Document:

Settlement Agreement and Mutual Release, dated as of October 23, 2006

 Exhibit 10.3 
 SETTLEMENT AGREEMENT 
 AND MUTUAL RELEASES 
 I. PARTIES 
 This Settlement Agreement (this
“Agreement”) is entered into by and among the United States of America, acting through the United States Department of Justice, on behalf of the Office of Inspector General (“OIG-HHS”) of the Department of Health and Human
Services (“HHS”) (collectively the “United States”); and defendant Medco Health Solutions, Inc. (“Medco”). (OIG-HHS and Medco are each referred to herein as a “Party” and are collectively referred to as the
Parties.”) 
 II. PREAMBLE 
 As a preamble to this Agreement, the Parties recite the following: 
 A. Medco is a pharmaceutical services company that administers
pharmacy benefit management (“PBM”) services for health plans and employers, including governmental employers. Medco operates mail order pharmacies and call centers licensed by states and other political subdivisions, and employs
pharmacists subject to state licensing requirements. Medco provides mail order prescriptions and related benefit services, and submits claims to Medicare and Medicare Advantage Organizations and Medicare + Choice Plans. Medco also provided the Medco
Coordination of Benefits Recovery Program (the “COB Program”) to certain commercial payer clients which allows the beneficiaries of those clients to have their claims submitted to the Medicare Part B program retroactively for services
provided by Medco. Medco is a Delaware corporation with its principal executive offices located at 100 Parsons Pond Drive, Franklin Lakes, New Jersey 07417. Medco is the corporate successor of Merck-Medco Managed Care, L.L.C., and operates or has
operated prescription drug mail order pharmacies under the names of wholly-owned subsidiaries including Merck-Medco Managed Care of California, Inc., Merck-Medco Rx Services of Florida No. 2, L.L.C., Merck-Medco Rx Services of Florida, L.L.C.,
Merck-Medco Rx Services of Massachusetts, L.L.C., Merck-Medco Rx Services of Nevada, Inc., Merck-Medco Rx Services of New Jersey, L.L.C., Merck-Medco Rx Services of New York, L.L.C., Merck-Medco Rx Service of Ohio, Ltd., Merck-Medco Rx Services of
Ohio No. 2, Ltd., Merck-Medco Rx Services of Oklahoma, L.L.C., Merck-Medco Rx Services of Pennsylvania, L.L.C., Merck-Medco Rx Services of Texas, L.L.C., Merck-Medco Rx Services of Virginia, L.L.C., and Merck-Medco Rx Services of Washington,
Inc. For purposes of this Agreement, unless the context clearly requires otherwise, the term “Medco” shall be deemed to include Medco Health Solutions, Inc., and its past and present parents, subsidiaries, affiliates, predecessors and
successors and each of the assigns of any of the foregoing. 
  

					
	Part B	  		  	

 B. The United States contends that it has certain civil claims against Medco, as specified in
subparagraphs B.1-B.11 below, for alleged errors and related conduct during the period from January 1, 1999 through December 31, 2004, and pertaining only to claims submitted to the Medicare program using Durable Medical Equipment Regional
Carrier (“DMERC”) numbers set forth in subparagraph (3) below (hereinafter referred to as the “Covered Conduct”): 
 (1) Medco’s submission of Medicare claims for payment through its hired vendor, Other Carrier Liability Recoveries (“OCLR”), pursuant to the operation of the COB Program with its clients from
January 1, 1999 through December 31, 2004. 
 (2) Medco’s receipt of payments of Medicare claims submitted
through OCLR, pursuant to the operation of the COB Program with its clients, submitted for services rendered during calendar years 1999 through December 31, 2004. 
 (3) The Medicare claims covered by this Agreement include only claims submitted to the Medicare program using the following DMERC numbers:

 1242200001 
 4359220001 
 1242260001 
 1241520001 
 1239700001 
 1241240001 
 1240280001 
 1242350001 
 1240290001 
 1241880001. 
 (4) Any allegation that Medco denied Medicare beneficiary claim requests by patients who use Medco as their supplier, but whose plans or employers are not enrolled in the Medicare Part B Recovery Program for services rendered during the
calendar years 1999 through December 31, 2004. 
 (5) Any allegation that Medco has adopted a practice of representing
dates of service on claim forms to Medicare, false or otherwise, in order to obtain payments for diabetic supplies, inhalation drugs, or other items for services rendered during the calendar years 1999 through December 31, 2004. 
  

					
	Part B	  	2	  	

 (6) Any allegation that Medco failed to give proper credit to Medicare for returned
products when the product is returned after the claim has been submitted for products returned during the calendar years 1999 through December 31, 2004. 
 (7) Any claim that Medco failed to have a system to accurately record or acknowledge that products for which claims are submitted were
actually ordered and received by the Medicare beneficiary, or to assure that products were actually ordered and received by the Medicare beneficiary, for services rendered during the calendar years 1999 through December 31, 2004. 
 (8) Any allegation that Medco failed to assure that signed patient authorization forms existed with respect to each patient as to whom
Medco submitted a claim representing that it had a signed patient authorization on file for services rendered during the calendar years 1999 through December 31, 2004. 
 (9) Any allegation that Medco failed to charge the client price when a claim is submitted by Medco to the Medicare program for a client
beneficiary for services rendered during the calendar years 1999 through December 31, 2004. 
 (10) Any claim relating to
the 2003 review by SMS, a vendor hired by Medco, of OCLR’s relationship with Medco in the operation of the Medco Part B program. 
 (11) Any claims relating to any DMERC overpayment determination letters received by Medco prior to the mailing of the letter dated January 27, 2005, from James G. Sheehan to Craig Holden, counsel for Medco.

 C. This Agreement is made in compromise of disputed claims. It is neither an admission of liability by Medco nor a concession by the
United States that its claims are not well founded. Medco expressly denies the allegations of the United States as set forth herein and denies that it has engaged in any wrongful conduct relating to the Covered Conduct. Neither this Agreement, its
execution, or the performance of any obligations under it, including any payments, nor the fact of the settlement, is intended to be, or shall be understood as, an admission of liability or wrongdoing, or other expression reflecting upon the merits
of the dispute by Medco. Further, nothing contained in this Agreement shall be interpreted or construed as an agreement or acknowledgment by Medco as to whether any customer, or other entity which has, or previously has had, a contract with Medco
has at any time engaged in any of the conduct alleged in this Agreement. 
  

					
	Part B	  	3	  	

 To avoid the delay, uncertainty, inconvenience, and expense of protracted litigation of the above claims
(collectively, the “Protracted Litigation Costs”), the Parties reach a full and final settlement of all claims arising out of the Covered Conduct pursuant to the Terms and Conditions below. 
 III. TERMS AND CONDITIONS 
 1. In consideration
for the promises and agreements of the Parties as set forth herein, Medco agrees to pay to the United States $8,000,000 (the “Settlement Amount”) plus interest as described in the letter from Medco to the United States of October 3,
2006. The Settlement Amount shall constitute a debt immediately due and owing on the Effective Date (as defined in Paragraph 22 below) of this Agreement. Medco agrees to pay the full Settlement Amount to the United States by electronic funds
transfer pursuant to written instructions to be provided by the United States Attorney’s Office for the Eastern District of Pennsylvania. Medco agrees to make this electronic funds transfer within fourteen (14) calendar days of the
Effective Date of this Agreement. 
 2. Subject to the exceptions set forth in Paragraph 4 below, and in consideration of the obligations of
Medco set forth in this Agreement, conditioned upon Medco’s full and timely payment of the Settlement Amount, the United States (on behalf of itself, its officers, agents, agencies, and departments), releases Medco and each of its past and
present officers, directors, employees, attorneys, insurers, and assigns of any of the foregoing (each a “Medco Released Part”y and, collectively, the “Medco Released Parties”) from any civil or administrative monetary claim the
United States has or may have for the Covered Conduct under the False Claims Act, 31 U.S.C. §§ 3729-3733; the Civil Monetary Penalties Law, 42 U.S.C. § 1320a-7a; the Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801-3812;
and any common law causes of action the United States may have for fraud, unjust enrichment, payment by mistake, or breach of contract. 
 3.
In consideration of the obligations of Medco set forth in this Agreement and the Corporate Integrity Agreement entered into by and between Medco, the Office of Inspector General of OPM (“OIG-OPM”) and OIG-HHS (the “CIA”),
conditioned upon Medco’s full and timely payment of the Settlement Amount, OIG- HHS agrees to release and refrain from instituting, directing, or maintaining any administrative action seeking exclusion from the Medicare, Medicaid, and any other
Federal health care programs (as defined in 42 U.S.C. § 1320a-7b(f)) under 42 U.S.C. § 1320a-7a (Civil Monetary Penalties Law), or 42 U.S.C. § 1320a-7(b)(7) (permissive exclusion for fraud, kickbacks, and other prohibited activities),
for the Covered Conduct against Medco, except as expressly reserved in Paragraph 4, below, and as reserved this Paragraph. The OIG-HHS 
  

					
	Part B	  	4	  	

 expressly reserves all rights to comply with any statutory obligations to exclude any Medco Released Party from Medicare,
Medicaid, and other Federal health care programs under 42 U.S.C. § 1320a-7(a) (mandatory exclusion) relating to the Covered Conduct. Nothing in this Paragraph precludes the OIG-HHS from taking action against entities or persons, or for conduct
and practices, for which claims have been reserved in Paragraph 4 below. 
 4. Notwithstanding any term of this Agreement, specifically
reserved and excluded from the scope and terms of this Agreement as to any entity or person are the following claims of the United States: 
 a. Any civil, criminal, or administrative liability arising under Title 26, U.S. Code (Internal Revenue Code); 
 b. Any criminal
liability; 
 c. Except as explicitly stated in this Agreement, any administrative liability, including mandatory exclusion from Federal
health care programs; 
 d. Any liability to the United States (or its agencies) for any conduct other than the Covered Conduct; 

e. Any liability of any individuals or entities not specifically and expressly released by this Agreement, including clients and customers of Medco;

 f. Any liability based upon such obligations as are created by this Agreement; 
 g. Any liability based upon obligations created by the Consent Order of Court for Permanent Injunction consented to by Medco and the United States,
acting through the United States Department of Justice, on or about April 26, 2004 and entered by the Clerk of Court on May 20, 2004; and 
 h. Any administrative liability against individuals, including current and former directors, officers, and employees of Medco; and, 
 i. Any liability for personal injury or property damage or for other consequential damages arising therefrom; 
 5. Medco waives and
will not assert any defenses Medco may have to any criminal prosecution or administrative action relating to the Covered Conduct not otherwise released pursuant to the terms hereof that may be based in whole or in part on a contention that, under
the Double Jeopardy Clause in the Fifth Amendment of the Constitution, or under the Excessive Fines Clause in the Eighth Amendment of the Constitution, this Agreement bars a remedy sought in such criminal prosecution or administrative action.
Nothing in this Paragraph or any other provision of this Agreement constitutes an agreement by the United States concerning the characterization of the Settlement Amount for purposes of the Internal Revenue laws, Title 26 of the United States Code.

