Document:

f8k111313ex10i_starstream.htm

Exhibit 10.1

 

GELIA GROUP, CORP.

SUBSCRIPTION AGREEMENT

 

As of November __, 2013

Ms. Kim Leadford

Chief Executive Officer

Gelia Group, Corp.

140 Rowayton Avenue, 2nd Floor

Rowayton, Connecticut 06854

 

	
1.

	
Subscription; Escrow Arrangement.

	
  

	
(a)

	
The undersigned subscriber (the “Subscriber”) hereby irrevocably subscribes for and agrees to purchase the number of shares (the “Shares” or “Securities”) of the Company’s common stock, par value $.001 per share (“Common Stock”), set forth on the signature page hereto from Gelia Group, Corp., a Nevada corporation (the “Company”) for the purchase price of $0.83 per share in connection with the Company’s offering of up to $900,000 in Common Stock, or such other amount as may be determined by the Company’s board of directors (the “Offering”).

This Subscription Agreement (the “Subscription Agreement”) together with the Exhibits and Schedules thereto constitutes the “Offering Documents.”

This subscription is based solely upon the information provided in the Offering Documents and upon the Subscriber’s own investigation as to the merits and risks of this investment.  The Subscriber shall deliver herewith duly executed copies of the signature pages to the following documents: (i) the Subscription Agreement, and (ii) the Accredited Investor Questionnaire & Form W-9.

The Offering may be consummated at more than one closing to occur on a date as may be determined by the Company. Each such closing is referred to as a “Closing” and the date of each such Closing is referred to as the “Closing Date.”  A final Closing shall be held by the Company on or before _____________, 2013 (the “Final Closing Date”).  At each Closing with respect to the Shares subscribed for hereby and accepted by the Company, the Escrow Agent shall release and turn over the subscription payments for the Shares to the Company and the Company shall promptly thereafter deliver to the Subscriber, the stock certificate for the Shares.  If the Company does not accept this subscription, in whole or in part, the Escrow Agent will promptly refund to the Subscriber, without deduction therefrom, any subscription payment received from the Subscriber for the Shares, the subscription for which was not accepted by the Company.

	
  

	
(b)

	
Subject to the terms and conditions hereinafter set forth, the Subscriber hereby subscribes for and agrees to purchase the number of Shares from the Company set forth on the signature page hereof, and when this Agreement is accepted and executed by the Company, the Company agrees to issue such Shares to the Subscriber.  The subscription price is payable by wire transfer to “Ofsink PLLC” pursuant to the following wire instructions.

 

  

 

  

 

WIRING INSTRUCTIONS

 

	
Bank’s Name and Address:

	
JP Morgan Chase N.A.

	 	
919 Third Avenue

	  	
New York, NY 10022

	
Account #:

	
3011704177

	
ABA Routing #:

	
021000021

	
SWIFT:

	
CHASUS33 (for overseas transfers)

	
Account Title:

	
Gelia Group, Corp. Escrow Account

 

	
2.

	
Subscriber Representations, Warranties and Agreements.  The Subscriber hereby acknowledges, represents and warrants as follows (with the understanding that the Company will rely on such representations and warranties in determining, among other matters, the suitability of this investment for the Subscriber in order to comply with federal and state securities laws):

	
  

	
(a)

	
In connection with this subscription, the Subscriber has read this Subscription Agreement and the other Offering Documents.  The Subscriber acknowledges that this Subscription Agreement is not intended to set forth all of the information which might be deemed pertinent by an investor who is considering an investment in the Securities.  It being the responsibility of Subscriber (i) to determine what additional information he desires to obtain in evaluating this investment and (ii) to obtain such information from the Company.

	
  

	
(b)

	
THIS OFFERING IS LIMITED TO PERSONS WHO ARE “ACCREDITED INVESTORS,” AS THAT TERM IS DEFINED IN REGULATION D UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND WHO HAVE THE FINANCIAL MEANS AND THE BUSINESS, FINANCIAL AND INVESTMENT EXPERIENCE AND ACUMEN TO CONDUCT AN INVESTIGATION AS TO, AND TO EVALUATE, THE MERITS AND RISKS OF THIS INVESTMENT. THE SUBSCRIBER HEREBY REPRESENTS THAT HE HAS READ, IS FAMILIAR WITH AND UNDERSTANDS RULE 501 OF REGULATION D UNDER THE ACT.  THE SUBSCRIBER IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(A) OF REGULATION D.

	
  

	
(c)

	
The Subscriber has had full access to all the information which the Subscriber (or the Subscriber’s advisor) considers necessary or appropriate to make an informed decision with respect to the Subscriber’s investment in the Securities.  The Subscriber acknowledges that the Company has made available to the Subscriber and the Subscriber’s advisors the opportunity to examine and copy any contract, matter or information which the Subscriber considers relevant or appropriate in connection with this investment and to ask questions and receive answers relating to any such matters including, without limitation, the financial condition, management, employees, business, obligations, corporate books and records, budgets, business plans of and other matters relevant to the Company.  To the extent the Subscriber has not sought information regarding any particular matter, the Subscriber represents that he or she had and has no interest in doing so and that such matters are not material to the Subscriber in connection with this investment.  The Subscriber has accepted the responsibility for conducting the Subscriber’s own investigation and obtaining for itself such information as to the foregoing and all other subjects as the Subscriber deems relevant or appropriate in connection with this investment.  The Subscriber is not relying on any representation other than that contained herein.  The Subscriber acknowledges that no representation regarding projected financial performance or a projected rate of return has been made to it by any party.

 

  

2

  

 

	
  

	
(d)

	
The Subscriber understands that the offering of the Securities has not been registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on an exemption for private offerings provided pursuant to Section 4(2) of the Securities Act and that, as a result, the Shares will be “restricted securities” as that term is defined in Rule 144 under the Securities Act.  The Subscriber further understands that the Offering of the Securities has not been qualified or registered under any foreign or state securities laws in reliance upon the representations made and information furnished by the Subscriber herein and any other documents delivered by the Subscriber in connection with this subscription; that the Offering has not been reviewed by the Commission or by any foreign or state securities authorities; and that the Subscriber’s rights to transfer the Securities will be restricted, which includes restrictions against transfers unless the transfer is not in violation of the Securities Act and applicable state securities laws (including investor suitability standards).

	
  

	
(e)

	
The Subscriber is empowered and duly authorized to enter into this Subscription Agreement which constitutes a valid and binding agreement of the Subscriber enforceable against the Subscriber in accordance with its terms; and the person signing this Subscription Agreement on behalf of the Subscriber is empowered and duly authorized to do so.

	
  

	
(f)

	
The Subscriber has liquid assets sufficient to assure that the purchase price of the Securities will cause no undue financial difficulties and that, after purchasing the Securities the Subscriber will be able to provide for any foreseeable current needs and possible personal contingencies; the Subscriber is able to bear the risk of illiquidity and the risk of a complete loss of this investment.

	
  

	
(g)

	
The information in any documents delivered by the Subscriber in connection with this subscription, including, but not limited to the Investor Questionnaire, is true, correct and complete in all respects as of the date hereof.

	
  

	
(h)

	
The offering and sale of the Securities to the Subscriber were not made through any advertisement in printed media of general and regular paid circulation, radio or television or any other form of advertisement, or as part of a general solicitation.

 

  

3

  

 

	
  

	
(i)

	
The Subscriber recognizes that an investment in the Securities involves significant risks. The Subscriber has read and understands such risks and that such risks, and others, can result in the loss of the Subscriber’s entire investment in the Securities.

	
  

	
(j)

	
The Subscriber is acquiring the Securities, as principal, for the Subscriber’s own account for investment purposes only, and not with a present intention toward or for the resale, distribution or fractionalization thereof, and no other person has a beneficial interest in the Securities.  The Subscriber has no present intention of selling or otherwise distributing or disposing of the Securities, and understands that an investment in the Securities must be considered a long-term illiquid investment.

	
  

	
(k)

	
The Subscriber hereby agrees to irrevocably waive for itself, its successors and assigns all right and entitlement to payment of the stock dividend of 3.272 shares for each share of Common Stock subscribed for by the undersigned under this Agreement declared by the Company on October 8, 2013 to be distributed to the stockholders of record as of November 4, 2013.

	
3.

	
Representations, Warranties and Covenants of the Company.  As a material inducement of the Subscribers to enter into this Subscription Agreement and subscribe for the Securities, the Company represents and warrants to the Subscriber, as of the date hereof, as follows:

	
  

	
(a)

	
Organization and Standing.  The Company is a duly organized corporation, validly existing and in good standing under the laws of the State of Nevada, has full power to carry on its business as and where such business is now being conducted and to own, lease and operate the properties and assets now owned or operated by it and is duly qualified to do business and is in good standing in each jurisdiction where the conduct of its business or the ownership of its properties requires such qualification except where the failure to be so qualified would not have a Material Adverse Effect on the Company.  “Material Adverse Effect” means any circumstance, change in, or effect on the Company that, individually or in the aggregate with any other similar circumstances, changes in, or effects on, the Company taken as a whole: (i) is, or is reasonably expected to be, materially adverse to the business, operations, assets, liabilities, employee relationships, customer or supplier relationships, prospects, results of operations or the condition (financial or otherwise) of the Company taken as a whole, or (ii) is reasonably expected to adversely affect the ability of the Company to operate or conduct the Company’s business in the manner in which it is currently operated or conducted or proposed to be operated or conducted by the Company; provided, however, that none of the following shall be deemed in and of themselves, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been or will be, a Material Adverse Effect: (i) any change, event, state of facts or development generally affecting the general political, economic or business conditions of the United States; (ii) any change, event, state of facts or development generally affecting the medical device industry; (iii) any change, event, state of facts or development arising from or relating to compliance with the terms of this Subscription Agreement; (iv) acts of war (whether or not declared), the commencement, continuation or escalation of a war, acts of armed hostility, sabotage or terrorism or other international or national calamity or any material worsening of such conditions; (v) changes in laws or Generally Accepted Accounting Principles after date hereof or interpretation thereof; or (vi) any matter set forth in the Offering Documents or other  Schedules or Exhibits provided thereunder.

