that is
inconsistent with the effective and efficient implementation of 42 CFR Part 422.



     (iii) CMS determines that the MA Organization no longer meets the requirements of 42 CFR Part
422 for being a contracting organization.



     (iv) There is credible evidence that the MA Organization committed or participated in false,
fraudulent or abusive activities affecting the Medicare program, including submission of false or
fraudulent data.



     (v) The MA Organization experiences financial difficulties so severe that its ability to make
necessary health services available is impaired to the point of posing an imminent and serious risk
to the health of its enrollees, or otherwise fails to make services available to the extent that
such a risk to health exists.



     (vi) The MA Organization substantially fails to comply with the requirements in 42 CFR Part
422 Subpart M relating to grievances and appeals.



     (vii) The MA Organization fails to provide CMS with valid risk adjustment data as
required under §422.310 and 423.329(b)(3).



     (viii) The MA Organization fails to implement an acceptable quality improvement program
as required under 42 CFR Part 422 Subpart D.



     (ix) The MA Organization substantially fails to comply with the prompt payment
requirements in §422.520.



     (x) The MA Organization substantially fails to comply with the service access
requirements in §422.112.



     (xi) The MA Organization fails to comply with the requirements of §422.208 regarding physician
incentive plans.



15









 





     (xii) The MA Organization substantially fails to comply with the marketing requirements in
422.80.



     (b) Notice. If CMS decides to terminate a contract for reasons other than the
grounds specified in section (B)(l)(a) above, it will give notice of the termination as
follows:



     (i) CMS will notify the MA Organization in writing 90 days before the intended date of the
termination.



     (ii) The MA Organization will notify its Medicare enrollees of the termination by mail at
least 30 days before the effective date of the termination.



     (iii) The MA Organization will notify the general public of the termination at least 30 days
before the effective date of the termination by publishing a notice in one or more newspapers of
general circulation in each community or county located in the MA Organization’s service area.



     (c) Immediate termination of contract by CMS.



     (i) For terminations based on violations prescribed in paragraph (B)(l)(a)(v) of this article,
CMS will notify the MA Organization in writing that its contract has been terminated effective the
date of the termination decision by CMS. If termination is effective in the middle of a month, CMS
has the right to recover the prorated share of the capitation payments made to the MA Organization
covering the period of the month following the contract termination.



     (ii) CMS will notify the MA Organization’s Medicare enrollees in writing of CMS’ decision to
terminate the MA Organization’s contract. This notice will occur no later than 30 days after CMS
notifies the plan of its decision to terminate this contract. CMS will simultaneously inform the
Medicare enrollees of alternative options for obtaining Medicare services, including alternative MA
Organizations in a similar geographic area and original Medicare.



     (iii) CMS will notify the general public of the termination no later than 30 days after
notifying the MA Organization of CMS’ decision to terminate this contract. This notice will be
published in one or more newspapers of general circulation in each community or county located in
the MA Organization’s service area.



     (d) Corrective action plan



     (i) General. Before terminating a contract for reasons other than the grounds
specified in section (B)(l)(a)(v) of this article, CMS will provide the MA Organization with
reasonable opportunity, not to exceed time frames specified at 42 CFR Part 422 Subpart N, to
develop and receive CMS approval of a corrective action plan to correct the deficiencies that are
the basis of the proposed termination.



     (ii) Exception. If a contract is terminated under section (B)(l)(a)(v) of this
article, the MA Organization will not have the opportunity to submit a corrective action plan.



     (e) Appeal rights. If CMS decides to terminate this contract, it will send written
notice to the MA Organization informing it of its termination appeal rights in accordance with 42 CFR
Part 422 Subpart N. [422.510]



2. Termination by the MA Organization




     (a) Cause for termination. The MA Organization may terminate this contract if CMS
fails to substantially carry out the terms of the contract.



     (b) Notice. The MA Organization must give advance notice as follows:



     (i) To CMS, at least 90 days before the intended date of termination. This notice must
specify the reasons why the MA Organization is requesting contract termination.



16









 





     (ii) To its Medicare enrollees, at least 60 days before the termination effective date. This
notice must include a written description of alternatives available for obtaining Medicare services
within the service area, including alternative MA and MA-PD plans, PDP plans, Medigap options, and
original Medicare and must receive CMS approval.