  

					
	Part B	  	5	  	

 6. Medco releases and forever discharges the United States, its agencies, employees, servants and agents
from any and all claims that any Medco Releasor ever had, has or may have through the Effective Date arising out of or in connection with the Covered Conduct and the United States’ investigation and prosecution of thereof. 
 7. The Settlement Amount shall not be decreased as a result of the denial of claims for payment now being withheld from payment by any Medicare carrier
or intermediary related to the Covered Conduct; and Medco shall not resubmit to any Medicare carrier or intermediary any previously denied claims related to the Covered Conduct, and shall not appeal any such denials of claims. 
 8. Medco agrees to the following: 
 a.
Unallowable Costs Defined: that all costs (as defined in the Federal Acquisition Regulation, 48 C.F.R. § 31.205-47; and in Titles XVIII and XIX of the Social Security Act, 42 U.S.C. §§ 1395-1395hhh and 1396-1396y; and the regulations
and official program directives promulgated thereunder) incurred by or on behalf of Medco, its present or former officers, directors, employees, shareholders, and agents in connection with the following shall be “unallowable costs” on
government contracts and under the Medicare Program, Medicaid Program, TRICARE Program, and Federal Employees Health Benefits Program (FEHBP): 
 i. the matters covered by this Agreement; 
 ii. the United States’ audit(s) and civil investigation(s) of the matters covered
by this Agreement; 
 iii. Medco’s investigation, defense, and corrective actions undertaken in response to the United States’
audit(s) and civil investigation(s) in connection with the matters covered by this Agreement. 
 iv. the negotiation and performance of this
Agreement; 
 v. the payment Medco makes to the United States pursuant to this Agreement; and 
 vi. the negotiation of, and obligations undertaken pursuant to the CIA to: 
 (a) retain an independent review organization to perform annual reviews as described in Section III of the CIA; and 
  

					
	Part B	  	6	  	

 (b) prepare and submit reports to the OIG-HHS. 
 However, nothing in this Paragraph 8.a.(vi) that may apply to the obligations undertaken pursuant to the CIA affects the status of costs that are not allowable based on
any other authority applicable to Medco. (All costs described or set forth in this Paragraph 8.a. are hereafter “unallowable costs.”) 
 b. Future Treatment of Unallowable Costs: These unallowable costs shall be separately determined and accounted for by Medco, and Medco shall not charge such unallowable costs directly or indirectly to any contracts with the United States or
any State Medicaid program, or seek payment for such unallowable costs through any cost report, cost statement, information statement, or payment request submitted by Medco or any of its subsidiaries or affiliates to the Medicare, Medicaid, TRICARE,
or FEHBP Programs. 
 c. Treatment of Unallowable Costs Previously Submitted for Payment: Medco further agrees that within 90 days of the
Effective Date of this Agreement it will identify to applicable Medicare fiscal intermediaries, carriers, or contractors, and Medicaid fiscal agents, any unallowable costs (as defined in this Paragraph) included in payments previously sought from
the United States, or any State Medicaid program, including payments sought in any cost reports, cost statements, information reports, or payment requests already submitted by Medco or any of its subsidiaries, and shall request, and agree, that such
cost reports, cost statements, information reports, or payment requests, even if already settled, be adjusted to account for the effect of the inclusion of the unallowable costs. Medco agrees that the United States, at a minimum, shall be entitled
to recoup from Medco any overpayment plus applicable interest and penalties as a result of the inclusion of such unallowable costs on previously-submitted cost reports, information reports, cost statements, or requests for payment. 
 Any payments due after the adjustments have been made shall be paid to the United States pursuant to the direction of the Department of Justice or the
affected agencies. The United States reserves its rights to disagree with any calculations submitted by Medco or any of its subsidiaries on the effect of inclusion of unallowable costs (as defined in this Paragraph) on Medco’s or any of its
subsidiaries’ or affiliates’ cost reports, cost statements, or information reports. 
 d. Nothing in this Agreement shall
constitute a waiver of the rights of the United States to audit, examine, or re-examine Medco’s books and records to determine that no unallowable costs have been claimed in accordance with the provisions of this Paragraph. 
  

					
	Part B	  	7	  	

 9. Medco agrees to cooperate fully and truthfully with the United States’ investigation, if any, of
individuals and entities not released in this Agreement. Upon reasonable notice, Medco shall (a) make reasonable efforts to facilitate access to, and encourage the cooperation of its directors, officers, and employees for interviews and
testimony, consistent with the rights and privileges of such individuals; (b) furnish to the United States, upon reasonable request, any non-privileged documents in its possession, custody or control; and (c) make commercially reasonable
efforts to cause any attorneys, auditors, investment bankers, or consultants engaged by Medco to furnish to the United States, upon reasonable request, any non-privileged documents in the possession, custody or control of any such third party. Medco
and the United States will cooperate in good faith to avoid duplicate production of documents. 
 10. Medco agrees that it shall not seek
payment for any of the monies owed under this Agreement from any health care beneficiaries or their parents, sponsors, legally responsible individuals, or third-party payers. Medco waives any causes of action against these beneficiaries or their
parents, sponsors, legally responsible individuals, or third party payers based upon the claims for payment covered by this Agreement. Medco waives and shall not seek payment for any of the health care billings covered by this Agreement from any
health care beneficiaries or their parents, sponsors, legally responsible individuals, or third party payors based upon the claims defined as Covered Conduct 
 11. Except as expressly set forth above, this Agreement is intended to be for the benefit of the Parties only, and no Party releases, waives or otherwise discharges, and each Party expressly reserves, any claims such
Party may have against any other person or entity. 
 12. Medco warrants that it has reviewed its respective financial situations and that it
currently is solvent within the meaning of 11 U.S.C. §§ 547(b)(3) and 548(a)(1)(B)(ii)(l), and will remain solvent following payment to the United States of the Settlement Amount. Further, the Parties warrant that, in evaluating whether to
execute this Agreement, they (a) have intended that the mutual promises, covenants, and obligations set forth constitute a contemporaneous exchange for new value given to Medco, within the meaning of 11 U.S.C. § 547(c)(1); and
(b) conclude that these mutual promises, covenants, and obligations do, in fact, constitute such a contemporaneous exchange. Further, the Parties warrant that the mutual promises, covenants, and obligations set forth herein are intended to and
do, in fact, represent a reasonably equivalent exchange of value that is not intended to hinder, delay, or defraud any entity that Medco was or became indebted to on or after the date of this transfer, within the meaning of 11 U.S.C. §
548(a)(1). 
  

					
	Part B	  	8	  	

 13. Except as expressly provided to the contrary in this Agreement and allowed by law, each Party shall
bear its own legal and other costs incurred in connection with this matter, including the preparation and performance of this Agreement. 
 14. Medco represents that this Agreement is freely and voluntarily entered into without any degree of duress or compulsion whatsoever. 
 15. This Agreement is governed by the laws of the United States. The Parties agree that the exclusive jurisdiction and venue for any dispute arising between and among the Parties under this Agreement is the United States District Court for
the Eastern District of Pennsylvania, except that disputes arising under the CIA shall be resolved exclusively under the dispute resolution provisions in the CIA. 
 16. This Agreement, together with the CIA, constitutes the complete agreement between the Parties with respect to the subject matter hereof and thereof and supersedes all prior oral or written communications between
or among the Parties or any of their affiliates regarding the subject matter hereof and thereof. This Agreement may not be amended except by written consent of the Parties, provided, however, that only Medco, OIG-OPM and OIG-HHS must
agree in writing to any modification of the CIA. 
 17. The individuals signing this Agreement on behalf of Medco represent and warrant that
they are authorized by Medco to execute this Agreement. The United States signatories represent that they are signing this Agreement in their official capacities and that they are authorized to execute this Agreement. Each Party further warrants and
represents that such Party has not assigned or transferred, or purported to assign or transfer, to any person or entity, any claims that such Party has or may have that are subject to this Agreement. 
 18. This Agreement may be executed in counterparts, each of which constitutes an original and all of which constitute one and the same Agreement.
Facsimiles of signatures shall constitute acceptable, binding signatures for purposes of this Agreement. 
 19. This Agreement is binding on
Medco’s successors, transferees, heirs, and assigns. 
 20. Neither this Agreement nor any of the rights, interests or obligations
hereunder may be assigned by any of the Parties hereto without the prior written consent of each other Party, and no assignment of any right, interest or obligation shall release any such assigning Party therefrom unless each other Party 

 

					
	Part B	  	9	  	

 shall have consented to such release in writing specifically referring to the right, interest or obligation from which
such assigning Party is to be released. Any purported assignment not in conformity with this Paragraph shall be null and void and of no effect. 
 21. All Parties consent to the United States’ disclosure of this Agreement, and information about this Agreement, to the public. 
 22. The term “Effective Date” as used herein shall refer to the date that the last signatory to the Agreement has executed the Agreement. This Agreement shall not be used in any proceeding, except one to enforce this Agreement or
as a defense to any claim released hereunder. 
 23. All recitals are incorporated herein as material provisions of this Agreement. The
captions and headings of the Sections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. Unless the context of this Agreement clearly requires otherwise: (a) references to the
plural include the singular, the singular the plural, and the part the whole, (b) references to one gender include all genders, (c) “or” has the inclusive meaning frequently identified with the phrase “and/or,”
(d) “including” has the inclusive meaning frequently identified with the phrase “including but not limited to” or “including without limitation,” (e) references to “hereunder,”“herein” or
“hereof” relate to this Agreement as a whole, and (f) the terms “dollars” and “$” refer to United States dollars. Section and subsection references are to this Agreement as originally executed unless otherwise
specified. Any reference herein to any person shall be deemed to include the heirs, personal representatives, successors and permitted assigns of such person. Any reference herein to a corporate entity shall be deemed to include (a) the
entity’s past and present parents, subsidiaries, affiliates, predecessors, and successors and each of the assigns of any of the foregoing. 
 24. In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and
effect. 
 25. Each Party agrees that the United States District Court for the Eastern District of Pennsylvania shall retain jurisdiction to
enforce the Agreement. 
  

					
	Part B	  	10	  	

 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the      day of
                     , 2006. 
  

					
		 	THE UNITED STATES OF AMERICA
			
	DATED:                     	 	BY:	 	 /s/ JAMES G. SHEEHAN

		 		 	PATRICK L. MEEHAN
		 		 	United States Attorney
		 		 	JAMES G. SHEEHAN
		 		 	Associate United States Attorney

  

					
	Part B	  	11	  	

					
	DATED: 10-23-06	 	BY:	 	 /s/ DAVID T. SHAPIRO

		 		 	MICHAL L. TINGLE
		 		 	DAVID T. SHAPIRO
		 		 	Trial Attorneys
		 		 	Commercial Litigation Branch
		 		 	Civil Division
		 		 	United States Department of Justice

  

					
	Part B	  	12	  	

					
	DATED: 10/23/06	 	BY:	 	 /s/ GREGORY E. DEMSKE

		 		 	GREGORY E. DEMSKE
		 		 	Assistant Inspector General for Legal Affairs
		 		 	Office of Counsel to the Inspector General
		 		 	Office of Inspector General
		 		 	United States Department of Health and Human Services

  

					
	Part B	  	13	  	

					
		 	MEDCO HEALTH SOLUTIONS, INC.
			
	DATED: 23 Oct 2006	 	BY:	 	 /s/ ELIZABETH S. FERGUSON

		 		 	ELIZABETH S. FERGUSON
		 		 	Vice President, Litigation and Government Programs
		 		 	Medco Health Solutions, Inc.
			
	DATED: 23 Oct 2006	 	BY:	 	 /s/ WILLIAM McDANIELS

		 		 	WILLIAM McDANIELS
		 		 	Counsel for Medco Health Solutions, Inc.

  

					
	Part B	  	14Corporate Integrity Agreement, dated as of October 23, 2006

 Exhibit 10.4 
 CORPORATE INTEGRITY AGREEMENT 
 BETWEEN THE 
 OFFICE OF INSPECTOR GENERAL OF THE 
 DEPARTMENT OF HEALTH AND HUMAN SERVICES 
 AND THE 
 OFFICE OF INSPECTOR GENERAL OF THE 
 OFFICE OF PERSONNEL MANAGEMENT 
 AND

 MEDCO HEALTH SOLUTIONS, INC. 
 I. PREAMBLE 
 Medco Health Solutions,
Inc. (Medco) hereby enters into this Corporate Integrity Agreement (CIA) with the Office of Inspector General of the United States Department of Health and Human Services (HHS-OIG) and the Office of Inspector General of the United States Office of
Personnel Management (OPM-OIG) (collectively referred to as “OIG”) to promote compliance with the statutes, regulations, and written directives of Medicare, Medicaid, all other Federal health care programs (as defined in 42 U.S.C. §
1320a-7b(f)), and the Federal Employees Health Benefits Program (FEHBP) administered under the Federal Employees Health Benefits Act, 5 U.S.C. § 8901-8914 (all of which are collectively referred to as “Covered Federal Programs”).

