Document:

CONTRACT BETWEEN MOLINA HC OF MICH. & STATE OF MICH. EFFECTIVE 10/1/00

  
 Exhibit 10.3

  
 Form No. DMB 234 (Rev. 1/96) 

AUTHORITY: Act 431 of 1984 
 COMPLETION: Required 
 PENALTY: Contract will not be executed unless form is filed

  
 STATE OF MICHIGAN 
 DEPARTMENT OF MANAGEMENT AND BUDGET 
 OFFICE OF PURCHASING 
 P.O. BOX 30026, LANSING, MI 48909 
 OR 
 530 W. ALLEGAN, LANSING, MI 48933 
  
 CONTRACT NO.
                                 
 between 
 THE STATE OF MICHIGAN

 and 
  

			
	NAME & ADDRESS OF VENDOR	  	TELEPHONE
	 	  	 
	 	 	

	 	  	VENDOR NUMBER/MAIL CODE
	 	  	 
	 	 	

	 	  	BUYER (517) 335-0230
	 	  	Irene Pena

					
	
	 Contract Administrator: Cheryl Bupp

	Comprehensive Health Care Program (CHCP) Services for Medicaid Beneficiaries in Selected Michigan Counties — Department of Community
Health
			
	 CONTRACT PERIOD:
	 	From: October 1, 2000	 	To: October 1, 2004*

							
				
	TERMS 	 	  
 NA
	 	SHIPMENT	 	  
 NA

				
	F.O.B. 	 	  
 NA
	 	SHIPPED FROM	 	  
 NA

	
	
	 MINIMUM DELIVERY REQUIREMENTS

	
	 *  Plus three (3) each possible one-year extensions

	
	 MISCELLANEOUS INFORMATION:

	
	 The terms and conditions of this Contract are those of ITB #071I0000251, this Contract Agreement and the vendor’s quote dated 5-1-00, and
subsequent Best And Final Offer. In the event of any conflicts between the specifications, terms and conditions indicated by the State and those indicated by the vendor, those of the State take precedence.
  
 Estimated Contract Value: The exact dollar value of this contract is unknown; the
Contractor will be paid based on actual beneficiary enrollment at the rates (prices) specified in Attachment A to the Contract

  
 THIS IS NOT AN ORDER: This Contract
Agreement is awarded on the basis of our inquiry bearing the ITB No.071I0000251. A Purchase Order Form will be issued only as the requirements of the State Departments are submitted to the Office of Purchasing. Orders for delivery may be issued
directly by the State Departments through the issuance of a Purchase Order Form. 
  
 All terms and conditions of the invitation to bid are made a part hereof. 
  

  

					
	FOR THE VENDOR:	 	 	 	FOR THE STATE:
			
	  	 	 	 	  
	
	 	 	 	

	Firm Name	 	 	 	Signature
			
	  	 	 	 	  
	
	 	 	 	

	Authorized Agent Signature	 	 	 	Name
			
	  	 	 	 	State Purchasing Director
	
	 	 	 	 
	Authorized Agent (Print or Type)	 	 	 	Title
			
	  	 	 	 	  
	
	 	 	 	

	Date	 	 	 	Date

  
 CONTRACT #071B [GRAPHIC]

  
 TABLE OF CONTENTS 
 SECTION I 
  
 CONTRACTUAL SERVICES TERMS AND CONDITIONS 
  

					
	 I-A
	  	 PURPOSE
	  	1
	 I-B
	  	 ISSUING OFFICE
	  	1
	 I-C
	  	 CONTRACT ADMINISTRATOR
	  	1
	 I-D
	  	 TERM OF CONTRACT
	  	2
	 I-E
	  	 PRICE
	  	2
	 I-F
	  	 COST LIABILITY
	  	2
	 I-G
	  	 CONTRACTOR RESPONSIBILITIES
	  	2
	 I-H
	  	 NEWS RELEASES
	  	3
	 I-I
	  	 DISCLOSURE
	  	3
	 I-J
	  	 CONTRACT INVOICING AND PAYMENT
	  	3
	 I-K
	  	 ACCOUNTING RECORDS
	  	4
	 I-L
	  	 INDEMNIFICATION
	  	4
	      1.
	  	 General Indemnification
	  	4
	      2.
	  	 Patent/Copyright Infringement Indemnification
	  	5
	      3.
	  	 Indemnification Obligation Not Limited
	  	5
	      4.
	  	 Continuation of Indemnification Obligation
	  	5
	      5.
	  	 Exclusion
	  	5
	 I-M
	  	 CONTRACTOR’S LIABILITY INSURANCE
	  	5
	 I-N
	  	 LITIGATION
	  	7
	 I-O
	  	 CANCELLATION
	  	7
	 I-P
	  	 ASSIGNMENT
	  	8
	 I-Q
	  	 DELEGATION
	  	8
	 I-R
	  	 CONFIDENTIALITY
	  	8
	 I-S
	  	 NON-DISCRIMINATION CLAUSE
	  	8
	 I-T
	  	 MODIFICATION OF CONTRACT
	  	9
	 I-U
	  	 ACCEPTANCE OF PROPOSAL CONTENT
	  	9
	 I-V
	  	 RIGHT TO NEGOTIATE EXPANSION
	  	9
	 I-W
	  	 MODIFICATIONS, CONSENTS AND APPROVALS
	  	9
	 I-X
	  	 ENTIRE AGREEMENT AND ORDER OF PRECEDENCE
	  	10
	 I-Y
	  	 NO WAIVER OF DEFAULT
	  	10
	 I-Z
	  	 SEVERABILITY
	  	10
	 I-AA
	  	 DISCLAIMER
	  	10
	 I-BB
	  	 RELATIONSHIP OF THE PARTIES (INDEPENDENT CONTRACTOR)
	  	10
	 I-CC
	  	 NOTICES
	  	10
	 I-DD
	  	 UNFAIR LABOR PRACTICES
	  	11
	 I-EE
	  	 SURVIVOR
	  	11
	 I-FF
	  	 GOVERNING LAW
	  	11

  

 i 

 CONTRACT #071B [GRAPHIC] 
  

 SECTION II 
  
 WORK STATEMENT 
  

					
	 II-A  
	  	 BACKGROUND/PROBLEM STATEMENT
	  	12
	 1.  
	  	 Value Purchasing
	  	12
	 2.  
	  	 Managed Care Direction
	  	12
	 II-B  
	  	 OBJECTIVES
	  	13
	 1.  
	  	 Objectives
	  	13
	 2.  
	  	 Objectives for Special Needs
	  	13
	 3.  
	  	 Objectives for Contractor Accountability
	  	13
	 II-C  
	  	 SPECIFICATIONS
	  	14
	 II-D  
	  	 TARGETED GEOGRAPHICAL AREA FOR IMPLEMENTATION OF THE CHCP
	  	14
	 1.  
	  	 Regions
	  	14
	 2.  
	  	 Multiple Region Service Areas
	  	15
	 3.  
	  	 Alternative Regions
	  	15
	 II-E  
	  	 MEDICAID ELIGIBILITY AND CHCP ENROLLMENT
	  	16
	 1.  
	  	 Medicaid Eligible Groups Who Must Enroll in the CHCP:
	  	16
	 2.  
	  	 Medicaid Eligible Groups Who May Voluntarily Enroll in the CHCP:
	  	16
	 3.  
	  	 Medicaid Eligible Groups Excluded From Enrollment in the CHCP:
	  	16
	 II-F  
	  	 ELIGIBILITY DETERMINATION
	  	16
	 II-G  
	  	 ENROLLMENT IN THE CHCP
	  	17
	 1.  
	  	 Enrollment Services
	  	17
	 2.  
	  	 Initial Enrollment
	  	17
	 3.  
	  	 Enrollment Lock-in
	  	17
	 4.  
	  	 Rural Area Exception
	  	18
	 5.  
	  	 Enrollment date
	  	18
	 6.  
	  	 Newborn Enrollment
	  	19
	 7.  
	  	 Open Enrollment
	  	19
	 8.  
	  	 Automatic Re-enrollment
	  	19
	 9.  
	  	 Enrollment Errors by the Department
	  	19
	 10.
	  	     Enrollees who move out of the Contractor’s Service Area
	  	19
	 11.
	  	     Disenrollment Requests Initiated by the Contractor
	  	19
	 12.
	  	     Medical Exception
	  	20
	 13.
	  	     Disenrollment for Cause Initiated by the Enrollee
	  	20
	 14.
	  	     Termination of Coverage
	  	20
	 II-H  
	  	 SCOPE OF COMPREHENSIVE BENEFIT PACKAGE
	  	22
	 1.  
	  	 Services Included
	  	22
	 2.  
	  	 Enhanced Services
	  	23
	 3.  
	  	 Services Covered Outside of the Contract
	  	23
	 4.  
	  	 Services Prohibited or Excluded Under Medicaid:
	  	24
	 II-I   
	  	 SPECIAL COVERAGE PROVISIONS
	  	24
	 1.  
	  	 Emergency Services
	  	24
	 2.  
	  	 Out-of-Network Services
	  	25
	 3.  
	  	 Family Planning Services
	  	25
	 4.  
	  	 Maternal and Infant Support Services
	  	25
	 5.  
	  	 Federally Qualified Health Centers (FQHCs)
	  	26
	 6.  
	  	 Co-payments
	  	27
	 7.  
	  	 Abortions
	  	27

  

 ii 

 CONTRACT #071B [GRAPHIC] 
  

					
	 8.    
	 	 Pharmacy
	  	27
	 9.    
	 	 Well Child Care/Early and Periodic Screening, Diagnosis & Treatment (EPSDT) Program
	  	28
	 10.  
	 	 Immunizations
	  	29
	 11.  
	 	 Transportation
	  	30
	 12.  
	 	 Transplant Services
	  	30
	 13.  
	 	 Post-Partum Stays
	  	30
	 14.  
	 	 Communicable Disease Services
	  	30
	 15.  
	 	 Restorative Health Services
	  	30
	 16.  
	 	 School Based/School Linked (Adolescent) Health Centers
	  	31
	 17.  
	 	 Hospice Services
	  	31
	 18.  
	 	 20 Visit Mental Health Outpatient Benefit
	  	31
	 II-J     
	 	 OBSERVANCE OF FEDERAL, STATE AND LOCAL LAWS
	  	31
	 1.    
	 	 Special Waiver Provisions for CHCP
	  	31
	 2.    
	 	 Fiscal Soundness of the Risk-Based Contractor
	  	32
	 3.    
	 	 Suspended Providers
	  	32
	 4.    
	 	 Public Health Reporting
	  	32
	 5.    
	 	 Compliance with CMS Regulation
	  	32
	 6.    
	 	 Compliance with HIPAA Regulation
	  	32
	 7.    
	 	 Advanced Directives Compliance
	  	33
	 8.    
	 	 Medicaid Policy
	  	33
	 II-K    
	 	 CONFIDENTIALITY
	  	33
	 II-L    
	 	 CRITERIA FOR CONTRACTORS
	  	33
	 1.    
	 	 Administrative and Organizational Criteria
	  	33
	 2.    
	 	 Financial Criteria
	  	34
	 3.    
	 	 Provider Network and Health Service Delivery Criteria
	  	34
	 II-M    
	 	CONTRACTOR ORGANIZATIONAL STRUCTURE, ADMINISTRATIVE SERVICES, FINANCIAL REQUIREMENTS AND PROVIDER NETWORKS	  	34
	 1.    
	 	 Organizational Structure
	  	34
	 2.    
	 	 Administrative Personnel
	  	35
	 (a)
	 	 Executive Management
	  	35
	 (b)
	 	 Medical Director
	  	35
	 (c)
	 	 Quality Improvement/Utilization Director
	  	35
	 (d)
	 	 Chief Financial Officer
	  	36
	 (e)
	 	 Support/Administrative Staff
	  	36
	 (f)
	 	 Member Services Director
	  	36
	 (g)
	 	 Provider Services Director
	  	36
	 (h)
	 	 Grievance/Complaint Coordinator
	  	36
	 (i)
	 	 Management Information System (MIS) Director
	  	36
	 (j)
	 	 Compliance Officer
	  	36
	 3.    
	 	 Administrative Requirements
	  	36
	 4.    
	 	 Management Information Systems
	  	37
	 5.    
	 	 Governing Body
	  	37
	 6.    
	 	 Provider Network in the CHCP
	  	38
	 (a)
	 	 General
	  	38
	 (b)
	 	 Mainstreaming
	  	39
	 (c)
	 	 Coordination of Care with Public and Community Providers and Organizations
	  	40

  

 iii 

 CONTRACT #071B [GRAPHIC] 
  

					
	 (d)
	 	 Coordination of Care with Local Behavioral Health and Developmental Disability Providers
	  	40
	 (e)
	 	 Network Changes
	  	41
	 (f)
	 	 Provider Contracts
	  	41
	 (g)
	 	 Disclosure of Physician Incentive Plan
	  	42
	 (h)
	 	 Provider Credentialing
	  	42
	 (i)
	 	 PCP Standards
	  	42
	 II-N    
	 	 PAYMENT TO PROVIDERS
	  	43
	 1.    
	 	 Electronic Billing Capacity
	  	44
	 2.    
	 	 Prompt Payment
	  	44
	 3.    
	 	 Payment Resolution Process
	  	44
	 4.    
	 	 Arbitration
	  	44
	 5.    
	 	 Post-payment Review
	  	45
	 6.    
	 	 Total Payment
	  	45
	 7.    
	 	 Case Rate Payments for Emergency Services
	  	45
	 8.    
	 	 Enrollee Liability for Payment
	  	45
	 II-O    
	 	 PROVIDER SERVICES (Network and Out-of-Network)
	  	45
	 II-P    
	 	 QUALITY ASSESSMENT AND PERFORMANCE IMPROVEMENT PROGRAM STANDARDS
	  	46
	 1.    
	 	 Quality Assessment and Performance Improvement Program Standards
	  	46
	 2.    
	 	 Annual Effectiveness Review
	  	47
	 3.    
	 	 Annual Performance Improvement Projects
	  	47
	 4.    
	 	 Performance Monitoring Standards
	  	47
	 5.    
	 	 External Quality Review
	  	48
	 6.    
	 	 Consumer Survey
	  	48
	 II-Q    
	 	 UTILIZATION MANAGEMENT
	  	48
	 II-R    
	 	 THIRD PARTY RESOURCE REQUIREMENTS
	  	49
	 II-S    
	 	 MARKETING
	  	49
	 1.    
	 	 Allowed Marketing Locations/Practices directed at the general population:
	  	49
	 2.    
	 	 Prohibited Marketing Locations/Practices that target individual Beneficiaries:
	  	50
	 3.    
	 	 Marketing Materials
	  	50
	 II-T    
	 	 MEMBER AND ENROLLEE SERVICES
	  	50
	 1.    
	 	 General
	  	50
	 2.    
	 	 Enrollee Education
	  	51
	 3.    
	 	 Member Handbook/Provider Directory
	  	51
	 4.    
	 	 Protection of Enrollees Against Liability for Payment and Balanced Billing
	  	53
	 II-U    
	 	 GRIEVANCE/APPEAL PROCEDURES
	  	54
	 1.    
	 	 Contractor Grievance/Appeal Procedure Requirements
	  	54
	 2.    
	 	 Notice to Enrollees of Grievance Procedure
	  	54
	 3.    
	 	 Notice to Enrollees of Appeal Procedure
	  	54
	 4.    
	 	 State Medicaid Appeal Process
	  	55
	 5.    
	 	 Expedited Appeal Process
	  	55
	 II-V    
	 	 CONTRACTOR On-Site Reviews
	  	55
	 II-W    
	 	 CONTRACT REMEDIES AND SANCTIONS
	  	56
	 II-X    
	 	 DATA REPORTING
	  	56
	 1.    
	 	 HEDIS®
	  	57
	 2.    
	 	 Encounter Data Reporting
	  	57
	 3.    
	 	 Financial and Claims Reporting Requirements
	  	57
	 4.    
	 	 Quality Assessment and Performance Improvement Program Reporting
	  	57

  

 iv 

 CONTRACT #071B [GRAPHIC] 
  

					
	 5. 
	  	 Semi-annual Grievance and Appeal Report
	  	58
	 II-Y  
	  	 RELEASE OF REPORT DATA
	  	58
	 II-Z  
	  	 MEDICAL RECORDS
	  	58
	 1. 
	  	 Medical Record Maintenance
	  	58
	 2. 
	  	 Medical Record Confidentiality/Access
	  	58
	 II-AA
	  	 SPECIAL PAYMENT PROVISIONS
	  	59
	 1. 
	  	 Payment of Rural Access Incentive
	  	59
	 2. 
	  	 Contractor Performance Bonus
	  	59
	 II-BB
	  	 RESPONSIBILITIES OF THE DEPARTMENT OF COMMUNITY HEALTH
	  	59
	 II-CC
	  	 PROGRAM INTEGRITY
	  	60

  

 v 

 CONTRACT #071B 
  

 SECTION III 
  
 CONTRACTOR INFORMATION 
  

					
			
	 III-A
	  	BUSINESS ORGANIZATION	  	62
			
	 III-B
	  	AUTHORIZED CONTRACTOR EXPEDITER	  	62
			
	 	  	APPENDICES	  	 
			
	 A
	  	MODEL LOCAL AGREEMENT WITH LOCAL HEALTH DEPARTMENTS & MATRIX FOR COORDINATION OF SERVICES	  	 
			
	 B
	  	MODEL LOCAL AGREEMENT WITH BEHAVIORAL PROVIDER	  	 
			
	 C
	  	MODEL LOCAL AGREEMENT WITH DEVELOPMENTAL DISABILITY PROVIDER	  	 
			
	 D
	  	FORMAT FOR PROFILES OF PRIMARY CARE PROVIDERS, SPECIALISTS, & ANCILLARY PROVIDER	  	 
			
	 E
	  	KEY CONTRACTOR PERSONNEL AUTHORIZATION FOR RELEASE OF INFORMATION	  	 
			
	 F
	  	HEALTH PLAN REPORTING FORMAT AND SCHEDULE	  	 
			
	 	  	ATTACHMENTS	  	 
			
	 A
	  	CONTRACTOR’S AWARDED PRICES	  	 
			
	 B
	  	APPROVED SERVICE AREAS	  	 
			
	 C
	  	CORRECTIVE ACTION PLANS (to be developed at a later date)	  	 
			
	 D
	  	MEDICAID MANAGED CARE PERFORMANCE MONITORING STANDARDS	  	 
			
	 E
	  	MODEL HEALTH PLAN/HOSPITAL CONTRACT	  	 

  

 vi 

 CONTRACT #071B [GRAPHIC] 
  

 DEFINITIONS/EXPLANATION OF TERMS 
  

			
		
	Abuse	  	Provider practices that are inconsistent with sound fiscal, business, or medical practices, and result in an unnecessary cost to the Medicaid program, or in reimbursement for services that are
not medically necessary or that fail to meet professionally recognized standards for health care. It also includes beneficiary practices that result in unnecessary cost to the Medicaid program.
		
	ACIP	  	Advisory Committee on Immunization Practices. A federal advisory committee convened by the Center for Disease Control, Public Health Service, Health & Human Services to make recommendations
on the appropriate use and scheduling of vaccines and immunizations for the general public.
		
	Administrative Law Judge	  	A person designated by DCH to conduct the Administrative Hearing in an impartial or unbiased manner.
		
	Advance directive	  	A written instruction, such as a living will or durable power of attorney for health care, recognized under State law, relating to the provision of health care when the individual is
incapacitated.
		
	Appeal	  	 A request for review of a Contractor’s decision that results in any of the following actions:
  
 •        The denial or limited authorization of a requested service, including the type or level of service;
  
 •        The reduction, suspension, or termination of
a previously authorized service;
  
 •        The denial, in whole or in part, of payment for a properly authorized and covered service;
  
 •        The failure to provide services in a timely manner, as defined by the
State;
  
 •        The failure of a Contractor to act within the established timeframes for grievance and appeal disposition;
  
 •        For a resident of a rural area with only one
Medicaid Health Plan, the denial of a Medicaid enrollee’s request to exercise his or her right, under 42 CFR 438.52(b)(2)(ii), to obtain services outside the network.

		
	Balanced Budget Act	  	The Balanced Budget Act (BBA) of 1997 (Public law 105-33) was signed into law by President Clinton in August 1997. This legislation enacts the most significant changes to the Medicare and
Medicaid Programs since their inception. Additionally, it expands the services provided through the new Child Health Insurance Program (Title XXI).
		
	Beneficiary	  	Any person determined eligible for the Medical Assistance Program as defined below.
		
	Blanket Purchase Order	  	Alternative term for “Contract” used in the State’s computer system (Michigan Automated Information Network) MAIN.
		
	Business Day	  	Monday through Friday except those days identified by the State as holidays.
		
	CAC	  	Clinical Advisory Committee appointed by the DCH.

  

 vii 

 CONTRACT #071B [GRAPHIC] 
  

			
		
	Capitation Rate	  	A fixed per person monthly rate payable to the Contractor by the DCH for provision of all Covered Services defined within this Contract. This rate shall not exceed the limits set forth in 42 CFR
447.361.
		
	CFR	  	Code of Federal Regulations
		
	CHCP	  	Comprehensive Health Care Program. Capitated health care services for Medicaid Beneficiaries in specified counties provided by Contractors that contract with the State.
		
	Clean Claim	  	Clean Claim means that as defined in MCL 400.111i and the Michigan Office of Financial and Insurance Services Bulletin 2000/09.
		
	CMHSP	  	Community Mental Health Services Program
		
	CMS	  	Centers for Medicare and Medicaid Services
		
	Contract	  	A binding agreement between the State of Michigan and the Contractor (see also “Blanket Purchase”).
		
	Contractor	  	A successful Bidder who is awarded a Contract to provide services under CHCP. In this Contract, the terms Contractor, HMO, Contractor’s plan, Health Plan, Qualified Health Plan, and QHP,
are used interchangeably.
		
	Covered Services	  	All services provided under Medicaid, as defined in Section II-H (1)-(2) that the Contractor has agreed to provide or arrange to be provided.
		
	CSHCS	  	Children’s Special Health Care Services.
		
	DCH or MDCH	  	The Department of Community Health or the Michigan Department of Community Health and its designated agents.
		
	DCH Administrative Hearing	  	Also called a fair hearing, an impartial review by DCH of a decision made by the Contractor that the Enrollee believes is inappropriate. An Administrative Law Judge conducts the Administrative
Hearing.
		
	Department	  	The Department of Community Health and its designated agents.
		
	DMB	  	The Department of Management and Budget.
		
	Emergency Medical Care/Services	  	Those services necessary to treat an emergency medical condition. Emergency medical condition means a medical condition manifesting itself by acute symptoms of sufficient severity (including
severe pain) such that a prudent lay person, With an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in: (i) serious jeopardy to the health of the individual or, in the case of a
pregnant woman, the health of the woman or her unborn child; (ii) serious impairment to bodily functions; or (iii) serious dysfunction of any bodily organ or part
		
	Enrollee	  	Any Medicaid Beneficiary who is currently enrolled in Medicaid managed care in a given Medicaid Health Plan.

  

 viii 

 CONTRACT #071B [GRAPHIC] 
  

			
		
	Enrollment Capacity	  	The number of persons that the Contractor can serve through its provider network under a Contract with the State. Enrollment Capacity is determined by a Contractor based upon its provider
network and organizational capacity. The DCH will verify that the provider network is under contract and of sufficient size before accepting the enrollment capacity statement.
		
	Enrollment Service	  	An entity contracted by the DMB to contact and educate general Medicaid and Children’s Special Health Care Services Beneficiaries about managed care and to enroll, disenroll, and change
enrollment(s) for these Beneficiaries.
		
	Expedited Appeal	  	An appeal conducted when the Contractor determines (based on the Enrollee request) or the provider indicates (in making the request on the enrollee’s behalf or supporting the
enrollee’s request) that taking the time for a standard resolution could seriously jeopardize the Enrollee’s life, health, or ability to attain, maintain, or regain maximum function.
		
	Expedited Authorization Decision	  	An authorization decision required to be expedited due to a request by the provider or determination by the Contractor that following the standard timeframe could seriously jeopardize the
Enrollee’s life or health.
		
	FIA	  	Family Independence Agency, formerly the Department of Social Services.
		
	FFS	  	Fee-for-service. A reimbursement methodology that provides a payment amount for each individual service delivered.
		
	FQHC	  	Federal Qualified Health Center
		
	Fraud	  	An intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself or some other person. It includes any
act that constitutes fraud under applicable Federal or State law.
		
	Grievance	  	Grievance means an expression of dissatisfaction about any matter other than an action subject to appeal.
		
	Health Plans	  	Managed care organizations that provide or arrange for the delivery of comprehensive health care services in exchange for a fixed prepaid sum or Per Member Per Month prepaid payment without
regard to the frequency, extent, or kind of health care services. A Health Plan must be licensed as a Health Maintenance Organization (HMO) not later than October 1, 2000. (See also “Contractor.”)
		
	HEDIS	  	Health Employer Data and Information Set.
		
	HMO	  	An entity that has received and maintains a state license to operate as an HMO.
		
	Long Term Care Facility	  	Any facility licensed and certified by the Michigan Department of Community Health, in accordance with 1978 PA 368, as amended, to provide inpatient nursing care services.

  

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	Marketing	  	Marketing means any communication, from a Contractor directed to a Medicaid Beneficiary who is not enrolled in the Contractor’s plan, that can reasonably be interpreted as intended to
influence the Beneficiary to enroll in that particular Contractor’s Medicaid product, or either to not enroll in, or to disenroll from, another health plan’s Medicaid product.
		
	Medicaid/Medical Assistance Program	  	A federal/state program authorized by the Title XIX of the Social Security Act, as amended, 42 U.S.C. 1396 et seq.; and section 105 of 1939 PA 280, as amended, MCL 400.105; which provides
federal matching funds for a Medical Assistance Program. Specified medical and financial eligibility requirements must be met.
		
	MSA	  	Medical Services Administration, the agency within the Department of Community Health responsible for the administration of the Medicaid Program.
		