     (iii) To the general public at least 60 days before the termination effective date by
publishing a CMS-approved notice in one or more newspapers of general circulation in each community
or county located in the MA Organization’s geographic area.



     (c) Effective date of termination. The effective date of the termination
will be determined by CMS and will be at least 90 days after the date CMS receives the MA
Organization’s notice of intent to terminate.



     (d) CMS’ liability. CMS’ liability for payment to the MA Organization ends as of the
first day of the month after the last month for which the contract is in effect, but CMS shall make
payments for amounts owed prior to termination but not yet paid.



     (e) Effect of termination by the organization. CMS will not enter into an agreement
with the MA Organization for a period of two years from the date the Organization has terminated
this contract, unless there are circumstances that warrant special consideration, as determined by
CMS. [422.512]



Article IX




Requirements of Other Laws and Regulations




A. The MA Organization agrees to comply with—




     (1) Federal laws and regulations designed to prevent or ameliorate fraud, waste, and
abuse, including, but not limited to, applicable provisions of Federal criminal law, the False
Claims Act (31 USC 3729 et seq.), and the anti-kickback statute (section 1128B(b) of the Act):
and



     (2) HIPAA administrative simplification rules at 45 CFR parts 160, 162, and 164.
[422.504(h)]


B. The MA Organization maintains ultimate responsibility for adhering to and otherwise fully
complying with all terms and conditions of its contract with CMS, notwithstanding any
relationship(s) that the MA organization may have with related entities, contractors, or
subcontractors. [422.504(i)]



C. In the event that any provision of this contract conflicts with the provisions of any statute or
regulation applicable to an MA Organization, the provisions of the statute or regulation shall
have full force and effect.




17









 








Article X




Severability



The MA Organization agrees that, upon CMS’ request, this contract will be amended to exclude any MA
plan or State-licensed entity specified by CMS, and a separate contract for any such excluded plan
or entity will be deemed to be in place when such a request is made. [422.504(k)]




Article XI




Miscellaneous



A. Definitions. Terms not otherwise defined in this contract shall have the meaning given to
such terms in 42 CFR Part 422.



B. Alteration to Original Contract Terms. The MA Organization agrees that it has not altered in
any way the terms of this contract presented for signature by CMS. The MA Organization
agrees that any alterations to the original text the MA Organization may make to this contract
shall not be binding on the parties.



C. Approval to Begin Marketing and Enrollment. The MA Organization agrees that it must
complete CMS operational requirements prior to receiving CMS approval to begin Part C
marketing and enrollment activities. Such activities include, but are not limited to, establishing
and successfully testing connectivity with CMS systems to process enrollment applications (or
contracting with an entity qualified to perform such functions on the MA Organization’s
Sponsor’s behalf) and successfully demonstrating capability to submit accurate and timely price
comparison data. To establish and successfully test connectivity, the MA Organization must,
1) establish and test physical connectivity to the CMS data center, 2) acquire user identifications
and passwords, 3) receive, store, and maintain data necessary to perform enrollments and send and
receive transactions to and from CMS, and 4) check and receive transaction status information.



D. Incorporation of Applicable Addenda. All addenda checked off and initialed on the cover
sheet of this contract by the MA Organization are hereby incorporated by reference.




18









 




In witness whereof, the parties hereby execute this contract.



FOR THE MA ORGANIZATION




	 	 	 	 	 
	 

Printed Name

	 	 

Title
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	Signature

	 	Date	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	Organization

	 	Address	 	 





FOR THE CENTERS FOR MEDICARE & MEDICAID SERVICES




	 	 	 	 	 
	 

David A. Lewis

	 	 

Date
	 	 
	Acting Director
	 	 	 	 
	Medicare Advantage Group
	 	 	 	 
	Center for Beneficiary Choices
	 	 	 	 






19









 





ADDENDUM TO MEDICARE MANAGED CARE CONTRACT PURSUANT TO

SECTIONS 1860D-1 THROUGH 1860D-42 OF THE SOCIAL SECURITY ACT

FOR THE OPERATION OF A VOLUNTARY MEDICARE PRESCRIPTION

DRUG PLAN



The Centers for Medicare & Medicaid Services (hereinafter referred to as “CMS”) and
                                                            , a Medicare
managed care organization (hereinafter referred to as the MA-PD Sponsor) agree to amend the
contract (INSERT “H” OR “R” NUMBER) governing the MA-PD Sponsor’s operation of a Part C plan
described in Section 1851(a)(2)(A) of the Social Security Act (hereinafter referred to as “the
Act”) or a Medicare cost plan to include this addendum under which the MA-PD Sponsor shall operate
a Voluntary Medicare Prescription Drug Plan pursuant to sections 1860D-1 through 1860D-42 (with the
exception of section 1860D-22 and 1860D-31) of the Act.