 Contemporaneously with this CIA, Medco is entering into three Settlement Agreements with the United States (collectively the
“Settlement Agreements.”) Medco represents that prior to the Effective Date of the CIA (as defined in Section II. A below), Medco had established a voluntary compliance program (the “Voluntary Compliance Program”) which included,
among other things, the appointment of a Compliance Officer, the appointment of a Compliance Committee, the development and dissemination of a Code of Conduct, the establishment of a toll-free number for employees to report potential violations of
Covered Federal Program requirements, the establishment of written policies and procedures, screening measures for Ineligible Persons (as defined in Section III.G.I.a below), regular training to all employees, including Covered Persons, concerning
Medco’s Code of Conduct, regular training to all employees, including Covered Persons (as defined in Section II.C.3 below, and various training and auditing programs. 
 Medco CIA 
  

 1 

 Medco represents that its Voluntary Compliance Program is aimed at Medco’s goal of promoting high
ethical standards in the conduct of Medco’s business practices. Medco agrees to continue the operation of its Voluntary Compliance Program in accordance with the terms set forth below during the term of this CIA. Medco may modify its Voluntary
Compliance Program as appropriate (subject to the terms of this CIA), but shall ensure that during the term of this CIA it complies with the obligations of Medco set forth herein. 
 II. TERM AND SCOPE OF THE CIA 
 A. The period of the compliance obligations assumed by Medco under this CIA shall be 5 years from the Effective Date of this CIA, unless otherwise specified. The effective date shall be the date on which the final
signatory of this CIA executes this CIA (the “Effective Date”). Each one-year period, beginning with the one-year period following the Effective Date, shall be referred to as a “Reporting Period.” 
 B. Sections VII, IX, X, and XI shall expire no later than 120 days after OIG’s receipt of: (1) Medco’s final Annual Report; or
(2) any additional materials submitted by Medco pursuant to OIG’s request, whichever is later. 
 C. The scope of this CIA shall be
governed by the following definitions: 
 1. “Arrangements” shall mean every arrangement or transaction that
involves, directly or indirectly, the offer, payment, solicitation, or receipt of anything of value; and is between Medco and any actual or potential source of health care business or referrals to Medco or any actual or potential source of health
care business or referrals from Medco. The term “source” shall mean any physician, contractor, vendor, or agent and the term “health care business or referrals” shall be read to include referring, recommending, arranging for,
ordering, leasing, or purchasing of any good, facility, item, or service for which payment may be made in whole or in part by a Covered Federal Program. 
 Medco CIA 
  

 2 

 2. “Focus Arrangements” means all Arrangements: 
 a. Under which compensation or remuneration is received by Medco from or on behalf of a pharmaceutical manufacturer, including but not
limited to, rebates, regardless of how categorized, market share incentives, commissions, fees under products and services agreements, fees received for sales of utilization data and administrative or management fees but specifically does not
include purchase discounts based upon invoiced purchase terms; 
 b. That are between Medco and a client where
“client” shall mean any governmental entity, employer, insurer, union or other entity that contracts with Medco to provide or administer a pharmacy benefit for such plan and its members or participants (hereinafter referred to as
“Client Plans”); or 
 c. That are between Medco and a broker or other agent engaged by Medco to perform services
on its behalf. 
 3. “Covered Persons” includes: 
 a. all officers, directors, and employees of Medco; 
 b. all agents engaged by Medco to perform functions related to: (1) the marketing of items or services reimbursable by Covered
Federal Programs on behalf of Medco; or (2) the negotiation, development, approval, management, review or implementation of Medco’s Arrangements on behalf of Medco; and 
 c. all contractors or other persons engaged by Medco to provide pharmacy patient services, where pharmacy patient services is defined as
having direct patient contact or processing of a prescription from receipt to shipping. 
 Medco CIA 
  

 3 

 Notwithstanding the above, this term does not include part-time or per diem employees, contractors,
subcontractors, agents, and other persons who are not reasonably expected to work more than 160 hours per year, except that any such individuals shall become “Covered Persons” at the point when they work more than 160 hours during the
calendar year. 
 4. “Covered Contractors” includes all contractors, who are not otherwise Covered Persons, engaged
by Medco to perform functions related to the negotiation, development, approval, management, review or implementation of Medco’s Arrangements on behalf of Medco. 
 5. “Relevant Covered Persons” means a Covered Person employed or engaged by Medco who is involved with the negotiation,
development, approval, management, review or implementation of Medco’s Arrangements identified in Section II.C above on behalf of Medco. 
 III.
CORPORATE INTEGRITY OBLIGATIONS 
 Medco shall maintain a compliance
program (the “Compliance Program”) that includes the following elements: 
 A. Compliance Officer and Committee. 

1. Compliance Officer. To the extent not already accomplished, within 90 days after the Effective Date, Medco shall appoint an individual to
serve as its Compliance Officer and shall maintain a Compliance Officer for the term of the CIA. The Compliance Officer shall be responsible for overseeing a staff that develop and implement policies, procedures, and practices designed to ensure
compliance with the requirements set forth in this CIA and with Covered Federal Program requirements. The Compliance Officer shall be a member of senior management of Medco, shall make periodic (at least quarterly) reports regarding compliance
matters directly to the Audit Committee of the Board of Directors of Medco and shall be authorized to report on such matters directly to the Board of Directors at any time. The Compliance Officer shall not be or be subordinate to the General Counsel
or Chief Financial Officer. The Compliance Officer shall be responsible for managing a compliance department that shall monitor the day-to-day compliance activities engaged in by Medco as well as for any reporting obligations created under this CIA.

 Medco CIA 
  

 4 

 Medco shall report to HHS-OIG, in writing, any changes in the identity of or any material changes in the
position description of the Compliance Officer, or any actions or changes that would affect the Compliance Officer’s ability to perform the duties necessary to meet the obligations in this CIA, within 15 days after such a change. 
 2. Compliance Committee. To the extent not already accomplished, within 90 days after the Effective Date, Medco shall appoint a Compliance
Committee. The Compliance Committee shall, at a minimum, include the Compliance Officer and other members of senior management necessary to meet the requirements of this CIA (e.g., senior executives of relevant departments, such as client and
account services, human resources, audit and operations, and legal). The Compliance Officer shall chair the Compliance Committee and the Committee shall support the Compliance Officer in fulfilling his/her responsibilities (e.g., shall assist
in the analysis of the organization’s risk areas and shall oversee monitoring of internal and external audits and investigations). 
 Medco shall report to HHS-OIG, in writing, any changes in the composition of the Compliance Committee, or any actions or changes that would affect the Compliance Committee’s ability to perform the duties necessary to meet the
obligations in this CIA, within 15 days after such a change. 
 B. Written Standards. 
 1. Code of Conduct. To the extent not already accomplished, within 120 days after the Effective Date, Medco shall distribute a written Code of
Conduct to all Covered Persons. Medco shall make the promotion of, and adherence to, the Code of Conduct an element in evaluating the performance of all employees. Distribution may include publishing the Code of Conduct on Medco’s intranet or
other internal web site available to all of its employees and Covered Persons. If Medco uses such an electronic distribution method, it must notify the individuals of the distribution of the Code of Conduct in that manner and it must monitor the
distribution to ensure that all appropriate individuals receive the revised Code of Conduct. The Code of Conduct shall, at a minimum, set forth: 
 a. Medco’s commitment to full compliance with all Covered Federal Program requirements, including its commitment to prepare and submit accurate claims consistent with such requirements; 
 Medco CIA 
  

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 b. Medco’s requirement that all of its Covered Persons shall be expected to comply with all
applicable Covered Federal Program requirements and with Medco’s own Policies and Procedures as implemented pursuant to this Section III.B (including the requirements of this CIA); 
 c. the requirement that all of Medco’s Covered Persons shall be expected to report to the Compliance Officer, or other appropriate individual
designated by Medco, suspected violations of any Covered Federal Program requirements or of Medco’s own Policies and Procedures; 
 d.
the possible consequences to both Medco and Covered Persons of failure to comply with Covered Federal Program requirements and with Medco’s own Policies and Procedures and the failure to report such noncompliance; and 
 e. the right of all individuals to use the Disclosure Program described in Section III.F, and Medco’s commitment to nonretaliation and to maintain,
as appropriate, confidentiality and anonymity with respect to disclosures made under the Disclosure Program. 
 Within 120 days after the
Effective Date, each Covered Person shall certify, in writing or electronically, that he or she has received, read, understood, and shall abide by Medco’s Code of Conduct. New Covered Persons shall receive the Code of Conduct and shall complete
the required certification within 30 days after becoming a Covered Person or within 90 days after the Effective Date, whichever is later. 
 Medco shall make available to each Covered Contractor, either through a contract attachment, posting on its web site or by other reasonable means, a copy of Medco’s Code of Conduct, and shall confirm that the Covered Contractor has its
own comparable compliance program. Medco shall request that the Covered Contractor make available a copy of the Medco Code of Conduct to its employees and/or agents who it believes are reasonably expected to provide Covered Contractor services to
Medco for more than 160 hours each calendar year. 
 Medco CIA 
  

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 Medco shall periodically review the Code of Conduct to determine if revisions are appropriate and shall
make any necessary revisions based on such review. Any materially revised Code of Conduct shall be distributed within 30 days after any revisions are finalized. In the case of a material change to the Code of Conduct, each Covered Person shall
certify, in writing or electronically, that he or she has received, read, understood, and shall abide by the revised Code of Conduct within 30 days after the distribution of the materially revised Code of Conduct. 
 2. Policies and Procedures. Within 120 days after the Effective Date, Medco shall implement written policies and procedures regarding the
operation of Medco’s compliance program and its compliance with Covered Federal Program requirements (collectively “Policies and Procedures”). At a minimum, the Policies and Procedures shall address: 
  

	 	a.	the subjects relating to the Code of Conduct identified in Section III.B.l; 

  

	 	b.	42 U.S.C. § 1320a-7b(b) (Anti-Kickback Statute); 42 U.S.C. § 1395nn (Stark Law); 41 U.S.C. § 51 et seq. (Public Contract Anti- Kickback Act); 31 U.S.C.
§§ 3729-3733 (False Claims Act), 18 U.S.C. § 666 (Theft or Bribery Concerning Programs Receiving Federal Funds); and the regulations and other guidance documents related to these statutes, and business or financial arrangements or
contracts that generate unlawful Covered Federal Program business in violation of any of these statutes; 

  

	 	c.	the requirements set forth in Section III.D (Compliance with the Anti-Kickback Statute, the Public Contract Anti-Kickback Act, and Stark Law), including but not limited to the Focus
Arrangements Database (as defined in section III.D.1.a below), the internal review and approval process, and the tracking of remuneration to and from sources of health care business or referrals; 

 To the extent not already accomplished, within 120 days after the Effective Date, the relevant portions of the Policies and Procedures shall be
distributed to all Covered 
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 Persons whose job functions relate to those Policies and Procedures. Appropriate and knowledgeable staff shall be
available to explain the Policies and Procedures. 
 Distribution may include publishing the Policies and Procedures on Medco’s intranet
or other internal web site available to all of its employees and Covered Persons. If Medco uses such an electronic distribution method, it must notify the individuals of the distribution of the Policies and Procedures in that manner and it must
monitor the distribution to ensure that all appropriate individuals receive the revised Policies and Procedures. 
 At least annually (and
more frequently, if appropriate), Medco shall assess and update as necessary the Policies and Procedures. Within 30 days after the effective date of any material revisions, the relevant portions of any such revised Policies and Procedures shall be
distributed to all individuals whose job functions relate to those Policies and Procedures at issue. 
 C. Training and Education.

 Medco represents that prior to the Effective Date, Medco had established compliance training programs for its Covered Persons and agrees
that it shall continue to conduct appropriate training programs that meet the requirements of this CIA. 
 Medco represents that it provides
training on a regular basis concerning a variety of topics to its employees. The training required by this CIA need not be separate and distinct from the regular training provided by Medco, but instead may be integrated fully into such regular
training provided, however, that the training satisfies the requirements set forth in this CIA. The Compliance Officer shall be responsible for determining how many of the hours of regular training shall be credited toward the General and
Arrangements Training requirements set forth in this Section III.C. 
 To the extent that Medco has provided training that satisfies the
General or Arrangements Training requirements set forth below within one hundred eighty (180) days prior to the Effective Date, the OIG shall credit that training for purposes of satisfying Medco’s training obligations for the first
Reporting Period of the CIA. For purpose of the General Training requirements, if Medco provided General Training that satisfies the requirements set forth in Section III.C. 1 below to Covered Person within 180 days prior to the Effective Date,
Medco may satisfy its remaining General Training 
 Medco CIA 
  

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 obligation for the first Reporting Period by notifying those Covered Persons of the fact that Medco entered a CIA and
notifying them in detail of Medco’s requirements and obligations under the CIA. 
 1. General Training. Within 120 days after the
Effective Date, Medco shall provide at least one hour of General Training to each Covered Person (the “General Training”). This training, at a minimum, shall explain Medco’s: 
  

	 	a.	CIA requirements; and 

  

	 	b.	Medco’s Compliance Program (including the Code of Conduct and the Policies and Procedures as they pertain to general compliance issues). 