	PCP	  	Primary Care Provider. Those providers within the Health Plans who are designated as responsible for providing or arranging health care for specified Enrollees of the Contractor. A PCP may be
any of the following: family practice physician, general practice physician, internal medicine physician, OB/GYN specialist, or pediatric physician when appropriate for an Enrollee, other physician specialists when appropriate for an Enrollee’s
health condition, nurse practitioner, and physician assistants.
		
	Persons with Special Health Care Needs	  	Enrollees who lose eligibility for the Children’s Special Health Care Services (CSHCS) program due to the program’s age requirements.
		
	PMPM	  	Per Member Per Month.
		
	Prevalent Language	  	Specific Non-English Language that is spoken as the primary language by more than 5% of the Contractor’s Enrollees.
		
	Provider	  	Provider means a health facility or a person licensed, certified, or registered under parts 61 to 65 or 161 to 182 of Michigan’s Public Health code, 1978 PA 368, as amended, MCL
333.6101-333.6523 and MCL 333.16101-333.18237.
		
	Purchasing Office	  	The Office of Purchasing within the Department of Management and Budget that is the sole point of contact throughout the procurement process.
		
	QIC	  	Quality Improvement Committee appointed by the Contractor.
		
	QHP	  	A Qualified Health Plan awarded a Contract to provide services under CHCP. (See also “Contractor”).
		
	RFP	  	Request for Proposal. Interchangeable with ITB, (Invitation to Bid). A procurement document that describes the services required, and instructs prospective Bidders how to prepare a
response.

  

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 CONTRACT #071B [GRAPHIC] 
  

			
		
	Rural	  	Rural is defined as any county not included in a standard metropolitan area (SMA).
		
	State	  	The State of Michigan.
		
	State Purchasing Director	  	The Director of the Office of Purchasing within the Department of Management and Budget. Also referred to as Director of Purchasing.
		
	Subcontractor	  	A subcontractor is any person or entity that performs a required, ongoing function of the Contractor under this Contract. A health care provider included in the network of the Contractor is not
considered a subcontractor for purposes of this Contract unless otherwise specifically noted in this Contract. Contracts for one-time only functions or service contracts, such as maintenance or insurance protection, are not intended to be covered by
this section.
		
	Successful Bidder	  	The Bidder (Contractor) awarded a Contract as a result of a proposal submitted in response to the ITB.
		
	VFC	  	Vaccines for Children program. A federal program which makes vaccine available free in immunize children age 18 and under who are Medicaid eligible, who have no health insurance, who are native
Americans or Alaskans, or who have health insurance but not for immunizations and receive their immunization at a FQHC.
		
	Well Child Visits/EPSDT	  	Early and periodic screening, diagnosis, and treatment program. A child health program of prevention and treatment intended to ensure availability and accessibility of primary, preventive, and
other necessary health care resources and to help Medicaid children and their families to effectively use these resources.

  

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 CONTRACT #071B [GRAPHIC]

  
 SECTION I 
 CONTRACTUAL SERVICES TERMS AND CONDITIONS 
  

	I-A	PURPOSE 

  
 The State of Michigan, by the Department of Management and Budget (DMB), Office of Purchasing, hereby enters into a Contract with the Contractor
identified in Section III-A for the Michigan Department of Community Health (DCH). 
  
 The purpose of this Contract is to obtain the services of the Contractor to provide Comprehensive Health Care Program (CHCP) Services for Medicaid beneficiaries (Beneficiaries) in the service area as described in
Attachment B to this Contract. This is a unit price (Per Member Per Month [PMPM] Capitated Rate) Contract, see Attachment A. The term of the Contract shall be effective October 1, 2000 and continue until October 1, 2004. The Contract may be extended
for no more than one (1) one year extensions after September 30, 2004. 
  

	I-B	ISSUING OFFICE 

  
 This Contract is issued by DMB, Office of Purchasing (Office of Purchasing), for and on the behalf of DCH. Where actions are a combination of those of the
Office of Purchasing and DCH, the authority will be known as the State. 
  
 The Office of Purchasing is the sole point of contact in the State with regard to all procurement and contractual matters relating to the services describe herein. The Office of Purchasing is the only office
authorized to change, modify, amend, clarify, or otherwise alter the prices, specifications, terms, and conditions of this Contract. The OFFICE OF PURCHASING will remain the SOLE POINT OF CONTACT until such time as the Director of Purchasing shall
direct otherwise in writing. See Paragraph I-C below. All communications with the DMB must be addressed to: 
  
 Irene Pena 
 Office of Purchasing 

Department of Management & Budget 
 P.O. Box 30026 
 Lansing, MI 48909 
  

	I-C	CONTRACT ADMINISTRATOR 

  
 Upon receipt by the Office of Purchasing of the properly executed Contract, it is anticipated that the Director of Purchasing will direct that the person
named below be authorized to administer the Contract on a day-to-day basis during the term of the Contract. However, administration of this Contract implies no authority to change, modify, clarify, amend, or otherwise alter the prices, terms,
conditions, and specifications of the Contract. That authority is retained by the Office of Purchasing. The Contract Administrator for this project is: 
  
 Cheryl Bupp, Manager 
 Plan Management Section

 Comprehensive Health Plan Division 
 Michigan Department of Community Health 
 P.O. Box 30479 
 Lansing, Michigan 48909-7979 
  

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 CONTRACT #071B [GRAPHIC] 
  

	I-D	TERM OF CONTRACT 

  
 The term of this Contract shall be from October 1, 2000 through September 30, 2002. The Contract may be extended for no more than three (3) one year
extensions after September 30, 2002. The State’s fiscal year is October 1st through September 30th. Payments in any given fiscal year are contingent upon and subject to enactment of legislative appropriations. 
  
 Because Beneficiaries must have a choice among Contractors, the State cannot
guarantee an exact number of Enrollees to any Contractor. 
  

	I-E	PRICE 

  
 Price adjustments for the second year period of the Contract and for any Contract extension thereafter may be proposed by the State or the Contractor.
Price adjustments proposed by the Contractor must be submitted in writing to the Director of Purchasing no later than June 15th of each contract year. Price adjustments proposed by the State will be submitted to the Contractor in no later than June
15th of each contract year. 
  
 Any changes requested by either party are subject to negotiation and written acceptance by the State Purchasing Director
before becoming effective. In the event the State and the Contractor cannot agree to changes by August 31st of each
contract year, the Contract may be canceled pursuant to Section I-O (6) CANCELLATION. The exact dollar value of this Contract is unknown; the Contractor will be paid based on actual Beneficiary enrollment at the rates (prices) specified in
Attachment “A” (Awarded Prices) of the Contract. 
  

	I-F	COST LIABILITY 

  
 The State assumes no responsibility or liability for costs incurred by the Contractor prior to the signing of this Contract by all parties. Total
liability of the State is limited to the terms and conditions of this Contract. 
  

	I-G	CONTRACTOR RESPONSIBILITIES 

  
 The Contractor will be required to assume responsibility for all contractual activities relative to this Contract whether or not that Contractor performs
them. Further, the State will consider the Contractor to be the sole point of contact with regard to contractual matters, including payment of any and all charges resulting from the Contract. Although it is anticipated that the Contractor will
perform the major portion of the duties as requested, subcontracting by the Contractor for performance of any of the functions requires prior notice to the State. The Contractor must identify all subcontractors, including firm name and address,
contact person, complete description of work to be subcontracted, and descriptive information concerning subcontractor’s organizational abilities. The Contractor must also outline the contractual relationship between the Contractor and each
subcontractor. The State reserves the right to approve subcontractors for administrative functions for this project and to require the Contractor to replace subcontractors found to be unacceptable. The Contractor is totally responsible for adherence
by the subcontractor to all provisions of the Contract. 
  
 A
subcontractor is any person or entity that performs a required, ongoing function of the Contractor under this Contract. A health care provider included in the network of the Contractor is not considered a subcontractor for purposes of this Contract
unless otherwise specifically noted in this Contract. Contracts for one-time only functions or service contracts, such as maintenance or insurance protection, are not intended to be covered by this section. 
  

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 CONTRACT #071B [GRAPHIC] 
  

 Although Contractors may enter into subcontracts, all communications shall take place between the
Contractor and the State directly; therefore, all communication by subcontractors must be with the Contractor only, not with the State. 
  
 If a Contractor elects to use a subcontractor not specified in the Contractor’s response, the State must be provided with a written request at least
21 days prior to the use of such subcontractor. Use of a subcontractor not approved by the State may be cause for termination of the Contract. 
  
 In accordance with 42 CFR 434.6(b), all subcontracts entered into by the Contractor must be in writing and fulfill the requirements of 42 CFR 434.6(a)
that are appropriate to the service or activity delegated under the subcontract. All subcontracts must be in compliance with all State of Michigan statutes and will be subject to the provisions thereof. All subcontracts must fulfill the requirements
of this Contract that are appropriate to the services or activities delegated under the subcontract. For each portion of the proposed services to be arranged for and administered by a subcontractor, the technical proposal must include: (1) the
identification of the functions to be performed by the subcontractor, and (2) the subcontractor’s related qualifications and experience. All employment agreements, provider contracts, or other arrangements, by which the Contractor intends to
deliver services required under this Contract, whether or not characterized as a subcontract, shall be subject to review and approval by the State and must meet all other requirements of this paragraph appropriate to the service or activity
delegated under the agreement. 
  
 The Contractor shall furnish
information to the State as to the amount of the subcontract, the qualifications of the subcontractor for guaranteeing performance, and any other data that may be required by the State. All subcontracts held by the Contractor shall be made available
on request for inspection and examination by appropriate State officials, and such relationships must meet with the approval of the State. 
  
 The Contractor shall furnish information to the State necessary to administer all requirements of the Contract. The State shall give Contractors at least
30 days notice before requiring new information. 
  

	I-H	NEWS RELEASES 

  
 News releases pertaining to this document or the services, study, data, or project to which it relates will not be made without prior written State
approval, and then only in accordance with the explicit written instructions from the State. No information or data related to this Contract is to be released without prior approval of the designated State personnel. 
  

	I–I	DISCLOSURE 

  
 All information in this Contract is subject to the provisions of the Freedom of Information Act, 1976 PA 442, as amended, MCL 15.231, et seq.

  

	I-J	CONTRACT INVOICING AND PAYMENT 

  
 This Contract reflects a fixed reimbursement mechanism and the specific payment schedule for this Contract will be monthly. The services will be under a
fixed price per covered member multiplied by the actual member count assigned to the Contractor in the month for which payment is made. DCH will generate reports to the Contractor prior to month’s end identifying expected enrollment for the
following service month. At the beginning of the service month, DCH will automatically generate invoices based on actual member enrollment. The Contractor will receive one lump-sum payment 

  

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 CONTRACT #071B [GRAPHIC] 
  

 
approximately at mid-service month. A process will be in place to ensure timely payments and to identify Enrollees that the Contractor was responsible for
during the month but for which no payment was received in the service month (e.g., newborns).  
  
 The application of Contract remedies and performance bonus payments as described in Section II of this Contract will affect the lump sum payment. Payments
in any given fiscal year are contingent upon and subject to enactment of legislative appropriations. 
  

	I-K	ACCOUNTING RECORDS 

  
 The Contractor will be required to maintain all pertinent financial and accounting records and evidence pertaining to the Contract in accordance with
generally accepted accounting principles and other procedures specified by the State of Michigan. Financial and accounting records shall be made available, upon request, to the Health Care Financing Administration (CMS), the State of Michigan, its
designees, the Department of Attorney General, or the Office of Auditor General at any time during the Contract period and any extension thereof, and for six (6) years from expiration date and final payment on the Contract or extension thereof.

  

	I-L	INDEMNIFICATION 

  

	 	1.	General Indemnification 

  
 The Contractor shall indemnify, defend and hold harmless the State, its departments, divisions, agencies, sections, commissions, officers, employees and
agents, from and against all losses, liabilities, penalties, fines, damages and claims (including taxes), and all related costs and expenses (including reasonable attorneys’ fees and disbursements and costs of investigation, litigation,
settlement, judgments, interest and penalties), arising from or in connection with any of the following: 
  

	 	(a)	Any claim, demand, action, citation or legal proceeding against the State, its employees and agents arising out of or resulting from (1) the products and services provided or (2)
performance of the work, duties, responsibilities, actions or omissions of the Contractor or any of its subcontractors under this Contract; 

  

	 	(b)	Any claim, demand, action, citation or legal proceeding against the State, its employees and agents arising out of or resulting from a breach by the Contractor of any representation
or warranty made by the Contractor in the Contract; 

  

	 	(c)	Any claim, demand, action, citation or legal proceeding against the State, its employees and agents arising out of or related to occurrences that the Contractor is required to
insure against as provided for in this Contract; 

  

	 	(d)	Any claim, demand, action, citation or legal proceeding against the State, its employees and agents arising out of or resulting from the death or bodily injury of any person, or the
damage, loss or destruction of any real or tangible personal property, in connection with the performance of services by the Contractor, by any of its subcontractors, by anyone directly or indirectly employed by any of them, or by anyone for whose
acts any of them may be liable; 

  

	 	(e)	Any claim, demand, action, citation or legal proceeding against the State, its employees and agents which results from an act or omission of the Contractor or any of its
subcontractors in its or their capacity as an employer of a person. 

  

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 CONTRACT #071B [GRAPHIC] 
  

	 	2.	Patent/Copyright Infringement Indemnification 

  
 The Contractor shall indemnify, defend and hold harmless the State, its employees and agents from and against all losses, liabilities, damages (including
taxes), and all related costs and expenses (including reasonable attorney’s fees and disbursements and costs of investigation, litigation, settlement, judgments, interest and penalties) incurred in connection with any action or proceeding
threatened or brought against the State to the extent that such action or proceeding is based on a claim that any piece of equipment, software, commodity or service supplied by the Contractor or its subcontractors, or the operation of such
equipment, software, commodity or service, or the use or reproduction of any documentation provided with such equipment, software, commodity or service infringes any United States of America or foreign patent, copyright, trade secret or other
proprietary right of any person or entity, which right is enforceable under the laws of the United States of America. In addition, should the equipment, software, commodity, or service, or the operation thereof, become or in the Contractor’s
opinion be likely to become the subject of a claim of infringement, the Contractor shall at the Contractor’s sole expense (i) procure for the State the right to continue using the equipment, software, commodity or service or, if such option is
not reasonably available to the Contractor, (ii) replace or modify the same with equipment, software, commodity or service of equivalent function and performance so that it becomes non-infringing, or, if such option is not reasonably available to
the Contractor, (iii) accept its return by the State with appropriate credits to the State against the Contractor’s charges and reimburse the State for any losses or costs incurred as a consequence of the State ceasing its use and returning it.

  

	 	3.	Indemnification Obligation Not Limited 

  
 In any and all claims against the State of Michigan, or any of its agents or employees, by any employee of the Contractor or any of its subcontractors,
the indemnification obligation under the Contract shall not be limited in any way by the amount or type of damages, compensation or benefits payable by or for the Contractor or any of its subcontractors under worker’s disability compensation
acts, disability benefits acts, or other employee benefits acts. This indemnification clause is intended to be comprehensive. Any overlap in subclauses, or the fact that greater specificity is provided as to some categories of risk, is not intended
to limit the scope of indemnification under any other subclause. 
  

	 	4.	Continuation of Indemnification Obligation 

  
 The duty to indemnify will continue in full force and effect notwithstanding the expiration or early termination of the Contract with respect to any
claims based on facts or conditions that occurred prior to termination. 
  

	 	5.	Exclusion 

  
 The Contractor is not required to indemnify the State of Michigan for services provided by health care providers mandated under federal statute or State policy, unless the health care provider is a voluntary
contractual member of the Contractor’s provider network. Local agreements with Community Mental Health Services program (CMHSP) do not constitute network provider contracts. 
  

	I-M	CONTRACTOR’S LIABILITY INSURANCE 

  
 The Contractor shall purchase and maintain such insurance as will protect it from claims set forth below, which may arise out of or result from the
Contractor’s operations under the Contract whether such operations are by it or by any subcontractor or by anyone 

  

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 CONTRACT #071B [GRAPHIC] 
  

 
directly or indirectly employed by any of them, or by anyone for whose acts any of them may be liable: 
  

	 	1.	Claims under workers’ disability compensation, disability benefit, and other similar employee benefit act. A non-resident Contractor shall have insurance for benefits payable
under Michigan’s Workers’ Disability Compensation Law for any employee resident of and hired in Michigan; and as respects any other employee protected by workers’ disability compensation laws of any other state the Contractor shall
have insurance or participate in a mandatory State fund to cover the benefits payable to any such employee. 

  
 In the event any work is subcontracted, the Contractor shall require the subcontractor similarly to provide workers’ compensation insurance for all
the subcontractor’s employees working in the State, unless those are covered by the workers’ compensation protection afforded by the Contractor. Any subcontract executed with a firm not having the requisite workers’ compensation
coverage will be considered void by the State. 
  

	 	2.	Claims for damages because of bodily injury, occupational sickness or disease, or death of its employees. 

  

	 	3.	Claims for damages because of bodily injury, sickness or disease, or death of any person other than its employees, subject to limits of liability of not less than $1,000,000.00 each
occurrence and, when applicable, $2,000,000.00 annual aggregate for non-automobile hazards and as required by law for automobile hazards. 

  

	 	4.	Claims for damages because of injury to or destruction of tangible property, including loss of use resulting there from, subject to a limit of liability of not less than $50,000.00
each occurrence for non-automobile hazards and as required by law for automobile hazards. 

  

	 	5.	Insurance for subparagraphs (3) and (4) non-automobile hazards on a combined single limit of liability basis shall not be less than $1,000,000.00 each occurrence and when
applicable, $2,000,000.00 annual aggregate. 

  

	 	6.	Director’s and Officer’s Errors and Omissions coverage that includes coverage of the Contractor’s peer review and care management activities and has limits of at
least $1,000,000.00 per occurrence and $3,000,000.00 aggregate. 

  

	 	7.	The Contractor shall also require that each of its subcontractors maintain insurance coverage as specified above, except for subparagraph (6), or have the subcontractors provide
coverage for each subcontractor’s liability and employees. The Contractor must provide proof, upon request of the DCH, of its Provider’s medical professional liability insurance in amounts consistent with the community accepted standards
for similar professionals. The provision of this clause shall not be deemed to limit the liability or responsibility of the Contractor or any of its subcontractors herein. 

  

	 	8.	The insurance shall be written for not less than any limits of liability herein specified or required by law, whichever is greater, and shall include contractual liability insurance
as applicable to the Contractor’s obligations under the Indemnification clause of the Contract. 

  

	 	9.	 Before starting work, the contractor’s insurance agency must furnish to the director of the office of purchasing, original certificate(s) of insurance
verifying that the required liability coverage is in effect for the amounts specified in the contract. The contract number must be shown on the certificate of insurance to ensure correct filing. The Contractor must immediately notify the State of
any changes in type, 

  

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 CONTRACT #071B [GRAPHIC] 
  

	 	 
amount, or duration of insurance coverage. These certificates shall contain a provision to the effect that the policy will not be canceled until at least
fifteen days prior written notice has been given to the State. The written notice will have the Contract number and must be received by the Director of Purchasing. 

  

	I-N	LITIGATION 

  
 The State, its departments, and its agents shall not be responsible for representing or defending the Contractor, Contractor’s personnel, or any
other employee, agent or subcontractor of the Contractor, named as a defendant in any lawsuit or in connection with any tort claim. 
  
 The State and the Contractor agree to make all reasonable efforts to cooperate with each other in the defense of any litigation brought by any person or
persons not a party to the Contract. 
  
 The Contractor shall
submit annual litigation reports in a format established by DCH, providing the following detail for all civil litigation that the Contractor, subcontractor, or the Contractor’s insurers or insurance agents are parties to: 
  
 Case name and docket number 
 Name of plaintiff(s) and defendant(s) 
 Names
and addresses of all counsel appearing 
 Nature of the claim 
 Status of the case. 
  
 The
provisions of this section shall survive the expiration or termination of the Contract. 
  

	I-O	CANCELLATION 

  

	 	1.	The State may cancel the Contract for default of the Contractor. Default is defined as the failure of the Contractor to fulfill the obligations of the proposal or Contract. In case
of default by the Contractor, the State may immediately cancel the Contract without further liability to the State, its departments, agencies, and employees, and procure the articles or services from other sources, and hold the Contractor
responsible for all costs occasioned thereby. 

  

	 	2.	The State may cancel the Contract in the event the State no longer needs the services or products specified in the Contract, or in the event, program changes, changes in laws,
rules, or regulations occur. The State may cancel the Contract without further liability to the State, its departments, divisions, agencies, sections, commissions, officers, agents, and employees by giving the Contractor written notice of such
cancellation 30 days prior to the date of cancellation. 

  

	 	3.	The State may cancel the Contract for lack of funding. The Contractor acknowledges that the term of this Contract extends for several fiscal years and that continuation of this
Contract is subject to appropriation of funds for this project. If funds to enable the State to effect continued payment under this Contract are not appropriated or otherwise made available, the State shall have the right to terminate this Contract
without penalty at the end of the last period for which funds have been appropriated or otherwise made available by giving written notice of termination to the Contractor. The State shall give the Contractor written notice of such non-appropriation
within 30 days after it receives notice of such non-appropriation. 

  

	 	4.	 The State may immediately cancel the Contract without further liability to the State, its departments, divisions, agencies, sections, commissions, officers, agents
and employees if the Contractor, an officer of the Contractor, or an owner of a 25% or greater share of the Contractor, is convicted of a criminal offense incident to the 

  

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application for or performance of a State, public, or private contact or subcontract; or convicted of a criminal offense including but not limited to any of
the following: embezzlement, theft, forgery, bribery, falsification or destruction of records, receiving stolen property, attempting to influence a public employee to breach the ethical conduct standards for State of Michigan employees; convicted
under state or federal antitrust statutes; or convicted of any other criminal offense, which, in the sole discretion of the State, reflects poorly on the Contractor’s business integrity. 

  

	 	5.	The State may immediately cancel the Contract in whole or in part by giving notice of termination to the Contractor if any final administrative or judicial decision or adjudication
disapproves a previously approved request for purchase of personal services pursuant to Constitution 1963, Article 11, Section 5, and Civil Service Rule 4-6. 

  

	 	6.	The State may, with 30 days written notice to the Contractor, cancel the Contract in the event prices proposed for Contract modification/extension are unacceptable to the State.
(See Sections I-E, Price, and I-T, Modification of Contract). 

  

	 	7.	Either the State or the Contractor may, upon 90 days written notice, cancel the contract for the convenience of either party. 

  
 In the event that a Contract is canceled, the Contractor will cooperate with
the State to implement a transition plan for Enrollees. The Contractor will be paid for Covered Services provided during the transition period in accordance with the Capitation Rates in effect between the Contractor and the State at the time of
cancellation. Contractors will be provided due process before the termination of any Contract. 
  

	I-P	ASSIGNMENT 

  
 The Contractor shall not have the right to assign or delegate any of its duties or obligations under this Contract to any other party (whether by
operation of law or otherwise), without the prior written consent of the State Purchasing Director. To obtain consent for assignment of this Contract to another party, documentation must be provided to the State Purchasing Director to demonstrate
that the proposed assignee meets all of the requirements for a Contractor under this Contract. Any purported assignment in violation of this Section shall be null and void. Further, the Contractor may not assign the right to receive money due under
the Contract without consent of the Director of Purchasing. 
  

	I-Q	DELEGATION 

  
 The Contractor shall not delegate any duties or obligations under this Contract to a subcontractor other than a subcontractor named in the bid unless the
State Purchasing Director has given written consent to the delegation. 
  

	I-R	CONFIDENTIALITY 

  
 The use or disclosure of information regarding Enrollees obtained in connection with the performance of this Contract shall be restricted to purposes
directly related to the administration of services required under the Contract. 
  

	I-S	NON-DISCRIMINATION CLAUSE 

  
 The Contractor shall comply with the Elliott-Larsen Civil Rights Act, 1976 PA 453, as amended, MCL 37.2101 et seq., the Persons with Disabilities
Civil Rights Act, 1976 PA 220, as amended, MCL 37.1101 et seq., and all other federal, state and local fair employment practices and equal opportunity laws and covenants that it shall not discriminate against any employee or applicant for
employment, to be employed in the 

  

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 CONTRACT #071B [GRAPHIC] 
  

 
performance of this Contract, with respect to his or her hire, tenure, terms, conditions, or privileges of employment, or any matter directly or indirectly
related to employment, because of his or her race, religion, color, national origin, age, sex, height, weight, marital status, or physical or mental disability that is unrelated to the individual’s ability to perform the duties of a particular
job or position. The Contractor agrees to include in every subcontract entered into for the performance of this Contract this covenant not to discriminate in employment. A breach of this covenant is a material breach of this Contract. 
  

	I-T	MODIFICATION OF CONTRACT 

  
 The Director of Purchasing reserves the right to modify Covered Services required under this Contract during the course of this Contract. Such
modification may include adding or deleting tasks that this service shall encompass and/or any other modifications deemed necessary. Any changes in pricing proposed by the Contractor resulting from the requested changes are subject to acceptance by
the State. Changes may be increases or decreases. Contract changes will not be necessary in order for the Contractor to keep current with changes in the delivery of Covered Services that may result from new technology or new drugs. 
  
 In the event prices submitted as the result of a modification of covered
service are not acceptable to the state, the contract may be terminated and the contract may be subject to competitive 
  
 Bidding and award based upon the new modified covered services if adequate capacity is not readily available to serve beneficiaries in the affected
service area through existing contracts with other contractors. 
  

	I-U	ACCEPTANCE OF PROPOSAL CONTENT 

  
 The contents of the RFP and the Contractor’s proposal resulting in this Contract are contractual obligations. 
  

	I-V	RIGHT TO NEGOTIATE EXPANSION 

  
 The State reserves the right to negotiate expansion of the services outlined within this Contract to accommodate the related service needs of additional
selected State agencies, or of additional entities within DCH. 
  