This addendum is made pursuant to Subpart L of 42 CFR Part 417 (in the case of cost plan sponsors
offering a Part D benefit) and Subpart K of 42 CFR Part 422 (in the case of an MA-PD Sponsor
offering a Part C plan).



NOTE: For purposes of this addendum, unless otherwise noted, reference to an “MA-PD Sponsor” or
“MA-PD Plan” is deemed to include a cost plan sponsor or a MA private fee-for-service contractor
offering a Part D benefit.

















 





Article I

Medicare Voluntary Prescription Drug Benefit





	A.	 	The MA-PD Sponsor agrees to operate one or more Medicare Voluntary Prescription
Drug Plans as described in its application and related materials, including but not
limited to all the attestations contained therein and all supplemental guidance, for
Medicare approval and in compliance with the provisions of this addendum, which
incorporates in its entirety the Solicitation For Applications for New Medicare
Advantage Prescription Drug Plan (MA-PD) Sponsors, released on January 24, 2006
[applicable to Medicare Part C contractors] or the Solicitation for Applications for
New Cost Plan Sponsors, released on January 24, 2006 [applicable to Medicare cost
plan contractors] (hereinafter collectively referred to as “the addendum”). The MA-
PD Sponsor also agrees to operate in accordance with the regulations at 42 CFR
§423.1 through 42 CFR §423.910 (with the exception of Subparts Q, R, and S),
sections 1860D-1 through 1860D-42 (with the exception of sections 1860D-22(a) and
1860D-31) of the Social Security Act, and the applicable solicitation identified above,
as well as all other applicable Federal statutes, regulations, and policies. This
addendum is deemed to incorporate any changes that are required by statute to be
implemented during the term of this addendum and any regulations or policies
implementing or interpreting such statutory provisions.






	B.	 	CMS agrees to perform its obligations to the MA-PD Sponsor consistent with the
regulations at 42 CFR §423.1 through 42 CFR §423.910 (with the exception of
Subparts Q, R, and S), sections 1860D-1 through 1860D-42 (with the exception of
sections 1860D-22(a) and 1860D-31) of the Social Security Act, and the applicable
solicitation, as well as all other applicable Federal statutes, regulations, and policies.






	C.	 	CMS agrees that it will not implement, other than at the beginning of a calendar year,
regulations under 42 CFR Part 423 that impose new, significant regulatory
requirements on the MA-PD Sponsor. This provision does not apply to new
requirements mandated by statute.






	D.	 	This addendum is in no way intended to supersede or modify 42 CFR, Parts 417, 422
or 423. Failure to reference a regulatory requirement in this addendum does not
affect the applicability of such requirements to the MA-PD Sponsor and CMS.





Article II

Functions to be Performed by the MA-PD Sponsor





	A.	 	ENROLLMENT






	 	1.	 	MA-PD Sponsor agrees to enroll in its MA-PD plan only Part D-eligible
beneficiaries as they are defined in 42 CFR §423.30(a) and who have elected to enroll in
MA-PD Sponsor’s Part C or Section 1876 benefit.




2









 












	 	2.	 	If the MA-PD Sponsor is a cost plan sponsor, the MA-PD Sponsor acknowledges that its
Section 1876 plan enrollees are not required to elect enrollment in its Part D plan.






	B.	 	PRESCRIPTION DRUG BENEFIT






	 	1.	 	MA-PD Sponsor agrees to provide the required prescription drug coverage as defined
under 42 CFR §423.100 and, to the extent applicable, supplemental benefits as defined in
42 CFR §423.100 and in accordance with Subpart C of 42 CFR Part 423. MA-PD Sponsor also
agrees to provide Part D benefits as described in the MA-PD Sponsor’s Part D bid(s)
approved each year by CMS (and in the Attestation of Benefit Plan and Price, attached
hereto).
	 