 New Covered Persons shall receive the General Training described above within 30 days after becoming a Covered Person or within 90 days after the
Effective Date, whichever is later. After receiving the initial General Training described above, each Covered Person shall receive at least one hour of General Training annually. 
 2. Arrangements Training. Within 120 days after the Effective Date, each Relevant Covered Person shall receive at least three hours of
Arrangements Training, in addition to the General Training required above. The Arrangements Training shall include a discussion of: 
  

	 	a.	Arrangements that potentially implicate the Anti-Kickback Statute, the Stark Law, or the Public Contract Anti-Kickback Act, as well as the regulations and other guidance documents
related to these statutes; 

  

	 	b.	Medco’s policies, procedures, and other requirements relating to Arrangements, including but not limited to the Focus Arrangements Database, the internal review and approval
process, and the tracking of remuneration to and from sources of health care business or referrals required by Section III.D of this CIA; 

  

	 	c.	the personal obligation of each Relevant Covered Person to know the applicable legal requirements and Medco’s Policies and Procedures; 

 Medco CIA 
  

 9 

	 	d.	the legal sanctions under the Anti-Kickback Statute, the Public Contract Anti-Kickback Act, and the Stark Law; and 

  

	 	e.	examples of violations of the Anti-Kickback Statute, the Public Contract Anti-Kickback Act, and the Stark Law. 

 New Relevant Covered Persons shall receive this training within 30 days after the beginning of their employment or becoming Relevant Covered Persons, or
within 90 days after the Effective Date, whichever is later. (To the extent a Relevant Covered Person is on a leave of absence when the training is provided, such Relevant Covered Person shall receive the Arrangements Training within 30 days after
the conclusion of the leave of absence.) A Medco employee who has completed the Arrangements Training shall review a new Relevant Covered Person’s work until such time as the new Relevant Covered Person completes his or her Arrangements
Training. 
 After receiving the initial Arrangements Training described in this Section, each Relevant Covered Person shall receive at least
two hours of Arrangements Training annually. 
 3. Certification. Each individual who is required to attend training shall certify, in
writing, or in electronic form, if applicable, that he or she has received the required training. The certification shall specify the type of training received and the date received. The Compliance Officer (or designee) shall retain the
certifications, along with all course materials. These certifications shall be made available to OIG, upon request. 
 4. Qualifications
of Trainer. Persons providing the training shall be knowledgeable about the subject area. 
 5. Update of Training. Medco shall
annually review the training, and, where appropriate, update the training to reflect changes in Covered Federal Program requirements, any issues discovered during internal audits or the Focus Arrangements Review, Unallowable Cost Review if
applicable, and any other relevant information. 
 6. Computer-based Training. Medco may provide the training required under this CIA
through appropriate computer-based training approaches. In that event, all applicable references to “hours” in this Section shall mean “normative hours” as that term is used in the computer-based training industry. If Medco
chooses to provide computer-based training, it shall make available appropriately qualified and knowledgeable staff or trainers to answer questions or provide additional information to the individuals receiving such training. 
 Medco CIA 
  

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 D. Compliance with the Anti-Kickback Statute, the Public Contract Anti-Kickback Act, and Stark
Law. 
 1. Arrangements Procedures. Within 90 days after the Effective Date, Medco shall create procedures reasonably designed to
ensure that each existing and new or renewed Arrangement does not violate the Anti-Kickback Statute, the Stark Law, and/or the Public Contract Anti-Kickback Act, or the regulations, directives, and guidance related to these statutes
(“Arrangements Procedures”). These procedures shall include the following: 
  

	 	a.	creating and maintaining a database of all existing and new or renewed Focus Arrangements that shall contain the information specified in Appendix A (“Focus Arrangements
Database”); 

  

	 	b.	tracking remuneration to and from all parties to each Focus Arrangement; 

  

	 	c.	tracking service and activity logs to ensure that parties to the Focus Arrangements are performing the services required under the applicable Focus Arrangement(s) (if applicable);

  

	 	d.	monitoring the use of leased space, medical supplies, medical devices, equipment, or other patient care items to ensure that such use is consistent with the terms of the applicable
Focus Arrangement(s) (if applicable); 

  

	 	e.	establishing and implementing a written review and approval process, where applicable, for all Arrangements, including but not limited to a legal review of Focus Arrangements by
counsel with expertise in the Anti-Kickback Statute, the Public Contract Anti-Kickback Act, and Stark Law, and appropriate documentation of all internal controls, the purpose of which is to ensure that all new and existing or renewed Focus
Arrangements do not violate the Anti-Kickback Statute, the Public Contract Anti-Kickback Act, and Stark Law; 

 Medco CIA 
  

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	 	f.	requiring the Compliance Officer to review the Focus Arrangements Database, the internal review and approval process, and other Arrangements Procedures on at least a quarterly basis
and to provide a report on the results of such review to the Compliance Committee; and 

  

	 	g.	implementing effective responses when suspected violations of the Anti-Kickback Statute, the Public Contract Anti-Kickback Act, and Stark Law are discovered, including disclosing
Reportable Events and quantifying and repaying Overpayments pursuant to Section III.I (Reporting) when appropriate. 

 2.
New or Renewed Focus Arrangements. Prior to entering into new Focus Arrangements or any amendment to an existing Focus Arrangement in which new terms and conditions (other than pricing terms and renewal dates) are negotiated and documented,
in addition to complying with the Arrangements Procedures set forth above, Medco shall comply with the following requirements (Focus Arrangements Requirements): 
  

	 	a.	Ensure that each Focus Arrangement is set forth in writing and signed by Medco and the other parties to the Focus Arrangement; 

  

	 	b.	Include in the written agreement a requirement that all individuals employed or engaged by the other parties and who meet the definition of Covered Persons shall comply with
Medco’s Compliance Program, including the training related to the Anti-Kickback Statute, the Public Contract Anti-Kickback Act, and the Stark Law. Additionally, Medco shall provide each party to the Focus Arrangement with access to its Code of
Conduct and Policies and Procedures related to the Anti-Kickback Statute, the Public Contract Anti-Kickback Act, and the Stark Law; and 

  

	 	c.	Include in the written agreement a statement by the parties to the Focus Arrangement that the parties shall not violate the Anti-Kickback Statute, the Public Contract Anti-Kickback
Act, and the Stark Law with respect to the performance of the Focus Arrangement. 

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 3. Records Retention and Access. Medco shall retain and make available to OIG, upon request, the
Focus Arrangements Database, all supporting documentation of the Focus Arrangements subject to this Section III.D and, to the extent available, all non-privileged communications related to the Focus Arrangements and the actual performance of the
duties under the Focus Arrangements. 
 E. Review Procedures. 
 1. General Description: 
  

	 	a.	Engagement of Independent Review Organization. Within 120 days after the Effective Date, Medco shall engage an individual or entity (or entities), such as an accounting,
auditing, law or consulting firm (hereinafter “Independent Review Organization” or “IRO”), to perform the following reviews: (i) a review to assist Medco in assessing its compliance with the obligations pursuant to Section
III.D of this CIA (Focus Arrangements Review), and (ii) if applicable, a review to analyze whether Medco sought payment for certain unallowable costs (Unallowable Cost Review). The IRO engaged by Medco to perform the Unallowable Costs Review
shall have expertise in the cost reporting requirements applicable to Medco and in the general requirements of the Covered Federal Program(s) from which Medco seeks reimbursement. 

 Each IRO shall assess, along with Medco, whether it can perform the IRO review in a professionally independent and/or objective fashion, as appropriate
to the nature of the engagement, taking into account any other business relationships or other engagements that may exist. The engagement of the IRO for the Focus Arrangements Review shall not be deemed to create an attorney-client relationship
between Medco and the IRO. The other applicable requirements relating to the IRO(s) are outlined in Appendix B to this CIA, which is incorporated by reference. 
 Medco CIA 
  

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	 	b.	Frequency of Focus Arrangements Review. The Focus Arrangements Review shall be performed annually and shall cover each of the Reporting Periods. The IRO(s) shall perform all
components of each annual Focus Arrangements Review. 

  

	 	c.	Frequency of Unallowable Cost Review. If applicable, the IRO shall perform the Unallowable Cost Review for the first Reporting Period. 

  

	 	d.	Retention of Records. The IRO and Medco shall retain and make available to OIG, upon request, all work papers, supporting documentation, correspondence, and draft reports
(those exchanged between the IRO and Medco) related to the Focus Arrangement Reviews and Unallowable Cost Reviews (if applicable) for a period of six years after the Effective Date. 

  

	 	e.	Responsibilities and Liabilities. Nothing in this Section III.E affects Medco’s responsibilities or liabilities under any criminal, civil, or administrative laws or
regulations applicable to any Covered Federal Program, including, but not limited to, the Anti-Kickback Statute, the Public Contract Anti-Kickback Act, and/or the Stark Law. 

 2. Focus Arrangements Review. The IRO shall perform a review to assess whether Medco is complying with the Arrangements Procedures and Focus
Arrangements Requirements required by Sections III.D.1 and III.D.2 of this CIA. The Focus Arrangements Review shall consist of the IRO randomly selecting a sample of 25 Focus Arrangements that were entered into or renewed during the Reporting
Period. The IRO shall assess whether Medco has implemented the Arrangements Procedures and, for each selected Focus Arrangement, the IRO shall assess whether Medco has complied with the Arrangements Procedures and Focus Arrangements Requirements
specifically with respect to that Focus Arrangement. 
 The IRO’s assessment of the Focus Arrangements sample shall include, but is not
limited to (a) verifying that the Focus Arrangement is listed in the Focus Arrangements Database; (b) verifying that the Focus Arrangement was subject to the internal review and approval process (including both a legal and business review)
and obtained the necessary approvals and that such review and approval is appropriately 
 Medco CIA 
  

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 documented; (c) verifying that the remuneration related to the Focus Arrangement is properly tracked;
(d) verifying that the service and activity logs are properly completed and reviewed (if applicable); (e) verifying that leased space, medical supplies, medical devices, and equipment, and other patient care items are properly monitored
(if applicable); (f) verifying that the Compliance Officer is reviewing the Focus Arrangements Database, the internal review and approval process, and other Arrangements Procedures on a quarterly basis and reporting the results of such review
to the Compliance Committee; (g) verifying that effective responses are being implemented when violations of the Anti-Kickback Statute, the Public Contract Anti-Kickback Act, and Stark Law are discovered; and (h) verifying that Medco has
met the requirements of Section III.D.2. 
 3. Focus Arrangements Review Report. The IRO shall prepare a report based upon the Focus
Arrangements Review performed (“Focus Arrangements Review Report”). The Focus Arrangements Review Report shall include the IRO’s findings with respect to (a) whether Medco has generally implemented the Arrangements Procedures
described in Section III.D.I; and (b) specific findings as to whether Medco has complied with the Arrangements Procedures and Focus Arrangements Requirements with respect to each of the randomly selected Focus Arrangements reviewed by the IRO.
In addition, the Focus Arrangements Review Report shall include any observations, findings and recommendations on possible improvements to Medco’s policies, procedures, and systems in place to ensure that all Focus Arrangements do not violate
the Anti-Kickback Statute, the Public Contract Anti-Kickback Act, and Stark Law. 
 4. Unallowable Cost Review. If applicable, the IRO
shall conduct a review of Medco’s compliance with the unallowable cost provisions of the Settlement Agreements. The IRO shall determine whether Medco has complied with its obligations not to charge to, or otherwise seek payment from, Federal or
State payors for unallowable costs (as defined in the Settlement Agreements) and its obligation to identify to applicable Federal or State payors any unallowable costs included in payments previously sought from the United States, or any State
Medicaid program. This unallowable cost analysis shall include, but not be limited to, payments sought in any cost reports, cost statements, information reports, or payment requests already submitted by Medco or any affiliates. To the extent that
such cost reports, cost statements, information reports, or payment requests, even if already settled, have been adjusted to account for the effect of the inclusion of the unallowable costs, the IRO shall determine if such adjustments were proper.
In making this determination, the IRO may need to review cost reports and/or financial statements from the year in which the Settlement Agreement were executed, as well as from previous years. 
 Medco CIA 
  