 

  

4

  

 

	
  

	
(b)

	

Subsidiaries.  Except for Starstream Entertainment, LLC, a Delaware limited liability company (“SSE”), Starstream Films, LLC, a Delaware limited liability company, and Starstream ELP, LLC, a Delaware limited liability company, and SUAD Film, LLC, a Delaware limited liability company, the Company does not own or control any subsidiaries. For purposes of this Agreement, “Subsidiary” means, with respect to any entity at any date, any corporation, limited or general partnership, limited liability company, trust, estate, association, joint venture or other business entity of which more than 51% of (i) the outstanding capital stock having (in the absence of contingencies) ordinary voting power to elect a majority of the board of directors or other managing body of such entity, (ii) in the case of a partnership or limited liability company, the interest in the capital or profits of such partnership or limited liability company or (iii) in the case of a trust, estate, association, joint venture or other entity, the beneficial interest in such trust, estate, association or other entity business is, at the time of determination, owned or controlled directly or indirectly through one or more intermediaries, by such entity.

	
  

	
(c)

	
Authority.  The execution, delivery and performance of this Subscription Agreement and the other Offering Documents by the Company and the consummation of the transactions contemplated hereby have been duly authorized by the Board of Directors of the Company. Each of the documents contained in the Offering Documents has been (or upon delivery will be) duly executed by the Company is or, when delivered in accordance with the terms hereof, will constitute, assuming due authorization, execution and delivery by each of the parties thereto, the valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

	
  

	
(d)

	
No Conflict.  The execution, delivery and performance of this Subscription Agreement and the consummation of the transactions contemplated hereby do not (i) violate or conflict with the Company’s Certificate of Incorporation, By-laws or other organizational documents, (ii) conflict with or result (with the lapse of time or giving of notice or both) in a material breach or default under any material agreement or instrument to which the Company is a party or by which the Company is otherwise bound, or (iii) violate any order, judgment, law, statute, rule or regulation applicable to the Company, except where such violation, conflict or breach would not have a Material Adverse Effect on the Company.  This Subscription Agreement when executed by the Company will be a legal, valid and binding obligation of the Company enforceable in accordance with its terms (except as may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws and equitable principles relating to or limiting creditors’ rights generally).

 

  

5

  

 

	
  

	

(e)

	Authorization.  Issuance of the Securities to Subscriber has been duly authorized by all necessary corporate actions of the Company.

 

	
  

	

(f)

	
Litigation and Other Proceedings.  There are no actions, suits, proceedings or investigations pending against the Company at law or in equity before or by any court or Federal, state, municipal or their governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign (an “Action”) which adversely affects or challenges the legality, validity or enforceability of any of the Offering Documents or could materially adversely affect the Company.  The Company is not subject to any continuing order, writ, injunction or decree of any court or agency against it which would have a material adverse effect on the Company. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.

 

	
  

	
(g)

	
Use of Proceeds.  The proceeds of this Offering and sale of the Securities, net of payment of placement expenses, will be used by the Company for working capital and general corporate purposes.

	
  

	

(h)

	
Consents/Approvals.  No consents, filings (other than Federal and state securities filings relating to the issuance of the Securities pursuant to applicable exemptions from registration, which the Company hereby undertakes to make in a timely fashion), authorizations or other actions of any governmental authority are required to be obtained or made by the Company for the Company’s execution, delivery and performance of this Subscription Agreement which have not already been obtained or made or will be made in a timely manner following the initial Closing.

 

	
  

	
(i)

	
Placement Agents.  The Company may engage finders, brokers or placement agents in connection with the transactions contemplated hereby and pay to such brokers fees not to exceed eight (8) percent of the gross proceeds of the Offering and shares of Common Stock representing eight (8) percent of shares of Common Stock sold in the Offering.

	
  

	
(j)

	
Capitalization. A capitalization table illustrating the authorized and outstanding capital stock of the Company as of the date hereof is attached as Schedule 3(j).  All of such outstanding shares have been, or upon issuance will be, validly issued, fully paid and non-assessable.  As of the date hereof, except as disclosed in Schedule 3(j), and except for Securities issued in the Offering (i) no shares of the Company’s capital stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company, (ii) there are no outstanding debt securities, (iii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its subsidiaries, (iv) there are no outstanding securities of the Company or any of its subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its subsidiaries is or may become bound to redeem a security of the Company or any of its subsidiaries, and (v) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance or exercise of the Securities as described in this Subscription Agreement.  The Company has furnished to the Subscriber true and correct copies of the Company’s Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible or exchangeable into or exercisable for Common Stock and the material rights of the holders thereof in respect thereto.  Schedule 3(j) also lists all outstanding debt of the Company with sufficient detail acceptable to Subscriber.

 

  

6

  

 

	
  

	
(k)

	
Intellectual Property Rights. The Company owns or possesses adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct its businesses as now conducted.  The Company does not have any knowledge of any infringement by the Company of trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations, trade secret or other similar rights of others, or of any such development of similar or identical trade secrets or technical information by others and there is no claim, action or proceeding being made or brought against, or to the Company’s knowledge, being threatened against, the Company regarding trademarks, trade name rights, patents, patent rights, inventions, copyrights, licenses, service names, service marks, service mark registrations, trade secrets or other infringement.

	
  

	
(l)

	
Disclosure. No representation or warranty by the Company in this Subscription Agreement, the other Offering Documents, nor in any certificate, Schedule or Exhibit delivered or to be delivered pursuant to this Subscription Agreement or the  other Offering Documents: contains or will contain any untrue statement of material fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading.  To the knowledge of the Company at the time of the execution of this Subscription Agreement and at each Closing, there is no information concerning the Company which has not heretofore been disclosed to the Subscribers that would have a Material Adverse Effect.

	
  

	
(m)

	
Title.  The Company has good and marketable title to all personal property owned by it which is material to the business of the Company, in each case free and clear of all liens, encumbrances and defects.

	
  

	
(n)

	
Tax Status.  The Company has made or filed all United States federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject and all such returns, reports and declarations are true, correct and accurate in all material respects.  The Company has paid all taxes and other governmental assessments and charges, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith, for which adequate reserves have been established, in accordance with generally accepted accounting principles (“GAAP”), and except where the failure to do so would not constitute a Material Adverse Effect on the Company.

 

  

7

  

 

	
  

	
(o)

	
Compliance with Laws. The business of the Company has been and is presently being conducted so as to comply with all applicable material federal, state and local governmental laws, rules, regulations and ordinances.

	
  

	
(p)

	
Restrictions on Business Activities.  There is no judgment, order, decree, writ or injunction binding upon the Company or any subsidiary that has or could prohibit or impair the conduct of their respective businesses as currently conducted or any business practice of the Company or any subsidiary, including the acquisition of property, the provision of services, the hiring of employees or the solicitation of clients, in each case either individually or in the aggregate.

	
  

	
(r)

	
Issuances. The Shares will be validly issued, fully paid and non-assessable.

	
  

	
(s)

	
USA PATRIOT Act and Money Laundering Laws. The operations of the Company are and have been conducted at all times in compliance with the money laundering requirements of all applicable governmental authorities and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental authority (collectively, the “Money Laundering Laws”) and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56 (signed into Law October 26, 2001) (the “USA PATRIOT Act”) and no action, suit or proceeding by or before any court or governmental authority or any arbitrator involving any of the Company or any of its Subsidiaries with respect to the Money Laundering Laws or USA PATRIOT Act is pending or, to the best knowledge of the Company, threatened.

	
4.

	
Legends.

	
  

	
(a)

	
The Subscriber understands and agrees that the Company will cause any necessary legends to be placed upon any instruments(s) evidencing ownership of the Securities, together with any other legend that may be required by federal or state securities laws or deemed necessary or desirable by the Company.

	
  

	
(b)

	
Certificates evidencing the Shares shall not contain any legend (i) while a registration statement covering the resale of such security is effective under the Securities Act, or (ii) following any sale of such Shares pursuant to Rule 144. The Company, at its own expense, shall cause its counsel to issue a legal opinion to the transfer agent promptly if required by the transfer agent to effect the removal of the legend hereunder. The Company may not make any notation on its records or give instructions to the transfer agent that enlarge the restrictions on transfer set forth in this Agreement. Certificates for Securities subject to legend removal hereunder shall be transmitted by the transfer agent to the Subscriber by crediting the account of the Subscriber’s prime broker with the Depository Trust Company System as directed by such Subscriber (in each case subject to representation letters from a broker and/or Subscriber required by the transfer agent or the Company).

 

  

8

  

 

	
5.

	
Registration Rights.

 

	
  

	
(a)   Registration Statement Requirements.  If at any time after the Closing, when there is not an effective Registration Statement providing for the resale of the Shares (the “Registrable Securities”), and any of the Registrable Securities may not be sold pursuant to Rule 144 under the Securities Act, and the Company shall determine to prepare and file with the U.S. Securities and Exchange Commission (the “Commission”) a Registration Statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities (other than for an underwritten offering or on Form S-4 or Form S-8, each as promulgated under the Securities Act, or their then equivalents), the Company shall send to each holder of Registrable Securities written notice of such determination.  If within fifteen (15) days after receipt of such notice, or within such shorter period of time as may be specified by the Company in such written notice as may be necessary for the Company to comply with its obligations with respect to the timing of the filing of such Registration Statement, any such holder shall so request in writing, (which request shall specify the Registrable Securities intended to be registered), the Company shall use commercially reasonable efforts to cause the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the holder.