 Such expansion shall be limited to those situations approved and negotiated by the Office of Purchasing at the request of DCH or another State agency. The Contractor shall be obliged to expeditiously evaluate and respond to specified needs
submitted by the Office of Purchasing with a proposal outlining requested services and pricing. All pricing for expanded services shall be shown to be consistent with the cost elements and /or unit pricing of the original Contract. 
  
 In the event that a Contract expansion proposal is accepted by the State,
the Office of Purchasing shall issue a Contract change notice to the Contract as notice to the Contractor to provide the work specified. Compensation is not allowed the Contractor until such time as a Contract change notice is issued. 
  

	I-W	MODIFICATIONS, CONSENTS AND APPROVALS 

  
 This Contract will not be modified, amended, extended, or augmented, except by a writing executed by the parties hereto, and any breach or default by a
party shall not be waived or released other than in writing signed by the other party. 
  

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	I-X	ENTIRE AGREEMENT AND ORDER OF PRECEDENCE 

  
 The following documents constitute the complete and exclusive statement of the agreement between the parties as it relates to this transaction. In the
event of any conflict among the documents making up the Contract, the following order of precedence shall apply (in descending order of precedence): 
  

	 	A.	This Contract and any Addenda thereto 

  

	 	B.	State’s RFP and any Addenda thereto 

  

	 	C.	Contractor’s proposal to the State’s RFP and Addenda 

  

	 	D.	Policy manuals of the Medical Assistance Program and subsequent publications 

  

In the event of any conflict over the interpretation of the specifications, terms, and conditions indicated by the State and those indicated by the
Contractor, those of the State take precedence. 
  
 This Contract
supersedes all proposals or other prior agreements, oral or written, and all other communications between the parties. 
  

	I-Y	NO WAIVER OF DEFAULT 

  
 The failure of the State to insist upon strict adherence to any term of this Contract shall not be considered a waiver or deprive the State of the right
thereafter to insist upon strict adherence to that term, or any other term, of the Contract. 
  

	I-Z	SEVERABILITY 

  
 Each provision of this Contract shall be deemed to be severable from all other provisions of the Contract and, if one or more of the provisions shall be
declared invalid, the remaining provisions of the Contract shall remain in full force and effect. 
  

	I-AA	DISCLAIMER 

  
 All statistical and fiscal information contained within the Contract and its attachments, and any amendments and modifications thereto, reflect the best
and most accurate information available to DCH at the time of drafting. No inaccuracies in such data shall constitute a basis for legal recovery of damages, either real or punitive. 
  
 Captions and headings used in this Contract are for information and organization purposes. Captions and headings, including
inaccurate references, do not, in any way, define or limit the requirements or terms and conditions of this Contract. 
  

	I-BB	RELATIONSHIP OF THE PARTIES (INDEPENDENT CONTRACTOR) 

  
 The relationship between the State and the Contractor is that of client and independent contractor. No agent, employee, or servant of the Contractor or
any of its subcontractors shall be deemed to be an employee, agent, or servant of the State for any reason. The Contractor will be solely and entirely responsible for its acts and the acts of its agents, employees, servants, and subcontractors
during the performance of a contract resulting from this Contract. 
  

	I-CC	NOTICES 

  
 Any notice given to a party under this Contract must be written and shall be deemed effective, if addressed to such party at the address indicated in
sections I-B, I-C and III-A of this Contract upon (i) delivery, if hand delivered; (ii) receipt of a confirmed 

  

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 CONTRACT #071B [GRAPHIC] 
  

 
transmission by telefacsimile if a copy of the notice is sent by another means specified in this Section; (iii) the third (3rd) Business Day after being sent by U.S. mail, postage pre-paid, return receipt requested; or (iv) the next Business Day after
being sent by a nationally recognized overnight express courier with a reliable tracking system. 
  
 Either party may change its address where notices are to be sent by giving written notice in accordance with this Section. 
  

	I-DD	UNFAIR LABOR PRACTICES 

  
 Pursuant to 1980 PA 278, as amended, MCL 423.321 et seq., the State shall not award a contract or subcontract to an employer or any subcontractor,
manufacturer or supplier of the employer, whose name appears in the current register compiled by the Michigan Department of Consumer and Industry Services. The State may void any contract if, subsequent to award of the Contract, the name of the
Contractor as an employer, or the name of the subcontractor, manufacturer of supplier of the contractor appears in the register. 
  

	I-EE	SURVIVOR 

  
 Any provisions of the Contract that impose continuing obligations on the parties including, but not limited to, the Contractor’s indemnity and other
obligations, shall survive the expiration or cancellation of this Contract for any reason. 
  

	I-FF	GOVERNING LAW 

  
 This Contract shall in all respects be governed by, and construed in accordance with, the laws of the State of Michigan. 
  

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 SECTION II 
 WORK STATEMENT 
  

	II-A	BACKGROUND/PROBLEM STATEMENT 

  

	 	1.	Value Purchasing 

  
 The creation of DCH through Executive Order 1996-1 brought together policy, programs, and resources to enable the State to become a more effective
purchaser of health care services for the Medicaid population. As the single State agency responsible for health policy and purchasing of health care services using State appropriated and federal matching funds, DCH intends to get better value while
ensuring quality and access. DCH will focus on “value purchasing.” Value purchasing involves aligning financing incentives to stimulate appropriate changes in the health delivery system that will: 
  

	 	•	Bring organization and accountability for the full range of benefits, 

  

	 	•	Provide greater flexibility in the range of services; 

  

	 	•	Improve access to and quality of care; 

  

	 	•	Achieve greater cost efficiency; and 

  

	 	•	Link performance of Contractors to improvements in the health status of the community. 

  

	 	2.	Managed Care Direction 

  
 Under the Comprehensive Health Care Program (CHCP), the State selectively contracts with Contractors who will accept financial risk for managing
comprehensive care through a performance contract. The managed care direction is the health care purchasing direction for Michigan’s future. Change in health care delivery systems is happening at the national and state levels. Michigan will
proactively work to shape the health care marketplace as a purchaser of services. The focus will be on quality of care, accessibility, and cost-effectiveness. 
  

It is critical that Michigan act now to bring the rate of growth in Medicaid more in line with the forecasted rate of growth in State revenues. Since
1990, State revenues have grown by about 3% per year. The growth of the Medicaid budget must be slowed but, at the same time, access to quality health care for the Medicaid population must be ensured. 
  
 There are three basic ways to slow down cost growth: restrict eligibility,
reduce benefits, or stimulate more efficiency in the health delivery system through managed care. DCH has chosen not to make program cuts, but rather to use the efficiency approach because other important health care goals can be achieved at the
same time. 
  
 There are two categories of specialized services
that are available outside of the CHCP. These are behavioral health services and services for persons with developmental disabilities. These specialized services are clearly defined as beyond the scope of benefits that are included in the CHCP. Any
Contractor contracting with the State as a capitated managed care provider will be responsible for coordinating access to these specialized services with those providers designated by the State to provide them. The criteria for contracted Qualified
Health Plans (MHPs) include the implementation of local agreements with the behavioral health and developmental disability providers who are under contract with DCH. Model agreements between Contractors and behavioral health and developmental
disability providers are included in the appendix to this Contract. 
  

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	II-B	OBJECTIVES 

  

	 	1.	Objectives 

  
 The Contract objectives of the State are: 
  

	 	•	The assurance of access to primary and preventive care; 

  

	 	•	The coordination for all necessary health care services; 

  

	 	•	The provision of medical care that is of high quality, provides continuity and is appropriate for the individual; and 

  

	 	•	The delivery of health care in a manner that makes costs more predictable for the Medicaid population. 

  

	 	2.	Objectives for Special Needs 

  
 When providing services under the CHCP, the Contractor must take into consideration the requirements of the Medicaid program and how to best serve the
Medicaid population in the CHCP. As an objective, the Contractor must also stress the collaborative effort of both the State and the private sector to operate a managed care system that meets the special needs of these Enrollees. 
  
 It is recognized that special needs will vary by individual and by county or
region. Contractors must have an underlying organizational capacity to address the special needs of their Enrollees, such as: responding to requests for assignment of specialists as Primary Care Providers (PCP), assisting in coordinating with other
support services, and generally responding and anticipating needs of Enrollees with special needs. Under their Covered Service responsibilities, Contractors are expected to provide early prevention and intervention services for recipients with
special needs, as well as all other recipients. 
  
 As an
example, while support services for persons with developmental disabilities may be outside of the direct service responsibility of the Contractor, the Contractor does have responsibility to assist in coordinating arrangements to receive necessary
support services. This coordination must be consistent with the person-centered planning principles established within the revised Michigan’s Mental Health Code. 
  
 Another example would be for Enrollees who have chronic illnesses such as diabetes or end-stage renal disease. In these
instances, the PCP assignment may be more appropriately located with a specialist within the Contractor’s network. When a Contractor designates a physician specialist as the PCP, that PCP will be responsible for coordinating all continuing
medical care for the assigned Enrollee. 
  

	 	3.	Objectives for Contractor Accountability 

  
 Contractor accountability must be established in order to ensure that the State’s objectives for managed care and goal for immunizations are met and
the objectives for special populations are addressed. Contractors contracting with the State will be held accountable for: 
  

	 	•	Ensuring that all Covered Services are available and accessible to Enrollees with reasonable promptness and in a manner, which ensures continuity. Medically necessary services shall
be available and accessible 24 hours a day and 7 days a week. 

  

	 	•	Delivering health care services in a manner that focuses on health promotion and disease prevention and features disease management strategies. 

  

	 	•	Demonstrating the Contractor’s capacity to adequately serve the Contractor’s expected enrollment of Enrollees. 

  

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 CONTRACT #071B [GRAPHIC] 
  

	 	•	Providing access to appropriate providers, including qualified specialists for all medically necessary services including those specialists described under model agreements for
behavioral health and developmental disabilities. 

  

	 	•	Providing assurances that it will not deny enrollment to, expel, or refuse to re-enroll any individual because of the individual’s health status or need for services, and that
it will notify all eligible persons of such assurances at the time of enrollment. 

  

	 	•	Paying providers in a timely manner for all Covered Services. 

  

	 	•	Establishing an ongoing internal quality improvement and utilization review program. 

  

	 	•	Providing procedures to ensure program integrity through the detection and elimination of fraud and abuse and cooperate with DCH and the Department of Attorney General as necessary.

  

	 	•	Reporting encounter data and aggregate data including data on inpatient and outpatient hospital care, physician visits, pharmaceutical services, and other services specified by the
Department. 

  

	 	•	Providing procedures for hearing and timely resolving grievances between the Contractor and Enrollees. 

  

	 	•	Providing for outreach and care coordination to Enrollees to assist them in using their health care resources appropriately. 

  

	 	•	Collaborating, through local agreements, with specialized behavioral and developmental disability services contractors on services provided by them to the Contractor’s
Enrollees. 

  

	 	•	Providing assurances for the Contractor’s solvency and guaranteeing that Enrollees and the State will not be liable for debts of the Contractor. 

  

	 	•	Meeting all standards and requirements contained in this Contract, and complying with all applicable federal and state laws, administrative rules, and policies promulgated by DCH.

  

	 	•	Cooperating with the State and/or CMS in all matters related to fulfilling Contract requirements and obligations. 

  

	II-C	SPECIFICATIONS 

  
 The following sections provide an explanation of the specifications and expectations that the Contractor must meet and the services that must be provided
under the Contract. The Contractor is not, however, constrained from supplementing this with additional services or elements deemed necessary to fulfill the intent of the CHCP. 
  

	II-D	TARGETED GEOGRAPHICAL AREA FOR IMPLEMENTATION OF THE CHCP 

  

	 	1.	Regions 

  
 The State will divide the delivery of Covered Services into ten regions. 
  
 Contractor’s plans for Region 1 and 10 must be tailored to each county in terms of the provider network, Enrollment Capacity and Capitation Rates.
Region 1 (Wayne County) and Region 10 (Oakland County) may have partial county service areas. 
  
 Contractor’s plans for Regions 2 through 9 must establish: 
  

	 	(a)	a network of providers that guarantees access to required services for the entire region; or 

  

	 	(b)	a network of providers that guarantees access to required services for a significant portion of the region. 

  
 Under alternative (b) the Contract must specifically identify the
contiguous portion of the region that will be served along (entire counties) with a description of the available provider network. 
  

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 CONTRACT #071B [GRAPHIC] 
  

 The counties included in the specific regions are as follows: 
  

			
	 Region 1:
	  	Wayne
		
	 Region 2:
	  	Hillsdale, Jackson, Lenawee, Livingston, Monroe, and Washtenaw
		
	 Region 3:
	  	Barry, Berrien, Branch, Calhoun, Cass, Kalamazoo, St. Joseph, Van Buren
		
	 Region 4:
	  	Allegan, Antrim, Benzie, Charlevoix, Cheboygan, Emmet, Grand Traverse, Ionia, Kalkaska, Kent, Lake, Leelanau Manistee, Mason, Mecosta, Missaukee, Montcalm, Muskegon, Newaygo, Oceana, Osceola,
Ottawa, and Wexford
		
	 Region 5:
	  	Clinton, Eaton, Ingham
		
	 Region 6:
	  	Genesee, Lapeer, Shiawassee
		
	 Region 7:
	  	Alcona, Alpena, Arenac, Bay, Clare, Crawford, Gladwin, Gratiot, Huron, Iosco, Isabella, Midland, Montmorency, Ogemaw, Oscoda, Otsego, Presque Isle, Roscommon, Saginaw, Sanilac,
Tuscola
		
	 Region 8:
	  	Alger, Baraga, Chippewa, Delta, Dickinson, Gogebic Houghton, Iron, Keweenaw, Luce, Mackinac, Marquette, Menominee, Ontonagon, Schoolcraft
		
	 Region 9:
	  	Macomb and St. Clair
		
	 Region 10:
	  	Oakland

  

	 	2.	Multiple Region Service Areas 

  
 Although Contractors may propose to contract for services in more than one of the above-described regions, the Contractor agrees to tailor its services to
each individual region in terms of the provider network, Enrollment Capacity, and Capitation Rates. DCH may determine Contractors to be qualified in one region but not in another. 
  
 Contractor may request service area expansion at any time during the term of the Contract using the provider profile
information form contained in Appendix D of the Contract. If Contractor seeks approval in a region which it did not seek or receive a service area approval under the original RFP (071I0000251), DCH may negotiate a contract modification covering that
service area that is within the parameters of approved pricing already in place for other contractors already approved in the same county. 
  

	 	3.	Alternative Regions 

  
 Contractors may propose alternatives to the regions listed above under the following condition: 
  

	 	•	One or more contiguous counties from other listed regions may be included in the service area for the Contract. The counties must be contiguous to the original region under
Contract. Under this alternative, the proposed provider network and Enrollment Capacity shall be included with the original region. However, the Capitation Rates, under this alternative, must be specific for the contiguous county(ies) in addition
to the regional Capitation Rates. 

  

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 CONTRACT #071B [GRAPHIC] 
  

	II-E	MEDICAID ELIGIBILITY AND CHCP ENROLLMENT 

  
 The Michigan Medicaid program arranges for and administers medical assistance to approximately 1.2 million Beneficiaries. This includes the categorically
needy (those individuals eligible for, or receiving, federally-aided financial assistance or those deemed categorically needy) and the medically needy populations. Eligibility for Michigan’s Medicaid program is based on a combination of
financial and non-financial factors. Within the Medicaid eligible population, there are groups that must enroll in the CHCP, groups that may voluntarily enroll, and groups that are excluded from participation in the CHCP as follows: 
  

	 	1.	Medicaid Eligible Groups Who Must Enroll in the CHCP: 

  

	 	•	Families with children receiving assistance under the Financial Independence Program (FIP) 

  

	 	•	Persons receiving Mich-Care Medicaid or Medicaid for pregnant women 

  

	 	•	Persons under age 21 who are receiving Medicaid. 

  

	 	•	Persons receiving Medicaid for caretaker relatives and families with dependent children who do not receive FIP 

  

	 	•	Supplemental Security Income (SSI) Beneficiaries who do not receive Medicare 

  

	 	•	Persons receiving Medicaid for the blind or disabled 

  

	 	•	Persons receiving Medicaid for the aged 

  

	 	•	Pregnant women 

  

	 	2.	Medicaid Eligible Groups Who May Voluntarily Enroll in the CHCP: 

  

	 	•	Migrants 

  

	 	•	Native Americans 

  

	 	•	Persons in the Traumatic Brain Injury program 

  

	 	3.	Medicaid Eligible Groups Excluded From Enrollment in the CHCP: 

  

	 	•	Persons without full Medicaid coverage, including those in the State Medical Program or PlusCare 

  

	 	•	Persons with Medicaid who reside in an ICF/MR (intermediate care facilities for the mentally retarded), or a State psychiatric hospital. 

  

	 	•	Persons receiving long term care (custodial care) in a licensed nursing facility 

  

	 	•	Persons being served under the Home & Community Based Elderly Waiver 

  

	 	•	Persons enrolled in Children’s Special Health Care Services (CSHCS) 

  

	 	•	Persons with commercial HMO coverage, including Medicare HMO coverage. 

  

	 	•	Persons in PACE (Program for All-inclusive Care for the Elderly) 

  

	 	•	Spend-down clients 

  

	 	•	Children in Foster Care or Child Care Institutions 

  

	 	•	Persons in the Refugee Assistance Program 

  

	 	•	Persons in the Repatriate Assistance Program 

  

	 	•	Persons with both Medicare and Medicaid eligibility 

  

	II-F	ELIGIBILITY DETERMINATION 

  
 The State has the sole authority for determining whether individuals or families meet any of the eligibility requirements as specified for enrollment in
the CHCP. 
  
 Individuals who attain eligibility due to a
pregnancy are usually guaranteed eligibility for comprehensive services through 60 days post-partum or post-loss of pregnancy. Their newborns are usually guaranteed coverage for 60 days and may be covered for one full year. 
  

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 CONTRACT #071B [GRAPHIC] 
  

	II-G	ENROLLMENT IN THE CHCP 

  

	 	1.	Enrollment Services 

  
 The State is required to contract for services to help Beneficiaries make informed choices regarding their health care, assist with client satisfaction
and access surveys, and assist Beneficiaries in the appropriate use of the Contractor’s complaint and grievance systems. DCH contracts with an Enrollment Services contractor to contact and educate general Medicaid and CSHCS Beneficiaries about
managed care and to enroll, disenroll, and change enrollment for these Beneficiaries. Although this Contract indicates that the enrollment and disenrollment process and related functions will be performed by DCH, generally, these activities are part
of the Enrollment Services contract. Enrollment Services references to DCH are intended to indicate functions that will be performed by either DCH or the Enrollment Services contractor. All Contractors agree to work closely with DCH and provide
necessary information, including provider files. 
  

	 	2.	Initial Enrollment 

  
 After a person applies to FIA for Medicaid, he or she will be assessed for eligibility in a Medicaid managed care program. If they are determined eligible
for the CHCP, they will be given marketing material on the Contractors available to them, and the opportunity to speak with an Enrollee counselor to obtain more in-depth information and to get answers to any questions or concerns they may have. DCH
will provide access to a toll-free number to call for information or to designate their preferred Contractor. Beneficiaries eligible for the CHCP will have full choice of Contractors within their county of residence. Beneficiaries must decide on the
Contractor they wish to enroll in within 30 days from the date of approval of Medicaid eligibility. If they do not voluntarily choose a Contractor within 30 days of approval, DCH will automatically assign the Beneficiaries to Contractors within
their county of residence. 
  
 Under the automatic enrollment
process, Beneficiaries will be automatically assigned to Contractors based on performance of the Contractor in areas specified by DCH. DCH will automatically assign a larger proportion of Beneficiaries to Contractors with a higher performance
ranking. The capacity of the Contractor to accept new Enrollees and to provide reasonable accessibility for the Enrollees also will be taken into consideration in automatic Beneficiary enrollment. Individuals in a family unit will be assigned
together whenever possible. DCH has the sole authority for determining the methodology and criteria to be used for automatic enrollment. 
  

	 	3.	Enrollment Lock-in 

  
 Except as stated in this subsection, enrollment into a Contractor’s plan will be for a period of 12 months with the following conditions: 

 

	 	•	At least 60 days before the start of each enrollment period and at least once a year, DCH, or the Enrollment Services contractor, will notify Enrollees of their right to disenroll;

  

	 	•	Enrollees will be provided with an opportunity to select any Contractor approved for their area during this open enrollment period; 

  

	 	•	Enrollees will be notified that if they do nothing, their current enrollment will continue; 

  

	 	•	Enrollees who choose to remain with the same Contractor will be deemed to have had their opportunity for disenrollment without cause and declined that opportunity;

  

	 	•	New Enrollees, those who have changed from one Contractor to another or are new to Medicaid eligibility, will have 90 days within which they may change Contractors without cause;

  

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 CONTRACT #071B [GRAPHIC] 
  

	 	•	Enrollees who change enrollment within the 90-day period will have another 90 days within which they may change Contractors without cause and this may continue throughout the year;

  

	 	•	An Enrollee who has already had a 90-day period with a particular Contractor will not be entitled to another 90-day period within the year with the same Contractor;

  

	 	•	Enrollees who disenroll from a Contractor will be required to change enrollment to another Contractor; 

  

	 	•	All such changes will be approved and implemented by DCH on a calendar month basis. 

  

	 	4.	Rural Area Exception 

  
 The DCH will establish a Rural Exception Policy consistent with 42 CFR 438.52 and with the approval from The Centers for Medicare and Medicaid Services
that permits a rural exception to the waiver requirement of having two HMOs in every county. This exception will permit mandatory enrollment of beneficiaries into a single health plan. This policy will only be implemented in counties that are
designated as “Rural.” A Rural County is defined as any county that is non-urban. The beneficiary much be permitted to choose from at least two physicians or case managers. The beneficiary must have the option of obtaining services from
any other provider if the following conditions exist: 
  

	 	•	The type of service or specialist is not available within the HMO, 

  

	 	•	The provider is not part of the network, but is the main source of a service to the beneficiary, 

  

	 	•	The only provider available to the beneficiary does not, because of moral or religious objections, provide the service the enrollee seeks, 

  

	 	•	Related services must be performed by the same provider and all of the services are not available within network, 

  

	 	•	The State determines other circumstances that warrant out of network treatment. 

  
 The State shall determine the rural counties to be part of this exception. The State will determine the method of Health
Plan Selection and Payment based on Benchmark status, performance measures, provider network, current enrollment, and/or other factors relevant to the area. Attachment A (Awarded Price) will be amended, if applicable, if the health plan is awarded a
rural exception county. 
  

	 	5.	Enrollment date 

  
 Any changes in enrollment will be approved and implemented by DCH on a calendar month basis. 
  
 If a Beneficiary is determined eligible during a month, he or she is
eligible for the entire month. In some cases, Enrollees may be retroactively determined eligible. Once a Beneficiary (other than a newborn) is determined to be Medicaid eligible, enrollment in the CHCP and assignment to a Contractor will occur on
the first day of the month following the eligibility determination. Contractors will not be responsible for paying for health care services during a period of retroactive eligibility and prior to the date of enrollment in their health plan, except
for newborns (Refer to II-G6). Only full-month capitation payments will be made to the Contractor. 
  
 If the Beneficiary is in an inpatient hospital setting on the date of enrollment (first day of the month), the Contractor will not be responsible for the
inpatient stay or any charges incurred prior to the date of discharge. The Contractor will be responsible for all care from the date of discharge forward. Similarly, if an Enrollee is disenrolled from a Contractor and is in an inpatient hospital
setting on the date 

  

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 CONTRACT #071B [GRAPHIC] 
  

 
of disenrollment (last day of the month), the Contractor will be responsible for all charges incurred until the date of discharge. 
  

	 	6.	Newborn Enrollment 

  
 Newborns of eligible CHCP mothers who were enrolled at the time of the child’s birth will be automatically enrolled with the mother’s
Contractor. The Contractor is responsible for submitting a newborn notification form to DCH. The Contractor will be responsible for all Covered Services for the newborn until notified otherwise by DCH. At a minimum, newborns are eligible for the
month of their birth and may be eligible for up to one year or longer. The Contractor will receive a capitation payment for the month of birth and for all subsequent months of enrollment. 
  

	 	7.	Open Enrollment 

  
 Open enrollment will occur for all Beneficiaries at least once every 12 months. Enrollees will be offered the choice to stay in the health plan they are
in or to change to another Contractor within their county at the end of the 12-month lock-in. If the beneficiary resides in a county currently operating under the Rural Exception, there will be no open enrollment period. 
  

	 	8.	Automatic Re-enrollment 

  
 Enrollees who are disenrolled from a Contractor’s plan due to loss of Medicaid eligibility will be automatically re-enrolled or assigned to the same
Contractor should they regain eligibility within three months. If more than three months have elapsed, Beneficiaries will have full choice of Contractors within their county of residence. 
  

	 	9.	Enrollment Errors by the Department 

  
 If DCH enrolls a non-eligible person with a Contractor, DCH will retroactively disenroll the person as soon as the error is discovered and will recoup the
capitation paid to the Contractor. Contractor may then recoup payments from its providers if that is permissible under its provider contracts. 
  

	 	10.	Enrollees who move out of the Contractor’s Service Area 

  
 The Contractor agrees to be responsible for services provided to an Enrollee who has moved out of the Contractor’s service area after the effective
date of enrollment until the Enrollee is disenrolled from the Contractor. DCH will permit Contractor to submit information that an Enrollee has moved out of service area only if such information can be corroborated by an independent third party
acceptable to DCH. DCH will expedite prospective disenrollments of Enrollees and process all such disenrollments effective the next available month after notification from FIA that the Enrollee has left the Contractor’s service area. Until the
Enrollee is disenrolled from the Contractor, the Contractor will receive a Capitation Rate for these Enrollees at a rate consistent with the highest rate approved for the Contractor. The Contractor is responsible for all medically necessary Covered
Services for these Enrollees until they are disenrolled. The Contractor may use its utilization management protocols for hospital admissions and specialty referrals for Enrollees in this situation. Contractors are responsible for all medically
necessary authorized services until a member is disenrolled from a plan. Contractors may require members to return to use network providers and provide transportation and Contractors may authorize out of network providers to provide medically
necessary services. Enrollment of Beneficiaries who reside out of the service area of a Contractor before the effective date of enrollment will be considered an “enrollment error” as described above. 
  