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 5. Unallowable Cost Review Report. If applicable, the IRO shall prepare a report based upon the
Unallowable Cost Review performed. The Unallowable Cost Review Report shall include the IRO’s findings and supporting rationale regarding the Unallowable Costs Review and whether Medco has complied with its obligation not to charge to, or
otherwise seek payment from, Federal or State payers for unallowable costs (as defined in the Settlement Agreements) and its obligation to identify to applicable Federal or State payors any unallowable costs included in payments previously sought
from such payor. 
 6. Validation Review. In the event HHS-OIG has reason to believe that: (a) Medco’s Focus Arrangements
Review or Unallowable Cost Review fails to conform to the requirements of this Agreement; or (b) the IRO’s findings or the Focus Arrangements Review or Unallowable Cost Review results are inaccurate, HHS-OIG may, at its sole discretion,
conduct its own review to determine whether the Focus Arrangements Review or Unallowable Cost Review complied with the requirements of the Agreement and/or the findings or Focus Arrangements Review or Unallowable Cost Review results are inaccurate
(Validation Review). Medco shall pay for the reasonable cost of any such review performed by HHS-OIG or any of its designated agents. Any Validation Review of Reports submitted as part of Medco’s final Annual Report must be initiated no later
than one year after Medco’s final submission (as described in Section II) is received by OIG. 
 Prior to initiating a Validation
Review, HHS-OIG shall notify Medco of its intent to do so and provide a written explanation of why HHS-OIG believes such a review is necessary. To resolve any concerns raised by HHS-OIG, Medco may request a meeting with HHS-OIG to: (a) discuss
the results of any Focus Arrangements Review or Unallowable Cost Review submissions or findings; (b) present any additional information to clarify the results of the Focus Arrangements Review or Unallowable Cost Review or to correct the
inaccuracy of the Focus Arrangements Review or Unallowable Cost Review; and/or (c) propose alternatives to the proposed Validation Review. Medco agrees to provide any additional information as may be requested by HHS-OIG under this Section in
an expedited manner. HHS-OIG will attempt in good faith to resolve any Focus Arrangements Review or Unallowable Cost Review issues with Medco prior to conducting a Validation Review. However, the final determination as to whether or not to proceed
with a Validation Review shall be made at the sole discretion of HHS-OIG. 
 Medco CIA 
  

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 7. Independence/Objectivity Certification. The IRO shall include in its report(s) to Medco a
certification or sworn affidavit that it has evaluated its professional independence and/or objectivity, as appropriate to the nature of the engagement, with regard to the Focus Arrangements Review or Unallowable Cost Review and that it has
concluded that it is, in fact, independent and/or objective. 
 F. Disclosure Program. 
 Medco represents that it has established and shall continue to maintain a Disclosure Program that includes a mechanism (e.g., a toll-free
compliance telephone line) to enable individuals to disclose, to the Compliance Officer or some other person who is not in the disclosing individual’s chain of command, any identified issues or questions associated with Medco’s policies,
conduct, practices, or procedures with respect to a Covered Federal Program believed by the individual to be a potential violation of criminal, civil, or administrative law. Medco shall continue to appropriately publicize the existence of the
disclosure mechanism (e.g., via periodic e-mails to employees or by posting the information in prominent common areas, including on Medco’s intranet or internal website available to all employees). 
 The Disclosure Program shall emphasize a nonretribution, nonretaliation policy, and shall include a reporting mechanism for anonymous communications for
which appropriate confidentiality shall be maintained. Upon receipt of a disclosure associated with Medco’s policies, conduct, practices or procedures with respect to any Covered Federal Program (each a “Disclosure”), the Compliance
Officer (or designee) shall gather all relevant information from the disclosing individual. The Compliance Officer (or designee) shall make a preliminary, good faith inquiry into the allegations set forth in every disclosure to ensure that he or she
has obtained all of the information necessary to determine whether a further review should be conducted. For any Disclosure that is sufficiently specific so that it reasonably: (1) permits a determination of the appropriateness of the alleged
improper practice; and (2) provides an opportunity for taking corrective action, Medco shall conduct an internal review of the allegations set forth in the disclosure and ensure that proper follow-up is conducted. 
 Medco CIA 
  

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 The Compliance Officer (or designee) shall maintain a disclosure log, which shall include a record and
summary of each disclosure received (whether anonymous or not), the status of the respective internal reviews, and any corrective action taken in response to the internal reviews. The disclosure log shall be made available to OIG upon request.

 G. Ineligible Persons. 
 1. Definitions. For purposes of this CIA: 
  

	 	a.	an “Ineligible Person” shall include an individual or entity who: 

 i. is currently excluded, debarred, suspended, or otherwise ineligible to participate in the Covered Federal Programs or in Federal procurement or nonprocurement programs; or 
 ii. has been convicted of a criminal offense that falls within the ambit of 42 U.S.C. § 1320a-7(a), but has not yet been excluded, debarred,
suspended, or otherwise declared ineligible. 
  

	 	b.	“Exclusion Lists” include: 

 i. the HHS/OIG List
of Excluded Individuals/Entities (available through the Internet at http://www.oig.hhs.gov); and 
 ii. the General Services
Administration’s List of Parties Excluded from Federal Programs (available through the Internet at http://www.epls.gov). 
  

	 	c.	“Screened Persons” include: 

 i. prospective and
current owners (other than shareholders who: (A) have an ownership interest of less than 5%; and (B) acquired the ownership interest through public trading); 
 Medco CIA 
  

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 ii. prospective and current Covered Persons; and 
 iii. prospective and current Covered Contractors. 
 2. Screening Requirements. Medco shall ensure that all Screened Persons are not Ineligible Persons, by implementing the following screening requirements. 
  

	 	a.	Medco shall screen or cause to be screened all Screened Persons against the Exclusion Lists prior to engaging their services and, as part of the hiring or contracting process, shall
require Screened Persons to disclose whether they are Ineligible Persons. 

  

	 	b.	Medco shall screen all Screened Persons against the Exclusion Lists within 90 days of the Effective Date and on an annual basis thereafter. 

  

	 	c.	Medco shall implement a policy requiring all Screened Persons to disclose immediately to Medco any debarment, exclusion, suspension, or other event that makes that person an
Ineligible Person. 

 Nothing in this Section affects the responsibility of (or liability for) Medco to refrain from billing Covered Federal
Programs for items or services furnished, ordered, or prescribed by an Ineligible Person. 
 3. Removal Requirement. If Medco has
actual notice that a Screened Person has become an Ineligible Person, Medco shall remove such person from responsibility for, or involvement with, Medco’s business operations related to the Covered Federal Programs and shall remove such person
from any position for which the Screened Person’s compensation or the items or services furnished, ordered, or prescribed by the Screened Person are paid in whole or part, directly or indirectly, by Covered Federal Programs or otherwise with
Federal funds at least until such time as the Screened Person is reinstated into participation in the Covered Federal Programs. 
 4.
Pending Charges and Proposed Exclusions or Debarments. If Medco has actual notice that a Screened Person is charged with a criminal offense that falls within the ambit of 42 U.S.C. §§ 1320a-7(a), 1320a-7(b)(l)-(3), or 5 U.S.C.
§ 8902a or is 
 Medco CIA 
  

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 proposed for exclusion, suspension, or debarment during his or her employment or contract term, Medco shall take all
appropriate actions to ensure that the responsibilities of that Screened Person have not and shall not adversely affect the quality of care rendered to any beneficiary, patient, or resident, or the accuracy of any claims submitted to any Covered
Federal Program. 
 H. Notification of Government Investigation or Legal Proceedings. 
 Within 30 days after discovery by senior management at Medco’s corporate headquarters in New Jersey, Medco shall notify OIG, in writing, of any
ongoing investigation or legal proceeding known to Medco conducted or brought by a governmental entity or its agents involving an allegation that Medco has committed a crime or has engaged in fraudulent activities in the United States (including the
United States, the District of Columbia, and the territories and possessions of the United States). This notification shall include a description of the allegation, the identity of the investigating or prosecuting agency, and the status of such
investigation or legal proceeding. Medco shall also provide written notice to OIG within 30 days after the resolution of the matter, and shall provide OIG with a description of the findings and/or results of the investigation or proceedings, if any.

 I. Reporting. 
 1.
Overpayments. 
  

	 	a.	Definition of Overpayments. For purposes of this CIA, an “Overpayment” shall mean the amount of money Medco has received from a Covered Federal Program in excess of
the amount due and payable under any Covered Federal Program requirements. 

  

	 	b.	Reporting of Overpayments. If, at any time, Medco identifies or learns of any Overpayment, Medco shall notify the payor (e.g., Medicare fiscal intermediary or carrier
or FEHBP carrier) within 30 days after identification of the Overpayment and take remedial steps within 60 days after identification (or such additional time as may be agreed to by the payor) to correct the problem, including preventing the
underlying problem and the Overpayment from recurring. Also, within 30 days after identification of the Overpayment, Medco shall 

 Medco CIA 
  

 20 

 repay the Overpayment to the appropriate payor to the extent such Overpayment has been quantified. If
not yet quantified, within 30 days after identification, Medco shall notify the payor of its efforts to quantify the Overpayment amount along with a schedule of when such work is expected to be completed. Notification and repayment to the payor
shall be done in accordance with the payer’s policies, and, for Medicare contractors, shall include the information contained on the Overpayment Refund Form, provided as Appendix C to this CIA. Notwithstanding the above, notification and
repayment of any Overpayment amount that routinely is reconciled or adjusted pursuant to: (1) policies and procedures established by the payor; (2) regulations established pursuant to Medicare D; or (3) contracts between Medco and the
payor should be handled in accordance with such policies, procedures, regulations, or contracts (as applicable). 
 2. Reportable
Events. 
  

	 	a.	Definition of Reportable Event. For purposes of this CIA, a “Reportable Event” means anything that involves: 

 i. a substantial Overpayment; or 
 ii. a
matter that a reasonable person would consider a probable violation of criminal, civil, or administrative laws applicable to any Covered Federal Program for which penalties or exclusion or debarment may be authorized. 
 A Reportable Event may be the result of an isolated event or a series of occurrences. 
  

	 	b.	Reporting of Reportable Events. If Medco determines (after a reasonable opportunity to conduct an appropriate review or investigation of the allegations) through any means
that there is a Reportable Event, Medco shall notify OIG, in writing, within 30 days after making the determination that the Reportable Event exists. The report to OIG shall include the following information: 

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 i. If the Reportable Event results in an Overpayment, the report to OIG shall be made at the same time
as the notification to the payor required in Section III.I.1, and shall include all of the information on the Overpayment Refund Form, as well as: 
 (A) the payer’s name, address, and contact person to whom the Overpayment was sent; and 
 (B) the date of the check and
identification number (or electronic transaction number) by which the Overpayment was repaid/refunded; 
 ii. a complete description of the
Reportable Event, including the relevant facts, persons involved, and legal and Covered Federal Program authorities implicated; 
 iii. a
description of Medco’s actions taken to correct the Reportable Event; and 
 iv. any further steps Medco plans to take to address the
Reportable Event and prevent it from recurring. 
 IV. NEW BUSINESS UNITS OR
LOCATIONS 
 In the event that, after the Effective Date, Medco changes locations or sells, closes,
purchases, or establishes a new business unit or location related to the furnishing of items or services that may be reimbursed by Covered Federal Programs, Medco shall notify OIG of this fact as soon as possible, but no later than within 30 days
after the date of change of location, sale, closure, purchase, or establishment. This notification shall include the address of the new business unit or location, phone number, fax number, Medicare provider number, provider identification number
and/or supplier number, and the corresponding contractor’s name and address that has issued each Medicare number. Each new business unit or location shall be subject to all the requirements of this CIA. 
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 V. IMPLEMENTATION AND ANNUAL REPORTS

 A. Implementation Report. Within 150 days after the Effective Date, Medco shall submit a written report to OIG summarizing the
status of its implementation of the requirements of this CIA (Implementation Report). The Implementation Report shall, at a minimum, include: 
 1. the name, address, phone number, and position description of the Compliance Officer required by Section III. A, and a summary of other noncompliance job responsibilities the Compliance Officer may have; 
 2. the names and positions of the members of the Compliance Committee required by Section III.A; 
 3. a copy of Medco’s Code of Conduct required by Section III.B.l; 
 4. a copy of all Policies and Procedures required by Section III.B.2; 
 5. the number of Covered Persons
required to complete the Code of Conduct certification required by Section III.B.l, the percentage of Covered Persons who have completed such certification, and an explanation of any exceptions (the documentation supporting this information shall be
available to OIG, upon request); 
 6. the following information regarding each type of training required by Section III.C: 
  

	 	a.	a description of such training, including a summary of the topics covered, the length of sessions and a schedule of training sessions; 

  

	 	b.	the number of Covered Persons required to be trained, percentage of Covered Persons actually trained, and an explanation of any exceptions. 