	
  

	
 

	
  

	
(b)   Registration Procedures. When the Company effects the registration of any Registrable Securities under the Securities Act, the Company will, as expeditiously as possible:

 

	
  

	
(i)    prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective until such registration statement has been effective for the earlier of (a) a period of one (1) year, or (b) until the Shares can be sold by the Subscriber pursuant to Rule 144 without volume restrictions;

	
  

	
 

	
  

	
(ii)   furnish to the Subscriber, at the Company’s expense, such number of copies of the registration statement and the prospectus included therein (including each preliminary prospectus) as the Subscriber reasonably may request in order to facilitate the public sale or their disposition of the securities covered by such registration statement or make them electronically available;

	
  

	
 

	
  

	
(iii)  use its reasonable best efforts to register or qualify the Registrable Securities covered by such registration statement under the securities or “blue sky” laws of such jurisdictions as the Subscriber shall request in writing, provided, however, that the Company shall not for any such purpose be required to qualify generally to transact business as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such jurisdiction; and

	
  

	
 

	
  

	
(iv)  list the Registrable Securities covered by such registration statement with any securities exchange on which the common stock of the Company is then listed.

 

  

9

  

 

	
  

	
(c)   Provision of Documents.  It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Subscriber that such Subscriber shall furnish to the Company in writing such information and representation letters, including a completed selling securityholder questionnaire in the form acceptable to the Company, with respect to itself and the proposed distribution by it as the Company may reasonably request to assure compliance with federal and applicable state securities laws.

	
  

	
 

	
  

	
(d)  Expenses.  All expenses incurred by the Company in complying with Section 5, including, without limitation, all registration and filing fees, printing expenses (if required), fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including reasonable counsel fees) incurred in connection with complying with state securities or “blue sky” laws, fees of FINRA, transfer taxes, and fees of transfer agents and registrars, are called “Registration Expenses.” The Company will pay all Registration Expenses in connection with any registration statement described in Section 5.

	
  

	
 

	
  

	
(e)   Indemnification and Contribution.

 

	
  

	
(i)    In the event of a registration of any Registrable Securities under the Securities Act pursuant to this Section 5, the Company will, to the extent permitted by law, indemnify and hold harmless the Subscriber, each of the officers, directors, agents, affiliates, members, managers, control persons, and principal shareholders of the Subscriber, each underwriter of such Registrable Securities thereunder and each other person, if any, who controls such Subscriber or underwriter within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which the Subscriber, or such underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such Registrable Securities was registered under the Securities Act pursuant to Section 5, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances when made, and will subject to the provisions of Section 5(e)(iii) reimburse the Subscriber, each such underwriter and each such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable to the Subscriber to the extent that any such damages arise out of or are based upon an untrue statement or omission made in any preliminary prospectus if (i) the Subscriber failed to send or deliver a copy of the final prospectus delivered by the Company to the Subscriber with or prior to the delivery of written confirmation of the sale by the Subscriber to the person asserting the claim from which such damages arise, (ii) the final prospectus would have corrected such untrue statement or alleged untrue statement or such omission or alleged omission, or (iii) to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by any such Subscriber in writing specifically for use in such registration statement or prospectus.

	
  

	
 

	
  

	
(ii)   In the event of a registration of any of the Registrable Securities under the Securities Act pursuant to Section 5, the Subscriber will, to the extent permitted by law, indemnify and hold harmless the Company, and each person, if any, who controls the Company within the meaning of the Securities Act, each officer of the Company who signs the registration statement, each director of the Company, each underwriter and each person who controls any underwriter within the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such officer, director, underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement under which such Registrable Securities were registered under the Securities Act pursuant to Section 5, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such officer, director, underwriter and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, provided, however, that the Subscriber will be liable hereunder in any such case if and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information pertaining to the Subscriber, as such, furnished in writing to the Company by such Subscriber specifically for use in such registration statement or prospectus, and provided, further, however, that the liability of the Subscriber hereunder shall be limited to the net proceeds actually received by the Subscriber from the sale of Registrable Securities pursuant to such registration statement.

 

  

10

  

 

	
  

	
(iii)  Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to such indemnified party other than under this Section 5(e)(iii) and shall only relieve it from any liability which it may have to such indemnified party under this Section 5(e)(iii), except and only if and to the extent the indemnifying party is prejudiced by such omission. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 5(e)(iii) for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected, provided, however, that, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnifying party shall have reasonably concluded that there may be reasonable defenses available to indemnified party which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, the indemnified parties, as a group, shall have the right to select one separate counsel, reasonably satisfactory to the indemnified and indemnifying party, and to assume such legal defenses and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred.

	
  

	
 

	
  

	
(iv)  In order to provide for just and equitable contribution in the event of joint liability under the Securities Act in any case in which either (i) the Subscriber, or any controlling person of the Subscriber, makes a claim for indemnification pursuant to this Section 5(e) but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 5(e) provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of the Subscriber or controlling person of the Subscriber in circumstances for which indemnification is not provided under this Section 5(e); then, and in each such case, the Company and the Subscriber will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that the Subscriber is responsible only for the portion represented by the percentage that the public offering price of its securities offered by the registration statement bears to the public offering price of all securities offered by such registration statement, provided, however, that, in any such case, (y) the Subscriber will not be required to contribute any amount in excess of the public offering price of all such securities sold by it pursuant to such registration statement; and (z) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation and provided, further, however, that the liability of the Subscriber hereunder shall be limited to the net proceeds actually received by the Subscriber from the sale of Registrable Securities pursuant to such registration statement.

 

  

11

  

 

	
6.

	
General Provisions.

	
  

	
(a)

	
Confidentiality.  The Subscriber covenants and agrees that it will keep confidential and will not disclose or divulge any confidential or proprietary information that such Subscriber may obtain from the Company pursuant to financial statements, reports, and other materials submitted by the Company to such Subscriber in connection with this offering or as a result of discussions with or inquiry made to the Company, unless such information is known, or until such information becomes known, to the public through no action by the Subscriber; provided, however, that a Subscriber may disclose such information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary in connection with his or her investment in the Company so long as any such professional to whom such information is disclosed is made aware of the Subscriber’s obligations hereunder and such professional agrees to be likewise bound as though such professional were a party hereto, (ii) if such information becomes generally available to the public through no fault of the Subscriber, or (iii) if such disclosure is required by applicable law or judicial order.

	
  

	
(b)

	
Successors.  The covenants, representations and warranties contained in this Subscription Agreement shall be binding on the Subscriber’s and the Company’s heirs and legal representatives and shall inure to the benefit of the respective successors and assigns of the Company.  The rights and obligations of this Subscription Agreement may not be assigned by any party without the prior written consent of the other party.

	
  

	
(c)

	
Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original agreement, but all of which together shall constitute one and the same instrument.

	
  

	
(d)

	
Execution by Facsimile.  Execution and delivery of this Agreement by facsimile transmission (including the delivery of documents in Adobe PDF format) shall constitute execution and delivery of this Agreement for all purposes, with the same force and effect as execution and delivery of an original manually signed copy hereof.

	
  

	
(e)

	
Governing Law and Jurisdiction.  This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts to be wholly performed within such state and without regard to conflicts of laws provisions.  Any legal action or proceeding arising out of or relating to this Subscription Agreement and/or the other Offering Documents may be instituted in the courts of the State of New York sitting in New York County or in the United States of America for the Southern District of New York, and the parties hereto irrevocably submit to the jurisdiction of each such court in any action or proceeding.  Subscriber hereby irrevocably waives and agrees not to assert, by way of motion, as a defense, or otherwise, in every suit, action or other proceeding arising out of or based on this Subscription Agreement and/or the other Offering Documents and brought in any such court, any claim that Subscriber is not subject personally to the jurisdiction of the above named courts, that Subscriber’s property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper.

 

  

12

  

 

	
  

	
(f)

	
(i)

	
Indemnification Generally.  The Company shall indemnify the Subscriber from and against any and all losses, damages, liabilities, claims, charges, actions, proceedings, demands, judgments, settlement costs and expenses of any nature whatsoever (including, without limitation, reasonable attorneys’ fees and expenses) resulting from any breach of a representation and warranty, covenant or agreement by the Company and all claims, charges, actions or proceedings incident to or arising out of the foregoing.

 

	
  

	 	
(ii)

	
Indemnification Procedures.  The Subscriber shall give notice as promptly as reasonably practicable to the Company of any action commenced against or by it in respect of which indemnity may be sought hereunder, but failure to so notify the Company shall not release the Company from any liability that it may have, otherwise than on account of this indemnity agreement so long as such failure shall not have materially prejudiced the position of the Company.  Upon such notification, the Company shall assume the defense of such action if it is a claim brought by a third party, and, if and after such assumption, the Company shall not be entitled to reimbursement of any expenses incurred by it in connection with such action except as described below.  In any such action, the Company shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of the Company unless (i) the Company and the Subscriber shall have mutually agreed to the contrary or (ii) the named parties in any such action (including any impleaded parties) include both the Company and the Subscriber and representation of both parties by the same counsel would be inappropriate due to actual or potential differing or conflicting interests between them.  The Company shall not be liable for any settlement of any proceeding effected without its written consent (which shall not be unreasonably withheld or delayed), but if settled with such consent or if there be final judgment for the plaintiff, the Company shall indemnify the Subscriber from and against any loss, damage or liability by reason of such settlement or judgment.

 

 

  

13

  

 

	
  

	
g.

	
Notices.  All notices, requests, demands, claims and other communications hereunder shall be in writing and shall be delivered by certified or registered mail (first class postage pre-paid), guaranteed overnight delivery, or facsimile transmission if such transmission is confirmed by delivery by certified or registered mail (first class postage pre-paid) or guaranteed overnight delivery, to the following addresses and facsimile numbers (or to such other addresses or facsimile numbers which such party shall subsequently designate in writing to the other party):

 

	  	
(i)

	
if to the Issuer:

	  	  	  
	  	  	
Gelia Group, Corp.

	  	  	
140 Rowayton Avenue, 2nd Floor

	  	  	
Rowayton, Connecticut 06853

	  	  	
Tel.: 203-803-1995

	  	  	
Facsimile: 212-656-1735

	  	  	  
	  	
(ii)

	
if to the Subscriber to the address set forth next to its name on the signature page hereto.

 

	
  

	
h.