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 CONTRACT #071B [GRAPHIC] 
  

	 	11.	Disenrollment Requests Initiated by the Contractor 

  
 The Contractor may initiate special disenrollment requests to DCH based on Enrollee actions inconsistent with Contractor membership—for example, if
there is fraud, abuse of the Contractor, or other intentional misconduct; or if, in the opinion of the attending PCP, the Beneficiary’s behavior makes it medically infeasible to safely or prudently render Covered Services to the Enrollee.
Special disenrollment requests are divided into three categories: 
  

	 	•	Violent/life-threatening situations involving physical acts of violence; physical or verbal threats of violence made against Contractor providers, staff, or the public at Contractor
locations; or stalking situations. 

  

	 	•	Fraud/misrepresentation involving alteration or theft of prescriptions, misrepresentation of Contractor membership, or unauthorized use of CHCP benefits. 

 

	 	•	Other noncompliance situations involving the failure to follow treatment plan; repeated use of non-Contractor providers; Contractor provider refusal to see the Enrollee; repeated
emergency room use; and other situations that impede care. 

  
 Disenrollment requests may also be initiated by the Contractor if the Enrollee becomes medically eligible for services under Title V of the Social Security Act as described in Section II-U-4-cv (page 56) or is
admitted to a nursing facility for custodial care. The Contractor must provide DCH with medical documentation to support this type of disenrollment request. Information must be provided in a timely manner using the format specified by DCH. DCH
reserves the right to require additional information from the Contractor to assess the need for Enrollee disenrollment and to determine the Enrollee’s eligibility for special services. 
  

	 	12.	Medical Exception 

  
 The Beneficiary may request an exception to enrollment in the CHCP if he or she has a serious medical condition and is undergoing active treatment for
that condition with a physician that does not participate with the Contractor at the time of enrollment. The Beneficiary must submit a medical exception request to DCH. 
  

	 	13.	Disenrollment for Cause Initiated by the Enrollee 

  
 The Enrollee may request a disenrollment for cause from a Contractor’s plan at any time during the enrollment period. Reasons cited in a request for
disenrollment for cause may include poor quality care or lack of access to necessary specialty services covered under the Contract. Beneficiaries must demonstrate that adequate care is not available by providers within the Health Plan’s
provider network. Further criteria, as necessary, will be developed by DCH. Enrollees who are granted a disenrollment for cause will be required to change enrollment to another Contractor. 
  

	 	14.	Termination of Coverage 

  

	 	(a)	The Contractor shall be responsible for the Enrollee’s medical care until the Department notifies the Contractor that its responsibility for the Enrollee is no longer in
effect. 

  

	 	(b)	 DCH will not retroactively disenroll any Enrollees unless the person was enrolled in error, the person died before the beginning of the month in which a capitation
payment was made, or for CSHCS enrollment as described under (c) (v) below. Recoupments of capitation will be collected by DCH for all retroactive disenrollments. DCH shall only retroactively enroll newborns. During Contract year beginning October
1, 2001, the DCH will initiate a process to prospectively re-enroll Medicaid Beneficiaries with the Contractor who have regained eligibility within 93 days from the date eligibility was lost. Until that process is implemented, the Contractor will
remain responsible for medically necessary 

  

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 CONTRACT #071B [GRAPHIC] 
  

	 	 
services provided to Beneficiaries who were retroactively reinstated with the Contractor. 

  

	 	(c)	Coverage for an Enrollee shall terminate whenever any of the following occurs: 

  

	 	i.	This Contract is terminated for any reason. 

  

	 	ii.	The Enrollee is no longer eligible for Medicaid and does not regain eligibility within ninety-three (93) days. 

  

	 	iii.	The Enrollee dies. The Contractor shall be entitled to a capitation payment for such person through the last day of the month in which death occurred. 

  

	 	iv.	Enrollee moves outside the Contractor’s service area. In such instances, the Enrollee shall be disenrolled effective the first (1st) day of the month following DCH’s
implementation of the change of address. The Contractor shall remain responsible for all medically necessary Covered Services until the effective date of disenrollment 

  

	 	v.	The Enrollee is medically eligible for CSHCS and has elected to enroll in CSHCS. When the Enrollee has joined CSHCS, the Enrollee will be disenrolled from the Contractor’s
health plan effective with the first day of the month for which CSHCS medical eligibility was determined. The Contractor will assist DCH in determining medical eligibility by promptly providing medical documentation to DCH using standard forms and
will also assist the DCH in CSHCS enrollment education efforts after medical eligibility has been confirmed. 

  

	 	vi.	The Enrollee is eligible for long-term custodial services in a nursing facility following discharge from an acute care inpatient facility. 

  

	 	•	The Contractor shall involve DCH in discharge planning for Enrollees whom the Contractor believes will require custodial long-term care services in a nursing facility upon discharge
from the inpatient setting. If DCH is involved and if DCH agrees that the Enrollee meets the criteria for admission to a nursing facility for long-term custodial care upon discharge from the inpatient setting, DCH will disenroll the Enrollee from
the Contractor’s plan upon discharge from the inpatient setting. 

  

	 	•	If the Contractor fails to provide DCH with sufficient notice of the impending discharge or does not include DCH in discharge planning for the Enrollee, the Contractor will be
responsible for all services required by the Enrollee for up to 45 days. 

  

	 	•	The Contractor is responsible for all restorative and rehabilitative services required by its Enrollees (including care in a nursing facility). The Contractor is not responsible for
Covered Services provided in a nursing facility that was not authorized by the Contractor. 

  

	 	•	DCH has sole responsibility for the determination of eligibility for long-term care services paid for by DCH. 

  

	 	vii.	The Enrollee is admitted to a state psychiatric hospital. An Enrollee admitted to a state psychiatric hospital shall be disenrolled at the end of the month. The Contractor shall not
be responsible for reimbursing the state psychiatric hospital. 

  

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 CONTRACT #071B [GRAPHIC] 
  

	II-H	SCOPE OF COMPREHENSIVE BENEFIT PACKAGE 

  

	 	1.	Services Included 

  
 The Covered Services that the Contractor has available for Enrollees must include, at a minimum, the Covered Services listed below. The Contractor may
limit services to those which are medically necessary and appropriate, and which conform to professionally accepted standards of care. Contractors must operate consistent with all applicable Medicaid provider manuals and publications for coverages
and limitations. If new services are added to the Michigan Medicaid Program, or if services are expanded, eliminated, or otherwise changed, the Contractor must implement the changes consistent with State direction in accordance with the provisions
of Contract Section I-T. 
  
 Although the Contractor must provide
the full range of Covered Services listed below, they may choose to provide services over and above those specified. 
  
 The services provided to Enrollees under this Contract include, but are not limited to, the following: 
  

	 	•	Ambulance and other emergency medical transportation 

  

	 	•	Blood lead follow-up services for individuals under the age of 21 

  

	 	•	Certified nurse midwife services 

  

	 	•	Certified pediatric and family nurse practitioner services 

  

	 	•	Chiropractic services for persons under age 21 

  

	 	•	Diagnostic lab, x-ray and other imaging services 

  

	 	•	Durable medical equipment and supplies 

  

	 	•	Emergency services 

  

	 	•	End Stage Renal Disease services 

  

	 	•	Family planning services 

  

	 	•	Health education 

  

	 	•	Hearing & speech services 

  

	 	•	Hearing aids for persons under age 21 

  

	 	•	Home Health services 

  

	 	•	Hospice services (if requested by the Enrollee) 

  

	 	•	Immunizations 

  

	 	•	Inpatient and outpatient hospital services 

  

	 	•	Intermittent or short-term restorative or rehabilitative nursing care (in or out of a facility) 

  

	 	•	Maternal and Infant Support Services (MSS/ISS) 

  

	 	•	Medically necessary weight reduction services 

  

	 	•	Mental health care up to 20 outpatient visits per Contract year 

  

	 	•	Out-of-state services authorized by the Contractor 

  

	 	•	Outreach for included services, especially, pregnancy related and well-child care 

  

	 	•	Parenting and birthing classes 

  

	 	•	Pharmacy services 

  

	 	•	Podiatry services for persons under age 21 

  

	 	•	Practitioners’ services (such as those provided by physicians, optometrists and dentists enrolled as a Medicaid Provider Type 10) 

  

	 	•	Prosthetics & orthotics 

  

	 	•	Therapies, (speech, language, physical, occupational) 

  

	 	•	Transplant services 

  

	 	•	Transportation 

  

	 	•	Treatment for sexually transmitted disease (STD) 

  

	 	•	Vision services 

  

	 	•	Well child/EPSDT for persons under age 21 

  

 22 

 CONTRACT #071B [GRAPHIC] 
  

	 	2.	Enhanced Services 

  
 In conjunction with the provision of Covered Services, the Contractor agrees to do the following: 
  

	 	•	Place strong emphasis on programs to enhance the general health and well-being of Enrollees; 

  

	 	•	Makes available health promotion programs to the Enrollees; 

  

	 	•	Promote the availability of health education classes for Enrollees; 

  

	 	•	Consider providing education for Enrollees with, or at risk for, a specific disability; 

  

	 	•	Consider providing education to Enrollees, Enrollees’ families, and other health care providers about early intervention and management strategies for various illnesses and/or
exacerbations related to that disability or disabilities. 

  
 The Contractor agrees that the enhanced services must comply with the marketing and other relevant guidelines established by DCH. DCH will be receptive to innovation in the provision of health promotion services and,
if appropriate, will seek any federal waivers necessary for the Contractor to implement a desired innovative program. 
  
 The Contractor may not charge an Enrollee a fee for participating in health education services that fall under the definition of a Covered Service
under this section of the Contract. A nominal fee may be charged to an Enrollee if the Enrollee elects to participate in programs beyond the Covered Services. 
  

	 	3.	Services Covered Outside of the Contract 

  
 The following services are not Contractor requirements: 
  

	 	•	Dental services 

  

	 	•	Services provided by a school district and billed through the Intermediate School District 

  

	 	•	Inpatient hospital psychiatric services (Contractors are not responsible for the physician cost related to providing psychiatric admission physical and histories. However, if
physician services are required for other than psychiatric care during a psychiatric inpatient admission, the Contractor would be responsible for covering the cost, provided the service has been prior authorized and is a covered benefit.)

  

	 	•	Outpatient partial hospitalization psychiatric care 

  

	 	•	Mental health services in excess of 20 outpatient visits each contract year 

  

	 	•	Substance abuse services through accredited providers including: 

  

	 	•	Screening and assessment 

  

	 	•	Detoxification 

  

	 	•	Intensive outpatient counseling and other outpatient services 

  

	 	•	Methadone treatment 

  

	 	•	Services provided to persons with developmental disabilities and billed through Provider Type 21 

  

	 	•	Custodial care in a nursing facility 

  

	 	•	Home and Community based waiver program services 

  

	 	•	Personal care or home help services 

  

	 	•	Transportation for services not covered in the CHCP 

  

	 	•	Pharmacy and related services prescribed by providers under the State’s Contract for specialty behavioral services or the State’s Contract for specialty services for
persons with developmental disabilities 

  

 23 

 CONTRACT #071B [GRAPHIC] 
  

	 	4.	Services Prohibited or Excluded Under Medicaid: 

  

	 	•	Elective abortions and related services 

  

	 	•	Experimental/Investigational drugs, procedures or equipment 

  

	 	•	Elective cosmetic surgery 

  

	II-I	SPECIAL COVERAGE PROVISIONS 

  
 Specific coverage and payment policies apply to certain types of services and providers, including the following: 
  

	 	•	Emergency services 

  

	 	•	Out-of-network services 

  

	 	•	Family planning services 

  

	 	•	Maternal and Infant Support Services 

  

	 	•	Federally Qualified Health Center (FQHC) 

  

	 	•	Co-payments 

  

	 	•	Abortions 

  

	 	•	Pharmacy services 

  

	 	•	Early and Periodic Screening, Diagnosis & Treatment (EPSDT) Program 

  

	 	•	Immunizations 

  

	 	•	Transportation 

  

	 	•	Transplant services 

  

	 	•	Post-partum stays 

  

	 	•	Communicable disease services 

  

	 	•	Restorative health services 

  

	 	•	Adolescent health centers 

  

	 	1.	Emergency Services 

  
 The Contractor must cover Emergency Services as well as medical screening exams consistent with the Emergency Medical Treatment and Active Labor Act
(EMTALA) (41 USCS 1395 dd (a)). The Enrollee must be screened and stabilized without requiring prior authorization. 
  
 The Contractor must ensure that Emergency Services are available 24 hours a day and 7 days a week. The Contractor is responsible for payment of all
out-of-plan or out-of-area Emergency Services and medical screening and stabilization services provided in an emergency department of a hospital consistent with the legal obligation of the emergency department to provide such services. The
Contractor will not be responsible for paying for non-emergency treatment services that are not authorized by the Contractor. 
  

	 	(a)	Emergency Transportation 

  
 The Contractor agrees to provide emergency transportation for Enrollees. In the absence of a contract between the emergency transportation provider and
the Contractor, a properly completed and coded claim form for emergency transport, which includes an appropriate ICD-9-CM diagnosis code as described in Medicaid policy, will receive timely processing and payment by the Contractor. 
  

	 	(b)	Professional Services 

  
 The Contractor agrees to provide professional services that are needed to evaluate or stabilize an emergency medical condition that is found to exist
using a prudent layperson standard. Contractors acknowledge that hospitals that offer emergency services are required to perform a medical screening examination on emergency room clients leading to a clinical determination by the examining physician
that an emergency medical condition does or does not 

  

 24 

 CONTRACT #071B [GRAPHIC] 
  

 
exist. The Contractor further acknowledges that if an emergency medical condition is found to exist, the examining physician must provide whatever treatment
is necessary to stabilize that condition of the Enrollee. 
  

	 	(c)	Facility Services 

  
 The Contractor agrees to ensure that Emergency Services continue until the Enrollee is stabilized and can be safely discharged or transferred. If an
Enrollee requires hospitalization or other health care services that arise out of the screening assessment provided by the emergency department, then the Contractor may require prior authorization for such services. However, such services shall be
deemed prior authorized if the Contractor does not respond within the timeframe established under rules of the federal Balanced Budget Act of 1997 for responding to a request for authorization being made by the emergency department. 
  

	 	2.	Out-of-Network Services 

  
 Services may be Contractor authorized either out of the area or out of the Contractor’s network of providers. Unless otherwise noted in this
Contract, the Contractor is responsible for coverage and payment of all emergency and authorized care provided outside of the established network. Out-of-network claims must be paid at established Medicaid fees that currently exist for paying
participating Medicaid providers as established by Medicaid policy. 
  

	 	3.	Family Planning Services 

  
 Family planning services include any medically approved diagnostic evaluation, drugs, supplies, devices, and related counseling for the purpose of
voluntarily preventing or delaying pregnancy or for the detection or treatment of sexually transmitted diseases (STDs). Services are to be provided in a confidential manner to individuals of child bearing age including minors who may be sexually
active, who voluntarily choose not to risk initial pregnancy, or wish to limit the number and spacing of their children. 
  
 The Contractor agrees: 
  

	 	•	That Enrollees will have full freedom of choice of family planning providers, both in-plan and out-of-plan; 

  

	 	•	To encourage the use of public providers in their network; 

  

	 	•	To pay providers of family planning services who do not have contractual relationships with the Contractor, or who do not receive PCP authorization for the service at established
Medicaid fee-for-service (FFS) fees that currently exist for paying participating Medicaid providers; 

  

	 	•	To encourage family planning providers to communicate with PCPs once any form of medical treatment is undertaken; 

  

	 	•	To maintain accessibility for family planning services through promptness in scheduling appointments, particularly for teenagers; 

  

	 	•	That family planning services do not include treatment for infertility. 

  

	 	4.	Maternal and Infant Support Services 

  
 In regard to MSS/ISS, the Contractor agrees: 
  

	 	•	That maternal and infant support services are specialized preventive services provided to pregnant women, mothers and their infants to help reduce infant mortality and morbidity;

  

	 	•	That these support services are effectively provided by a multidisciplinary team of health professionals who concentrate on social services, nutrition, and health education;

  

 25 

 CONTRACT #071B [GRAPHIC] 
  

	 	•	That it will ensure that the mothers and infants have proper nutrition, psychosocial support, transportation for all health services, assistance in understanding the importance of
receiving routine prenatal care, Well Child Visits and immunizations, as well as other necessary health services, care coordination, counseling and social casework, Enrollee advocacy, and appropriate referral services; 

  

	 	•	That the support services are intended for those Enrollees who are most likely to experience serious health problems due to psychosocial or nutritional conditions;

  

	 	•	Certified providers must provide that maternal and infant support services. 

  

The Contractor agrees that during the course of providing prenatal or infant care, support services will be provided if any of the following conditions
are likely to affect the pregnancy: 
  

	 	•	Disadvantageous social situation 

  

	 	•	Negative or ambivalent feelings about the pregnancy 

  

	 	•	Mother under age 18 and has no family support 

  

	 	•	Need for assistance to care for herself and infant 

  

	 	•	Mother with cognitive emotional or mental impairment 

  

	 	•	Nutrition problem 

  

	 	•	Need for transportation to keep medical appointments 

  

	 	•	Need for childbirth education 

  

	 	•	Abuse of alcohol or drugs or smoking 

  
 The Contractor agrees that infant support services are home based services and will be provided if any of the following conditions exist with the mother
or infant: 
  

	 	•	Abuse of alcohol or drugs (especially cocaine) or smoking 

  

	 	•	Mother is under age 18 and has no family support 

  

	 	•	Family history of child abuse or neglect 

  

	 	•	Failure to thrive 

  

	 	•	Low birth weight (less than 2500 grams) 

  

	 	•	Mother with cognitive, emotional or mental impairment 

  

	 	•	Homeless or dangerous living/home situation 

  

	 	•	Any other condition that may place the infant at risk for death, illness or significant impairment 

  
 Due to the potentially serious nature of these conditions, some Enrollees will need the assistance of the FIA
Children’s Protective Services. The Contractor agrees to work cooperatively and on an ongoing basis with local FIA office to establish and maintain a referral protocol and working relationship. 
  

	 	5.	Federally Qualified Health Centers (FQHCs) 

  
 The Contractor agrees to provide Enrollees with access to services provided through a Federally Qualified Health Center (FQHC) if the Enrollee resides in
the FQHC’s service area and if the Enrollee requests such services. For purposes of this requirement, the service area will be defined as the county in which the FQHC is located. The Contractor must inform Enrollees of this right in their
member handbooks. If a Contractor has an FQHC in its provider network and allows members to receive medically necessary services from the FQHC, the Contractor has fulfilled its responsibility to provide FQHC services and does not need to allow its
members to access FQHC services out-of-network. 
  
 If a
Contractor does not include an FQHC in its provider network and an FQHC exists in the service area (county), the Contractor will have to pay FQHC charges if an Enrollee member requests such services. 
  

 26 

 CONTRACT #071B [GRAPHIC] 
  

 For services furnished on or after October 1, 1997, FQHCs are entitled, pursuant to the Social
Security Act, to reasonable cost-based reimbursement as subcontractors of section 1903 (m) organizations. Section 4712(b)(2) requires that rates of payments between FQHCs and Managed Care Organizations (Health Plans) shall not be less than the
amount of payment for a similar set of services with a non- 
  
 FQHC. States are required to make supplemental payments, at least on a quarterly basis, for the difference between the rates paid by section 1903 (m) organizations (Health Plans) and the reasonable cost of FQHC subcontracts with the 1903
(m) organization (Health Plans). Beginning in Fiscal Year (FY) 2000, the difference states will be required to pay begins to phase down from 100 percent; specifically, 95 percent of reasonable cost in FY 2000, 2001, and 2002; 90 percent in FY 2003;
and 85 percent in FY 2004. 
  
 FQHC services must be prior
authorized by the Contractor, however the Contractor may not refuse to authorize medically necessary services if the Contractor does not have a FQHC in the network for the service area (county). Contractors may expect a sharing of information and
data and appropriate network referrals from FQHCs. 
  

	 	6.	Co-payments 

  
 The Contractor may subject Enrollees to co-payment requirements, consistent with state and federal guidelines, including, but not limited to, 42 CFR 447.50 through 447.60. In regard to co-payments, the Contractor
agrees that it will not implement co-payments without DCH approval and that co-payments will only be implemented following the annual open enrollment period. Enrollees must be informed of co-payments during the open enrollment period. 
  
 Subject to the same limitations identified in this subsection, the DCH will
permit co-payments to be implemented by Health Plans outside of the annual enrollment period if the Health Plan provides notification to all of their Medicaid Enrollees and waives the 12-month lock-in from date of notification to enrollees through
30 days following the effective date of the co-payment. Approval outside of the annual open enrollment period will be permitted only once a year consistent with a DCH developed schedule. 
  
 No provider may deny services to an individual who is eligible for the services due to the individual’s inability to
pay the co-payment. 
  

	 	7.	Abortions 

  
 Medicaid funds cannot be used to pay for elective abortions (and related services) to terminate pregnancy unless a physician certifies that the abortion is medically necessary to save the life of the mother. Elective
abortions must also be covered if the pregnancy is a result of rape or incest. Treatment for medical complications occurring as a result of an elective abortion will be covered. Treatments for spontaneous, incomplete, or threatened abortions and for
ectopic pregnancies will be covered. 
  

	 	8.	Pharmacy 

  
 The Contractor may have a prescription drug management program that includes a drug formulary. DCH may review a formulary if Enrollee complaints regarding access have been filed regarding the formulary. The Contractor
agrees to have a process to approve physicians’ requests to prescribe any medically appropriate drug that is covered under the Medicaid fee-for-services program. 
  
 Drug coverages must include over-the-counter products such as insulin syringes, reagent strips, psyllium, and aspirin, as
covered by the Medicaid fee-for-services program. Condoms must also be made available to all eligible Enrollees. 
  

 27 

 CONTRACT #071B [GRAPHIC] 
  

 The Contractor agrees to act as DCH’s third party administrator and reimburse pharmacies for
psychotropic drugs. In the performance of this function: 
  

	 	(a)	The Contractor must follow Medicaid Fee-For-Service utilization controls for Medicaid psychotropic prescriptions. The Contractor must prior authorize only the psychotropic drugs
that are prior authorized by Medicaid Fee-For-Service. 

  

	 	(b)	The Contractor agrees that it and its pharmacy benefit managers are precluded from billing manufacturer rebates on psychotropic drugs. 

  

	 	(c)	The Contractor agrees to provide payment files to DCH in the format and manner prescribed by DCH. 

  

	 	(d)	DCH agrees to use the payment files to reimburse the Contractor for the payments made on behalf of CMHSPs using the following formula: 

  

	 	•	100% of all anti-psychotics 

  

	 	•	100% of antiparkinson drugs, anticholinergic 

  

	 	•	60% all other psychotropic drugs 

  

	 	(e)	In order to meet the terms of this sub-section, the Contractor will have to enroll with DCH as a Medicaid pharmacy provider; however, that enrollment is limited to fulfilling the
terms of this part of the Contract. 

  

	 	(f)	Contractor is responsible for covering lab and x-ray services related to the ordering of psychotropic drug prescriptions for CMHSP clients who are also Enrollees of the
contractor’s health plan but may limit access to its contracted lab and x-ray providers. 

  

	 	9.	Well Child Care/Early and Periodic Screening, Diagnosis & Treatment (EPSDT) Program 

  
 Well Child/EPSDT is a Medicaid child health program of early and periodic screening, diagnosis and treatment services for
children, adolescents, and young adults under the age of 21. It supports two goals: to ensure access to necessary health resources, and to assist parents and guardians in appropriately using those resources. The Contractor agrees to provide the
following program: 
  

	 	(a)	As specified in federal regulations, the screening component includes a general health screening most commonly known as a periodic well-child exam. The required Well Child/EPSDT
screening guidelines, based on the American Academy of Pediatrics’ recommendations for preventive pediatric health care, include: 

  

	 	•	Health and developmental history 

  

	 	•	Developmental/behavioral assessment 

  

	 	•	Age appropriate unclothed physical examination 

  

	 	•	Height and weight measurements, and age appropriate head circumference 

  

	 	•	Blood pressure for children 3 and over 

  

	 	•	Immunization review and administration of appropriate immunizations 

  

	 	•	Health education including anticipatory guidance 

  

	 	•	Nutritional assessment 

  

	 	•	Hearing, vision and dental assessments 

  

	 	•	Lead toxicity screening ages 1-5, with blood sample for lead level determination as indicated 

  

	 	•	Interpretive conference and appropriate counseling for parents or guardians 

  

Additionally, objective testing for developmental behavior, hearing, and vision must be performed in accordance with the periodicity schedule included
in Medicaid policy. Laboratory services for tuberculin testing, hematocrit, urinalysis, hemoglobin, or other needed testing as determined by the physician must be provided. 
  

	 	(a)	Vision services under Well Child/EPSDT must include at least diagnosis and treatment for defective vision, including glasses if appropriate. 

  

 28 

 CONTRACT #071B [GRAPHIC] 
  

	 	(b)	Dental services under Well Child/EPSDT must include at least relief of pain and infections, restoration of teeth, and maintenance of dental health. (The Contractor is responsible
for screening and referral only.) 

  

	 	(c)	Hearing services must include at least diagnosis and treatment for hearing defects, including hearing aids as appropriate. 

  

	 	(d)	Other health care, diagnostic services, treatment, or services covered under the State Medicaid Plan necessary to correct or ameliorate defects, physical or mental illnesses, and
conditions discovered during a screening. A medically necessary service may be available under Well Child/EPSDT if listed in a federal statute as a potentially covered service, even if Michigan’s Medicaid program does not cover the service
under its State plan for Medical Assistance Program. 