	 	2.	 	MA-PD Sponsor agrees to calculate and collect beneficiary Part D premiums in
accordance with 42 CFR §§423.286 and 423.293.
	 
	 	3.	 	If the MA-PD Sponsors is a cost plans sponsor, it acknowledge that its Part D benefit
is offered as an optional supplemental service in accordance with 42 CFR
§417.440(b)(2)(ii).






	C.	 	DISSEMINATION OF PLAN INFORMATION






	 	1.	 	MA-PD Sponsor agrees to provide the information required in 42 CFR §423.48.
	 
	 	2.	 	MA-PD Sponsor agrees to disclose information related to Part D benefits to
beneficiaries in the manner and the form specified by CMS under 42 CFR §§423.128 and
423.50 and in the “Marketing Materials Guidelines for Medicare Advantage-Prescription Drug
Plans (MA-PDs) and Prescription Drug Plans (PDPs).”
	 
	 	3.	 	MA-PD Sponsor certifies that all materials it submits to CMS under the File and Use
Certification authority described in the Marketing Materials Guidelines are accurate,
truthful, not misleading, and consistent with CMS marketing guidelines.






	D.	 	QUALITY ASSURANCE/UTILIZATION MANAGEMENT
	 
	 	 	MA-PD Sponsor agrees to operate quality assurance, cost, and utilization management,
medication therapy management programs, and support electronic prescribing in accordance
with Subpart D of 42 CFR Part 423.
	 
	E.	 	APPEALS AND GRIEVANCES
	 
	 	 	MA-PD Sponsor agrees to comply with all requirements in Subpart M of 42 CFR Part 423 governing
coverage determinations, grievances and appeals, and formulary exceptions. MA-PD Sponsor
acknowledges that these requirements are separate and distinct from the appeals and grievances
requirements applicable to the MA-PD Sponsor through the operation of its Part C or cost plan
benefits.





3









 






	F.	 	PAYMENT TO MA-PD SPONSOR






	 	1.	 	MA-PD Sponsor and CMS agree that payment paid for Part D services under the
addendum will be governed by the rules in Subpart G of 42 CFR Part 423.
	 
	 	2.	 	If the MA-PD Sponsor is participating in the Part D Reinsurance Payment
Demonstration, described in 70 FR 9360 (Feb. 25, 2005), it affirms that it will not seek
payment under the demonstration for services provided to employer group enrollees.






	G.	 	BID SUBMISSION AND REVIEW
	 
	 	 	If the MA-PD Sponsor intends to participate in the Part D program for the future year, MA-PD
Sponsor agrees to submit a future year’s Part D bid, including all required information on
premiums, benefits, and cost-sharing, by the applicable due date, as provided in Subpart F of
42 CFR Part 423 so that CMS and the MA-PD Sponsor may conduct negotiations regarding the terms
and conditions of the proposed bid and benefit plan renewal. MA-PD Sponsor acknowledges that
failure to submit a timely bid under this section may affect the sponsor’s ability to offer a
Part C plan, pursuant to the provisions of 42 CFR §422.4(c).






	H.	 	COORDINATION WITH OTHER PRESCRIPTION DRUG COVERAGE






	 	1.	 	MA-PD Sponsor agrees to comply with the coordination requirements with State Pharmacy
Assistance Programs (SPAPs) and plans that provide other prescription drug coverage as
described in Subpart J of 42 CFR Part 423.
	 
	 	2.	 	MA-PD Sponsor agrees to comply with Medicare Secondary Payer procedures as stated
in 42 CFR §423.462.






	I.	 	SERVICE AREA AND PHARMACY ACCESS






	 	1.	 	The MA-PD Sponsor agrees to provide Part D benefits in the service area for which it
has been approved by CMS to offer Part C or cost plan benefits utilizing a pharmacy
network and formulary approved by CMS that meet the requirements of 42 CFR §423.120.
	 
	 	2.	 	The MA-PD Sponsor agrees to ensure adequate access to Part D-covered drugs at
out-of-network pharmacies according to 42 CFR §423.124.
	 
	 	3.	 	MA-PD Sponsor agrees to provide benefits by means of point-of-service systems to
adjudicate prescription drug claims in a timely and efficient manner in compliance with
CMS standards, except when necessary to provide access in underserved areas, I/T/U
pharmacies (as defined in 42 CFR §423.100), and long-term care pharmacies (as defined in
42 CFR §423.100).