 A copy of all training materials and the documentation supporting this information shall be available to OIG, upon request. 
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 7. a description of the Focus Arrangements Database required by Section III.D.1.a; 
 8. a description of the internal review and approval process required by Section III.D.l.e; 
 9. a description of the tracking and monitoring procedures and other Arrangements Procedures required by Section III.D.l; 
 10. a description of the Disclosure Program required by Section III.F; 
 11. the following information regarding the IRO(s): (a) identity, address, and phone number; (b) a copy of the engagement letter; (c) a summary and description of any and all current and prior
engagements and agreements between Medco and the IRQ; and (d) the proposed start and completion dates of the Focus Arrangements Review and Unallowable Costs Review, if applicable; 
 12. a certification from the IRO regarding its professional independence and/or objectivity with respect to Medco; 
 13. a description of the process by which Medco fulfills the requirements of Section III.G regarding Ineligible Persons; 
 14. the name, title, and responsibilities of any Screened Person who is determined to be an Ineligible Person under Section III.G; the actions taken in
response to the screening and removal obligations set forth in Section III.G; and the actions taken to identify, quantify, and repay any overpayments to Covered Federal Programs relating to items or services furnished, ordered or prescribed by an
Ineligible Person; 
 15. to the extent not already provided to OIG, a list of all of Medco’s locations (including locations and mailing
addresses); the corresponding name under which each location is doing business; the corresponding phone numbers and fax numbers; each location’s Medicare provider number(s), provider identification number(s), and/or supplier number(s), if
applicable; and the name and address of each Medicare contractor to which Medco currently submits claims; 
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 16. to the extent not already provided to OIG, a description of Medco’s corporate structure,
including identification of any parent and sister companies, subsidiaries, and their respective lines of business; and 
 17. the
certifications required by Section V.C. 
 B. Annual Reports. Medco shall submit to OIG annually a report with respect to the status
of, and findings regarding, Medco’s compliance activities for each of the five Reporting Periods (Annual Report). 
 Each Annual Report shall include,
at a minimum: 
 1. any change in the identity, position description, or other noncompliance job responsibilities of the Compliance Officer
and any change in the membership of the Compliance Committee described in Section III.A; 
 2. a summary of any significant changes or
amendments to the Policies and Procedures required by Section III.B and the reasons for such changes (e.g., change in contractor policy) and copies of any compliance-related Policies and Procedures; 
 3. the number of Covered Persons required to complete the Code of Conduct certification required by Section III.B.l, the percentage of Covered Persons
who have completed such certification, and an explanation of any exceptions (the documentation supporting this information shall be available to OIG, upon request); 
 4. a summary of the steps taken to comply with the provisions of Section III.B.l pertaining to Covered Contractors and the results of those steps, including identification of any instances in which Medco was unable to
confirm that a Covered Contractor has a comparable compliance program 
 5. the following information regarding each type of training
required by Section III.C: 
  

	 	a.	a description of such training, including a summary of the topics covered, the length of sessions and a schedule of training sessions; 

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	 	b.	the number of Covered Persons required to be trained, percentage of Covered Persons actually trained, and an explanation of any exceptions. 

 A copy of all training materials and the documentation supporting this information shall be available to OIG, upon request. 
 6. a description of any changes to the Focus Arrangements Database required by Section III.D.l.a; 
 7. a description of any changes to the internal review and approval process required by Section III.D.l.e; 
 8. a description of any changes to the tracking and monitoring procedures and other Arrangements Procedures required by Section III.D.l; 
 9. a complete copy of all reports prepared pursuant to Section III.E, along with a copy of the IRO’s engagement letter (if applicable); 

10. Medco’s response and corrective action plan(s) related to any issues raised by the reports prepared pursuant to Section III.E; 
 11. a summary and description of any and all current and prior engagements and agreements between Medco and the IRO, if different from what was submitted
as part of the Implementation Report; 
 12. a certification from the IRO regarding its professional independence and/or objectivity with
respect to Medco; 
 13. a summary of Reportable Events (as defined in Section III.I) identified during the Reporting Period and the status
of any corrective and preventative action relating to all such Reportable Events; 
 14. a report of the aggregate Overpayments, if any, that
Medco has received and that have been returned to the Covered Federal Programs. Overpayment amounts shall be broken down into the following categories, as applicable to Medco: Medicare, Medicaid (report each applicable state separately, if
applicable), FEHBP, and 
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 other Covered Federal Programs. Overpayment amounts that are routinely reconciled or adjusted pursuant to policies and
procedures established by the payor do not need to be included in this aggregate Overpayment report; 
 15. a summary of the Disclosures in
the Disclosure log required by Section III.F that: (a) relate to Covered Federal Programs; (b) allege abuse or neglect of patients; or (c) involve allegations of conduct that may involve illegal remunerations or inappropriate
referrals in violation of the Anti-Kickback Statute, the Public Contract Anti- Kickback Act, or Stark law; 
 16. any changes to the process
by which Medco fulfills the requirements of Section III.G regarding Ineligible Persons; 
 17. the name, title, and responsibilities of any
Screened Person who is determined to be an Ineligible Person under Section III.G; the actions taken by Medco in response to the screening and removal obligations set forth in Section III.G; and the actions taken to identify, quantify, and repay any
overpayments from Covered Federal Programs received by Medco relating to items or services relating to items or services furnished, ordered or prescribed by an Ineligible Person; 
 18. a summary describing any ongoing investigation or legal proceeding required to have been reported pursuant to Section III.H. The summary shall
include a description of the allegation, the identity of the investigating or prosecuting agency, and the status of such investigation or legal proceeding; 
 19. a description of all changes to the most recently provided list of Medco’s locations (including addresses) as required by Section V.A.15; the corresponding name under which each location is doing business;
the corresponding phone numbers and fax numbers; each location’s Medicare provider number(s), provider identification number(s), and/or supplier number(s); and the name and address of each Medicare contractor to which Medco currently submits
claims; and 
 20. the certifications required by Section V.C. 
 The first Annual Report shall be received by OIG no later than 60 days after the end of the first Reporting Period. Subsequent Annual Reports shall be received by OIG no later than the anniversary date of the due date
of the first Annual Report. 
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 C. Certifications. The Implementation Report and Annual Reports shall include a certification by
the Compliance Officer that: 
 1. to the best of his or her knowledge, except as otherwise described in the applicable report, Medco is in
compliance with all of the requirements of this CIA; 
 2. to the best of his or her knowledge, Medco has implemented procedures reasonably
designed to ensure that all Arrangements do not violate the Anti-Kickback Statute, the Public Contract Anti-Kickback Act, and Stark Law, including the Arrangements Procedures required in Section III.D of the CIA; 
 3. to the best of his or her knowledge, Medco has fulfilled the requirements for New and Renewed Focus Arrangements under Section III.D.2 of the CIA;

 4. he or she has reviewed the Report and has made reasonable inquiry regarding its content and believes that the information in the Report
is accurate and truthful; and 
 5. if applicable, Medco has complied with its obligations under the Settlement Agreement: (a) not to
resubmit to any Covered Federal Program payers any previously denied claims related to the Covered Conduct addressed in the Settlement Agreement, and not to appeal any such denials of claims; (b) not to charge to or otherwise seek payment from
Federal or State payers for unallowable costs (as defined in the Settlement Agreement); and (c) to identify and adjust any past charges or claims for unallowable costs. 
 D. Designation of Information. Medco shall clearly identify any portions of its submissions that it believes are trade secrets, or information
that is commercial or financial and privileged or confidential, and therefore potentially exempt from disclosure under the Freedom of Information Act (FOIA), 5 U.S.C. § 552. Medco shall refrain from identifying any information as exempt from
disclosure if that information does not meet the criteria for exemption from disclosure under FOIA. 
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 VI. NOTIFICATIONS AND SUBMISSION OF
REPORTS 
 Unless otherwise stated in writing after the Effective Date, all notifications and reports required under
this CIA shall be submitted to the following entities: 
 HHS-OIG: 
 Administrative and Civil Remedies Branch 
 Office of Counsel to the Inspector General 
 Office of Inspector General 
 U.S. Department of Health and Human Services 
 Cohen Building, Room 5527 
 330 Independence Avenue, S.W. 
 Washington, DC 20201 
 Telephone:
202.619.2078 
 Facsimile: 202.205.0604 
 OPM-OIG: 
 Debarring Official 
 Office of Inspector General 
 U.S. Office of Personnel Management 
 1900 E Street NW, Room 6400 
 Washington, DC
20415-1100 
 Telephone: (202) 606-1200 
 Facsimile: (202) 606-2153 
 Medco: 
 Dan Walden 
 Medco Health Solutions

 100 Parsons Pond Drive mail stop B3-MS1 
 Franklin Lakes, NJ 07417 
 Telephone: (201) 269-5240 
 Facsimile:  (201) 269-2910 
 Unless otherwise
specified, all notifications and reports required by this CIA may be made by certified mail, overnight mail, hand delivery, or other means, provided that there is proof that such notification was received. For purposes of this requirement, internal

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 facsimile confirmation sheets do not constitute proof of receipt. In addition to sending notifications and correspondence
to the Medco contact specified above, the OIG will endeavor to also provide copies of all notifications and correspondence to Medco’s General Counsel at the address specified above. 
 VII. OIG INSPECTION, AUDIT, AND REVIEW RIGHTS 
 In addition to any other rights OIG may have by statute, regulation, or contract, OIG or its duly authorized representative(s) may examine or request copies of Medco’s books, records, and other documents and
supporting materials and/or conduct on-site reviews of any of Medco’s locations for the purpose of verifying and evaluating: (a) Medco’s compliance with the terms of this CIA; and (b) Medco’s compliance with the requirements
of the Covered Federal Programs in which it participates. The documentation described above shall be made available by Medco to OIG or its duly authorized representative(s) at all reasonable times for inspection, audit, or reproduction. 