  
 Appropriate referrals must be made for a diagnostic or treatment service determined to be necessary. Oral screening should be part of a physical exam; however, each child must have a direct referral to a dentist after age two. It is the
Contractor’s responsibility to ensure that an appropriate dental provider sees the child. Children should also be referred to a hearing and speech clinic, optometrist or ophthalmologist, or other appropriate provider for objective hearing and
vision services as necessary. Referral to community mental health services also may be appropriate. If a child is found to have elevated blood lead levels in accordance with standards disseminated by DCH, a referral should be made to the local
health department for follow-up services that may include an epidemiological investigation to determine the source of blood lead poisoning. 
  
 The Contractor shall provide or arrange for outreach services to Medicaid beneficiaries who are due or overdue for well-child visits. Outreach contacts
may be by phone, home visit, or mail. The Contractor will meet this requirement by contracting with local health departments and the provision to local health departments of the names of children due or overdue for well child visits. 
  

	 	10.	Immunizations 

  
 The Contractor agrees to provide all Enrollees with all vaccines and immunizations in accordance with the Advisory Committee on Immunization Practices
(ACIP) guidelines. The Contractor must ensure that all providers use vaccines available free under the Vaccine for Children (VFC) program for children 18 years old and younger, and use vaccines for adults such as hepatitis B available at no cost
from local health departments under the Vaccine Replacement Program. Immunizations should be given in conjunction with Well-Child/EPSDT care. The Contractor must participate in the locally accessed Michigan Children’s Immunization Registry that
will maintain a database of child vaccination histories and enable tracking and recall. 
  
 Contractor will be responsible for the reimbursement of immunization that Enrollees have obtained from local health departments at Medicaid-Fee-For-Service rates. This policy is effective without Contractor prior
authorization and regardless of whether a contract exists between the Contractor and the local health departments. 
  

 29 

 CONTRACT #071B [GRAPHIC] 
  

	 	11.	Transportation 

  
 The Contractor must ensure transportation and travel expenses determined to be necessary for Enrollees to secure medically necessary medical examinations
and treatment. The Contractor agrees to provide a description, upon request, of the method(s) used to ensure this requirement is met. Contractors will receive supplemental funding for non-emergency transportation. 
  

	 	12.	Transplant Services 

  
 The Contractor agrees to cover all costs associated with transplant surgery and care. Related care may include but is not limited to organ procurement,
donor searching and typing, harvesting of organs, related donor medical costs. Cornea and kidney transplants and related procedures are covered services. Extrarenal organ transplants (heart, lung, heart-lung, liver, pancreas, bone marrow including
allogenic, autologous and peripheral stem cell harvesting, and small bowel) must be covered on a patient-specific basis when determined medically necessary according to currently accepted standards of care. The Contractor must have a process in
place to evaluate, document, and act upon such requests. 
  

	 	13.	Post-Partum Stays 

  
 Contractors agree to cover a minimum length of post-partum stay at a hospital that is consistent with the minimum hospital stay standards of the American
Academy of Pediatrics and the American College of Obstetricians and Gynecologists. 
  

	 	14.	Communicable Disease Services 

  
 The Contractor agrees that Enrollees may receive treatment services for communicable diseases from local health departments without prior authorization by
the Contractor. For purposes of this section, communicable diseases are HIV/AIDS, STDs, tuberculosis, and vaccine-preventable communicable diseases. 
  
 To facilitate coordination and collaboration, Contractors are encouraged to enter into agreements with local health departments. Such agreements should
provide details regarding confidentiality, service coordination and instances when local health departments will provide direct care services for the Contractor’s Enrollees. Agreements should also discuss, where appropriate, reimbursement
arrangements between the Contractor and the local health department. 
  
 If a local agreement is not in effect, and an Enrollee receives services for a communicable disease from a local health department, the Contractor is responsible for payment to the local health department at established Medicaid
fee-for-service fees that currently exist for participating providers. 
  

	 	15.	Restorative Health Services 

  
 The Contractor is responsible for providing up to 45 days of restorative health care services as long as medically necessary and appropriate for
Enrollees. 
  
 Restorative health services means intermittent or
short-term “restorative” or rehabilitative nursing care that may be provided in or out of health care facilities. 
  
 The Contractor will be expected to help facilitate support services such as home help services that are not the direct responsibility of the Contractor
but are services to which Enrollees may be entitled. Such care coordination should be provided consistent with the individual or person-centered planning that is necessary for Enrollee members with special health care needs. 
  

 30 

 CONTRACT #071B [GRAPHIC] 
  

	 	16.	School Based/School Linked (Adolescent) Health Centers 

  
 The Contractor acknowledges that Enrollees may choose to obtain services from a School Based/School Linked Health Center (SBLHC) without prior
authorization from the Contractor. If the SBLHC does not have a contractual relationship with the Contractor, then the Contractor is responsible for payment to the SBLHC at Medicaid fee-for-service rates in effect on the date of service. 

 
 Contractors may contract with an SBLHC to deliver Covered Services as
part of the Contractor’s network. Covered Services shall be medically necessary and administered, or arranged for, by a designated PCP. The SBLHC will meet the Contractor’s written credentialing and re-credentialing policies and procedures
for ensuring quality of care and ensuring that all providers rendering services to Enrollees are licensed by the State and practice within their scope of practice as defined for them in Michigan’s Public Health Code. 
  
 If a contract exists between the SBLHC and the Contractor, then the SBLHC is
to be reimbursed according to the provisions of the contractual agreement. 
  

	 	17.	Hospice Services 

  
 Contractor is responsible for all medically necessary and authorized hospice services, including the “room and board” component of the hospice
benefit when provided in a nursing home. Members who have elected the hospice benefit will not be disenrolled after 45 days in a nursing home as otherwise permitted under subsection (15) of the section. 
  

	 	18.	20 Visit Mental Health Outpatient Benefit 

  
 The Contractor shall provide the 20 Visit Mental Health Outpatient Benefit consistent with the policy and procedures established by Medicaid Policy
Bulletin (QHP 00-08). Services may be provided through contracts with Community Mental Health Services Programs (CMHSP) or through contracts with other appropriate providers within the service area. 
  

	II-J	OBSERVANCE OF FEDERAL, STATE AND LOCAL LAWS 

  
 The Contractor agrees that it will comply with all state and federal statutes, regulations and administrative procedures that become effective during the
term of this Contract. Federal regulations governing contracts with risk-based managed care plans are specified in section 1903(m) of the Social Security Act and 42 CFR Part 434, and will govern this Contract. The State is not precluded from
implementing any changes in state or federal statutes, rules or administrative procedures that become effective during the term of this Contract and will implement such changes pursuant to Contract Section (I-T). 
  

	 	1.	Special Waiver Provisions for CHCP 

  
 DCH’s waiver renewal application to CMS under the auspices of section 1915(b)(1)(2), requesting that section 1902 (a)(23) of the Social Security Act
be waived, has been approved. The renewal was approved by CMS for the period April 22, 2003 through April 22, 2005. Under this waiver, Beneficiaries will be enrolled with a Contractor in the county of their residence. All health care for Enrollees
will be arranged for or administered by the Contractor only. Federal approval of the waiver is required prior to commitment of the federal financing share of funds under this Contract. No other waiver is necessary to implement this Contract.

  

 31 

 CONTRACT #071B [GRAPHIC] 
  

	 	2.	Fiscal Soundness of the Risk-Based Contractor 

  
 Federal regulations require that the risk-based Contractors maintain a fiscally solvent operation and DCH has the right to evaluate the ability of the
risk-based Contractor to bear the risk of potential financial losses, or to perform services based on determinations of payable amounts under the Contract. The State will require a minimum net worth and a set reserve amount as a condition of
maintaining status as a Contractor. 
  

	 	3.	Suspended Providers 

  
 Federal regulations and State law preclude reimbursement for any services ordered, prescribed, or rendered by a provider who is currently suspended or
terminated from direct and indirect participation in the Michigan Medicaid program or federal Medicare program. An Enrollee may purchase services provided, ordered, or prescribed by a suspended or terminated provider, but no Medicaid funds may be
used. DCH publishes a list of providers who are terminated, suspended, or otherwise excluded from participation in the program. The Contractor must ensure that its provider networks do not include these providers. 
  
 Pursuant to Section 1932(d)(1) of the Social Security Act, a Contractor may
not knowingly have a director, officer, partner, or person with beneficial ownership of more than 5% of the entity’s equity who is currently debarred or suspended by any federal agency. Contractors are also prohibited from having an employment,
consulting, or any other agreement with a debarred or suspended person for the provision of items or services that are significant and material to the Contractor’s contractual obligation with the State. 
  
 The United States General Services Administration (GSA) maintains a list of
parties excluded from federal programs. The “excluded parties lists” (EPLS) and any rules and/or restrictions pertaining to the use of EPLS data can be found on GSA’s homepage at the following Internet address: www.arnet.gov/epls.

  

	 	4.	Public Health Reporting 

  
 State law requires that health professionals comply with specified reporting requirements for communicable disease and other health indicators. The
Contractor agrees to ensure compliance with all such reporting requirements through its provider contracts. 
  

	 	5.	Compliance with CMS Regulation 

  
 Contractors are required to comply with all CMS regulations, including, but not limited to, the following: 
  

	 	•	Enrollee Payments: As required by 42 CFR Part 432.22, DCH will deny payment for new Enrollees when payment for those Enrollees are denied by CMS pursuant to 42 CFR 434.67(e).

  

	 	•	Enrollment and Disenrollment: As required by 42 CFR 438.56, Contractors must meet all the requirements specified for enrollment and disenrollment limitations.

  

	 	•	Provision of Covered Services: As required by 42 CFR 438.102(2), Contractors are required to provide all covered services listed in Section II-H or II-I of the contract.

  

	 	6.	Compliance with HIPAA Regulation 

  
 The Contractor shall comply with all applicable provisions of the Health Insurance Portability and Accountability Act of 1996 by the required deadlines
(codified at 45 CFR Parts 160 through 164). 
  

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	 	7.	Advanced Directives Compliance 

  
 The Contractor shall comply with all provisions for advance directives as required under 42 CFR 434.28. The Contractor must have in effect, written
policies and procedures for the use and handling of advance directives written for any adult individual receiving medical care by or through the Contractor. The policies and procedures must include at least the following provisions: 
  

	 	•	The Enrollees’ right to have and exercise advance directives under the law of the State of Michigan, [MCL 700.5506-700.5512 (Act 386 of 1998) and MCL 333.1051-333.1064 (Act 193
of 1996)]. Changes to State law must be updated in the policies no later than 90 days after the changes occur, if applicable. 

  

	 	•	The Contractor’s procedures for respecting those rights, including any limitations if applicable 

  

	 	8.	Medicaid Policy 

  
 As required, Contractors shall comply with provisions of Medicaid policy developed under the formal policy consultation process, as established by the
Medical Assistance Program. 
  

	II-K	CONFIDENTIALITY 

  
 All Enrollee information, medical records, data and data elements collected, maintained, or used in the administration of this Contract shall be protected
by the Contractor from unauthorized disclosure. The Contractor must provide safeguards that restrict the use or disclosure of information concerning Enrollees to purposes directly connected with its administration of the Contract. 
  
 The Contractor must have written policies and procedures for maintaining the
confidentiality of data, including medical records, client information, appointment records for adult and adolescent sexually transmitted disease, and family planning services. 
  

	II-L	CRITERIA FOR CONTRACTORS 

  
 The Contractor agrees to maintain its capability to deliver Covered Services to Enrollees by meeting the following criteria: 
  

	 	1.	Administrative and Organizational Criteria 

  
 The Contractor will: 
  

	 	•	Provide organizational and administrative structure and key specified personnel; 

  

	 	•	Provide management information systems capable of collecting processing, reporting and maintaining information as required; 

  

	 	•	Have a governing body that meets the requirements defined in this Contract; 

  

	 	•	Meet the specified administrative requirements, i.e., quality improvement, utilization management, provider network, reporting, member services, provider services, staffing;

  

	 	•	Be accredited as a managed care organization by either the National Committee for Quality Assurance (NCQA) or Joint Commission on Accreditation of Health Care Organizations (JCAHO)
no later than September 30, 2003. 

  

	 	•	Be incorporated within the State of Michigan. 

  

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	 	2.	Financial Criteria 

  
 The Contractor agrees to comply with all HMO financial requirements and maintain financial records for its Medicaid activities separate from other
financial records. 
  

	 	3.	Provider Network and Health Service Delivery Criteria 

  
 The Contractor: 
  

	 	•	Has a network of qualified providers in sufficient numbers and locations to provide appropriate access to Covered Services; 

  

	 	•	Provides or arranges appropriate accessible care 24 hours a day, 7 days a week to the enrolled population. 

  

	 	•	Has local agreements with DCH contracted behavioral health and developmental disability providers and coordinates care. 

  

	 	•	Complies with Medicaid Policy regarding procedures for authorization and reimbursement for out of network providers. 

  

	II-M	 CONTRACTOR ORGANIZATIONAL STRUCTURE, ADMINISTRATIVE SERVICES, FINANCIAL REQUIREMENTS AND PROVIDER NETWORKS 

  

	 	1.	Organizational Structure 

  
 The Contractor will maintain an administrative and organizational structure that supports a high quality, comprehensive managed care program. The
Contractor’s management approach and organizational structure will ensure effective linkages between administrative areas such as: provider services, member services, regional network development, quality improvement and utilization review,
grievance/complaint review, and management information systems. 
  
 The Contractor will be organized in a manner that facilitates efficient and economic delivery of services that conforms to acceptable business practices within the State. The Contractor will employ senior level managers with sufficient
experience and expertise in health care management, and must employ or contract with skilled clinicians for medical management activities. 
  
 The Contractor must not include persons who are currently suspended or terminated from the Medicaid program in its provider network or in the conduct of
the Contractor’s affairs. 
  
 The Contractor will provide,
upon request from DCH, a copy of the current organizational chart with reporting structures, names, and positions. A written narrative which documents the operation of the organization and the educational background, relevant work experience, and
current job description for the key personnel identified in the organizational chart must be available upon request. 
  
 The Contractor will not employ, or hold any contracts or arrangements with, any individuals who have been suspended, debarred, or otherwise excluded under
the Federal Acquisition Regulation as described in 42 CFR 438.610. This prohibition includes all individuals responsible for the conduct of the Contractor’s affairs, or their immediate families, or any legal entity in which they or their
families have a financial interest exceeding 5% of the stock or assets of the entity. 
  
 The Contractor will provide, upon request, a disclosure statement fully disclosing to DCH the nature and extent of any contracts or arrangements between the individuals responsible for the conduct of the
Contractor’s affairs (or their immediate families, or any legal entity in which they or their families have a financial interest exceeding 5% of the stock or assets of the entity) and the Contractor or a provider or other person concerning any
financial relationship with the Contractor. The 

  

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disclosure statements must be signed by each person listed and notarized. DCH must be notified in writing of a substantial change in the facts set
forth in the statement not more than 30 days from the date of the change. 
  
 Information required to be disclosed in this section shall also be available to the Department of Attorney General, Health Care Fraud Division. 
  

	 	2.	Administrative Personnel 

  
 The Contractor will have sufficient administrative staff and organizational components to comply with all program standards. The Contractor shall ensure
that all staff has appropriate training, education, experience, licensure as appropriate, liability coverage, and orientation to fulfill the requirements of the positions. Resumes for key personnel must be available upon request from DCH. Resumes
must indicate the type and amount of experience each person has relative to the position. 
  
 The Contractor must promptly provide written notification to DCH of any vacancies of key positions and must make every effort to fill vacancies in all key positions with qualified persons as quickly as possible. The
Contractor shall inform DCH in writing within seven (7) days of staffing changes in the following key positions: 
  

	 	•	Administrator (Chief Executive Officer) 

  

	 	•	Medical Director 

  

	 	•	Chief Financial Officer 

  

	 	•	Management Information System Director 

  
 The Contractor shall provide the following positions (either through direct employment or contract): 
  

	 	(a)	Executive Management 

  
 A full time administrator with clear authority over general administration and implementation of requirements set forth in the Contract including
responsibility to oversee the budget and accounting systems implemented by the Contractor. The administrator shall be responsible to the governing body for the daily conduct and operations of the Contractor’s plan. 
  

	 	(b)	Medical Director 

  
 The medical director shall be a Michigan-licensed physician (MD or DO) and shall be actively involved in all major clinical program components of the
Contractor’s plan including review of medical care provided, medical professional aspects of provider contracts, and other areas of responsibility as may be designated by the Contractor. The medical director shall devote sufficient time to the
Contractor’s plan to ensure timely medical decisions, including after hours consultation as needed. The medical director shall be responsible for managing the Contractor’s Quality Assessment and Performance Improvement Program. The medical
director shall ensure compliance with state and local reporting laws on communicable diseases, child abuse, and neglect. 
  

	 	(c)	Quality Improvement/Utilization Director 

  
 A full time quality improvement/utilization director who is either the Contractor’s medical director, or a Michigan licensed physician, or Michigan
licensed registered nurse, or another licensed clinician as approved by DCH based on the plan’s ability to demonstrate that the clinician possesses the training and 

  

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education to perform the duties of the quality improvement/utilization director outlined in the contract. 
  

	 	(d)	Chief Financial Officer 

  
 Full-time chief financial officer to oversee the budget and accounting systems implemented by the Contractor. 
  

	 	(e)	Support/Administrative Staff 

  
 Adequate clerical and support staff to ensure appropriate functioning of the Contractor’s operation. 
  

	 	(f)	Member Services Director 

  
 Staff to coordinate communications with Enrollees and to act as Enrollee advocates. There shall be sufficient member service staff to enable Enrollees to
receive prompt resolution of their problems or inquiries. 
  

	 	(g)	Provider Services Director 

  
 Staff to coordinate communications between the Contractor and its subcontractors and other providers. There shall be sufficient provider services staff
to enable providers to receive prompt resolution of their problems or inquiries. 
  

	 	(h)	Grievance/Complaint Coordinator 

  
 Staff to coordinate, manage, and adjudicate member and provider grievances. 
  

	 	(i)	Management Information System (MIS) Director 

  
 Full-time MIS director to oversee the data management system, and to ensure that all reporting and claims payments are timely and accurate. 

 

	 	(j)	Compliance Officer 

  
 Full-time compliance officer to oversee that a mandatory compliance plan is in place and all reporting of fraud and abuse guidelines are being followed
as outlined in the Balanced Budget Act (BBA). 
  

	 	3.	Administrative Requirements 

  
 The Contractor agrees to have the following policies, processes, and plans in place. 
  

	 	•	Written policies, procedures and an operational plan for management information systems; 

  

	 	•	A process to review and authorize all network provider contracts; 

  

	 	•	A process to credential and monitor credentials of all healthcare personnel; 

  

	 	•	A process to identify and address instances of fraud and abuse; 

  

	 	•	A process to review and authorize contracts established for reinsurance and third party liability if applicable; 

  

	 	•	Policies that comply with all federal and state business requirements; 

  

	 	•	The Contractor must comply with all Contract reporting requirements; and 

  

	 	•	 Designated liaisons – these must include a management information system (MIS) liaison and a general management liaison. All communication between the
Contractor and DCH must occur through the designated liaisons unless otherwise specified by DCH. The general management liaison will also be 

  

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 CONTRACT #071B [GRAPHIC] 
  

	 	 
designated as the authorized Contractor expediter pursuant to Contract Section III-B. 

  
 All policies, procedures, and clinical guidelines that the Contractor
follows must be in writing and available on request to DCH and/or CMS. All medical records, reporting formats, information systems, liability policies, provider network information and other detail specific to performing the contracted services must
be available on request to DCH and/or CMS. 
  

	 	4.	Management Information Systems 

  
 The Contractor must maintain a health information system that collects, analyzes, integrates, and reports data as required by DCH. The information system
must have the capability for: 
  

	 	•	Collecting data on enrollee and provider characteristics and on services provided to enrollees as specified by the State through an encounter data system; 

 

	 	•	Supporting provider payments and data reporting between the Contractor and DCH; 

  

	 	•	Controlling, processing, and paying providers for services rendered to Contractor Enrollees; 

  

	 	•	Collecting service-specific procedures and diagnosis data, collecting price specific procedures or encounters (depending on the agreement between the provider and the Contractor),
and maintaining detailed records of remittances to providers; 

  

	 	•	Supporting all Contractor operations, including, but not limited to, the following: 

  

	 	•	Member enrollment, disenrollment, and capitation payments 

  

	 	•	Utilization 

  

	 	•	Provider enrollment 

  

	 	•	Third Party liability activity 

  

	 	•	Claims payment 

  

	 	•	Grievance and appeal tracking 

  

	 	•	Tracking and recall for immunizations, well-child visits/EPSDT, and other services as required by DCH 

  

	 	•	Encounter reporting 

  

	 	•	Quality reporting 

  

	 	•	Member access and satisfaction 

  
 The Contractor must ensure that data received from providers is accurate and complete by: 
  

	 	•	Verifying the accuracy and timeliness of the data; 

  

	 	•	Screening the data for completeness, logic, and consistency; 

  

	 	•	Collecting service information in standardized formats; 

  

	 	•	Identification and tracking of fraud and abuse. 

  
 The Contractor is responsible for annual IRS form 1099 reporting of provider earnings and must make all collected data available to the State and, upon
request, to CMS. 
  

	 	5.	Governing Body 

  
 Each Contractor will have a governing body that has a minimum of 1/3 of its membership consisting of adult Enrollees who are not compensated officers,
employees, stockholders who own more than 5% of the shares of the Contractor’s plan, or other individuals responsible for the conduct of, or financially interested in, the Contractor’s affairs. The Contractor must have written policies and
procedures 

  

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 CONTRACT #071B [GRAPHIC] 
  

 
detailing how Enrollee board members will be elected, the length of the term, filling of vacancies, notice to Enrollees and subscribers, etc. The governing
body will ensure adoption and implementation of written policies governing the operation of the Contractor’s plan. The Enrollee board members must have the same responsibilities as other board members in the development of policies governing
the operation of the Contractor’s plan. The administrator or executive officer that oversees the day-to-day conduct and operations of the Contractor will be responsible to the governing body. The governing body must meet at least
quarterly, and must keep a permanent record of all proceedings that is available to DCH and/or CMS on request. 
  

	 	6.	Provider Network in the CHCP 

  

	 	(a)	General 

  
 The Contractor is solely responsible for arranging and administering Covered Services to Enrollees. Covered Services shall be medically necessary and administered, or arranged for, by a designated PCP. The Contractor
must demonstrate that it can maintain a delivery system of sufficient size and resources to offer quality care that accommodates the needs of the enrolled Beneficiaries within each enrollment area. The delivery system (in and out of network) must
include adequate numbers of providers with the training, experience, and specialization to furnish the covered services listed in Sections II-H and II-I of this contract to all Enrollees. 
  
 Enrollees shall be provided with an opportunity to select their PCP. If the
Enrollee does not choose a PCP at the time of enrollment, it is the Contractor’s responsibility to assign a PCP within one month of the effective date of enrollment. If the Contractor cannot honor the Enrollee’s choice of the PCP, the
Contractor must contact the Enrollee to allow the Enrollee to either make a choice of an alternative PCP or to disenroll. The Contractor must notify all Enrollees assigned to a PCP whose provider contract will be terminated and assist them in
choosing a new PCP prior to the termination of the provider contract. 
  
 The Contractor’s provider network must meet the following requirements: 
  

	 	•	Provides available, accessible and adequate numbers of facilities, locations, and personnel for the provision of Covered Services with adequate numbers of provider locations with
provisions for physical access for Enrollees with physical disabilities; 

  

	 	•	Has sufficient capacity to handle the maximum number of Enrollees specified under this Contract; 

  

	 	•	Guarantees that emergency services are available seven days a week, 24-hours per day; 

  

	 	•	Provides reasonable access to specialists based on the availability and distribution of such specialists. If the Contractor’s provider network does not have a provider
available for a second opinion within the network, the Enrollee must be allowed to obtain a second opinion from an out-of-network provider with prior authorization from the Contractor at no cost to the Enrollee; 

  

	 	•	Provides adequate access to ancillary services such as pharmacy services, durable medical equipment services, home health services, and Maternal and Infant Support Services;

  

	 	•	Utilizes arrangements for laboratory services only through those laboratories with CLIA certificates; 

  

	 	•	Contains only ancillary providers and facilities appropriately licensed or certified if required under 1978 PA 368, as amended; 

  

	 	•	Responds to the cultural, racial and linguistic needs (including interpretive services as necessary) of the Medicaid population; 

  

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 CONTRACT #071B [GRAPHIC] 
  

	 	•	Selected PCPs are accessible taking into account travel time, availability of public transportation and other factors that may determine accessibility; 

  

	 	•	Primary care and hospital services are available to Enrollees within 30 minutes or 30 miles travel. Exceptions to this standard may be granted if the Contractor documents that no
other network or non-network provider is accessible within the 30 minutes or 30 miles travel time. For pharmacy services, the State’s expectations are that the Contractor will ensure access within 30 minutes travel time and that services will
be available during evenings and on weekends; 

  

	 	•	Contracted PCPs provide or arrange for coverage of services 24 hours a day, 7 days a week; 

  

	 	•	PCPs must be available to see patients a minimum of 20 hours per practice location per week. 

  
 Provider files will be used to give Beneficiaries information on available Contractors and to ensure that the provider
networks identified for Contractors are adequate in terms of number, location, and hours of operation. The Contractor will ensure: 
  

	 	•	That it will provide to DCH’s Enrollment Services contractor provider files which contain a complete description of the provider network available to Enrollees;

  

	 	•	That provider files will be submitted in the format specified by DCH; 

  

	 	•	That provider files will be updated as necessary to reflect the existing provider network; 

  

	 	•	That provider files will be submitted to DCH’s Enrollment Services contractor in a timely manner; 

  

	 	•	That it will provide to DCH’s Enrollment Services contractor a description of the Contractor’s service network, including but not limited to: the specialty and hospital
network available, arrangements for provision of medically necessary non-contracted specialty care; any family planning services network available, any affiliations with Federally Qualified Health Centers, Rural Health Clinics, and Adolescent Health
Centers; arrangements for access to obstetrical and gynecological services; availability of case management or care coordination services; and arrangements for provision of ancillary services. The description will be updated as necessary;

  

	 	•	That the services network will be submitted to DCH’s Enrollment Services contractor in a timely manner in the format requested 

  

	 	(b)	Mainstreaming 

  
 DCH considers mainstreaming of Enrollees into the broader health delivery system to be important. The Contractor must have guidelines and a process in
place to ensure that Enrollees are provided Covered Services without regard to race, color, creed, sex, religion, age, national origin, ancestry, marital status, sexual preference, or physical or mental handicap. In addition, the Contractor must
ensure that: 
  

	 	•	Enrollees will not be denied a Covered Service or availability of a facility or provider identified in this Contract. 