4









 












	 	4.	 	MA-PD Sponsor agrees to contract with any pharmacy that meets the MA-PD Sponsor’s
reasonable and relevant standard terms and conditions. If MA-PD Sponsor has demonstrated
that it historically fills 98% or more of its enrollees’ prescriptions at pharmacies owned
and operated by the MA-PD Sponsor (or presents compelling circumstances that prevent the
sponsor from meeting the 98% standard or demonstrates that its Part D plan design will
enable the sponsor to meet the 98% standard during the contract year), this provision does
not apply to MA-PD Sponsor’s plan.
	 
	 	5.	 	The provisions of 42 CFR §423.120(a) concerning the TRICARE retail pharmacy access
standard do not apply to MA-PD Sponsor if the Sponsor has demonstrated to CMS that it
historically fills more than 50% of its enrollees’ prescriptions at pharmacies owned and
operated by the MA-PD Sponsor. MA-PD Sponsors excused from meeting the TRICARE standard are
required to demonstrate retail pharmacy access that meets the requirements of 42 CFR
§422.112 for a Part C contractor and 42 CFR §417.416(e)for a cost plan contractor.






	J.	 	COMPLIANCE PLAN/PROGRAM INTEGRITY
	 
	 	 	MA-PD Sponsor agrees that it will develop and implement a compliance plan that applies to its
Part D-related operations, consistent with 42 CFR §423.504(b)(4)(vi).






	K.	 	LOW-INCOME SUBSIDY
	 
	 	 	MA-PD Sponsor agrees that it will participate in the administration of subsidies for low-income
individuals according to Subpart P of 42 CFR Part 423.






	L.	 	BENEFICIARY FINANCIAL PROTECTIONS
	 
	 	 	The MA-PD Sponsor agrees to afford its enrollees protection from liability for payment of fees
that are the obligation of the MA-PD Sponsor in accordance with 42 CFR §423.505(g).






	M.	 	RELATIONSHIP WITH RELATED ENTITIES, CONTRACTORS, AND SUBCONTRACTORS






	 	1.	 	The MA-PD Sponsor agrees that it maintains ultimate responsibility for adhering to
and otherwise fully complying with all terms and conditions of this addendum.
	 
	 	2.	 	The MA-PD Sponsor shall ensure that any contracts or agreements with subcontractors
or agents performing functions on the MA-PD Sponsor’s behalf related to the operation of
the Part D benefit are in compliance with 42 CFR §423.505(i).





5









 






	N.	 	CERTIFICATION OF DATA THAT DETERMINE PAYMENT




MA-PD Sponsor must provide certifications in accordance with 42 CFR §423.505(k).




Article III

Record Retention and Reporting Requirements





	A.	 	MAINTENANCE OF RECORDS
	 
	 	 	MA-PD Sponsor agrees to maintain records and provide access in accordance with 42 CFR
§§423.504(d) and 505(d) and (e).






	B.	 	GENERAL REPORTING REQUIREMENTS
	 
	 	 	The MA-PD Sponsor agrees to submit to information to CMS according to 42 CFR §§423.505(f),
423.514, and the “Final Medicare Part D Reporting Requirements,” a document issued by CMS
and subject to modification each program year.






	C.	 	CMS LICENSE FOR USE OF PLAN FORMULARY






PDP Sponsor agrees to submit to CMS each plan’s formulary information, including any
changes to its formularies, and hereby grants to the Government[, and any person or entity
who might receive the formulary from the Government,] a non-exclusive license to use all or
any portion of the formulary for any purpose related to the administration of the Part D
program, including without limitation publicly distributing, displaying, publishing or
reconfiguration of the information in any medium, including www.medicare.gov, and
by any electronic, print or other means of distribution.



Article IV

HIPAA Transactions/Privacy/Security





	A.	 	MA-PD Sponsor agrees to comply with the confidentiality and enrollee record
accuracy requirements specified in 42 CFR §423.136.
	 
	B.	 	MA-PD Sponsor agrees to enter into a business associate agreement with the entity
with which CMS has contracted to track Medicare beneficiaries’ true out-of-pocket
costs.