	
Entire Agreement.  The Offering Documents delivered at  a Closing pursuant hereto, contain the entire understanding of the parties in respect of its subject matter and supersede all prior agreements and understandings between or among the parties with respect to such subject matter.  The Exhibits and schedules constitute a part hereof as though set forth in full above.

	
  

	
i.

	
Amendment; Waiver.  This Subscription Agreement may not be modified, amended, supplemented, canceled or discharged, except by written instrument executed by the Company and the holders of not less than a majority of the Shares at the time such consent is sought.  No failure to exercise, and no delay in exercising, any right, power or privilege under this Subscription Agreement shall operate as a waiver, nor shall any single or partial exercise of any right, power or privilege hereunder preclude the exercise of any other right, power or privilege.  No waiver of any breach of any provision shall be deemed to be a waiver of any proceeding or succeeding breach of the same or any other provision, nor shall any waiver be implied from any course of dealing between the parties.  No extension of time for performance of any obligations or other acts hereunder or under any other agreement shall be deemed to be an extension of the time for performance of any other obligations or any other acts.  The rights and remedies of the parties under this Subscription Agreement are in addition to all other rights and remedies, at law or equity, that they may have against each other.

	
  

	
j.

	
No Impairment.  At all times after the date hereof, the Company will not take or permit any action, or cause or permit any subsidiary to take or permit any action that materially impairs or adversely affects the rights of the Subscribers under the this Subscription Agreement or any of the other Offering Documents.

[SIGNATURE PAGES FOLLOW]

 

  

14

  

IN WITNESS WHEREOF, the Company has executed this Subscription Agreement as of the date first written above.

 

	 	
GELIA GROUP, CORP.

	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	Name:	Name 	 
	 	Title:	Chief Executive Officer	 

  

  

  

 

SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT

INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL

DOLLAR AMOUNT INVESTED   $            

NUMBER OF SHARES SUBSCRIBED FOR                                                                                                                            

NAME IN WHICH SHARES SHOULD BE ISSUED:                                                

                                                                                                                                                                                                            

 

AMOUNT INVESTED TO BE SENT VIA:      o Check (enclosed)     o Wire

Address Information

For individual subscribers this address should be the Subscriber’s primary legal residence.  For entities other than individual subscribers, please provide address information for the entities primary place of business.  Information regarding a joint subscriber should be included in the column at right.

	
 

_________________________________

Legal Address

	
 

_________________________________

Legal Address

	
 

_________________________________

City, State, and Zip Code

	
 

_________________________________

City, State, and Zip Code

Alternate Address Information

Subscribers who wish to receive correspondence at an address other than the address listed above should complete the Alternate Address section on the following page.

	
 

_________________________________

Tax ID # or Social Security #

 

	
 

_________________________________

Tax ID # or Social Security #

 

	
AGREED AND SUBSCRIBED

 

 

This __ day of ______________________, 2013

 

By:_________________________________

Name:

Title (if any):

	
AGREED AND SUBSCRIBED

SIGNATURE OF JOINT SUBSCRIBER (if any)

 

This __ day of ______________________, 2013

 

By:_________________________________

Name:

Title (if any):

 

	
 

__________________________________

Subscriber Name (Typed or Printed)

	
 

__________________________________

Additional Subscriber Name (Typed or Printed)

 

  

  

  

 

	
ACCEPTED:

 

GELIA GROUP, CORP.

 

By:_________________________________

Name: Kim Leadford

Title: Chief Executive Officer

 

Date of Acceptance:  ____________________

 

	  

Alternate Address Information (if applicable)

 

	
 

_________________________________

Alternate Address for Correspondence

	
 

_________________________________

Alternate Address for Correspondence

	
 

_________________________________

City, State and Zip Code

	
 

_________________________________

City, State and Zip Code

	
 

_________________________________

Telephone

	
 

_________________________________

Telephone

	
 

_________________________________

Facsimile

	
 

_________________________________

Facsimile

	
 

_________________________________

Tax ID # or Social Security #

 

	
 

_________________________________

Tax ID # or Social Security #

 

 

  

  

  

 

CERTIFICATE OF SIGNATORY

(To be completed if the Shares are

being subscribed for by an entity)

 

           I,                                             , am the___________________________ of _____________________________________________ (the “Entity”).

           I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Subscription Agreement and to purchase and hold the Shares, and certify further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

           IN WITNESS WHEREOF, I have set my hand this ____ day of ______________, 2013.

 

 ____________________________________

(Signature)Ex101amendment1toamandresKYcontracts

Back to 8-K
Exhibit 10.1

FIRST AMENDMENT TO THE
AMENDED MANAGED CARE CONTRACTS

BETWEEN

THE COMMONWEALTH OF KENTUCKY 
ON BEHALF OF 
DEPARTMENT FOR MEDICAID SERVICES
AND
 
WELLCARE OF KENTUCKY, INC.
REGION 3 AND STATE-WIDE

This Amendment to the Amended Medicaid Managed Care Contracts State-Wide and Region 3 (the “Contracts”) entered into on September 30, 2013 by and between the Commonwealth of Kentucky, through the Cabinet for Finance and Administration, on behalf of the Cabinet for Heath and Family Services, Department for Medicaid Services (collectively herein “Commonwealth”) and WellCare of Kentucky, Inc., to address Affordable Care Act issues (the “ACA Amendment”) shall be effective the 1st day of January, 2014 pursuant to Section 39.16 of the Contracts.   

Section 1.  The following Contract sections and/or subsections shall be amended as follows: 
11.2    Rate Adjustments 
Prospective adjustments to the rates may be required if there are mandated changes in Medicaid services as a result of legislative, executive, regulatory, or judicial action. Changes mandated by state or federal legislation, or executive, regulatory or judicial mandates, will take effect on the dates specified in the legislation or mandate.  In the event of such changes, any rate adjustments shall be made through the Contract amendment process. The Department has finalized its internal review to determine adjustments that need to be made to the Department’s Covered Benefits to ensure compliance with the Essential Benefits requirement of the Affordable Care Act. The revised Appendix I lists the adjustments to Covered Benefits and Appendix B-2 contains the increase in the Capitation Rates for those adjustments, which increase is contingent upon approval by CMS..  The adjustments are detailed in the State Plan Amendments submitted to CMS on October 1, 2013 with some revisions filed on November 15, 2013, and the new or revised Regulations which will be adopted as Emergency Regulations on or before December 31, 2013.  The rates have been determined to be actuarially sound by the Department’s actuary. If the actuarially sound rate adjustments are not acceptable to Contractor, then the Department shall allow the Contractor to exit the program without penalty imposed by the Department or recourse by the Contractor to the Department for any incurred expenses by the Contractor.

The health insurers’ premium fee under the ACA will come due in September 2014 for calendar year 2013 premiums and each year thereafter unless otherwise 

2

modified. If the Contractor is subject to the health insurer’s premium fee for the Capitation Payments being made under the existing Managed Care Contract(s) with the Commonwealth, as amended, the Commonwealth shall compensate the Contractor for that fee and for any federal taxes resulting from such compensation.  To facilitate this payment, the Contractor shall provide the Department with the Insurer’s Premium Fee assessment received from the Federal Government and the pro rata portion attributed to the Contractor’s Capitation Payments under its Contract(s) for the preceding calendar year.  In addition the Contractor shall provide a certified statement from its Chief Financial Officer as to the effective Federal Tax Rate paid for the past five tax periods.  These shall be submitted to the Department no later than September 1 of each year that the Insurer’s premium fee is imposed.  The Department will make a one-time payment on or before September 30 to the Contractor for the Commonwealth’s share of the Insurers’ premium fee and the Contractor’s Federal Tax payment attributed to this one-time payment using the average of the Federal Tax Rate the Contractor paid for the past five tax periods.  This payment method is contingent upon receipt of federal financial participation for the payment and CMS approval.

28.1    Network Providers to Be Enrolled 
The Contractor’s Network shall include Providers from throughout the provider community. The Contractor shall comply with the any willing provider statute as described in 907 KAR 1:672 or as amended and KRS 304.17A-270. Neither the Contractor nor any of its Subcontractors shall require a Provider to enroll exclusively with its network to  provide Covered Services under this Contract(s) as such would violate the requirement of 42 CFR Part 438 to provide Members with continuity of care and choice.  The Contractor shall enroll at least one (1) Federally Qualified Health Centers (FQHCs) into its network if there is a FQHC appropriately licensed to provide services in the region or service area and at least one teaching hospital.  

In addition the Contractor shall enroll the following types of providers who are willing to meet the terms and conditions for participation established by the Contractor: physicians, psychiatrists, advanced practice registered nurses, physician assistants, free-standing birthing centers, dentists, primary care centers including, home health agencies, rural health clinics, opticians, optometrists, audiologists, hearing aid vendors, speech therapists, physical therapists, occupational therapists, private duty nursing agency, pharmacies, durable medical equipment suppliers, podiatrists, renal dialysis clinics, ambulatory surgical centers, family planning providers, emergency medical transportation provider, non-emergency medical transportation providers as specified by the Department, other laboratory and x-ray providers, individuals and clinics providing Early and Periodic Screening, Diagnosis, and Treatment services, chiropractors, community mental health centers, psychiatric residential treatment facilities, hospitals (including acute care, critical access, rehabilitation, and psychiatric hospitals), local health departments, and providers of EPSDT Special Services.  The Contractor shall also enroll, 

3

Psychologists, Licensed Professional Clinical Counselors, Licensed Marriage and Family Therapists, Licensed Psychological Practitioners, Behavioral Health Multi-Specialty Groups, Certified Peer Support Providers, Certified Parental Support Providers, and Licensed Clinical Social Workers,. The Contractor may also enroll other providers, which meet the credentialing requirements, to the extent necessary to provide covered services to the Members.  Enrollment forms shall include those used by the Kentucky Medicaid Program as pertains to the provider type. The Contractor shall use such enrollment forms as required by the Department.

The Department will continue to enroll and certify hospitals, nursing facilities, home health agencies, independent laboratories, preventive health care providers, FQHC, RHC and hospices.   The Medicaid provider file will be available for review by the Contractor so that the Contractor can ascertain the status of a Provider with the Medicaid Program and the provider number assigned by the Kentucky Medicaid Program.  