  

	 	•	Network providers will not intentionally segregate Enrollees in any way from other persons receiving health care services. 

  

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 CONTRACT #071B [GRAPHIC] 
  

	 	(c)	Coordination of Care with Public and Community Providers and Organizations 

  
 Contractors must work closely with local public and private community-based organizations and providers to address prevalent health care conditions and
issues. Such agencies and organizations include local health departments, local FIA offices, family planning agencies, Substance Abuse Coordinating Agencies, community and migrant health centers, school based and adolescent health centers, and local
or regional consortiums centered on various health conditions. Local coordination and collaboration with these entities will make a wider range of essential health care and support services available to the Contractor’s Enrollees. Each county
has a different array of these providers, and agencies or organizations. Contractors are encouraged to coordinate with these entities through participation of their provider networks in Michigan’s county-based community health assessment and
improvement process and multipurpose human services collaborative bodies. 
  
 A local coordination matrix is provided in the Appendix of this Contract. The Contractor is encouraged to use this document as a guide for establishing coordination and collaboration practices and protocols with local
public health agencies. To ensure that the services provided by these agencies are available to all Contractors, an individual Contractor shall not require an exclusive contract as a condition of participation with the Contractor. 
  
 It is also beneficial for Contractors to collaborate with non-profit
organizations that have maintained a historical base in the community. These entities are seen by many Enrollees as “safe harbors” due to their familiarity with the cultural standards and practices within the community. For example,
adolescent health centers are specifically designed to be accessible and acceptable, and are viewed as a “safe harbor” where adolescents will seek rather than avoid or delay needed services. 
  

	 	(d)	Coordination of Care with Local Behavioral Health and Developmental Disability Providers 

  
 Some Enrollees in each Contractor’s plan may also be eligible for services provided by Behavioral Health Services and
Services for Persons with Developmental Disabilities managed care programs. Contractors are not responsible for the direct delivery of specified behavioral health and developmental disability services. The Contractor will establish and maintain
local agreements with behavioral health and developmental disability agencies or organizations contracting with the State. 
  
 Contractors must ensure that local agreements address the following issues: 
  

	 	•	Emergency services 

  

	 	•	Pharmacy and laboratory service coordination 

  

	 	•	Medical coordination 

  

	 	•	Data and reporting requirements 

  

	 	•	Quality assurance coordination 

  

	 	•	Grievance and complaint resolution 

  

	 	•	Dispute resolution 

  
 Examples of local agreements are included in the Appendix of this Contract. 
  

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 CONTRACT #071B [GRAPHIC] 
  

	 	(e)	Network Changes 

  
 Contractors will notify DCH within seven (7) days of any changes to the composition of the provider network that affects the Contractor’s ability to
make available all Covered Services in a timely manner. Contractors will have procedures to address changes in its network that negatively affect access to care. Changes in provider network composition that DCH determines to negatively affect
Enrollees’ access to Covered Services may be grounds for sanctions or Contract termination. 
  
 If the Contractor expands the PCP network within a county and can serve more Enrollees the Contractor may submit a request to DCH to increase capacity.
The request must include details of the changes that would support the increased capacity. Contractor must use the format specified by DCH to describe network capacity. 
  

	 	(f)	Provider Contracts 

  
 In addition to HMO licensure requirements, Contractor provider contracts will meet the following criteria: 
  

	 	•	Prohibit the provider from seeking payment from the Enrollee for any Covered Services provided to the Enrollee within the terms of the Contract and require the provider to look
solely to the Contractor for compensation for services rendered. No cost sharing or deductibles can be collected from Enrollees. Co-payments are only permitted with DCH approval. 

  

	 	•	Require the provider to cooperate with the Contractor’s quality improvement and utilization review activities. 

  

	 	•	Include provisions for the immediate transfer of Enrollees to another Contractor PCP if their health or safety is in jeopardy. 

  

	 	•	Cannot prohibit a provider from discussing treatment options with Enrollees that may not reflect the Contractor’s position or may not be covered by the Contractor.

  

	 	•	Cannot prohibit a provider from advocating on behalf of the Enrollee in any grievance or utilization review process, or individual authorization process to obtain necessary health
care services. 

  

	 	•	Require providers to meet Medicaid accessibility standards as established in Medicaid policy. 

  

	 	•	Provides for continuity of treatment in the event a provider’s participation terminates during the course of a member’s treatment by that provider.

  

	 	•	Prohibit the provider from denying services to an individual who is eligible for the services due to the individual’s inability to pay the co-payment. 

 
 In accordance with Section 1932 (b)(7) of the Social Security Act as
implemented by Section 4704(a) of the Balanced Budget Act, Contractors may not discriminate with respect to participation, reimbursement, or indemnification as to any provider who is acting within the scope of provider’s license or
certification under applicable State law, solely on the basis of such license or certification. This provision should not be construed as an “any willing provider” law, as it does not prohibit Contractors from limiting provider
participation to the extent necessary to meet the needs of the Enrollees. This provision also does not interfere with measures established by Contractors that are designed to maintain quality and control costs consistent with the responsibility of
the organization. 
  

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	 	(g)	Disclosure of Physician Incentive Plan 

  
 Contractors will annually disclose to DCH the information on their provider incentive plans listed in 42 CFR 422.208 and 422.210, as required in 42 CFR
438.6(h), in order to determine whether the incentive plans meet the requirements of 42 CFR 422.208-422.210 when there exists compensation arrangements under the Contract where payment for designated health services furnished to an individual on the
basis of a physician referral would otherwise be denied under Section 1903 (s) of the Social Security Act. The Contractor will provide the information on its physician incentive plans listed in 42 CFR 422.208 and 422.210 to any Enrollee. 

 

	 	(h)	Provider Credentialing 

  
 The Contractor will have written credentialing and re-credentialing (at least every three years) policies and procedures for ensuring quality of care and
ensuring that all providers rendering services to their Enrollees are licensed by the State and are qualified to perform their services throughout the life of the Contract. The Contractor must ensure that network providers residing and providing
services in bordering states meet all applicable licensure and certification requirements within their state. The Contractor also must have written policies and procedures for monitoring its providers and for sanctioning providers who are out of
compliance with the Contractor’s medical management standards. If the plan declines to include providers in the plan’s network, the plan must give the affected providers written notice of the reason for the decision. 
  

	 	(i)	PCP Standards 

  
 The Contractor must offer its Enrollees freedom of choice in selecting a PCP. The Contractor will have written policies and procedures describing how
Enrollees choose and are assigned to a PCP, and how they may change their PCP. The PCP is responsible for supervising, coordinating, and providing all primary care to each assigned Enrollee. In addition, the PCP is responsible for initiating
referrals for specialty care, maintaining continuity of each Enrollee’s health care, and maintaining the Enrollee’s medical record, which includes documentation of all services provided by the PCP as well as any specialty or referral
services. 
  
 The Contractor will permit enrollees to choose a
clinic as a PCP provided that the provider files submitted to the Enrollment Services Contractor is completed consistent with DCH requirements. 
  
 The Contractor will allow a specialist to perform as a PCP when the Enrollee’s medical condition warrants management by a physician specialist. This
may be necessary for those Enrollees with conditions such as diabetes, end-stage renal disease or other chronic disease or disability. The need for management by a physician specialist should be determined on a case-by-case basis in consultation
with the Enrollee. If the Enrollee disagrees with the Contractor’s decision, the Enrollee should be informed of his or her right to file a grievance with the Contractor and/or to file an appeal with DCH. 
  
 The Contractor will ensure that there is a reliable method and system for
providing 24 hour access to urgent care and emergency services 7 days a week. All PCPs within the network must have information on the system and must reinforce with their Enrollees the appropriate use of health care services. Routine physician and
office visits must be available during regular and scheduled office hours. Provisions must be available for obtaining urgent care 

  

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 CONTRACT #071B [GRAPHIC] 
  

 
24 hours a day. Urgent care may be provided directly by the PCP or directed by the Contractor through other arrangements. Emergency Services must always be
available. 
  
 Direct contact with a qualified clinical staff
person must be available through a toll-free telephone number at all times. 
  
 At a minimum, the Contractor shall have or provide one full-time PCP per 2,000 members. This ratio shall be used to determine maximum Enrollment Capacity for the Contractor in an approved service area. 
  
 The Contractor will assign a PCP who is within 30 minutes or 30 miles
travel time to the Enrollee’s home, unless the Enrollee chooses otherwise. Exceptions to this standard may be granted if the Contractor documents that no other network or non-network provider is accessible within the 30 minute or 30 mile
travel time. The Contractor will take the availability of handicap accessible public transportation into consideration when making PCP assignments. 
  
 PCPs must be available to see Enrollees a minimum of 20 hours per practice location per week. This provision may be waived by DCH in response to a
request supported by appropriate documentation. Specialists are not required to meet this standard for minimum hours per practice location per week. In the event that a specialist is assigned to act as a PCP, the Enrollee must be informed of the
specialist’s business hours. In circumstances where teaching hospitals use residents as providers in a clinic and a supervising physician is designated as the PCP by the Contractor, the supervising physician must be available at least 20 hours
per practice location per week. 
  
 The Contractor will ensure
that some providers offer evening and weekend hours of operation in addition to scheduled daytime hours. The Contractor will provide notice to Enrollees of the hours and locations of service for their assigned PCP. 
  
 The Contractor will monitor waiting times to get appointments with
providers, as well as the length of time actually spent waiting to see the provider. This data must be reported to DCH upon request. The Contractor will have established criteria for monitoring appointment scheduling for routine and urgent care and
for monitoring waiting times in provider offices. These criteria must be submitted to DCH upon request. 
  
 The Contractor will ensure that a maternity care provider is designated for an enrolled pregnant woman for the duration of her pregnancy and postpartum
care. A maternity care provider is a provider meeting the Contractor’s credentialing requirements and whose scope of practice includes maternity care. An individual provider must be named as the maternity care provider to assure continuity of
care. An OB/GYN clinic or practice cannot be designated as a PCP or maternity care provider. Designation of individual providers within a clinic or practice is appropriate as long as that individual, within the clinic or practice, agrees to accept
responsibility for the Enrollees care for the duration of the pregnancy and post-partum care. 
  
 For maternity care, the Contractor will be able to provide initial prenatal care appointments for enrolled pregnant women according to standards
developed by the CAC and the QIC. 
  

	II-N	PAYMENT TO PROVIDERS 

  
 The Contractor will make timely payments to all providers for Covered Services rendered to Enrollees. With the exception of newborns, the Contractor will
not be responsible for any payments owed to providers for services rendered prior to a Beneficiary’s enrollment with the Contractor’s plan. Except for newborns, payment for 

  

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 CONTRACT #071B [GRAPHIC] 
  

 
services provided during a period of retroactive eligibility will be the responsibility of DCH. 
  

	 	1.	Electronic Billing Capacity 

  
 The Contractor must meet the following timeframes for electronic billing capacity and may require its providers to meet the same standard as a condition
for payment: 
  

	 	(a)	Be capable of accepting electronic billing for UB 92 (inpatient and outpatient claims) in the Medicare version 050 electronic format. 

  

	 	(b)	Be capable of accepting professional claims electronically using the National Electronic Data Interchange Transaction Set Health Care Claim: Professional 837 (ASC X12N 837, version
3051) format no later than August 1, 2001. DCH will publish guidelines describing the electronic format requirements. 

  
 The promulgation of Medicaid policy and provider manuals will specify the coding and procedures that will be acceptable. Therefore, a provider should be
able to bill a health plan using the same format and coding instructions as that required for the Medicaid Fee for Service programs. Health plans may not require providers to complete additional fields on the electronic forms that are not specified
under the Medicaid Fee for Service policy and provider manuals. 
  
 The distinction in billing between health plans and the Medicaid Fee for Service program will be limited to requests of additional documentation and identification of services requiring prior authorization. Health plans may require
additional documentation, such as medical records, to justify the level of care provided. In addition, health plans may require prior authorization for services for which the Medicaid Fee for Service program does not require prior authorization.

  
 DCH has published and will update the web-site addresses or
e-mail address of plans. This information will make it more convenient for providers; (including out of network providers) to be aware of and contact respective health plans regarding the documentation, prior authorization issues, and provider
appeal processes. The DCH web-site location is: www.michigan.gov\mdch 
  

	 	2.	Prompt Payment 

  
 Contractors must meet the prompt payment requirements as stated in 2000 PA 187. 
  

	 	3.	Payment Resolution Process 

  
 The Contractor will have an effective provider appeal process to promptly resolve provider billing disputes. The Contractor will cooperate with providers
who have exhausted the Contractor’s appeal process by entering into arbitration or other alternative dispute resolution process. 
  

	 	4.	Arbitration 

  
 When a provider requests arbitration, the Contractor is required to participate in a binding arbitration process. 
  
 DCH will provide a list of neutral arbitrators that can be made available to resolve billing disputes. These arbitrators will be organizations with the
appropriate expertise to analyze medical claims and supporting documentation available from medical record reviews and determine whether a claim is complete, appropriately coded, and should or should not be paid. A model agreement will be developed
by DCH that both parties to the dispute will be required to sign. This agreement will specify the name of the arbitrator, the dispute resolution process, a timeframe for the arbitrator’s decision, and the method of payment for the
arbitrator’s fee. The party found to be at fault will be assessed the cost of the arbitrator. If both parties are at fault, the cost of the arbitration will be apportioned. 
  

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	 	5.	Post-payment Review 

  
 The Contractor may utilize a post-payment review methodology to assure claims have been paid appropriately. 
  

	 	6.	Total Payment 

  
 The Contractor or its providers may not require any co-payments, patient-pay amounts, or other cost-sharing arrangements unless authorized by DCH. The
Contractor’s providers may not bill Enrollees for the difference between the provider’s charge and the Contractor’s payment for Covered Services. The Contractor’s providers will not seek nor accept additional or supplemental
payment from the Enrollee, his/her family, or representative, in addition to the amount paid by the Contractor even when the Enrollee has signed an agreement to do so. These provisions also apply to out-of-network providers. 
  

	 	7.	Case Rate Payments for Emergency Services 

  
 The Contractor, in the absence of a contract with emergency providers, must provide reimbursement at Medicaid rates for professional and facility services
provided in the emergency room of a hospital as required in Section II-I-1and Section II-1-2 of this Contract. 
  

	 	8.	Enrollee Liability for Payment 

  
 The Enrollee may not be held liable for any of the following provisions consistent with 42 CFR Part 438.106 and 42 CFR 438.116: 
  

	 	•	The Contractors debts, in case of insolvency; 

  

	 	•	Covered services under this Contract provided to the Enrollee for which the State did not pay the Contractor; 

  

	 	•	Covered services provided to the Enrollee for which the State or the Contractor does not pay the provider due to contractual, referral or other arrangement; or

  

	 	•	Payments for covered services furnished under a contract, referral, or other arrangement, to the extent that those payments are in excess of the amount that the Enrollee would owe
if the Contractor provided the services directly. 

  

	II-O	PROVIDER SERVICES (Network and Out-of-Network) 

  
 The Contractor will: 
  

	 	•	Provide contract and education services for the provider network, ensure proper maintenance of medical records, maintain proper staffing to respond to provider inquiries, and be
able to process provider grievances, complaints, and an appeal system to resolve provider billing disputes; 

  

	 	•	Maintain a written plan detailing methods of provider recruitment and education regarding Contractor policies and procedures; 

  

	 	•	Maintain a regular means of communicating and providing information on changes in policies and procedures to its providers. This may include guidelines for answering written
correspondence to providers, offering provider-dedicated phone lines, or a regular provider newsletter; 

  

	 	•	Provide a staff of sufficient size to respond timely to provider inquiries, questions, and concerns regarding Covered Services. 

  

	 	•	Provide a copy of the Contractor’s prior authorization policies to the provider when the provider joins the Contractor’s provider network. The Contractor must notify
providers of any changes to prior authorization policies as changes are made. 

  

	 	•	Make its provider policies, procedures and appeal processes available over its website. Updates to the policies and procedures will be available on the website as well as through
other media used by the Contractor. 

  

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	II-P	QUALITY ASSESSMENT AND PERFORMANCE IMPROVEMENT PROGRAM STANDARDS 

  

	 	1.	Quality Assessment and Performance Improvement Program Standards 

  
 The Contractor will have an ongoing Quality Assessment and Performance Improvement Program for the services furnished to its enrollees that meets the
requirements of 42 CFR 438.240. The Contractor’s medical director shall be responsible for managing the Quality Assessment and Performance Improvement Program. The Contractor must maintain a QIC for purposes of reviewing the Quality Assessment
and Performance Improvement Program, its results and activities, and recommending changes on an ongoing basis. The QIC must be comprised of Contractor staff, including but not limited to the quality improvement director and other key management
staff, as well as health professionals providing care to Enrollees. 
  
 The Contractor’s Quality Assessment and Performance Improvement Program will be capable of identifying opportunities to improve the provision of health care services and the outcomes of such care for Enrollees. The Contractor’s
Quality Assessment and Performance Improvement Program must also incorporate and address findings of site reviews by DCH, external independent reviews, and statewide focused studies and the recommendations of the CAC. In addition, the
Contractor’s Quality Assessment and Performance Improvement Program must develop or adopt performance improvement goals, objectives, and activities or interventions as required by the DCH to improve service delivery or health outcomes for
Enrollees. 
  
 The Contractor will have a written plan for the
Quality Assessment and Performance Improvement Program which includes a statement of the Contractor’s performance goals and objectives, lines of authority and accountability including data responsibilities, evaluation tools, and performance
improvement activities. 
  
 The written plan must also describe
how the Contractor will: 
  

	 	•	Analyze both the processes and outcomes of care using currently accepted standards from recognized medical authorities, including focused review of individual cases, as appropriate.

  

	 	•	Determine underlying reasons for variations in the provision of care to Enrollees. 

  

	 	•	Establish clinical and non-clinical priority areas and indicators for assessment and performance improvement. 

  

	 	•	Use measures to analyze the delivery of services and quality of care, over and under utilization of services, disease management strategies, and outcomes of care. The Contractor is
expected to collect and use data from multiple sources such as medical records, encounter data, HEDIS®, claims processing, grievances, utilization review and member satisfaction instruments in this activity. 

  

	 	•	Compare Quality Assessment and Performance Improvement Program findings with past performance and with established program goals and available external standards.

  

	 	•	Measure the performance of Contractor providers and conduct peer review activities such as: identification of practices that do not meet Contractor standards; recommendation of
appropriate action to correct deficiencies; and monitoring of corrective action by providers. 

  

	 	•	Measure provider performance at least twice annually and provide performance feedback to providers, including detailed discussion of clinical standards and expectations of the
Contractor. 

  

	 	•	 Develop and/or adopt clinically appropriate practice parameters and protocols/guidelines. Submit these parameters and protocols/guidelines to 

  

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providers with sufficient explanation and information to enable the providers to meet the established standards. 

  

	 	•	The Contractor must ensure that where applicable, utilization management, enrollee education, coverage of services, and other areas as appropriate are consistent with the
Contractor’s practice guidelines. 

  

	 	•	Evaluate access to care for Enrollees according to the established standards and those developed by DCH and Contractor’s QIC and implement a process for ensuring that network
providers meet and maintain the standards. The evaluation should include an analysis of the accessibility of services to Enrollees with disabilities. 

  

	 	•	Perform a member satisfaction survey annually, in collaboration with DCH or independently, and distribute results to providers, Enrollees, and DCH. 

  

	 	•	Implement improvement strategies related to program findings and evaluate progress periodically but at least annually. 

  

	 	•	Maintain Contractor’s written Quality Assessment and Performance Improvement Program that will be available to DCH upon request. 

  

	 	2.	Annual Effectiveness Review 

  
 The Contractor will annually conduct an effectiveness review of its Quality Assessment and Performance Improvement Program. The effectiveness review must
include analysis of whether there have been improvements in the quality of health care and services for Enrollees as a result of quality assessment and improvement activities and interventions carried out by the Contractor. The analysis should take
into consideration trends in service delivery and health outcomes over time and include monitoring of progress on performance goals and objectives. Information on the effectiveness of the Contractor’s Quality Assessment and Performance
Improvement Program must be provided annually to network providers and to Enrollees upon request. Information on the effectiveness of the Contractor’s Quality Assessment and Performance Improvement Program must be provided to DCH annually
during the site visit and upon request. 
  

	 	3.	Annual Performance Improvement Projects 

  
 In addition to the internal Quality Assessment and Performance Improvement Program, the Contractor will conduct performance improvement projects that
focus on clinical and non-clinical area. The Contractor must meet minimum performance objectives. The Contractor may be required to participate in statewide performance improvement projects. 
  
 The DCH will collaborate with Stakeholders and Contractors to determine
priority areas for statewide performance improvement projects. The priority areas may vary from one year to the next and will reflect the needs of the population; such as care of children, pregnant women, and persons with special health care needs,
as defined by DCH. The Contractor will assess performance for the priority area(s) identified by DCH and/or other Stakeholders. 
  

	 	4.	Performance Monitoring Standards 

  
 DCH will establish and attach annual performance monitoring standards to the Contract (Attachment D). The Contractor will incorporate any statewide
performance improvement objectives, established as a result of a statewide performance improvement project or monitoring, into the written plan for its Quality Assessment and Performance Improvement Program. DCH will use the results of performance
assessments as part of the formula for automatic enrollment assignments. 
  

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	 	5.	External Quality Review 

  
 The State will arrange for an annual, external independent review of the quality and outcomes, timeliness of, and access to Covered Services provided by
the Contractor. The Contractor will address the findings of the external review through its Quality Assessment and Performance Improvement Program. The Contractor must develop and implement performance improvement goals, objectives, and activities
in response to the external review findings as part of the Contractor’s Quality Assessment and Performance Improvement Program. A description of the performance improvement goals, objectives and activities developed and implemented in response
to the external review findings will be included in the Contractor’s quality assessment and performance improvement program and provided to DCH upon request. DCH may also require separate submission of an improvement plan specific to the
findings of the external review. 
  

	 	6.	Consumer Survey 

  
 Contractors must conduct a survey of their enrollee population using the Consumer Assessment of Health Plan Survey (CAHPS) instrument either by partnering
with the DCH through cost sharing or by directly contracting with an NCQA certified CAHPS vendor and submitting the data according to the specifications and timelines established by the DCH. 
  

	II-Q	UTILIZATION MANAGEMENT 

  
 The major components of the Contractor’s utilization management program must encompass, at a minimum, the following: 
  

	 	•	Written policies with review decision criteria and procedures that conform to managed health care industry standards and processes. 

  

	 	•	A formal utilization review committee directed by the Contractor’s medical director to oversee the utilization review process. 

  

	 	•	Sufficient resources to regularly review the effectiveness of the utilization review process, and to make changes to the process as needed. 

  

	 	•	An annual review and reporting of utilization review activities and outcomes/interventions from the review. 

  

	 	•	The utilization management activities of the Contractor must be integrated with the Contractor’s quality assessment and performance improvement program.

  
 The Contractor must establish and use a written
prior approval policy and procedure for utilization management purposes. The Contractor may not use such policies and procedures to avoid providing medically necessary services within the coverages established under the Contract. The policy must
ensure that the review criteria for authorization decisions are applied consistently and require that the reviewer consult with the requesting provider when appropriate. The policy must also require that utilization management decisions be made by a
health care professional who has appropriate clinical expertise regarding the service under review. 
  
 The Contractor’s authorization policy must establish timeframes for standard and expedited authorization decisions. These timeframes may not exceed
14 days for standard authorization decisions and 3 working days for expedited authorization decisions. These timeframes may be extended up to 14 additional calendar days if requested by the provider or Enrollee and the Contractor justifies the need
for additional information and explains how the extension is in the Enrollee’s interest. The Enrollee must be notified of the plan’s intent to extend the timeframe. The Contractor must ensure that compensation to individuals or
subcontractor that conduct utilization management activities is not structured so as to provide incentives for the individual or subcontractor to deny, limit, or discontinue medically necessary services to any Enrollee. 
  

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	II-R	THIRD PARTY RESOURCE REQUIREMENTS 

  
 The Contractor will collect any payments available from other health insurers including Medicare and private health insurance for services provided to its
members in accordance with Section 1902(a)(25) of the Social Security Act and 42 CFR 433 Subpart D. The Contractor will be responsible for identifying and collecting third party liability information and may retain third party collections. If third
party resources are available, the Contractor is not required to pay the provider first and then recover money from the third party. The Contractor should follow Medicaid Policy regarding third party liability. 
  
 Third party liability (TPL) refers to any other health insurance plan or
carrier (e.g., individual, group, employer-related, self-insured or self-funded plan or commercial carrier, automobile insurance and worker’s compensation) or program (e.g., Medicare) that has liability for all or part of a member’s health
care coverage. Contractors are payers of last resort and will be required to identify and seek recovery from all other liable third parties in order to make themselves whole. The Contractor may retain all such collections. The Contractor must report
third party collections in its encounter data submission and in aggregate as required by DCH. 
  
 DCH will provide the Contractor with a listing of known third party resources for its Enrollees. The listing will be produced monthly and will contain information made available to the State at the time of eligibility
determination and /or redetermination. 
  
 When an Enrollee is
also enrolled in Medicare, Medicare will be the primary payer ahead of any Contractor. The Contractor must make the Enrollee whole by paying or otherwise covering all Medicare cost sharing amounts incurred by the Enrollee such as coinsurance and
deductibles. 
  

	II-S	MARKETING 

  
 With the approval of DCH, Contractors are allowed to promote their services to the general population in the community, provided that such promotion and
distribution of materials is directed at the population of the entire approved service area. 
  