6









 





Article V

Addendum Term and Renewal





	A.	 	TERM OF ADDENDUM
	 
	 	 	This addendum is effective from the date of CMS’ authorized representative’s signature through
December 31, 2007. This addendum shall be renewable for successive one-year periods thereafter
according to 42 CFR §423.506. MA-PD Sponsor shall not conduct Part D-related marketing
activities prior to October 1, 2006 and shall not process enrollment applications prior to
November 15, 2006. MA-PD Sponsor shall begin delivering Part D benefit services on January 1,
2007.






	B.	 	QUALIFICATION TO RENEW ADDENDUM






	 	1.	 	In accordance with 42 CFR §423.507, the MA-PD Sponsor will be determined
qualified to renew this addendum annually only if—






	 	(a)	 	CMS informs the MA-PD Sponsor that it is qualified to renew its
addendum; and
	 
	 	(b)	 	The MA-PD Sponsor has not provided CMS with a notice of intention not
to renew in accordance with Article VII of this addendum.






	 	2.	 	Although MA-PD Sponsor may be determined qualified to renew its addendum
under this Article, if the MA-PD Sponsor and CMS cannot reach agreement on
the Part D bid under Subpart F of 42 CFR Part 423, no renewal takes place, and
the failure to reach agreement is not subject to the appeals provisions in Subpart N
of 42 CFR Parts 422 or 423. (Refer to Article XI for consequences of non
renewal on the Part C contract and the ability to enter into a Part C contract.)





Article VI

Nonrenewal of Addendum





	A.	 	NONRENEWAL BY THE MA-PD SPONSOR






	 	1.	 	MA-PD Sponsor may non-renew this addendum in accordance with 42 CFR
423.507(a).
	 
	 	2.	 	If the MA-PD Sponsor non-renews this addendum under this Article, CMS cannot enter
into a Part D addendum with the organization for 2 years unless there are special
circumstances that warrant special consideration, as determined by CMS.






	B.	 	NONRENEWAL BY CMS
	 
	 	 	CMS may non-renew this addendum under the rules of 42 CFR 423.507(b). (Refer to Article X for
consequences of non-renewal on the Part C contract and the ability to enter into a Part C
contract.)





7









 





Article VII

Modification or Termination of Addendum by Mutual Consent



This addendum may be modified or terminated at any time by written mutual consent in accordance
with 42 CFR 423.508. (Refer to Article X for consequences of non-renewal on the Part C contract
and the ability to enter into a Part C contract.)




Article VIII

Termination of Addendum by CMS



CMS may terminate this addendum in accordance with 42 CFR 423.509. (Refer to Article X for
consequences of non-renewal on the Part C contract and the ability to enter into a Part C
contract.)




Article IX

Termination of Addendum by the MA-PD Sponsor





	A.	 	The MA-PD Sponsor may terminate this addendum only in accordance with 42 CFR
423.510.
	 
	B.	 	CMS will not enter into a Part D addendum with an organization that has terminated
its addendum within the preceding 2 years unless there are circumstances that warrant
special consideration, as determined by CMS.
	 
	C.	 	If the addendum is terminated under section A of this Article, the MA-PD Sponsor
must ensure the timely transfer of any data or files. (Refer to Article X for
consequences of non-renewal on the Part C contract and the ability to enter into a Part
C contract.)





Article X

Relationship Between Addendum and Part C Contract or 1876 Cost Contract





	A.	 	MA-PD Sponsor acknowledges that, if it is a Medicare Part C contractor, the termination or
nonrenewal of this addendum by either party may require CMS to terminate or non-renew the
Sponsor’s Part C contract in the event that such nonrenewal or termination prevents the MA-PD
Sponsor from meeting the requirements of 42 CFR §422.4(c), in which case the Sponsor must
provide the notices specified in this contract, as well as the notices specified under Subpart
K of 42 CFR Part 422. MA-PD Sponsor also acknowledges that Article X.B. of this addendum may
prevent the sponsor from entering into a Part C contract for two years following an addendum
termination or non-renewal where such non-renewal or termination prevents the MA-PD Sponsor
from meeting the requirements of 42 CFR §422.4(c).










8









 












	B.	 	The termination of this addendum by either party shall not, by itself, relieve the
parties from their obligations under the Part C or cost plan contracts to which this
document is an addendum.
	 