Providers performing laboratory tests are required to be certified under the CLIA.  The Department will continue to update the provider file with CLIA information from the OSCAR file provided by the Centers for Medicare & Medicaid Services for all appropriate providers.  This will make laboratory certification information available to the Contractor on the Medicaid provider file.

The Contractor shall have written policies and procedures regarding the selection and retention of Contractor’s Network.  The policies and procedures regarding selection and retention must not discriminate against providers who service high-risk populations or who specialize in conditions that require costly treatment or based upon that Provider’s licensure or certification.

If the Contractor declines to include individuals or groups of providers in its network, it shall give affected providers written notice of the reason for its decision.

The Contractor must offer participation agreements with currently enrolled Medicaid providers who have received electronic health record incentive funds who are willing to meet the terms and conditions for participation established by the Contractor. 

33.    Behavioral Health Services

33.1    Department for Behavioral Health, Developmental and Intellectual Disabilities (DBHDID) Responsibilities 

The Department for Behavioral Health, Developmental and Intellectual Disabilities (DBHDID) is responsible for planning and overseeing behavioral health, intellectual disability, and developmental disability services using state and federal funds.  Behavioral health services have been provided through fourteen (14) regional 

4

mental health centers and four psychiatric hospitals (three of which are state operated and one private) to assure that community and inpatient behavioral health services are available to Kentucky citizens.  DBHDID works collaboratively with Department, to assure that Medicaid Members receive quality services.

DBHDID will work with the Contractor to insure that evidence-based practices (EBPs) are routinely used in all behavior health services and that they meet the standards of national models.  

33.2    DBHDID Goals for Behavioral Health Services

DBHDID will work with the Contractor who will engage in behavioral health promotion efforts, psychotropic medication management, suicide prevention and overall person centered treatment approaches, to lower morbidity among Members with serious mental illnesses, including Members with co-occurring developmental disabilities, substance use disorders and   smoking cessation. 

The Contractor in its design and operation of behavioral health services shall incorporate these core values for Medicaid Members: 

		
	A.
	Maintaining basic personal rights.  Individuals with mental illness have the same rights and obligations as other citizens of the Commonwealth.  Consumers have the right to retain the fullest possible control over their own lives.

		
	B.
	Being responsive to the consumer and community.  The Contractor’s provision of behavioral health services shall be responsive to the people it serves, coherently organized, and accessible to those who require behavioral healthcare.

		
	C.
	Providing care in the most appropriate setting. The Contractor shall provide the most normative care in the least restrictive setting and permit Members to be served in the community when appropriate.

		
	D.
	Having well-managed services. The Contractor shall promote cost effective services and hold all components accountable by requiring monitoring and self-evaluation, responding rapidly to identify weaknesses, adapting to changing needs, and improving technology.  

		
	E.
	The Contractor shall place a high priority on measuring Members’ satisfaction with the services they receive.  Outcome measures are a key component for evaluating program effectiveness.  

33.3    General Behavioral Health Requirements

The Department requires the Contractor’s provision of behavioral health services to be recovery and resiliency focused.  This means that services will be provided to allow individuals, or in the case of a minor, family or guardian, to have the greatest 

5

opportunities for decision making and participation in the individual’s treatment and rehabilitation plans.

33.4    Covered Behavioral Health Services

The Contractor shall assure the provision of all Medically Necessary Behavioral Health Services for Members.  These services are described in Appendix I. “Covered Services.” All Behavioral Health services shall be provided in conformance with the access standards established by the Department.  When assessing Members for Behavioral Health Services, the Contractor and its providers shall use the DSM-V classification.  The Contractor may require use of other diagnostic and assessment instrument/outcome measures in addition to the DMS-V.  Providers shall document DSM-V diagnosis and assessment/outcome information in the Member’s medical record.

33.5    Behavioral Health Provider Network

The Contractor must emphasize access to services, utilization management, assuring the services authorized are provided, are medically necessary and produce positive health outcomes.  The Department and DBHDID will coordinate on the requirement of data collection and reporting to assure that state and federal funds utilized in financing behavioral health services are efficiently utilized and meet the overall goals of health outcomes. 

The Contractor shall utilize ICD-9/10 coding and DSM-V classification for Behavioral Health billings. 

The Contractor shall provide access to psychiatrists, psychologists, and other behavioral health service providers.  Community Mental Health Centers (CMHCs) located within the Contractor service region shall be offered participation in the Contractor provider network.  Other eligible providers of behavioral health services include Licensed Professional Clinical Counselor and/or Group, Licensed Marriage and Family Therapist and/or Group, Licensed Psychological Practitioner and/or Group, Behavioral Health Multi-Specialty Group, Licensed Clinical Social Worker, Licensed Psychologist and/or Group, Certified Peer and Parental Support Providers. .  To the extent that non-psychiatrists and other providers of Behavioral health services may also be provided as a component of FQHC and RHC services, these facilities shall be offered the opportunity to participate in the Behavioral Health network.  FQHC and RHC providers can continue to provide the same services they currently provide under their licenses.  

6

The Contractor shall ensure accessibility and availability of qualified providers to all Members.  In order to ensure such accessibility, the Contractor shall, prior to March 1, 2014, submit credentialing documents for no fewer than one hundred fifty (150) behavioral health providers distributed throughout the state.1 

The Contractor shall maintain a Member education process to help Members know where and how to obtain Behavioral Health Services.

The Contractor shall permit Members to participate in the selection of the appropriate behavioral health individual practitioner(s) who will serve them and shall provide the Member with information on accessible in-network Providers with relevant experience.

(33.6 & 33.7 no change)

33.8    Follow-up after Hospitalization for Behavioral Health Services
The Contractor shall require, through Provider contract provision, that all Members receiving inpatient behavioral health services are scheduled for outpatient follow-up and/or continuing treatment prior to discharge.  The outpatient treatment must occur within seven (7) days from the date of discharge.  The Contractor shall ensure that Behavioral Health Service Providers contact Members who have missed appointment within twenty-four (24) hours to reschedule appointments.  

(33.9 no change)

33.10    Continuity of Care Upon Discharge from a Psychiatric Hospital

		
	A.
	The Contractor shall coordinate with providers of behavioral health services, and state operated or state contracted psychiatric hospitals and nursing facilities regarding admission and discharge planning, treatment objectives and projected length of stay for Members admitted to the state psychiatric hospital.  The Contractor shall enter into a collaborative agreement with the state operated or state contracted psychiatric hospital assigned to their region in accordance with 908 KAR 3:040 and in accordance with federal Olmstead law.  At a minimum the agreement shall include responsibilities of the Behavioral Health Service Provider to assure continuity of care for successful transition back into community-based supports.  In addition, the Contractor’s Behavioral Health Service Providers shall participate in quarterly Continuity of Care meetings hosted by the state operated or state contracted psychiatric hospital.  

____________
1 Region 3 shall have no fewer than thirty (30) behavioral health providers.

7

		
	B.
	The Contractor shall ensure Behavioral Health Service Providers assign a case manager prior to or on the date of discharge and provide basic, targeted or intensive case management services as medically necessary to Members with severe mental illness and co-occurring developmental disabilities who are discharged from a state operated or state contracted psychiatric facility or state operated nursing facility for Members with severe mental illness.  The Case Manager and other identified behavioral health service providers shall participate in discharge planning meetings to ensure compliance with federal Olmstead and other applicable laws.  Appropriate discharge planning shall be focused on ensuring needed supports and services are available in the least restrictive environment to meet the Member’s behavioral and physical health needs, including psychosocial rehabilitation and health promotion.  Appropriate follow up by the Behavioral Health Service Provider shall occur to ensure the community supports are meeting the needs of the Member discharged from a state operated or state contracted psychiatric hospital.  The Contractor shall ensure the Behavioral Health Service Providers assist Members in accessing free or discounted medication through the Kentucky Prescription Assistance Program (KPAP) or other similar assistance programs.  

(33.11 & 33.12 no change) 

34.    Case Management and Care Coordination
34.1    Health Risk Assessment (HRA)

The Contractor shall have programs and processes in place to address the preventive and chronic physical and behavioral health care needs of its population.  The Contractor shall implement processes to assess, monitor, and evaluate services to all subpopulations, including but not limited to, the on-going special conditions that require a course of treatment or regular care monitoring, Medicaid eligibility category, type of disability or chronic conditions, race, ethnicity, gender and age.

The Contractor shall conduct initial health screening assessments, including mental health and substance use disorders screenings, of new Members who have not been enrolled in the prior twelve (12) month period for the purpose of accessing the Members’ health care needs within ninety (90) days of Enrollment.  If the Contractor has a reasonable belief a Member is  pregnant, the Member shall be screened within thirty (30) days of Enrollment, and if pregnant, referred for appropriate prenatal care.  The Contractor agrees to make all reasonable efforts to contact new Members in person, by telephone, or by mail to have Members complete the initial health 

8

screening questionnaire and the survey instrument for both substance use and mental health disorders. 

Information to be collected shall include demographic information, current health and behavioral health status to determine the Member’s need for care management, disease management, behavioral health services and/or any other health or community services.

The Contractor shall use appropriate health care professionals in the assessment process. Members shall be offered assistance in arranging an initial visit to their PCP for a baseline medical assessment and other preventive services, including an assessment or screening of the Members potential risk, if any, for specific diseases or conditions, including substance use and mental health disorders.

The Contractor shall submit a quarterly report on the number of new Member assessment; number of assessment completed; number of assessment not completed after reasonable effort; number of refusals. 

Prior to July 1, 2014, the Contractor shall make reasonable efforts to update health screening assessment for Members who were not initially screened for substance use disorder or mental health disorder prior.  

The Contractor shall be responsible for the management and continuity of health care for all Members.  