 However, direct marketing to individual Beneficiaries is prohibited. The Contractor may not provide inducements through which compensation, reward, or supplementary benefits or services are offered to Beneficiaries to
enroll or to remain enrolled with the Contractor. DCH will review and approve any form of marketing. The following are examples of allowed and prohibited marketing locations and practices: 
  

	 	1.	Allowed Marketing Locations/Practices directed at the general population: 

  

	 	•	Newspaper articles 

  

	 	•	Newspaper advertisements 

  

	 	•	Magazine advertisements 

  

	 	•	Signs 

  

	 	•	Billboards 

  

	 	•	Pamphlets 

  

	 	•	Brochures 

  

	 	•	Radio advertisements 

  

	 	•	Television advertisements 

  

	 	•	Noncapitated plan sponsored events 

  

	 	•	Public transportation (i.e. buses, taxicabs) 

  

	 	•	Mailings to the general population 

  

	 	•	Individual Contractor “Health Fair” for Enrollee Members 

  

	 	•	Malls or Commercial retail establishments 

  

	 	•	Community Centers 

  

	 	•	Churches 

  

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	 	2.	Prohibited Marketing Locations/Practices that target individual Beneficiaries: 

  

	 	•	Local FIA offices 

  

	 	•	Provider offices 

  

	 	•	Hospitals 

  

	 	•	Check cashing establishments 

  

	 	•	Door-to-door marketing 

  

	 	•	Telemarketing 

  

	 	•	Clinics 

  

	 	•	Direct mail targeting individual Medicaid Beneficiaries 

  

	 	•	WIC clinics. 

  

	 	3.	Marketing Materials 

  
 The Contractor is required to develop informational materials such as pamphlets and brochures that can be used to assist Beneficiaries in choosing a
Contractor. Marketing materials shall contain provider and physician choices offered by the Contractor, and their locations and specialties. 
  
 All written and oral marketing materials must be prior approved by DCH. Upon receipt by DCH on a complete file for allowed marketing practices and
locations, the DCH will provide a decision to the Contractor within 30 business days or the Contractor’s request will be deemed approved. 
  
 Marketing materials must be available in languages appropriate to the Beneficiaries being served within the county. All material must be culturally
appropriate and available in alternative formats in accordance with the American with Disabilities Act. 
  
 DCH may impose monetary or restricted enrollment penalties should the Contractor or any of its subcontractors or providers be found to use marketing
materials which have not been approved in writing by DCH or engage in prohibited marketing practices. DCH reserves the right to suspend all enrollment of new Enrollees into the Contractor’s plan. Such suspensions may be imposed for a period of
sixty (60) days from notification of the violation by DCH to the Contractor. 
  
 Materials must be written at no higher than 6th grade level as determined by any one of the following indices: 
  

	 	•	Flesch – Kincaid 

  

	 	•	Fry Readability Index 

  

	 	•	PROSE The Readability Analyst (software developed by Educational Activities, Inc.) 

  

	 	•	Gunning FOG Index 

  

	 	•	McLaughlin SMOG Index 

  

	 	•	Other computer generated readability indices accepted by DCH. 

  

	II-T	MEMBER AND ENROLLEE SERVICES 

  
 All written and oral materials directed to Enrollees must be prior approved by DCH. Upon receipt by DCH of a complete file of the proposed communication,
the DCH will provide a decision to the Contractor within 30 business days or the Contractor’s request will be deemed approved. All Enrollee services must address the need for culturally appropriate interventions. Reasonable accommodation must
be made for Enrollees with hearing and/or vision impairments. 
  

	 	1.	General 

  
 Contractors will establish and maintain a toll-free 24 hours a day, 7 days a week telephone number to assist with questions that Enrollees may have about the Contractor’s providers or Covered Services.

  

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 Contractors will issue an eligibility card to all Enrollees that includes the toll free 24 hours a
day, 7 days a week phone number for Enrollees to call and a unique identifying number for the Enrollee. The card must also identify the member’s PCP name and phone number. Contractors may meet this requirement in one of the following ways:

  

	 	•	Print the PCP name and phone number on the card. (The Contractor must send a new card to the Enrollee when the PCP assignment changes.) 

  

	 	•	Print the PCP name and phone number on a replaceable sticker to be attached to the card. (The Contractor must send a anew sticker to the Enrollee when the PCP assignment changes.)

  

	 	•	Any other method approved by DCH, provided that the PCP name and phone number is affixed to the card and the information changes when the PCP assignment changes.

  
 The Contractor will demonstrate a commitment to
case managing the complex health care needs of Enrollees. Commitment will be demonstrated by the involvement of the Enrollee in the development of his or her treatment plan and will take into account all of an Enrollee’s needs (e.g. home health
services, therapies, durable medical equipment and transportation). 
  
 Contractors will accept as enrolled all Enrollees appearing on monthly enrollment reports and infants enrolled by virtue of the mother’s enrollment status. Contractors may not discriminate against Beneficiaries on the basis of health
needs or health status. 
  
 The duties of each Contractor include
arrangements for medically necessary services and education of Enrollees with regard to the importance of preventive care. In this context, Contractors may not encourage an Enrollee to disenroll because of health care needs or a change in health
care status. Further, an Enrollee’s health care utilization patterns may not serve as the basis for disenrollment from the Contractor. Subject to the above, Contractors may request that DCH prospectively disenroll an Enrollee for cause and
present all relevant evidence to assist DCH in reaching its decision. DCH shall consider all relevant factors in making its decision. DCH’s decision regarding disenrollment shall be final. Disenrollments “for cause” will be the first
day of the next available month. 
  

	 	2.	Enrollee Education 

  

	 	(a)	The Contractor will be responsible for developing and maintaining Enrollee education programs designed to provide the Enrollee with clear, concise, and accurate information about
the Contractor’s services. Materials for Enrollee education should include: 

  

	 	•	Member handbook 

  

	 	•	Contractor bulletins or newsletters sent to the Contractor’s Enrollees at least two times a year that provide updates related to Covered Services, access to providers and
updated policies and procedures. 

  

	 	•	Literature regarding health/wellness promotion programs offered by the Contractor. 

  

	 	(b)	Enrollee education should also focus on the appropriate use of health services. Contractors are encouraged to work with local and community based organizations to facilitate their
provision of Enrollee education services. 

  

	 	3.	Member Handbook/Provider Directory 

  
 Contractors must mail the member ID Card to Enrollees via first class mail within ten business days of being notified of their enrollment. All other
printed information, 

  

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 CONTRACT #071B [GRAPHIC] 
  

 
including member handbook, provider directory, and information regarding accessing services may be mailed separately from the ID card. These materials do not
have to be mailed via first class but must be mailed within ten business days of being notified of the member’s enrollment. 
  
 Contractors may select the option of distributing new member packets to each household, instead of to each individual member in the household, provided
that the mailing includes individual Health Plan membership cards for each member enrolled in the household. When there are program or service site changes, notification must be provided to the affected Enrollees at least ten (10) Business Days
before implementation. 
  
 The Contractor must maintain
documentation verifying that the information in the member handbook is reviewed for accuracy and updated at least once a year. The provider directory may be published separately. At a minimum the member handbook must include: 
  

	 	•	A table of contents 

  

	 	•	Information on how to choose and change PCPs 

  

	 	•	What to do when family size changes 

  

	 	•	How to make, change, and cancel appointments with a PCP 

  

	 	•	A description of all available Contract services and an explanation of any service limitations or exclusions from coverage 

  

	 	•	How to contact the Contractor’s Member Services and a description of its function 

  

	 	•	Information regarding the grievance and appeal process including how to register a grievance with the Contractor and/or State, how to file a written appeal, and the deadlines for
filing an appeal and an expedited appeal 

  

	 	•	Information regarding the State’s fair hearing process and that access to that process may occur without first going through the Contractor’s grievance/complaint process

  

	 	•	What to do in case of an emergency and instructions for receiving advice on getting care in case of any emergency. Enrollees should be instructed to activate emergency medical
services (EMS) by calling 9-1-1 in life threatening situations 

  

	 	•	How to obtain emergency transportation and medically necessary transportation 

  

	 	•	How to obtain medically necessary durable medical equipment (or customized durable medical equipment) 

  

	 	•	How to access hospice services 

  

	 	•	Information on the signs of substance abuse problems, available substance abuse services and accessing substance abuse services 

  

	 	•	Information on well-child care, immunizations, and follow-up services for Enrollees under age 21 (EPSDT) 

  

	 	•	Information on vision services, family planning services, and how to access these services 

  

	 	•	Information on the process of referral to specialists and other providers 

  

	 	•	Information on the availability and process for accessing Covered Services that are not the responsibility of the Contractor, but are available to its Enrollees such as dental care,
behavioral health and developmental disability services 

  

	 	•	Information on how to handle out of county and out of state services 

  

	 	•	Information to Enrollees that they are entitled to receive FQHC services 

  

	 	•	How Enrollees can contribute towards their own health by taking responsibility, including appropriate and inappropriate behavior 

  

	 	•	Information regarding pregnancies which conveys the importance of prenatal care and continuity of care, to promote optimum care for mother and infant 

  

	 	•	Information regarding the Women’s, Infant’s, and Children (WIC) Supplemental Food and Nutrition Program 

  

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 CONTRACT #071B [GRAPHIC] 
  

	 	•	Information advising Enrollees of their right to request information regarding physician incentive arrangements including those that cover referral services that place the physician
at significant financial risk (more than 25%), other types of incentive arrangements, whether stop-loss coverage is provided 

  

	 	•	Information regarding when specialists may be designated as their PCP; and 

  

	 	•	Information regarding the Enrollee’s right to obtain routine OB/GYN and Pediatric services from network providers without a referral. 

  

	 	•	Information on how to obtain oral interpretation services and written information in Prevalent Languages, as defined by the Contract. 

  

	 	•	Information on how to obtain written materials in alternative formats for enrollees with special needs. 

  

	 	•	Information on Enrollee rights and responsibilities. The Enrollee rights information must include a statement that conveys that Contractor staff and affiliated providers will comply
with all requirements concerning Enrollee rights. 

  

	 	•	Information concerning advance directives that includes, at a minimum: (1) information about the Contractor’s advance directives policy, (2) information regarding the
State’s advance directives law, and (3) directions on how to file a complaint with the State concerning noncompliance with the advance directive requirements. Any changes in the State law must be updated in this written information no later
than 90 days following the effective date of the change. 

  

	 	•	Any other information deemed essential by the Contractor and/or the DCH 

  
 The handbook must be written at no higher than a sixth grade reading level and must be available in alternative formats for Enrollees with special needs.
Member handbooks must be available in the Prevalent Language other than English when more than five percent (5%) of the Contractor’s Enrollees speak a Prevalent Language, as defined by the Contract. These Contractors must also provide a
mechanism for Enrollees who speak the Prevalent Language to obtain member materials in the Prevalent Language or to obtain assistance with interpretation. The Contractor must submit all member handbook material to DCH for approval prior to
distribution to the members. The Contractor must agree to make modifications in the handbook language so as to comply with the specifications of this Contract. 
  

The Contractor must maintain a provider directory that contains, at a minimum, the following information: 
  

	 	•	PCPs and Specialists listed by county. 

  

	 	•	For PCP listings, the following information must be provided: Provider name, address, telephone number, any hospital affiliation, days and hours of operation, whether the provider
is accepting new patients, and languages spoken. 

  

	 	•	For Specialist listings, the following information must be provided: Provider name, address, telephone number, and any hospital affiliation. 

  

	 	•	A list of all hospitals, pharmacies, medical suppliers, and other ancillary health providers the Enrollees may need to access. The list must contain the address and phone number of
the provider. 

  
 Ancillary providers that are part
of a retail chain may be listed by the name of the chain without listing each specific site. 
  

	 	4.	Protection of Enrollees Against Liability for Payment and Balanced Billing 

  
 Section 1932(b)(6) of the Social Security Act requires Contractors to protect Enrollees from certain payment liabilities. Section 1128B(d)(1) of the
Social Security Act authorizes criminal penalties to providers in the case of services provided to an individual enrolled with a Contractor which are charges at a rate in excess of the rate permitted under the organization’s Contract.

  

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	II-U	GRIEVANCE/APPEAL PROCEDURES 

  
 The Contractor will establish and maintain an internal process for the resolution of grievances and appeals from Enrollees. Enrollees may file a grievance
or appeal on any aspect of service provided to them by the Contractor as specified in the definitions of grievance and appeal. 
  

	 	1.	Contractor Grievance/Appeal Procedure Requirements 

  
 The Contractor agrees to have written policies and procedures governing the resolution of grievances and appeals. These written policies and procedures
will meet the following requirements: 
  

	 	•	The Contractor shall administer an internal grievance and appeal procedure according to the requirements of MCL 500.2213 and MCL 550.1404 and shall cooperate with the Michigan
Office of Financial and Insurance Services in the implementation of MCL 550.1901-1929, “Patient’s Rights to Independent Review Act.” 

  

	 	•	The Contractor’s internal grievance and appeal procedure must include the following components: 

  

	 	•	The Contractor must give Enrollees reasonable assistance in completing forms and taking other procedural steps. The Contractor must provide interpreter services and TTY/TDD toll
free numbers. 

  

	 	•	The Contractor must acknowledge receipt of each grievance and appeal. 

  

	 	•	The Contractor must ensure that the individuals who make decisions on grievances and appeals are individuals: 

  

	 	(i)	Who were not involved in any previous level of review or decision-making; and 

  

	 	(ii)	Are health care professionals who have the appropriate clinical expertise in treating the Enrollee’s condition or disease, when the grievance or appeal involves a clinical
issue. 

  

	 	2.	Notice to Enrollees of Grievance Procedure 

  
 The Contractor will inform Enrollees about the Contractor’s internal grievance procedures at the time of initial enrollment and any other time an
Enrollee expresses dissatisfaction with the Contractor. The information will be included in the member handbook and will explain: 
  

	 	•	How to file a grievance with the Contractor 

  

	 	•	The internal grievance resolution process 

  

	 	3.	Notice to Enrollees of Appeal Procedure 

  
 The Contractor will inform Enrollees about the Contractor’s appeal procedure at the time of initial enrollment, each time a service is denied,
reduced, or terminated, and any other time a Contractor makes a decision that is subject to appeal under the definition of appeal in this Contract. The information will be included in the member handbook and will explain: 
  

	 	•	How to file an appeal with the Contractor 

  

	 	•	The internal appeal process 

  

	 	•	The member’s right to a fair hearing with the State 

  
 When the Contractor makes a decision subject to appeal, as defined in this contract, the Contractor must provide a written adverse action notice to the
Enrollee and the requesting provider, if applicable. Adverse action notices for the suspension, reduction or termination of services must be made at least 10 days prior to the 

  

 54 

 CONTRACT #071B [GRAPHIC] 
  

 
change in services. Adverse action notices involving service authorization decisions that deny or limit services must be made within the time frames
described in Section II-Q of this Contract. The notice must include the following components: 
  

	 	•	The action the Contractor or subcontractor has taken or intends to take; 

  

	 	•	The reasons for the action; 

  

	 	•	The Enrollee’s or Provider’s right to file an Appeal; 

  

	 	•	An explanation of the Contractor’s Appeal Process; 

  

	 	•	The Enrollee’s right to request a Medicaid fair hearing; 

  

	 	•	The circumstances under which expedited resolution is available and how to request it; and 

  

	 	•	The Enrollee’s right to have benefits continue pending resolution of the Appeal, how to request that benefits be continued, and the circumstances under which the Enrollee may
be required to pay the costs of these services. 

  

	 	4.	State Medicaid Appeal Process 

  
 The State will maintain a Medicaid fair hearing process to ensure that Enrollees have the opportunity to appeal decisions directly to the State. The
Contractor must include the Medicaid Fair Hearing Process as part of the written internal process for resolution of appeals and must describe the Medicaid Fair Hearing process in the Member Handbook. 
  

	 	5.	Expedited Appeal Process 

  
 The Contractor’s written policies and procedures governing the resolution of appeals must include provisions for the resolution of expedited appeals
as defined in the Contract. These provisions must include, at a minimum, the following requirements: 
  

	 	•	The Enrollee or provider may file an expedited appeal either orally or in writing. 

  

	 	•	The Enrollee or provider must file a request for an expedited appeal within 10 days of the adverse determination. 

  

	 	•	The Contractor will make a decision on the expedited appeal within 3 working days of receipt of the expedited appeal. This timeframe may be extended up to 10 calendar days if the
enrollee requests the extension or if the Contractor can show that there is need for additional information and can demonstrate that the delay is in the Enrollee’s interest. If the Contractor utilizes the extension, the Contractor must give the
Enrollee written notice of the reason for the delay. 

  

	 	•	The Contractor will give the Enrollee oral and written notice of the appeal review decision. 

  

	 	•	If the Contractor denies the request for an expedited appeal, the Contractor will transfer the appeal to the standard 35-day timeframe and give the Enrollee written notice of the
denial within 2 days of the expedited appeal request. 

  

	 	•	The Contractor will not take any punitive actions toward a provider who requests or supports an expedited appeal on behalf of an Enrollee 

  

	II-V	CONTRACTOR On-Site Reviews 

  
 Contractor on-site reviews by DCH will be an ongoing activity conducted during the Contract. The Contractor’s on-site review may include the
following areas: administrative, financial, provider, Covered Services, quality assurance, utilization review, data reporting, claims processing, fraud and abuse, and documentation. The DCH shall establish findings of pass, incomplete, fail, or
deemed status for each criteria included in the annual site visit and tool used to assess health plan compliance. 

  

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 CONTRACT #071B [GRAPHIC] 
  

 
Findings of incomplete or fail shall require the development of a corrective action plan that will be included each year as Attachment C to this Contract.

  

	II-W	 CONTRACT REMEDIES AND SANCTIONS 

  
 The State will utilize a variety of means to assure compliance with Contract requirements. The State will pursue remedial actions or improvement plans
that the Contractor can implement to resolve outstanding requirements. If remedial action or improvement plans are not appropriate or are not successful, Contract sanctions will be implemented. 
  
 DCH may employ contract remedies and/or sanctions to address any Contractor
noncompliance with the Contract; this includes, but is not limited to, noncompliance with Contract requirements on the following issues: 
  

	 	•	Marketing practices 

  

	 	•	Member services 

  

	 	•	Provision of medically necessary, covered services 

  

	 	•	Enrollment practices, including but not limited to discrimination on the basis of health status or need for health services 

  

	 	•	Provider networks 

  

	 	•	Provider payments 

  

	 	•	Financial requirements, including but not limited to failure to comply with physician incentive plan requirements 

  

	 	•	Enrollee satisfaction 

  

	 	•	Performance standards included at Attachment D to the Contract 

  

	 	•	Misrepresentation or false information provided to DCH, CMS, providers, Enrollees, or potential Enrollees. 

  
 The use of intermediate sanctions for non-compliance is described in 42 CFR
438.700. Intermediate sanctions employed by DCH may include suspension of enrollment and/or payment. Intermediate sanctions may also include the appointment of temporary management, as provided in 42 CFR 438.706, in cooperation with the Office of
Financial and Insurance Services. 
  
 If intermediate sanctions
are not successful or DCH determines that immediate termination of the Contract is appropriate, as allowed by Section I-O, the State will terminate the Contract with the Contractor. The Contractor must be afforded a hearing before termination of a
Contract under this section can occur. The State must notify Enrollees of such a hearing and allow Enrollees to disenroll, without cause, if they choose. 
  
 In addition to the sanctions described above, DCH will also administer and enforce a monetary penalty of not more than $5000,00 to a Contractor for
repeated failures on any of the findings of DCH site visit report. Collections under this Contract sanction will be through gross adjustments to the monthly payments described in Section I-J of this Contract and will be allocated to the fund
established under Section II-AA-e of the Contract for performance bonus. 
  

	II-X	DATA REPORTING 

  
 To measure the Contractor’s accomplishments in the areas of access to care, utilization, medical outcomes, Enrollee satisfaction, and to provide
sufficient information to track expenditures and calculate future Capitation Rates the Contractor must provide the DCH with uniform data and information as specified by DCH. The Contractor must submit an annual consolidated report using the
instructions and format covered in Contract Appendix F. In addition to the annual consolidated report, the Contractor must submit monthly and quarterly reports as specified in this section. Any changes in the reporting requirements will be
communicated to the Contractor at least ninety (90) days before they are effective unless state or federal law requires otherwise. 
  

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 CONTRACT #071B [GRAPHIC] 
  

 Within the first 15 days of each new fiscal year, the Contractor’s CEO must submit a DCH Data
Certification form to DCH. The document must attest to the accuracy, completeness, and truthfulness of any and all data and documents submitted to the State as required by the Contract. When the health plan employs a new CEO, a new DCH Data
Certification form must be submitted to DCH within 15 days of the employment date. 
  
 Submitted encounter data will be subject to edits prior to acceptance into DCH’s data warehouse. Stored encounter data will be subject to regular and ongoing quality checks as developed by DCH. The
Contractor’s submission of encounter data must meet timeliness and completeness requirements as specified by DCH. The contractor must participate in regular data quality assessments conducted as a component of ongoing on-site activity described
in Section II-V. 
  
 The Contractor must cooperate with DCH in
carrying out validation of data provided by the Contractor by making available medical records and a sample of its data and data collection protocols. The Contractor must develop and implement corrective action plans to correct data validity
problems as identified by the DCH. 
  
 The following information
and reports must be submitted to the Department in addition to the annual consolidated report: 
  

	 	1.	HEDIS® 

  
 The Contractor
annually submit Michigan specific HEDIS reports according to the most current NCQA specifications and timelines, utilizing Michigan specific samples of Enrollees. The Contractor must contract with a NCQA certified HEDIS auditing vendor and undergo a
full audit of their HEDIS reporting process. 
  

	 	2.	Encounter Data Reporting 

  
 In order to assess quality of care, determine utilization patterns and access to care for various health care services, affirm Capitation Rate
calculations and estimates, the Contractor will submit encounter data containing detail for each patient encounter reflecting all services provided by the Contractor. Encounter records will be submitted monthly via electronic media in the format
specified by DCH. Encounter level records must have a common identifier that will allow linkage between DCH’s and the Contractor’s Management Information Systems. 
  
 Submitted encounter data will be subject to edits prior to acceptance into DCH’s data warehouse. Stored encounter data
will be subject to regular and ongoing quality checks as developed by DCH. The Contractor’s submission of encounter data must meet timeliness and completeness requirements as specified by DCH. The Contractor must participate in regular data
quality assessments conducted as a component of ongoing on site activity described in Section II-V. 
  

	 	3.	Financial and Claims Reporting Requirements 

  
 In addition to meeting all HMO financial reporting requirements and providing copies of the HMO financial reports to DCH, Contractors must provide to DCH
monthly statements that provide information regarding paid claims, aging of unpaid claims, and denied claims. The DCH may also require monthly financial statements from Contractors. 
  

	 	4.	Quality Assessment and Performance Improvement Program Reporting 

  
 The Contractor must perform and document annual assessments of their quality assessment and performance improvement program. This assessment is to 

  

 57 

 CONTRACT #071B [GRAPHIC] 
  

 
summarize any modifications made in the quality assessment and performance improvement program, a description of performance improvement activities for the
previous year, an effectiveness review (including progress on performance goals and objectives), and a work plan for the coming year. The assessment must also include results of the Contractor’s member satisfaction survey if the Contractor does
not participate with DCH coordinated survey activity. The Contractor may be required to provide this assessment and other reports or improvement plans addressing specific contract performance issues identified through site visit reviews, external
independent reviews, focused studies or other monitoring activities conducted by DCH. 
  

	 	5.	Semi-annual Grievance and Appeal Report 

  
 The Contractor must track the number and type of grievances and appeals. This information should be summarized by the level at which the grievance or
appeal was resolved. 
  

	II-Y	RELEASE OF REPORT DATA 

  
 The Contractor must obtain DCH’s written approval prior to publishing or making formal public presentations of statistical or analytical material
based on its Enrollees. 
  

	II-Z	MEDICAL RECORDS 

  
 The Contractor must ensure that its providers maintain medical records of all medical services received by the Enrollee. The medical record must include,
at a minimum, a record of outpatient and emergency care, specialist referrals, ancillary care, diagnostic test findings including all laboratory and radiology, prescriptions for medications, inpatient discharge summaries, histories and physicals,
immunization records, other documentation sufficient to fully disclose the quantity, quality, appropriateness, and timeliness of services provided. 
  

	 	1.	Medical Record Maintenance 

  
 The Contractor’s medical records must be maintained in a detailed and comprehensive manner that conforms to good professional medical practice,
permits effective professional medical review and medical audit processes, and which facilitates an adequate system for follow-up treatment. Medical records must be signed and dated. All medical records must be retained for at least six (6) years.

  
 The Contractor must have written policies and procedures for
the maintenance of medical records so that those records are documented accurately and in a timely manner, are readily accessible, and permit prompt and systematic retrieval of information. The Contractor must have written plans for providing
training and evaluating providers’ compliance with the recognized medical records standards. 
  

	 	2.	Medical Record Confidentiality/Access 

  
 The Contractor must have written policies and procedures to maintain the confidentiality of all medical records. DCH and/or CMS shall be afforded prompt
access to all Enrollees’ medical records. Neither CMS nor DCH are required to obtain written approval from an Enrollee before requesting an Enrollee’s medical record. When an Enrollee changes PCP, the former PCP must forward his or her
medical records or copies of medical records to the new PCP within ten (10) working days from receipt of a written request. 
  

 58 

 CONTRACT #071B [GRAPHIC] 
  

	II-AA	SPECIAL PAYMENT PROVISIONS 

  

	 	1.	Payment of Rural Access Incentive 

  
 In addition to the capitation payment agreed to and included in the Contract as Attachment A, the DCH will provide an additional “add-on”
payment for health plans who have been approved to provide services in any or all of the following counties: 
  

	 	•	Alcona, Alpena, Antrim, Benzie, Charlevoix, Cheboygan, Clare, Crawford, Emmet, Gladwin, Huron, Kalkaska, Leelanau, Mason, Mecosta, Midland, Missaukee, Montmorency, Oceana, Osceola,
Otsego, Presque Isle, Sanilac, Tuscola, and Wexford. 