	C.	 	In the event that the MA-PD Sponsor’s Part C or cost plan contract (as applicable) is
terminated or nonrenewed by either party, the provisions of this addendum shall also
terminate. In such an event, the MA-PD Sponsor and CMS shall provide notice to
enrollees and the public as described in this contract as well as 42 CFR Part 422,
Subpart K or 42 CFR Part 417, Subpart K, as applicable.





Article XI

Intermediate Sanctions



The MA-PD Sponsor shall be subject to sanctions and civil monetary penalties, consistent
with Subpart O of 42 CFR Part 423.




Article XII

Severability



Severability of the addendum shall be in accordance with 42 CFR §423.504(e).




Article XIII

Miscellaneous





	A.	 	DEFINITIONS: Terms not otherwise defined in this addendum shall have the
meaning given such terms at 42 CFR Part 423 or, as applicable, 42 CFR Part 422 or
Part 417.
	 
	B.	 	ALTERATION TO ORIGINAL ADDENDUM TERMS: The MA-PD Sponsor
agrees that it has not altered in any way the terms of the MA-PD addendum presented
for signature by CMS. MA-PD Sponsor agrees that any alterations to the original text
the MA-PD Sponsor may make to this addendum shall not be binding on the parties.
	 
	C.	 	ADDITIONAL CONTRACT TERMS: The MA-PD Sponsor agree to include in this
addendum other terms and conditions in accordance with 42 CFR §423.505(j).
	 
	D.	 	CMS APPROVAL TO BEGIN MARKETING AND ENROLLMENT ACTIVITIES:
The MA-PD Sponsor agrees that it must complete CMS operational requirements
related to its Part D benefit prior to receiving CMS approval to begin MA-PD plan
marketing activities relating to its Part D benefit. Such activities include, but are not
limited to, establishing and successfully testing connectivity with CMS systems to
process enrollment applications (or contracting with an entity qualified to perform




9









 










such functions on MA-PD Sponsor’s behalf) and successfully demonstrating the capability to submit
accurate and timely price comparison data. To establish and successfully test connectivity, the PDP
Sponsor must, 1) establish and test physical connectivity to the CMS data center, 2) acquire user
identifications and passwords, 3) receive, store, and maintain data necessary to perform
enrollments and send and receive transactions to and from CMS, and 4) check and receive transaction
status information.




10









 





PART C/D BENEFIT PLAN(S) DESCRIPTION

TO BE ATTACHED TO MA CONTRACT




SECTION 1876/PART D OPTIONAL SUPPLEMENTAL BENEFIT PLAN

DESCRIPTION TO BE ATTACHED TO SECTION 1876 CONTRACT





11












 







ATTACHMENT A




ATTESTATION
OF ENROLLMENT INFORMATION

 RELATING TO CMS PAYMENT 


TO A MEDICARE ADVANTAGE ORGANIZATION




     Pursuant to the contract(s) between the Centers for Medicare & Medicaid Services (CMS) and
(INSERT NAME OF MA ORGANIZATION), hereafter referred to as the MA Organization, governing
the operation of the following Medicare Advantage plans (INSERT PLAN IDENTIFICATION NUMBERS
HERE), the MA Organization hereby requests payment under the contract, and in doing so, makes
the following attestation concerning CMS payments to the MA Organization. The MA Organization
acknowledges that the information described below directly affects the calculation of CMS payments
to the MA Organization and that misrepresentations to CMS about the accuracy of such information
may result in Federal civil action and/or criminal prosecution. This attestation shall not be
considered a waiver of the MA Organization’s right to seek payment adjustments from CMS based on
information or data which does not become available until after the date the MA Organization
submits this attestation.



     1. The MA Organization has reported to CMS for the month of (INDICATE MONTH AND YEAR)
all new enrollments, disenrollments, and changes in enrollees’ institutional status with respect to
the above-stated MA plans. Based on best knowledge, information, and belief as of the date
indicated below, all information submitted to CMS in this report is accurate, complete, and
truthful.



     2. The MA Organization has reviewed the CMS monthly membership report and reply listing for
the month of (INDICATE MONTH AND YEAR) for the above-stated MA plans and has reported to
CMS any discrepancies between the report and the MA Organization’s records. For those portions of
the monthly membership report and the reply listing to which the MA Organization raises no
objection, the MA Organization, through the certifying CEO/CFO, will be deemed to have attested,
based on best knowledge, information, and belief as of the date indicated below, to their accuracy,
completeness, and truthfulness.