35.4    Children in Foster Care

Upon Enrollment with the Contractor, each child in Foster Care shall have a service plan prepared by DCBS. DCBS shall forward a copy of the service plan to the Contractor on each newly enrolled Foster Care child.  No less than monthly, DCBS staff shall meet with Contractor’s staff to identify, discuss and resolve any health care issues and needs of the child as identified in the service plan.  Examples of these issues include needed specialized Medicaid Covered Services, community services and whether the child’s current primary and specialty care providers are enrolled in the Contractor’s Network.
If DCBS service plan identifies the need for case management or DCBS staff requests case management for a Member, the foster parent and/or DCBS staff will work with Contractor’s staff to develop a case management care plan. 
The Contractor will consult with DCBS staff before the development of a new case management care plan (on a newly identified health care issue) or modification of an existing case management care plan. 

9

The DCBS and designated Contractor staff will sign each service plan to indicate their agreement with the plan.  If the DCBS and Contractor staff cannot reach agreement on the service plan for a Member, information about that Member’s physical health care needs, unresolved issues in developing the case management plan, and a summary of resolutions discussed by the DCBS  and Contractor staff will be forwarded to the designated county DCBS worker.  That DCBS staff member shall work with the designated Contractor representative and a designated Department representative, if needed, to agree on a service plan. If agreement is not reached through mediation, the service plan shall be referred to the Department for resolution through the appeals process.
The Contractor shall notify the Department and DCBS no later than forty-eight (48) hours prior to the decertification of a foster child certified for services at a hospital or other residential facility located in Kentucky and no later than seven (7) days prior to the decertification of a foster child for services at a hospital or other residential facility located out of state. The Department and DCBS shall provide the Contractor with the office or division, the individual(s) and the contact information for such notification upon the execution of this Amendment and provide updated contact information as necessary.  If the Contractor fails to notify the Department and DCBS at least forty-eight (48) hours or seven (7) days as applicable prior to the decertification and the foster child remains in the facility because arrangements for placement cannot be made, the Contractor shall be responsible for the time the foster child remains in the facility up to forty-eight hours or seven days as applicable.  

The Contractor shall require in its contracts with Providers that the Provider provide basic, targeted or intensive case management services as medically necessary to foster children who are discharged from a hospital or other residential facility.  The Contractor shall require the case manager and Provider to participate in appropriate discharge planning, focused on ensuring that the needed supports and services to meet the Member’s behavioral and physical health needs will be provided outside of the hospital or other residential facility.  

Section 2.    Appendix B shall be amended by the addition of the attached ACA Benefits Capitation Rate schedule as Appendix B-2.
Section 3.    Appendix I shall be amended as indicated on “Appendix I Revised” attached hereto. 
Section 4.    Appendix S shall be amended as indicated on “Appendix S Revised” attached hereto.

10

Approvals:

This Amendment to the Contracts is subject to the terms and conditions as stated.  The parties certify that they are authorized to bind this agreement between parties and that they accept the terms of this agreement.

	
			
	CONTRACTOR:
	 
	WELLCARE OF KENTUCKY, INC.

	
			
	/s/ Kelly A. Munson
	 
	State President

	SIGNATURE
	 
	TITLE

	
			
	Kelly A. Munson
	 
	12-23-13

	PRINTED NAME
	 
	DATE

COMMONWEALTH OF KENTUCKY
CABINET FOR FINANCE AND ADMINISTRATION

	
			
	/s/ Donald R. Speer
	 
	Executive Director

	SIGNATURE
	 
	TITLE

	
			
	Donald R. Speer
	 
	1/3/2014

	PRINTED NAME
	 
	DATE

Approved As To Form And Legality:

/s/ Geri Grigsby    
GENERAL COUNSEL
CABINET FOR FINANCE AND ADMINISTRATION

11

APPENDIX B-2
Kentucky Medicaid
Cabinet for Health and Family Services
Capitation Rate Development - ACA Benefit Adjustments
Rates Effective January 1, 2014 through June 30, 2015
ACA Benefit Changes
	
																										
	Existing Medicaid Rate Cells
	All ACA Benefit Changes

	Region 1
	Region 2
	Region 3
	Region 4
	Region 5
	Region 6
	Region 7
	Region 8

	ZC101
	Families and Children Infant (age under 1)
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   

	ZC102
	Families and Children Child (age 1 through 5)
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   

	ZC103
	Families and Children Child (age 6 through 12)
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   

	ZC104
	Families and Children Child (age 13 through 18) – Female
	$
	0.17
	

	$
	0.17
	

	$
	0.17
	

	$
	0.17
	

	$
	0.17
	

	$
	0.17
	

	$
	0.17
	

	$
	0.17
	

	ZC105
	Families and Children Child (age 13 through 18) – Male
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   

	ZC106
	Families and Children Adult (age 19 through 24) - Female
	$
	9.04
	

	$
	8.37
	

	$
	9.04
	

	$
	7.97
	

	$
	10.43
	

	$
	8.44
	

	$
	8.86
	

	$
	9.39
	

	ZC107
	Families and Children Adult (age 19 through 24) - Male
	$
	8.87
	

	$
	8.20
	

	$
	8.87
	

	$
	7.80
	

	$
	10.26
	

	$
	8.27
	

	$
	8.70
	

	$
	9.22
	

	ZC108
	Families and Children Adult (age 25 through 39) – Female
	$
	9.04
	

	$
	8.37
	

	$
	9.04
	

	$
	7.97
	

	$
	10.43
	

	$
	8.44
	

	$
	8.86
	

	$
	9.39
	

	ZC109
	Families and Children Adult (age 25 through 39) - Male
	$
	8.87
	

	$
	8.20
	

	$
	8.87
	

	$
	7.80
	

	$
	10.26
	

	$
	8.27
	

	$
	8.70
	

	$
	9.22
	

	ZC110
	Families and Children Adult (age 40 or Older) – Female
	$
	9.04
	

	$
	8.37
	

	$
	9.04
	

	$
	7.97
	

	$
	10.43
	

	$
	8.44
	

	$
	8.86
	

	$
	9.39
	

	ZC111
	Families and Children Adult (age 40 or Older) - Male
	$
	8.87
	

	$
	8.20
	

	$
	8.87
	

	$
	7.80
	

	$
	10.26
	

	$
	8.27
	

	$
	8.70
	

	$
	9.22
	

	ZC201
	SSI without Medicare Adult (age 19 through 24) - Female
	$
	14.01
	

	$
	11.67
	

	$
	16.90
	

	$
	10.89
	

	$
	16.20
	

	$
	11.28
	

	$
	13.78
	

	$
	14.95
	

	ZC202
	SSI without Medicare Adult (age 19 through 24) - Male
	$
	13.85
	

	$
	11.50
	

	$
	16.73
	

	$
	10.72
	

	$
	16.03
	

	$
	11.11
	

	$
	13.61
	

	$
	14.78
	

	ZC203
	SSI without Medicare Adult (age 25 through 44) - Female
	$
	14.01
	

	$
	11.67
	

	$
	16.90
	

	$
	10.89
	

	$
	16.20
	

	$
	11.28
	

	$
	13.78
	

	$
	14.95
	

	ZC204
	SSI without Medicare Adult (age 25 through 44) - Male
	$
	13.85
	

	$
	11.50
	

	$
	16.73
	

	$
	10.72
	

	$
	16.03
	

	$
	11.11
	

	$
	13.61
	

	$
	14.78
	

	ZC205
	SSI without Medicare Adult (age 45 or older) - Female
	$
	14.01
	

	$
	11.67
	

	$
	16.90
	

	$
	10.89
	

	$
	16.20
	

	$
	11.28
	

	$
	13.78
	

	$
	14.95
	

	ZC206
	SSI without Medicare Adult (age 45 or older) - Male
	$
	13.85
	

	$
	11.50
	

	$
	16.73
	

	$
	10.72
	

	$
	16.03
	

	$
	11.11
	

	$
	13.61
	

	$
	14.78
	

	ZC301
	Dual Eligible – Female
	$
	8.04
	

	$
	10.51
	

	$
	10.51
	

	$
	8.52
	

	$
	9.99
	

	$
	9.46
	

	$
	10.89
	

	$
	8.90
	

	ZC302
	Dual Eligible – Male
	$
	8.04
	

	$
	10.51
	

	$
	10.51
	

	$
	8.52
	

	$
	9.99
	

	$
	9.46
	

	$
	10.89
	

	$
	8.90
	

	ZC401
	SSI Infant (age under 1)
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   

	ZC402
	SSI Child (age 1 through 5)
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   

	ZC403
	SSI Child (age 6 through 18)
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   

	ZC501
	Foster Care Infant (age under 1)
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   

	ZC502
	Foster Care (age 1 through 5)
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   

	ZC503
	Foster Care (age 6 through 12)
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   

	ZC504
	Foster Care (age 13 or older) – Female
	$
	0.17
	

	$
	0.17
	

	$
	0.17
	

	$
	0.17
	

	$
	0.17
	

	$
	0.17
	

	$
	0.17
	

	$
	0.17
	

	ZC505
	Foster Care (age 13 or older) – Male
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   
	$   -   

	Composite
	$
	3.10
	

	$
	3.24
	

	$
	3.43
	

	$
	3.20
	

	$
	3.96
	

	$
	2.60
	

	$
	4.44
	

	$
	5.32
	

	 
	 
	 
	 
	 
	 
	 
	 
	$
	3.84
	

	
																										