Furthermore, for purposes of this provision, OIG or its duly authorized representative(s) may interview any of Medco’s employees, contractors, or agents who
consent to be interviewed at the individual’s place of business during normal business hours or at such other place and time as may be mutually agreed upon between the individual and OIG. Medco shall assist OIG or its duly authorized
representative(s) in contacting and arranging interviews with such individuals upon OIG’s request. Medco’s employees may elect to be interviewed with or without a representative of Medco present. 
 VIII. DOCUMENT AND RECORD RETENTION 
 Medco shall maintain for inspection all documents and records relating to reimbursement from the Covered Federal Programs, or to compliance with this CIA, for six years
from the Effective Date (or longer if otherwise required by law). 
 IX. DISCLOSURES 
 A. Consistent with HHS’s FOIA procedures, set forth in 45 C.F.R. Part 5, HHS-OIG shall make a reasonable effort to notify Medco prior to any release
by HHS-OIG of information submitted by Medco pursuant to its obligations under this CIA and identified upon submission by Medco as trade secrets, or information that is commercial or financial and privileged or confidential, under the FOIA rules.
With respect to such releases, Medco shall have the rights set forth at 45 C.F.R. § 5.65(d). 
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 B. Consistent with OPM’s FOIA procedures, set forth in 5 C.F.R. part 294, OPM-OIG shall make a
reasonable effort to notify Medco prior to any release by OPM-OIG of information submitted by Medco pursuant to its obligations under this CIA and identified upon submission by Medco as trade secrets, or information that is commercial or financial
and privileged or confidential, under the FOIA rules. With respect to such releases, Medco shall have the rights set forth at 5 C.F.R. § 294.112. 
 X. BREACH AND DEFAULT PROVISIONS 
 Medco is expected to
fully and timely comply with all of its CIA obligations. As between HHS-OIG and OPM-OIG, HHS-OIG will be responsible for determinations regarding Medco’s compliance with the CIA obligations and determinations regarding whether to seek
stipulated monetary penalties or exclusion for a breach of the CIA obligations. As set forth in Section X.F below, Medco agrees that a finding of material breach by HHS-OIG (or by an HHS ALT or the HHS DAB if applicable) constitutes an independent
basis for OPM to debar Medco from participation in the Federal Employee Health Benefits Program (FEHBP). The remedies available to HHS-OIG under this Section X do not preempt or limit any actions that OPM may take against Medco under applicable
authorities. 
 A. Stipulated Penalties for Failure to Comply with Certain Obligations. As a contractual remedy, Medco and HHS-OIG
hereby agree that failure to comply with certain obligations as set forth in this CIA may lead to the imposition of the following monetary penalties (hereinafter referred to as “Stipulated Penalties”) in accordance with the following
provisions. 
 1. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the obligation became due) for each
day Medco fails to establish and implement any of the following obligations as described in Section III: 
  

	 	a.	a Compliance Officer; 

  

	 	b.	a Compliance Committee 

  

	 	c.	a written Code of Conduct; 

  

	 	d.	written Policies and Procedures; 

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CIA 
  

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	 	e.	the training of Covered Persons; 

  

	 	f.	the Arrangements Procedures and/or Focus Arrangements Requirements described in Sections III.D.l and III.D.2; 

  

	 	g.	a Disclosure Program; 

  

	 	h.	Ineligible Persons screening and removal requirements; and 

  

	 	i.	Notification of Government investigations or legal proceedings. 

 2. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the obligation became due) for each day Medco fails to engage an IRO, as required in Section III.E and Appendix B. 
 3. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the obligation became due) for each day Medco fails to submit
the Implementation Report or the Annual Reports to OIG in accordance with the requirements of Section V by the deadlines for submission. 
 4. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the obligation became due) for each day Medco fails to submit the annual Focus Arrangements Review Report and Unallowable Cost Review Report, if
applicable, in accordance with the requirements of Section III.E. 
 5. A Stipulated Penalty of $1,500 for each day Medco fails to grant
access to the information or documentation as required in Section VII. (This Stipulated Penalty shall begin to accrue on the date Medco fails to grant access.) 
 6. A Stipulated Penalty of $5,000 for each false certification submitted by or on behalf of Medco as part of its Implementation Report, Annual Report, additional documentation to a report (as requested by the OIG), or
otherwise required by this CIA. 
 7. A Stipulated Penalty of $1,000 for each day Medco fails to comply fully and adequately with any
obligation of this CIA. HHS-OIG shall provide notice to Medco, stating the specific grounds for its determination that Medco has failed to comply fully 
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 and adequately with the CIA obligation(s) at issue and steps Medco shall take to comply with the CIA. (This Stipulated
Penalty shall begin to accrue 10 days after Medco receives this notice from HHS-OIG of the failure to comply.) A Stipulated Penalty as described in this Subsection shall not be demanded for any violation for which HHS-OIG has sought a Stipulated
Penalty under Subsections 1-6 of this Section. 
 B. Timely Written Requests for Extensions. Medco may, in advance of the due date,
submit a timely written request for an extension of time to perform any act or file any notification or report required by this CIA. Notwithstanding any other provision in this Section, if HHS-OIG grants the timely written request with respect to an
act, notification, or report, Stipulated Penalties for failure to perform the act or file the notification or report shall not begin to accrue until one day after Medco fails to meet the revised deadline set by HHS-OIG. Notwithstanding any other
provision in this Section, if HHS-OIG denies such a timely written request, Stipulated Penalties for failure to perform the act or file the notification or report shall not begin to accrue until three business days after Medco receives
HHS-OIG’s written denial of such request or the original due date, whichever is later. A “timely written request” is defined as a request in writing received by HHS-OIG at least five business days prior to the date by which any act is
due to be performed or any notification or report is due to be filed. 
 C. Payment of Stipulated Penalties. 
 1. Demand Letter. Upon a finding that Medco has failed to comply with any of the obligations described in Section X.A and after determining that
Stipulated Penalties are appropriate, HHS-OIG shall notify Medco of: (a) Medco’s failure to comply; and (b) HHS-OIG’s exercise of its contractual right to demand payment of the Stipulated Penalties (this notification is referred
to as the “Demand Letter”). Such a Demand Letter shall specifically state the conduct that the HHS-OIG contends constitutes the basis for imposing the Stipulated Penalty. 
 2. Response to Demand Letter. Within 10 days after the receipt of the Demand Letter, Medco shall either: (a) cure the breach to
HHS-OIG’s satisfaction and pay the applicable Stipulated Penalties; or (b) request a hearing before an HHS administrative law judge (ALJ) to dispute HHS-OIG’s determination of noncompliance, pursuant to the agreed upon provisions set
forth below in Section X.E. In the event Medco elects to request an ALJ hearing, the Stipulated Penalties shall continue to accrue until Medco cures, to HHS-OIG’s satisfaction, the alleged breach in dispute. Failure to 
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 respond to the Demand Letter in one of these two manners within the allowed time period shall be considered a material
breach of this CIA and shall be grounds for exclusion under Section X.D. 
 3. Form of Payment. Payment of the Stipulated Penalties
shall be made by certified or cashier’s check, payable to: “Secretary of the Department of Health and Human Services,” and submitted to HHS-OIG at the address set forth in Section VI. 
 4. Independence from Material Breach Determination. Except as set forth in Section X.D.l.c, these provisions for payment of Stipulated Penalties
shall not affect or otherwise set a standard for HHS-OIG’s decision that Medco has materially breached this CIA, which decision shall be made at HHS-OIG’s discretion and shall be governed by the provisions in Section X.D, below.

 D. Exclusion for Material Breach of this CIA. 
 1. Definition of Material Breach. A material breach of this CIA means: 
  

	 	a.	a failure by Medco to report a Reportable Event, take corrective action, and make the appropriate refunds, as required in Section III.I; 

  

	 	b.	a repeated or flagrant violation of the obligations under this CIA, including, but not limited to, the obligations addressed in Section X.A; 

  

	 	c.	a failure to respond to a Demand Letter concerning the payment of Stipulated Penalties in accordance with Section X.C; or 

  

	 	d.	a failure to engage and use an IRO in accordance with Section III.D. 

 2. Notice of Material Breach and Intent to Exclude. The parties agree that a material breach of this CIA by Medco constitutes an independent basis for Medco’s exclusion from participation in the Medicare,
Medicaid, and other Federal health care programs. Upon a determination by HHS-OIG that Medco has materially breached this CIA and that exclusion is the appropriate remedy, HHS-OIG shall notify Medco in writing of: (a) Medco’s material
breach; and (b) HHS-OIG’s intent to exercise its contractual right to impose exclusion (this notification is hereinafter referred to as the “Notice of Material Breach and Intent to Exclude”). 
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 3. Opportunity to Cure. Medco shall have 30 days from the date of receipt of the Notice of
Material Breach and Intent to Exclude to demonstrate to HHS-OIG’s satisfaction that: 
  

	 	a.	Medco is in compliance with the obligations of the CIA cited by HHS-OIG as being the basis for the material breach; 

  

	 	b.	the alleged material breach has been cured; or 

  

	 	c.	the alleged material breach cannot be cured within the 30-day period, but that: (i) Medco has begun to take action to cure the material breach; (ii) Medco is pursuing such
action with due diligence; and (iii) Medco has provided to HHS-OIG a reasonable timetable for curing the material breach. 

 4. Exclusion Letter. If, at the conclusion of the 30-day period, Medco fails to satisfy the requirements of Section X.D.3, HHS-OIG may exclude Medco from participation in the Federal health care programs. HHS-OIG shall notify Medco
in writing of its determination to exclude Medco (this letter shall be referred to hereinafter as the “Exclusion Letter”). Subject to the Dispute Resolution provisions in Section X.E, below, the exclusion shall go into effect 30 days after
the date of Medco’s receipt of the Exclusion Letter. The exclusion shall have national effect and shall also apply to all other Federal procurement and nonprocurement programs. Reinstatement to program participation is not automatic. After the
end of the period of exclusion, Medco may apply for reinstatement by submitting a written request for reinstatement in accordance with the provisions at 42 C.F.R. §§ 1001.3001-.3004. 
 E. Dispute Resolution. 
 1. Review
Rights. Upon HHS-OIG’s delivery to Medco of its Demand Letter or of its Exclusion Letter, and as an agreed-upon contractual remedy for the resolution of disputes arising under this CIA, Medco shall be afforded certain review rights
comparable to the ones that are provided in 42 U.S.C. § 1320a-7(f) and 42 C.F.R. Part 1005 as if they applied to the Stipulated Penalties or exclusion sought pursuant to 
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 this CIA. Specifically, HHS-OIG’s determination to demand payment of Stipulated Penalties or to seek exclusion shall
be subject to review by an HHS ALJ and, in the event of an appeal, the HHS Departmental Appeals Board (DAB), in a manner consistent with the provisions in 42 C.F.R. § 1005.2-1005.21. Notwithstanding the language in 42 C.F.R. § 1005.2(c),
the request for a hearing involving Stipulated Penalties shall be made within 10 days after receipt of the Demand Letter and the request for a hearing involving exclusion shall be made within 25 days after receipt of the Exclusion Letter.

 2. Stipulated Penalties Review. Notwithstanding any provision of Title 42 of the United States Code or Title 42 of the Code of
Federal Regulations, the only issues in a proceeding for Stipulated Penalties under this CIA shall be: (a) whether Medco was in full and timely compliance with the obligations of this CIA for which HHS-OIG demands payment; and (b) the
period of noncompliance. Medco shall have the burden of proving its full and timely compliance and the steps taken to cure the noncompliance, if any. HHS-OIG shall not have the right to appeal to the DAB an adverse ALJ decision related to Stipulated
Penalties. If the ALJ agrees with HHS-OIG with regard to a finding of a breach of this CIA and orders Medco to pay Stipulated Penalties, such Stipulated Penalties shall become due and payable 20 days after the ALJ issues such a decision unless Medco
requests review of the ALJ decision by the DAB. If the ALJ decision is properly appealed to the DAB and the DAB upholds the determination of HHS-OIG, the Stipulated Penalties shall become due and payable 20 days after the DAB issues its decision.

 3. Exclusion Review. Notwithstanding any provision of Title 42 of the United States Code or Title 42 of the Code of Federal
Regulations, the only issues in a proceeding for exclusion based on a material breach of this CIA shall be: 
  

	 	a.	whether Medco was in material breach of this CIA; 

  

	 	b.	whether such breach was continuing on the date of the Exclusion Letter; and 

  

	 	c.	whether the alleged material breach could not have been cured within the 30-day period, but that: (i) Medco had begun to take action to cure the material breach within that
period; (ii) Medco has pursued and is pursuing such action with due diligence; and (iii) Medco provided to HHS-OIG within that period a reasonable timetable for curing the material breach and Medco has followed the timetable.