	 	 	 	 	 
	 

	 	 

(INDICATE TITLE [CEO, CFO, or delegate])
	 	 
	 
	 	 	 	 
	 

	 	on behalf of	 	 
	 
	 	 	 	 
	 

	 	 

(INDICATE MA ORGANIZATION)
	 	 
	 
	 	 	 	 
	 

	 	 

DATE
	 	 






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ATTACHMENT B




ATTESTATION OF RISK ADJUSTMENT DATA INFORMATION RELATING TO

CMS PAYMENT TO A MEDICARE ADVANTAGE ORGANIZATION




     Pursuant to the contract(s) between the Centers for Medicare & Medicaid Services (CMS) and
(INSERT NAME OF MA ORGANIZATION), hereafter referred to as the MA Organization, governing
the operation of the following Medicare Advantage plans (INSERT PLAN IDENTIFICATION NUMBERS
HERE), the MA Organization hereby requests payment under the contract, and in doing so, makes
the following attestation concerning CMS payments to the MA Organization. The MA Organization
acknowledges that the information described below directly affects the calculation of CMS payments
to the MA Organization or additional benefit obligations of the MA Organization and that
misrepresentations to CMS about the accuracy of such information may result in Federal civil action
and/or criminal prosecution.




     The MA Organization has reported to CMS during the
period of (INDICATE DATES) all
(INDICATE TYPE OF DATA — INPATIENT HOSPITAL, OUTPATIENT
HOSPITAL, OR PHYSICIAN) risk
adjustment data available to the MA Organization with respect to the above-stated MA plans. Based
on best knowledge, information, and belief as of the date indicated below, all information
submitted to CMS in this report is accurate, complete, and truthful.



	 	 	 	 	 
	 

	 	 

(INDICATE TITLE [CEO, CFO, or delegate])
	 	 
	 
	 	 	 	 
	 

	 	on behalf of	 	 
	 
	 	 	 	 
	 

	 	 

(INDICATE MA ORGANIZATION)
	 	 
	 
	 	 	 	 
	 

	 	 

DATE
	 	 






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[SAMPLE — DO NOT USE -
THIS DOCUMENT WILL BE SENT DIRECTLY TO THE MAO THROUGH HPMS]

ATTACHMENT C - Medicare Advantage Plan Attestation of Benefit Plan and Price




<Legal Entity Name>

<Contract#>




Date: <XX/XX/XXXX>



I attest that the following plan numbers as established in the final Plan Benefit
Package (PBP) will be operated by the above-stated organization and made available to
eligible Medicare beneficiaries in the approved service area during program year 2007.




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Plan	 	Segment	 	 	 	 	 	 	 	Transaction	 	MA	 	PartD	 	CMS	 	Effective Date
	ID	 	ID	 	Version	 	Plan Name	 	Plan Type	 	Type	 	Premium	 	Premium	 	Approval	 	Date
	<xxx>

	 	<x>
	 	<x>
	 	<Plan Name>
	 	<Plan Type>
	 	<Transaction Type>
	 	$<Plan Premium>
	 	$<Plan D Premium>
	 	<xx/xx/xx>
	 	<xx/xx/xx>
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	<xxx>

	 	<x>
	 	<x>
	 	<Plan Name>
	 	<Plan Type>
	 	<Transaction
Type>
	 	$<Plan Premium>
	 	$<Plan D Premium>
	 	<xx/xx/xx>
	 	<xx/xx/xx>
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	<xxx>

	 	<x>
	 	<x>
	 	<Plan Name>
	 	<Plan Type>
	 	<Transaction
Type>
	 	$<Plan Premium>
	 	$<Plan D Premium>
	 	<xx/xx/xx>
	 	<xx/xx/xx>






	 	 	 	 	 	 	 
	 

CEO

	 	 	 	 

CFO
	 	 
	 
	<Name of CFO>
<Title>

	 	Date
	 	<Name of CFO>
<Title>
	 	Date
	<Address 1>

	 	 	 	<Address 1>	 	 
	<Address 2>

	 	 	 	<Address 2>	 	 
	<City, State Zip>

	 	 	 	<City, State Zip>	 	 
	<Phone #>

	 	 	 	<Phone #>	 	 






22