	Medicaid Expansion Rate Cells
	All ACA Benefit Changes

	Region 1
	Region 2
	Region 3
	Region 4
	Region 5
	Region 6
	Region 7
	Region 8

	ZC506
	Former Foster Care Child (>=18 <21) – Female
	$
	2.74
	

	$
	2.74
	

	$
	2.74
	

	$
	2.74
	

	$
	2.74
	

	$
	2.74
	

	$
	2.74
	

	$
	2.74
	

	ZC507
	Former Foster Care Child (>=18 <21) – Male
	$
	2.57
	

	$
	2.57
	

	$
	2.57
	

	$
	2.57
	

	$
	2.57
	

	$
	2.57
	

	$
	2.57
	

	$
	2.57
	

	ZC508
	Former Foster Care Child (>=21 <26) – Female
	$
	44.14
	

	$
	63.08
	

	$
	44.14
	

	$
	63.08
	

	$
	48.10
	

	$
	43.26
	

	$
	22.56
	

	$
	45.90
	

	ZC509
	Former Foster Care Child (>=21 <26) – Male
	$
	43.97
	

	$
	62.91
	

	$
	43.97
	

	$
	62.91
	

	$
	47.93
	

	$
	43.09
	

	$
	22.39
	

	$
	45.73
	

	ZC601
	MAGI Adult (age through 18) - Female
	$
	15.04
	

	$
	11.65
	

	$
	15.04
	

	$
	9.64
	

	$
	22.08
	

	$
	12.03
	

	$
	14.17
	

	$
	16.80
	

	ZC602
	MAGI Adult (age through 18) - Male
	$
	14.88
	

	$
	11.49
	

	$
	14.88
	

	$
	9.48
	

	$
	21.91
	

	$
	11.86
	

	$
	14.00
	

	$
	16.63
	

	ZC603
	MAGI Adult (age 19 through 24) - Female
	$
	15.04
	

	$
	11.65
	

	$
	15.04
	

	$
	9.64
	

	$
	22.08
	

	$
	12.03
	

	$
	14.17
	

	$
	16.80
	

	ZC604
	MAGI Adult (age 19 through 24) – Male
	$
	14.88
	

	$
	11.49
	

	$
	14.88
	

	$
	9.48
	

	$
	21.91
	

	$
	11.86
	

	$
	14.00
	

	$
	16.63
	

	ZC605
	MAGI Adult (age 25 through 39) – Female
	$
	15.04
	

	$
	11.65
	

	$
	15.04
	

	$
	9.64
	

	$
	22.08
	

	$
	12.03
	

	$
	14.17
	

	$
	16.80
	

	ZC606
	MAGI Adult (age 25 through 39) – Male
	$
	14.88
	

	$
	11.49
	

	$
	14.88
	

	$
	9.48
	

	$
	21.91
	

	$
	11.86
	

	$
	14.00
	

	$
	16.63
	

	ZC607
	MAGI Adult (age 40 or older) – Female
	$
	15.04
	

	$
	11.65
	

	$
	15.04
	

	$
	9.64
	

	$
	22.08
	

	$
	12.03
	

	$
	14.17
	

	$
	16.80
	

	ZC608
	MAGI Adult (age 40 or older) – Male
	$
	14.88
	

	$
	11.49
	

	$
	14.88
	

	$
	9.48
	

	$
	21.91
	

	$
	11.86
	

	$
	14.00
	

	$
	16.63
	

	Composite
	$
	15.16
	

	$
	11.86
	

	$
	15.15
	

	$
	9.94
	

	$
	22.15
	

	$
	12.31
	

	$
	14.10
	

	$
	16.81
	

	Statewide Composite- Expansion (n=167,546)
	 
	 
	 
	 
	 
	 
	 
	$
	15.49
	

	Adult Composite - Existing Plus Expansion
	 
	 
	 
	 
	 
	 
	 
	$
	13.66
	

Appendix I (Revised)

Covered Services

		
	I.
	Contractor Covered Services 

		
	A.
	Ambulatory Surgical Center Services

		
	B.
	Allergy Testing and Treatment for Adults (in addition to these services provided to Children and Pregnant and Postpartum Women)

		
	C.
	Chiropractic Services

		
	D.
	Community Mental Health Center Services

		
	E.
	Dental Services, including Oral Surgery, Orthodontics and Prosthodontics

		
	F.
	Durable Medical Equipment, including Prosthetic and Orthotic Devices, and Disposable Medical Supplies

		
	G.
	Early and Periodic Screening, Diagnosis & Treatment (EPSDT) screening and special services

		
	H.
	End Stage Renal Dialysis Services

		
	I.
	Family Planning Clinic Services in accordance with federal and state law and judicial opinion

		
	J.
	Freestanding Birth Center Services

		
	K.
	Hearing Services, including Hearing Aids for Members Under age 21

		
	L.
	Home Health Services

		
	M.
	Hospice Services (non-institutional only)

		
	N.
	Impact Plus Services

		
	O.
	Independent Laboratory Services

		
	P.
	Inpatient Hospital Services

		
	Q.
	Inpatient Mental Health Services

		
	R.
	Meals and Lodging for Appropriate Escort of Members

		
	S.
	Medical Detoxification, meaning management of symptoms during the acute withdrawal phrase from a substance to which the individual has been addicted.

		
	T.
	Medical Services, including but not limited to, those provided by Physicians, Advanced Practice Registered Nurses, Physicians Assistants and FQHCs, Primary Care Centers and Rural Health Clinics

		
	U.
	Organ Transplant Services not Considered Investigational by FDA

		
	V.
	Other Laboratory and X-ray Services

		
	W.
	Outpatient Hospital Services

		
	X.
	Outpatient Behavioral Health Services

		
	Y.
	Pharmacy and Limited Over-the-Counter Drugs including Behavioral Health Drugs

		
	Z.
	Podiatry Services

		
	AA.
	Preventive Health Services, including those currently provided in Public Health Departments, FQHCs/Primary Care Centers, and Rural Health Clinics and including BRCA1 and BRCA2 testing

		
	BB.
	Private Duty Nursing Services

64

		
	CC.
	Psychiatric Residential Treatment Facilities (Level I and Level II)

		
	DD.
	Specialized Case Management Services for Members with Complex Chronic Illnesses (Includes adult and child targeted case management)

		
	EE.
	Therapeutic Evaluation and Treatment, including Physical Therapy, Speech Therapy, Occupational Therapy 

		
	FF.
	Transportation to Covered Services, including Emergency and Ambulance Stretcher Services

		
	GG.
	Substance Use Disorder Services, including Residential Treatment, Intense Out-Patient Treatment, Therapy, Case Management, and Peer and Parental Support

		
	HH.
	Urgent and Emergency Care Services

		
	II.
	Vision Care, including Vision Examinations, Services of Opticians, Optometrists and Ophthalmologists, including eyeglasses for Members Under age 21

		
	JJ.
	Specialized Children’s Services Clinics

		
	II.
	Member Covered Services and Summary of Benefits Plan

		
	A.
	General Requirements and Limitations

The Contractor shall provide, or arrange for the provision of, health services, including Emergency Medical Services, to the extent services are covered for Members under the then current Kentucky Medicaid Program State Plan, as designated by the department in administrative regulations adopted in accordance with KRS Chapter 13A and as required by federal and state regulations, guidelines, transmittals, and procedures.  

This Appendix was developed to provide, for illustration purposes only, the Contractor with a summary of currently covered Kentucky Medicaid services and to communicate guidelines for the submission of specified Medicaid reports.  The summary is not meant to act, nor serve as a substitute for the then current administrative regulations and the more detailed information relating to services which is contained in administrative regulations governing provision of Medicaid services (Title 907 of the Kentucky Administrative Regulations (KAR) and in individual Medicaid program services benefits summaries incorporated by reference in the administrative regulations.  If the Contractor questions whether a service is a Covered Service or Non-Covered Service, the Department reserves the right to make the final determination, based on the then current administrative regulations in effect at the time of the contract.

Administrative regulations and incorporated by reference Medicaid program services benefits summaries may be accessed by contacting:

Kentucky Cabinet for Health and Family Services

65

Department for Medicaid Services
275 East Main Street, 6th Floor
Frankfort, Kentucky 40621

Kentucky’s administrative regulations are also accessible via the Internet at http://www.lrc.state.ky.us/kar/title907.htm 

Kentucky Medicaid covers only Medically Necessary services.  (907 KAR 3:130) These services are considered by the Department to be those which are reasonable and necessary to establish a diagnosis and provide preventive, palliative, curative or restorative treatment for physical or mental conditions in accordance with the standards of health care generally accepted at the time services are provided, including but not limited to services for children in accordance with 42 USC 1396d(r).  Each service must be sufficient in amount, duration, and scope to reasonably achieve its purpose.  The amount, duration, or scope of coverage must not be arbitrarily denied or reduced solely because of the diagnosis, scope of illness, or condition. 

The Contractor shall provide any Covered Services ordered to be provided to a Member by a Court, to the extent not in conflict with federal laws.  The Department shall provide written notification to the Contractor of any court-ordered service.  The Contractor shall additionally cover forensic pediatric and adult sexual abuse examinations performed by health care professional(s) credentialed to perform such examinations and any physical and sexual abuse examination(s) for any Member when the Department for Community Based Services is conducting an investigation and determines that the examination(s) is necessary.

		
	III.
	EMERGENCY CARE SERVICES (42 CFR 431.52)

The Contractor must provide, or arrange for the provision of, all covered emergency care immediately using health care providers most suitable for the type of injury or illness in accordance with Medicaid policies and procedures, even when services are provided outside the Contractor’s region or are not available using Contractor enrolled providers.  Conditions related to provision of emergency care are shown in 42 CFR 438.144.

		
	IV.
	MEDICAID SERVICES COVERED AND NOT COVERED BY THE CONTRACTOR

The Contractor must provide Covered Services under current administrative regulations.  The scope of services may be expanded with approval of the Department and as necessary to comply with federal mandates and state laws.  Certain Medicaid services are currently excluded from the Contractor benefits 

66

package, but continue to be covered through the traditional fee-for-service Medicaid Program.  The Contractor will be expected to be familiar with these Contractor excluded services, designated Medicaid “wrap-around” services and to coordinate with the Department’s providers in the delivery of these services to Members.  

Information relating to these excluded services’ programs may be accessed by the Contractor from the Department to aid in the coordination of the services.

		
	A.
	Health Services Not Covered Under Kentucky Medicaid

Under federal law, Medicaid does not receive federal matching funds for certain services.   Some of these excluded services are optional services that the Department may or may not elect to cover.  The Contractor is not required to cover services that Kentucky Medicaid has elected not to cover for Members.  