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 For purposes of the exclusion herein, exclusion shall take effect only after an ALJ decision favorable to
HHS-OIG, or, if the ALJ rules for Medco, only after a DAB decision in favor of HHS-OIG. Medco’s election of its contractual right to appeal to the DAB shall not abrogate HHS-OIG’s authority to exclude Medco upon the issuance of an
ALJ’s decision in favor of HHS-OIG. If the ALJ sustains the determination of HHS-OIG and determines that exclusion is authorized, such exclusion shall take effect 20 days after the ALJ issues such a decision, notwithstanding that Medco may
request review of the ALJ decision by the DAB. If the DAB finds in favor of HHS-OIG after an ALJ decision adverse to HHS-OIG, the exclusion shall take effect 20 days after the DAB decision. Medco shall waive its right to any notice of such exclusion
if a decision upholding the exclusion is rendered by the ALJ or DAB. If the DAB finds in favor of Medco, Medco shall be reinstated effective on the date of the original exclusion. 
 4. Finality of Decision. The review by an ALJ or DAB provided for above shall not be considered to be an appeal right arising under any statutes
or regulations. Consequently, the parties to this CIA agree that the DAB’s decision (or the ALJ’s decision if not appealed) shall be considered final for all purposes under this CIA. 
 F. Debarment for Material Breach of this CIA. 
 The
parties agree that a material breach of this CIA by Medco constitutes an independent basis for Medco’s debarment from participation in the FEHBP. Therefore, if HHS-OIG determines that Medco has materially breached this CIA and that exclusion is
the appropriate remedy, and HHS-OIG excludes Medco under Section X.D.4, Medco agrees that OPM may debar it from participation in FEHBP. In such a case, OPM-OIG shall notify Medco in writing of its determination to debar Medco (this letter shall be
referred to hereinafter as the “Debarment Letter”.) The debarment shall go into effect 30 days after the date of Medco’s receipt of the Debarment Letter. 
 If Medco seeks a review of HHS-OIG’s determination to exclude Medco for a material breach pursuant to Section X.E., and the ALJ or the DAB, as applicable, find in favor of HHS-OIG, Medco agrees that OPM may debar
it from participation in FEHBP. In such a case, the debarment shall go into effect 20 days after the ALJ or DAB, as applicable, finds in favor of HHS-OIG. 
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 XL. EFFECTIVE AND BINDING AGREEMENT

 Consistent with the provisions in the Settlement Agreements pursuant to which this CIA is entered, Medco and OIG agree as follows:

 A. This CIA shall be binding on the successors, assigns, and transferees of Medco; 
 B. This CIA shall become final and binding on the Effective Date; 
 C. Any modifications to this CIA shall be made with the prior written consent of the parties to this CIA; 
 D. OIG may agree to a suspension of Medco’s obligations under the CIA in the event of Medco’s cessation of participation in Covered Federal Programs. If Medco withdraws from participation in Covered Federal Programs and is
relieved of its CIA obligations by OIG, Medco shall notify OIG at least 30 days in advance of Medco’s intent to reapply as a participating provider or supplier with any Covered Federal Program or to enter into a contract with any FEHBP carrier.
Upon receipt of such notification, OIG shall evaluate whether the CIA should be reactivated or modified; 
 E. The undersigned Medco
signatories represent and warrant that they are authorized to execute this CIA. The undersigned OIG signatories represent that they are signing this CIA in their official capacities and that they are authorized to execute this CIA; and 

F. This CIA may be executed in counterparts, each of which shall constitute an original and all of which taken together shall constitute one and the
same agreement. Facsimiles of signatures shall constitute acceptable binding signatures for purposes of this CIA. 
 Medco
CIA 
  

 38 

 ON BEHALF OF MEDCO HEALTH SOLUTIONS, INC. 
  

					
	 /s/ Elizabeth S. Ferguson
	 		 	 20 October 2006

	Elizabeth S. Ferguson	 		 	DATE
	Vice President, Litigation	 		 	
	and Government Programs	 		 	
			
	 /s/ William McDaniels
	 		 	 October 20, 2006

	William McDaniels, Esq.	 		 	DATE
	Counsel for Medco	 		 	

 Medco CIA 
  

 39 

 ON BEHALF OF THE OFFICE OF INSPECTOR GENERAL 
 OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES 
  

					
	 /s/ Gregory E. Demske
	 	 	 	 10/23/06

	Gregory E. Demske	 		 	DATE
	Assistant Inspector General for Legal Affairs	 		 	
	Office of Inspector General	 		 	
	U.S. Department of Health and Human Services	 		 	

 Medco CIA 
  

 40 

 ON BEHALF OF THE OFFICE OF INSPECTOR GENERAL 
 OF THE OFFICE OF PERSONNEL MANAGEMENT 
  

					
	 /s/ J. David Cope
	 		 	 10/20/2006

	J. David Cope	 		 	DATE
	 Debarring Official
	 		 	
	 Office of Inspector General
	 		 	
	 U.S. Office of Personnel Management
	 		 	

  

 41 

 APPENDIX A 
 ARRANGEMENTS DATABASE 
 Medco shall create and maintain an Arrangements Database to track all new and existing Focus
Arrangements in order to ensure that each Focus Arrangement does not violate the Anti-Kickback Statute, the Public Contract Anti-Kickback Act, or the Stark Law. The Arrangements Database shall contain certain information to assist Medco in
evaluating whether each Focus Arrangement violates the Anti-Kickback Statute, the Public Contract Anti-Kickback Act, or the Stark Law, including but not limited to the following: 
 1. Each party involved in the Focus Arrangement; 
 2. The type of Focus Arrangement (e.g., physician employment contract, medical directorship, lease agreement); 
 3. The term
of the Focus Arrangement, including the effective and expiration dates and any automatic renewal provisions; 
 4. The amount of compensation
to be paid pursuant to the Focus Arrangement and the means by which compensation is paid; 
 5. The methodology for determining the
compensation under the Focus Arrangements, including the methodology used to determine the fair market value of such compensation; 
 6.
Whether the amount of compensation to be paid pursuant to the Focus Arrangement is determined based on the volume or value of referrals between the parties; 
 7. Whether each party has fulfilled the requirements of Section III.D.2; and 
 8. Whether the Focus
Arrangement satisfies the requirements of an Anti-Kickback Statute safe harbor and/or a Stark Law exception or safe harbor, as applicable. 

 APPENDIX B 
 INDEPENDENT REVIEW ORGANIZATION 
 This Appendix contains the requirements relating to the Independent Review
Organization (IRO) required by Section III.E of the CIA. 
 A. IRO Engagement. 
 Medco shall engage an IRO that possesses the qualifications set forth in Paragraph B, below, to perform the responsibilities in Paragraph C, below. The
IRO shall conduct the review in a professionally independent and/or objective fashion, as set forth in Paragraph D. Within thirty (30) days after OIG receives written notice of the identity of the selected IRO, OIG will notify Medco if the IRO
is unacceptable. Absent notification from OIG that the IRO is unacceptable, Medco may continue to engage the IRO. 
 If Medco engages a new
IRO during the term of the CIA, this IRO shall also meet the requirements of this Appendix. If a new IRO is engaged, Medco shall submit the information identified in Section V.A.8 to OIG within 30 days of engagement of the IRO. Within 30 days after
OIG receives written notice of the identity of the selected IRO, OIG will notify Medco if the IRO is unacceptable. Absent notification from OIG that the IRO is unacceptable, Medco may continue to engage the IRO. 
 B. IRO Qualifications. 
 The IRO shall: 
 1. assign individuals to conduct the Arrangements Review and, if applicable, Unallowable Cost Review engagements who have expertise in the requirements of
the reviews being performed and in the general requirements of the applicable Federal health care program(s); 
 2. assign individuals to
design and select the Arrangements Review sample who are knowledgeable about the appropriate statistical sampling techniques; and 
 3. have
sufficient staff and resources to conduct the reviews required by the CIA on a timely basis. 

 C. IRQ Responsibilities. 
 The IRQ shall: 
 1. perform each Arrangements Review and, if applicable, Unallowable Cost Review in
accordance with the specific requirements of the CIA; 
 2. follow all applicable Medicare, Medicaid and other Federal health care programs
rules and guidelines in making assessments in the Arrangements Review; 
 3. if in doubt of the application of a particular Medicare,
Medicaid or other Federal health care programs, policy or regulation, request clarification from the appropriate authority; 
 4. respond to
all OIG inquires in a prompt, objective, and factual manner; and 
 5. prepare timely, clear, well-written reports that include all the
information required by Appendix A. 
 D. IRQ Independence/Objectivity. 
 The IRQ must perform the Arrangements Review in a professionally independent and/or objective fashion, as appropriate to the nature of the engagement, taking into account any other business relationships or
engagements that may exist between the IRQ and Medco. 
 E. IRQ Removal/Termination. 
 1. Provider. If Medco terminates its IRO during the course of the engagement, Medco must submit a notice explaining its reasons to OIG no later
than 30 days after termination. Medco must engage a new IRO in accordance with Paragraph A of this Appendix. 
 2. OIG Removal of IRO.
In the event OIG has reason to believe that the IRO does not possess the qualifications described in Paragraph B, is not independent and/or objective as set forth in Paragraph D, or has failed to carry out its responsibilities as described in
Paragraph C, OIG may, at its sole discretion, require Medco to engage a new IRO in accordance with Paragraph A of this Appendix. 
 Prior to
requiring Medco to engage a new IRO, OIG shall notify Medco of its intent to do so and provide a written explanation of why OIG believes such a step is necessary. To resolve any concerns raised by OIG, Medco may request a meeting with OIG to discuss
any aspect of the IRO’s qualifications, independence or performance of its 

 responsibilities and to present additional information regarding these matters. Medco shall provide any additional
information as may be requested by OIG under this Paragraph in an expedited manner. OIG will attempt in good faith to resolve any differences regarding the IRO with Medco prior to requiring Medco to terminate the IRO. However, the final
determination as to whether or not to require Medco to engage a new IRO shall be made at the sole discretion of OIG. 

 OVERPAYMENT REFUND 
 TO BE COMPLETED BY MEDICARE CONTRACTOR 
 Date:                                     
        
 Contractor Deposit Control
#                                       
 Date of Deposit:
                                        
         
 Contractor Contact
Name:                                       
                                 Phone
#                                        
                             
 Contractor
Address:                                      
                                        
                                        
                                        
       
 Contractor Fax: 
 TO BE COMPLETED BY PROVIDER/PHYSICIAN/SUPPLIER 
 Please complete and forward to Medicare Contractor. This
form, or a similar document containing the following information, should accompany every voluntary refund so that receipt of check is properly recorded and applied. 
 PROVIDER/PHYSICIAN/SUPPLIERNAME                                 
                                        
                                        
        
 ADDRESS                                     
                                        
                                        
                                        
                    
 PROVIDER/PHYSICIAN/SUPPLIER
#                                        
    CHECK
NUMBER#                                       
             
 CONTACT
PERSON:                                       
                                     PHONE
#                                        
                        AMOUNT 
 OF CHECK $                                     CHECK
DATE                                       
  
 REFUND INFORMATION 
 For each Claim, provide the following: 
 Patient
Name                                       
                                        
                                        
 HIC
#                                        
                       
 Medicare Claim
Number                                       
                         Claim Amount Refunded
$                                        
     
 Reason Code for Claim Adjustment:             (Select reason
code from list below. Use one reason per claim) 
 (Please list all claim numbers involved. Attach separate sheet, if
necessary) 
  

	Note:	If Specific Patient/HIC/Claim #/Claim Amount data not available for all claims due to Statistical Sampling, please indicate methodology and formula used to determine
amount
and                            reason           
                                        
             for
overpayment:                                     
                                        
                                        
                                        
                    

 For
Institutional Facilities Only: 
 Cost Report Year(s)
                                        
                         
 (If
multiple cost report years are involved, provide a breakdown by amount and corresponding cost report year.) 
 For OIG Reporting Requirements:

 Do you have a Corporate Integrity Agreement with
OIG?                    Yes                    No

 Reason Codes: 
  

					
	Billing/Clerical Error	  	MSP/Other Paver Involvement	  	Miscellaneous
			
	01 - Corrected Date of Service	  	08 - MSP Group Health Plan Insurance	  	13 - Insufficient Documentation
	02 - Duplicate	  	09 - MSP No Fault Insurance	  	14 - Patient Enrolled in an HMO
	03 - Corrected CPT Code	  	10 - MSP Liability Insurance	  	15 - Services Not Rendered
	04 - Not Our Patient(s)	  	11 - MSP, Workers Comp.(Including	  	16 - Medical Necessity
	05 - Modifier Added/Removed	  	            Black Lung	  	17 - Other (Please Specify)
	06 - Billed in Error	  	12 - Veterans
Administration                                     
                           
	07 - Corrected CPT Code	  		  	

 appendix c..wpd

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