Following are services currently not covered by the Kentucky Medicaid Program:
		
	•
	Any laboratory service performed by a provider without current certification in accordance with the Clinical Laboratory Improvement Amendment (CLIA).  This requirement applies to all facilities and individual providers of any laboratory service;

		
	•
	Cosmetic procedures or services performed solely to improve appearance;

		
	•
	Hysterectomy procedures, if performed for hygienic reasons or for sterilization only;

		
	•
	Medical or surgical treatment of infertility (e.g., the reversal of sterilization, invitro fertilization, etc.);

		
	•
	Induced abortion and miscarriage performed out-of-compliance with federal and Kentucky laws and judicial opinions;

		
	•
	Paternity testing;

		
	•
	Personal service or comfort items;

		
	•
	Post mortem services;

		
	•
	Services, including but not limited to drugs, that are investigational, mainly for research purposes or experimental in nature;

		
	•
	Sex transformation services;

		
	•
	Sterilization of a mentally incompetent or institutionalized member; 

		
	•
	Services provided in countries other than the United States, unless approved by the Secretary of the Kentucky Cabinet for Health and Family Services;

		
	•
	Services or supplies in excess of limitations or maximums set forth in federal or state laws, judicial opinions and Kentucky Medicaid program regulations referenced herein;

		
	•
	Services for which the Member has no obligation to pay and for which no other person has a legal obligation to pay are excluded from coverage; and

67

		
	V.
	Health Services Limited by Prior Authorization

The following services are currently limited by Prior Authorization of the Department for Members. Other than the Prior Authorization of organ transplants, the Contractor may establish its own policies and procedures relating to Prior Authorization.

		
	•
	Early and Periodic Screening, Diagnosis and Treatment (EPSDT) Special Services

The Contractor is responsible for providing and coordinating Early and Periodic Screening, Diagnosis and Treatment Services (EPSDT), and EPSDT Special Services, through the primary care provider (PCP), for any Member under the age of twenty-one (21) years.

EPSDT Special Services must be covered by the Contractor and include any Medically Necessary health care, diagnostic, preventive, rehabilitative or therapeutic service that is Medically Necessary for a Member under the age of twenty-one (21) years to correct or ameliorate defects, physical and mental illness, or other conditions whether the needed service is covered by the Kentucky Medicaid State Plan in accordance with Section 1905 (a) of the Social Security Act.

		
	•
	Transplantation of Organs and Tissue (Currently found at 907 KAR 1:350

		
	•
	Other Prior Authorized Medicaid Services

Other Medicaid services limited by Prior Authorization are identified in the individual program coverage areas in Section VI.

		
	VI.
	Current Medicaid Programs’ Services and Extent of Coverage

The Contractor shall cover all services for its Members at the appropriate level, in the appropriate setting and as necessary to meet Members’ needs to the extent services are included in Covered Services.  The Contractor may expand coverage to include other services not routinely covered by Kentucky Medicaid, if the expansion is approved by the Department, if the services are deemed cost effective and Medically Necessary, and as long as the costs of the additional services do not affect the Capitation Rate.   

The Contractor shall provide covered services as required by the following statutes or administrative regulations:

		
	•
	Medical Necessity and Clinical Appropriate Determination Basis 

(907 KAR 3:130)
		
	•
	Freestanding Birth Center Services (907 KAR 1:180)

		
	•
	Allergy Testing and Treatment for Adults (907 KAR 3:005)

68

		
	•
	Ambulatory Surgical Center and Anesthesia Services (907 KAR 1:008)

		
	•
	Chiropractic Services (907 KAR 3:125)

		
	•
	Commission for Children with Special Health Care Needs 

(907 KAR 1:440)
		
	•
	Community Mental Health Center Services (907 KAR 1:044 and 907 KAR 3:110) 

		
	•
	Dental Health Services (907 KAR 1:026)

		
	•
	Dialysis Center Services (907 KAR 1:400)

		
	•
	Durable Medical Equipment, Medical Supplies, Orthotic and Prosthetic Devices (907 KAR 1:479)

		
	•
	Early and Periodic Screening, Diagnosis and Treatment (EPSDT) Services (907 KAR 11:034)

		
	•
	Family Planning Clinic Services (907 KAR 1:048 & 1:434)

		
	•
	Hearing Program Services (907 KAR 1:038)

		
	•
	Home Health Services (907 KAR 1:030)

		
	•
	Hospice Services – non-institutional (907 KAR 1:330 & 1: 436)

		
	•
	Hospital Inpatient Services (907 KAR 10:012) 

		
	•
	Hospital Outpatient Services (907 KAR 10:014)

		
	•
	Laboratory Services (907 KAR 1:028)

		
	•
	Medicare Non-Covered Services  (907 KAR 1:006)

		
	•
	Behavioral Health Inpatient Services (907 KAR 10:016) 

		
	•
	Behavioral Health Outpatient Services ( 907 KAR 15:010) Nursing Facility Services (907 KAR 1:022)Other Laboratory and X-ray Provider Services (907 KAR 1:028)

		
	•
	Outpatient Pharmacy Prescriptions and Over-the-Counter Drugs including 

		
	•
	Mental/Behavioral Health Drugs (907 KAR 1:019, KRS 205.5631, 205.5632,KRS 205.560) 

		
	•
	Out-Patient Physical Therapy, Speech Therapy, Occupational Therapy, (907 KAR 8:010, Occupational therapy services, 907 KAR 8:020, Physical therapy services, 907 KAR 8:030, Speech therapy services)

		
	•
	Psychiatric Residential Treatment Facility Services –  (907 KAR 9:005) 

		
	•
	Physicians and Nurses in Advanced Practice Medical Services (907 KAR 3:005 and 907 KAR 1:102) 

		
	•
	Podiatry Services (907 KAR 1:270)

		
	•
	Preventive Health Services (907 KAR 1:360)

		
	•
	Primary Care and Rural Health Center Services (907 KAR 1:054, 1:082, 1:418 and 1:427)

		
	•
	Private Duty Nursing (907 KAR 13:010)

		
	•
	Sterilization, Hysterectomy and Induced Termination of Pregnancy Procedures (Sterilizations of both male and female Members are covered only when performed in compliance with federal regulations 42 CFR 441.250.)

		
	•
	Substance Use Disorder Services (907 KAR 15:020)

		
	•
	Targeted Case Management Services (907 KAR 1:515, 907 KAR 1:525, 907 KAR 1:550 and 907 KAR 1:555)

69

		
	•
	Transportation, including Emergency and Non-emergency Ambulance (907 KAR 1:060)

		
	•
	Vaccines for Children (VFC) Program (907 KAR 1:680) 

		
	•
	Vision Services (907 KAR 1:038)

		
	•
	Specialized Children’s Services Clinics (907 KAR 3:160)

70

APPENDIX  S. (Revised)
TRANSITION/COORDINATION OF CARE PLANS

Upon receipt of a HIPAA 834 indicating that a Member is transferring from one Medicaid Managed Care Organization (Former MCO) to another MCO (New MCO), the Former MCO shall be responsible to contact the New MCO, the recipient and the recipient’s providers in order to transition existing care. A Prior Authorization (PA) shall be honored by the New MCO for 90 days or until the recipient or provider is contacted by the New MCO regarding the PA.  If the recipient and provider are not contacted by the New MCO, the existing Medicaid PA shall be honored until expired.

Hospital Admission Prior to the Member’s Transition. 

If the Member is an in-patient in any facility at the time of transition, the entity responsible for the Member’s care at the time of admission shall continue to provide coverage for the Member at that facility, including all Professional Services, until the recipient is discharged from the facility for the current admission. An inpatient admission within fourteen (14) calendar days of discharge for the same diagnosis shall be considered a “current admission.” The “same diagnosis” is defined as the first five digits of a diagnosis code.

Outpatient Facility Services and Non-Facility Services

Effective on the Member’s Transition date, the New MCO will be responsible for outpatient services both facility and non-facility. Outpatient reimbursement includes outpatient hospital, ambulatory surgery centers, and renal dialysis centers.

Nursing Homes 

Eligibility for Long Term Care in a Nursing Facility (NF) includes some financial requirements not needed for basic Medicaid eligibility.  When an eligible member enters an NF the facility must receive a Level of Care (LOC) determination to ensure the member meets medical criteria for Nursing Facility.  That LOC is passed electronically to the DCBS eligibility worker, triggering the eligibility determination for this additional benefit.  That determination can generally be completed within thirty days.  Once LTC eligible, worker entries exempt the member from managed care effective with the next feasible month.  If the worker action is completed prior to cut off (eight business days before the end of the month), managed care ends at the last day of current month.  If the action is after cut off, managed care ends the last day of the following month.  During this transition, the MCO will be responsible for ancillary, physician and pharmaceuticals charges and the Department will reimburse for those services billed by Nursing Facility.  Once exempt from Managed Care, the Department will be responsible for all eligible services associated with this recipient.

Waiver Participation

1915(c) Home and Community Based Services Wavier programs are simply added benefits for eligible members; however, the action that exempts those members from being subject to Managed Care resides with the DCBS eligibility worker.  These services require a Level of Care (LOC).  The LOC is passed electronically to the DCBS eligibility worker; receipt of 

374

the LCO triggers the eligibility worker to complete entries within the eligibility system.   Those entries exempt the member from managed care effective the next feasible month.  If the worker action is completed prior to cut off (eight business days before the end of the month), managed care ends at the last day of current month.  If the action is after cut off, managed care ends the last day of the following month.  During this transition, the MCO will be responsible for all services except the additional Waiver benefits.  The Waiver Services will be paid by the Department as fee for service.  Coding in our billing system allows the Wavier Service to be processed during the transition period, once the eligibility worker has completed the necessary entries.   Once exempt from Managed Care the Department will be responsible for all services associated with this recipient.

Transplants

Follow up care provided on or after the Member’s Transition that is billed outside the Global Charges, will be the responsibility of the New MCO.

Eligibility Issues

For a Member who loses eligibility during an inpatient stay, an  MCO is responsible for the care through discharge if the hospital is compensated under a DRG methodology or  through the day of ineligibility if the hospital is comenstated under a per deum methodology.

375

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00225-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00225-of-00352.parquet"}]]