  
 Payment will be provided each month in the form of an additional $3 dollars/per member/per month payment for each Beneficiary enrolled with the Contractor. Five ($5) dollars per member per month will be paid to the Contractor if the
Contractor is serving all of the above listed counties. It is expected that the additional payment will be used to help support the provider and infrastructure costs for operating a managed care plan in a rural environment. Contractors will be
required to report on the disposition of the payments received through this additional reimbursement. 
  

	 	2.	Contractor Performance Bonus 

  
 During each Contract year, the DCH will withhold .0025 of the approved capitation for each Contractor. The amount withheld will be used to establish a
fund for awarding Contractor performance bonus payments. These payments will be made to those high performing Contractors according to criteria established by DCH. The criteria will include assessment of performance in quality of care, beneficiary
responsiveness, and administrative functions. The DCH will establish the criteria and measurement of the criteria at the start of each fiscal year and provide notice to each Contractor. 
  
 In establishing the annual performance bonus criteria, the DCH will use the following reports and assessments for the
applicable calendar/fiscal year and consult with Contractors: 
  

	 	•	External Quality Review (EQR); 

  

	 	•	Medicaid HEDIS Report; 

  

	 	•	Consumer (enrollee member) survey results; 

  

	 	•	Beneficiary hotline summary data for the most current 12 month reporting period; 

  

	 	•	Administrative, claims payment, and encounter reporting performance; and 

  

	 	•	Current nationally recognized NCQA or JCAHO accreditation status 

  

	II-BB	RESPONSIBILITIES OF THE DEPARTMENT OF COMMUNITY HEALTH 

  
 DCH will be responsible for administering the CHCP. It will administer Contracts with Contractors, monitor Contract performance, and perform the following
activities: 
  

	 	•	Pay to the Contractor a PMPM Capitation Rate as agreed to in the Contract for each Enrollee. 

  

	 	•	Determine eligibility for the Medicaid program and determine which Beneficiaries will be enrolled. 

  

	 	•	Determine if and when an Enrollee will be disenrolled from the Contractor’s plan or changed to another Medicaid managed care program. 

  

	 	•	Notify the Contractor of changes in enrollment. 

  

	 	•	Notify the Contractor of the Enrollee’s name, address, and telephone number if available. The Contractor will be notified of changes as they are known to the DCH.

  

	 	•	Issue Medicaid identification cards (mihealth card) to Enrollees. 

  

 59 

 CONTRACT #071B [GRAPHIC] 
  

	 	•	Provide the Contractor with information related to known third party resources and any subsequent changes and be responsible for reporting paternity related expenses to FIA.

  

	 	•	Notify the Contractor of changes in Covered Services or conditions of providing Covered Services. 

  

	 	•	Maintain a CAC to collaborate with Contractors on quality improvement. 

  

	 	•	Administer a Medicaid fair hearing process consistent with federal requirements. 

  

	 	•	Collaborate with the Contractor on quality improvement activities, fraud and abuse issues, and other activities which impact on the health care provided to Enrollees.

  

	 	•	Conduct a member satisfaction survey of all Enrollees, compile, and publish the results. 

  

	 	•	Review and approve Contractor marketing and member information materials before being released to Enrollees. 

  

	 	•	Apply Contract remedies as necessary to assure compliance with Contract requirements. 

  

	 	•	Monitor the operation of the Contractor to ensure access to quality care for Enrollees. 

  

	 	•	Provide timely data to Health Plans at least 60 days before the effective date of fee for service pricing or coding changes or DRG changes. 

  

	 	•	Implement mechanisms to identify persons with special health care needs. 

  

	 	•	Assess the quality and appropriateness of care and services furnished to all of Contractor’s Medicaid Enrollees and individuals with special health care needs utilizing
information from required reports, on-site reviews, or other methods DCH determines appropriate. 

  

	 	•	Identify the race, ethnicity, and primary language spoken of each Medicaid Enrollee. (State must provide this information to the Contractor at the time of enrollment).

  

	 	•	Regularly monitor and evaluate the Contractor’s compliance with the standards. 

  

	 	•	Protect against fraud and abuse involving Medicaid funds and Enrollees in cooperation with appropriate state and federal authorities. 

  

	 	•	Make all fraud and/or abuse referrals to the office of Attorney General, Health Care Fraud Division. 

  

	II-CC	PROGRAM INTEGRITY 

  
 The Contractor must have administrative and management arrangements or procedures, including a mandatory compliance plan. The Contractors’
arrangements or procedures must include the following as defined in Section 438.608 of the Balanced Budget Act: 
  

	 	•	Written policies and procedures that describe how the Contractor will monitor Fraud and Abuse. 

  

	 	•	The designation of a compliance officer and a compliance committee who are accountable to the senior management or Board of Directors and who have effective lines of communication
to the Contractor’s employees. 

  

	 	•	Effective training and education for the compliance officer and the Contractor’s employees. 

  

	 	•	Provisions for internal monitoring and auditing. 

  

	 	•	Provisions for prompt response to detected offenses and development of corrective action initiatives. 

  

	 	•	Documentation of the Contractor’s enforcement of the Federal and State fraud and abuse standards. 

  
 Contractors who have any suspicion or knowledge of fraud and/or abuse within any of the DCH’s programs must report
directly to the DCH by calling (866) 428-0005 or sending a memo or letter to: 
  
 Program Investigations Section 
 Capitol Commons Center Building 
 400 S. Pine Street, 6th floor 
 Lansing, Michigan 48909 
  

 60 

 CONTRACT #071B [GRAPHIC] 
  

 When reporting suspected fraud and/or abuse, the Contractor should provide to the DCH the following
information: 
  

	 	•	Nature of the Complaint 

  

	 	•	The name of the individuals and/or entity involved in the suspected fraud and/or abuse, including their address, phone number and Medicaid identification number, and any other
identifying information. 

  
 The Contractor shall
not attempt to investigate or resolve the reported suspicion, knowledge, or action without informing the DCH and must cooperate fully in any investigation by the DCH or Office of Attorney General and any subsequent legal action that may result from
such investigation. 
  

 61 

 CONTRACT #071B [GRAPHIC] 
  

 SECTION III 
  
 CONTRACTOR INFORMATION 
  

	III-A	BUSINESS ORGANIZATION 

  
 PRIMARY CONTRACTOR: 
  
 SUB-CONTRACTOR: 
  

	III-B	AUTHORIZED CONTRACTOR EXPEDITER: 

  

 62 

 CONTRACT #071B [GRAPHIC] 
  

 APPENDIX A 
  
 MODEL LOCAL AGREEMENT WITH LOCAL HEALTH DEPARTMENTS & MATRIX FOR COORDINATION OF SERVICES 
  
 (see file 10010 apndx A thru F.pdf) 
  

 CONTRACT #071B [GRAPHIC] 
  

 APPENDIX B 
  
 MODEL LOCAL AGREEMENT WITH BEHAVIORAL PROVIDER 
  
 (see file 10010 apndx A thru F.pdf) 
  

 CONTRACT #071B [GRAPHIC] 
  

 APPENDIX C 
  
 MODEL LOCAL AGREEMENT WITH DEVELOPMENTAL DISABILITY PROVIDER 
  
 (see file 10010 apndx A thru F.pdf) 
  

 CONTRACT #071B [GRAPHIC] 
  

 APPENDIX D 
  
 FORMAT FOR PROFILES OF PRIMARY CARE PROVIDERS, SPECIALISTS, & ANCILLARY PROVIDER 
  
 (see file 10010 apndx A thru F.pdf) 
  

 CONTRACT #071B [GRAPHIC] 
  

 APPENDIX E 
  
 KEY CONTRACTOR PERSONNEL AUTHORIZATION FOR RELEASE OF INFORMATION 
  
 (see file 10010 apndx A thru F.pdf) 
  

 CONTRACT #071B [GRAPHIC] 
  

 APPENDIX F 
  
 HEALTH PLAN REPORTING FORMAT AND SCHEDULE 
  
 (see file 10010 apndx A thru F.pdf) 
  

 CONTRACT #071B [GRAPHIC] 
  

 ATTACHMENT A 
  
 CONTRACTOR’S AWARDED PRICES 
  
 In compliance with 42 CFR 438.6 (c), the attached rates have been certified as actuarially sound by the Contractor.

  

 CONTRACT #071B [GRAPHIC] 
  

 ATTACHMENT B 
  
 APPROVED SERVICE AREAS 
  

 CONTRACT #071B [GRAPHIC] 
  

 ATTACHMENT C 
  
 CORRECTIVE ACTION PLANS 
 (to be developed at a later date) 
  

 CONTRACT #071B [GRAPHIC] 
  

 ATTACHMENT D 
  
 MEDICAID MANAGED CARE 
 PERFORMANCE STANDARDS 
  

 CONTRACT #071B [GRAPHIC] 
  

 MEDICAID MANAGED CARE 
 PERFORMANCE STANDARDS 
 (Contract Year October 1, 2003 – September 30,
2004) 
  
 ATTACHMENT D – PERFORMANCE MONITORING
STANDARDS 
  
 PURPOSE: The purpose of the performance monitoring standards
is to establish an explicit process for the ongoing monitoring of health plan performance in important areas of quality, access, customer services, and reporting. Through this attachment, the State incorporates the performance standards into the
Contract between the State of Michigan and Contracting Medicaid Health Plans. Attachment D is a summary of the performance monitoring standards. Details on each performance monitoring standard are contained in the MDCH Performance Monitoring
Standards Specifications. 
  
 The performance monitoring process is dynamic and
reflects statewide issues that may change on a year- to-year basis. Performance measurement reports are shared with Health Plans during the year. The reports compare performance of each Plan over time, to other health plans, and to industry
standards, where available. 
  
 The Performance Monitoring Standards reflect the
following performance areas: 
  

	 	•	Quality of Care 

  

	 	•	Access to Care 

  

	 	•	Customer Services 

  

	 	•	Encounter Data 

  

	 	•	Provider File reporting 

  

	 	•	Claims Payment 

  
 Within each area, specific performance measures are identified including: 
  

	 	•	Goal description 

  

	 	•	Minimum Standard 

  

	 	•	Data Source 

  

	 	•	Monitoring Interval, (monthly, quarterly, annually) 

  
 Failure to meet the minimum performance monitoring standards may result in the implementation of remedial actions and/or improvement plans as outlined in the contract
section II-W. 
  

 CONTRACT #071B [GRAPHIC] 
  

									
	 PERFORMANCE AREA

	  	 GOAL DESCRIPTION

	  	 MINIMUM
STANDARD

	  	 DATA SOURCE

	  	 MONITORING
 INTERVALS

					
	 •        Quality of Care:
  
 Childhood Immunization
	  	Fully immunize children who turn two years old during the calendar year.	  	Combination 1 3 65%	  	HEDIS report	  	Annual
					
	 •        Quality of Care:
  
 Prenatal care
	  	Pregnant women receive an initial prenatal care visit in the first trimester or within 42 days of enrollment	  	3 65%	  	HEDIS report	  	Annual
					
	 •        Quality of Care:
  
 Blood Lead Screening
	  	Children at the age of 3 years that have had at least one blood lead test on/before 3rd birthday	  	3 40%	  	Blood Lead Registry	  	Quarterly
					
	 •        Access to Care:
  
 Well child visits First 15
 months of Life
	  	Children in the first 15 months of life receive one or more well child visits during 12 month period	  	3 90%	  	Encounter data	  	Quarterly
					
	 •        Access to Care:
  
 Well child visits 3-6 years
	  	Children three, four, five, and six old receive one or more well child visits during twelve-month period.	  	3 45%	  	Encounter data	  	Quarterly
					
	 •        Customer Services:
  
 Enrollee complaints
	  	Plans will have minimal enrollee contacts through Medicaid Helpline which are determined to be a complaint issue	  	Complaint rate < 5 per 1000 member months	  	Beneficiary/ Provider complaint tracking (BPCT)	  	Quarterly
					
	 •        Claims Reporting
	  	Health Plans are compliant with statutory requirements for payment of clean claims	  	 390% clean claims paid within 30 days;
 £ 2% of ending inventory >45 days old
	  	Claims report submitted by health plan	  	Monthly
					
	 •        Encounter Data Reporting
	  	Timely and complete encounter data submission by the 15th of the month	  	Timely and Complete	  	MDCH Data Exchange Gateway (DEG)	  	Monthly
					
	 •        Provider File Reporting
	  	Timely provider file update/submission before the last Tuesday of the month	  	Monthly submission	  	MI Enrolls	  	Monthly

  

 CONTRACT #071B [GRAPHIC] 
  

 ATTACHMENT E 
  
 MODEL HEALTH PLAN/HOSPITAL CONTRACT2003-2005 CONTRACT FOR HEALTHY OPTIONS & STATE CHILDREN'S HLTH INSUR PLAN

 Exhibit 10.6 
  
 DEPARTMENT OF SOCIAL AND HEALTH SERVICES 
  
 MEDICAL ASSISTANCE ADMINISTRATION 
  
 2003 – 2005 CONTRACT 
  
 Amendment 2 
  
 Effective January 1, 2004 
  
 FOR 
  
 HEALTHY OPTIONS

  
 AND 
  
 STATE CHILDREN’S HEALTH 
 INSURANCE PLAN 
  
 APPROVED AS TO FORM BY THE ATTORNEY GENERAL’S OFFICE 

 TABLE OF CONTENTS 
  

							
	1.      DEFINITIONS	  	1
				
	 	 	1.1  	  	ACTION	  	1
	 	 	1.2  	  	ADVANCE DIRECTIVE	  	1
	 	 	1.3  	  	ANCILLARY SERVICES	  	1
	 	 	1.4  	  	APPEAL	  	1
	 	 	1.5  	  	APPEAL PROCESS	  	1
	 	 	1.6  	  	CHILDREN WITH SPECIAL HEALTH CARE NEEDS	  	1
	 	 	1.7  	  	COLD CALL MARKETING	  	1
	 	 	1.8  	  	COMPARABLE COVERAGE	  	1
	 	 	1.9  	  	CONTINUITY OF CARE	  	1
	 	 	1.10	  	 COORDINATION OF CARE
	  	2
	 	 	1.11	  	 COVERED SERVICES
	  	2
	 	 	1.12	  	 DUAL COVERAGE
	  	2
	 	 	1.13	  	 EPSDT
	  	2
	 	 	1.14	  	 ELIGIBLE CLIENTS
	  	2
	 	 	1.15	  	 EMERGENCY MEDICAL CONDITION
	  	2
	 	 	1.16	  	 EMERGENCY SERVICES
	  	2
	 	 	1.17	  	 ENROLLEE
	  	2
	 	 	1.18	  	 GRIEVANCE
	  	3
	 	 	1.19	  	 GRIEVANCE PROCESS
	  	3
	 	 	1.20	  	 GRIEVANCE SYSTEM
	  	3
	 	 	1.21	  	 HEALTH CARE PROFESSIONAL
	  	3
	 	 	1.22	  	 MANAGED CARE
	  	3
	 	 	1.23	  	 MARKETING
	  	3
	 	 	1.24	  	 MARKETING MATERIALS
	  	3
	 	 	1.25	  	 MEDICALLY NECESSARY SERVICES
	  	3
	 	 	1.26	  	 PARTICIPATING PROVIDER
	  	3
	 	 	1.27	  	 PEER-REVIEWED MEDICAL LITERATURE
	  	4
	 	 	1.28	  	 PHYSICIAN GROUP
	  	4
	 	 	1.29	  	 PHYSICIAN INCENTIVE PLAN
	  	4
	 	 	1.30	  	 POST-STABILIZATION SERVICES
	  	4
	 	 	1.31	  	 POTENTIAL ENROLLEE
	  	4
	 	 	1.32	  	 PRIMARY CARE PROVIDER (PCP)
	  	4
	 	 	1.33	  	 RISK
	  	4
	 	 	1.34	  	 SERVICE AREA
	  	5
	 	 	1.35	  	 SCHIP
	  	5
	 	 	1.36	  	 SUBCONTRACT
	  	5
		
	2.      ENROLLMENT	  	5
				
	 	 	2.1  	  	SERVICE AREAS	  	5
	 	 	2.2  	  	ELIGIBLE CLIENT GROUPS	  	6
	 	 	2.3  	  	CLIENT NOTIFICATION	  	6
	 	 	2.4  	  	EXEMPTION FROM ENROLLMENT	  	6
	 	 	2.5  	  	ENROLLMENT PERIOD	  	7
	 	 	2.6  	  	ENROLLMENT PROCESS	  	7
	 	 	2.7  	  	EFFECTIVE DATE OF ENROLLMENT	  	7
	 	 	2.8  	  	ENROLLMENT LISTING AND REQUIREMENTS FOR CONTRACTOR’S
RESPONSE	  	8
	 	 	2.9  	  	TERMINATION OF ENROLLMENT	  	8
	 	 	2.10	  	 ENROLLMENT NOT DISCRIMINATORY
	  	11
		
	3.      PAYMENT	  	12
				
	 	 	3.1	  	RATES/PREMIUMS	  	12

  

							
	 	 	3.2  	  	DELIVERY CASE RATE PAYMENT	  	13
	 	 	3.3  	  	RENEGOTIATION OF RATES	  	14
	 	 	3.4  	  	REINSURANCE/RISK PROTECTION	  	14
	 	 	3.5  	  	RECOUPMENTS	  	14
	 	 	3.6  	  	ENROLLEE HOSPITALIZED AT ENROLLMENT	  	14
	 	 	3.7  	  	ENROLLEE HOSPITALIZED AT DISENROLLMENT	  	15
	 	 	3.8  	  	THIRD-PARTY LIABILITY (TPL)	  	15
	 	 	3.9  	  	SUBROGATION RIGHTS OF THIRD-PARTY LIABILITY	  	16
	 	 	3.10	  	 RATE SETTING METHODOLOGY
	  	17
	 	 	3.11	  	 COPAYMENTS
	  	17
		
	4.      ACCESS AND CAPACITY	  	17
				
	 	 	4.1  	  	NETWORK CAPACITY	  	17
	 	 	4.2  	  	ACCESSIBILITY OF SERVICES	  	18
	 	 	4.3  	  	24/7 AVAILABILITY	  	18
	 	 	4.4  	  	APPOINTMENT STANDARDS	  	18
	 	 	4.5  	  	PROVIDER NETWORK-DISTANCE STANDARDS	  	19
	 	 	4.6  	  	ACCESS TO SPECIALTY CARE	  	20
	 	 	4.7  	  	EQUAL ACCESS FOR ENROLLEES AND POTENTIAL ENROLLEES WITH
COMMUNICATION BARRIERS	  	20
	 	 	4.8  	  	AMERICANS WITH DISABILITIES ACT	  	21
	 	 	4.9  	  	CAPACITY LIMITS AND ORDER OF ACCEPTANCE	  	22
	 	 	4.10	  	 ASSIGNMENT OF ENROLLEES
	  	23
	 	 	4.11	  	 PROVIDER NETWORK CHANGES
	  	23
	 	 	4.12	  	 WOMEN’S HEALTH CARE SERVICES
	  	23
	 	 	4.13	  	 MATERNITY NEWBORN LENGTH OF STAY
	  	23
	 	 	4.14	  	 CULTURAL CONSIDERATIONS
	  	23
		
	5.      QUALITY OF CARE	  	24
				
	 	 	5.1  	  	QUALITY IMPROVEMENT PROGRAM	  	25
	 	 	5.2  	  	ACCREDITATION	  	25
	 	 	5.3  	  	PERFORMANCE IMPROVEMENT PROJECTS	  	26
	 	 	5.4  	  	INDEPENDENT QUALITY REVIEW ORGANIZATION (EQRO)	  	27
	 	 	5.5  	  	CAHPS®	  	27
	 	 	5.6  	  	PROVIDER EDUCATION	  	29
	 	 	5.7  	  	CLAIMS PAYMENT STANDARDS	  	29
	 	 	5.8  	  	HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT (HIPAA)	  	29
	 	 	5.9  	  	PRACTICE GUIDELINES	  	30
	 	 	5.10	  	 ADVANCE DIRECTIVES
	  	30
	 	 	5.11	  	 HEALTH INFORMATION SYSTEMS
	  	32
		
	6.      REPORTING REQUIREMENTS	  	32
				
	 	 	6.1  	  	CERTIFICATION REQUIREMENTS	  	32
	 	 	6.2  	  	HEDIS® MEASURES	  	33
	 	 	6.3  	  	ENCOUNTER DATA	  	34
	 	 	6.4  	  	INTEGRATED PROVIDER NETWORK DATABASE (IPND)	  	34
	 	 	6.5  	  	FQHC/RHC REPORT	  	34
	 	 	6.6  	  	ENROLLEE MORTALITY	  	35
	 	 	6.7  	  	ACTIONS, GRIEVANCES AND APPEALS	  	35
	 	 	6.8  	  	DRUG FORMULARY REVIEW AND APPROVAL	  	36
	 	 	6.9  	  	FRAUD AND ABUSE	  	36
	 	 	6.10	  	 FIVE PERCENT EQUITY
	  	36
		
	7.      GENERAL TERMS AND CONDITIONS	  	36
				
	 	 	7.1  	  	COMPLETE AGREEMENT	  	36
	 	 	7.2  	  	MODIFICATION	  	36
	 	 	7.3  	  	WAIVER	  	36

  

							
	 	 	7.4  	  	LIMITATION OF AUTHORITY	  	37
	 	 	7.5  	  	NOTICES	  	37
	 	 	7.6  	  	FORCE MAJEURE	  	38
	 	 	7.7  	  	SANCTIONS	  	38
	 	 	7.8  	  	ASSIGNMENT OF THIS AGREEMENT	  	40
	 	 	7.9  	  	HEADINGS NOT CONTROLLING	  	40
	 	 	7.10	  	 ORDER OF PRECEDENCE
	  	40
	 	 	7.11	  	 PROPRIETARY RIGHTS
	  	41
	 	 	7.12	  	 COVENANT AGAINST CONTINGENT FEES
	  	41
	 	 	7.13	  	 ENROLLEES’ RIGHT TO OBTAIN A CONVERSION
AGREEMENT
	  	41
	 	 	7.14	  	 RECORDS MAINTENANCE AND RETENTION
	  	41
	 	 	7.15	  	 ACCESS TO FACILITIES AND RECORDS
	  	42
	 	 	7.16	  	 SOLVENCY
	  	42
	 	 	7.17	  	 COMPLIANCE WITH ALL APPLICABLE LAWS AND
REGULATIONS
	  	43
	 	 	7.18	  	 NONDISCRIMINATION
	  	44
	 	 	7.19	  	 REVIEW OF CLIENT INFORMATION
	  	44
	 	 	7.20	  	 CONTRACTOR NOT EMPLOYEE OF DSHS
	  	44
	 	 	7.21	  	 DSHS NOT GUARANTOR
	  	44
	 	 	7.22	  	 MUTUAL INDEMNIFICATION AND HOLD HARMLESS
	  	44
	 	 	7.23	  	 DISPUTES
	  	45
	 	 	7.24	  	 GOVERNING LAW AND VENUE
	  	45
	 	 	7.25	  	 SEVERABILITY
	  	45
	 	 	7.26	  	 EXCLUDED PERSONS
	  	46
	 	 	7.27	  	 FRAUD AND ABUSE REQUIREMENTS-POLICIES AND
PROCEDURES
	  	46
	 	 	7.28	  	 INSURANCE
	  	47
		
	8.      SUBCONTRACTS	  	49
				
	 	 	8.1  	  	CONTRACTOR REMAINS LEGALLY RESPONSIBLE	  	49
	 	 	8.2  	  	SOLVENCY REQUIREMENTS FOR SUBCONTRACTORS	  	49
	 	 	8.3  	  	REQUIRED PROVISIONS	  	49
	 	 	8.4  	  	HEALTH CARE PROVIDER SUBCONTRACTS	  	51
	 	 	8.5  	  	HEALTH CARE PROVIDER SUBCONTRACTS DELEGATING ADMINISTRATIVE
FUNCTIONS	  	52
	 	 	8.6  	  	EXCLUDED PROVIDERS	  	52
	 	 	8.7  	  	HOME HEALTH PROVIDERS	  	53
	 	 	8.8  	  	PHYSICIAN INCENTIVE PLANS	  	53
	 	 	8.9  	  	PAYMENT TO FQHCS/RHCs	  	56
		
	9.      TERM AND TERMINATION	  	56
				
	 	 	9.1  	  	TERM	  	56
	 	 	9.2  	  	TERMINATION FOR CONVENIENCE	  	56
	 	 	9.3  	  	TERMINATION BY THE CONTRACTOR FOR DEFAULT	  	57
	 	 	9.4  	  	TERMINATION BY DSHS FOR DEFAULT	  	58
	 	 	9.5  	  	MANDATORY TERMINATION	  	58
	 	 	9.6  	  	TERMINATION FOR REDUCTION IN FUNDING	  	59
	 	 	9.7  	  	INFORMATION ON OUTSTANDING CLAIMS AT TERMINATION	  	59
	 	 	9.8  	  	CONTINUED RESPONSIBILITIES	  	59
	 	 	9.9  	  	ENROLLEE NOTICE OF TERMINATION	  	59
	 	 	9.10	  	 PRE-TERMINATION DISPUTE RESOLUTION
	  	59
		
	10.    SERVICE DELIVERY	  	59
				
	 	 	10.1  	  	SCOPE OF SERVICES	  	59
	 	 	10.2  	  	MEDICAL NECESSITY DETERMINATION	  	60
	 	 	10.3  	  	ENROLLEE CHOICE OF PCP	  	61
	 	 	10.4  	  	CONTINUITY OF CARE	  	61
	 	 	10.5  	  	COORDINATION OF CARE	  	62
	 	 	10.6  	  	SECOND OPINIONS	  	63

  

							
	 	 	10.7  	  	ENROLLEE SELF-DETERMINATION	  	63
	 	 	10.8  	  	COMPLIANCE WITH FEDERAL REGULATIONS FOR STERILIZATIONS AND
HYSTERECTOMIES	  	63
	 	 	10.9  	  	PROGRAM INFORMATION	  	63
	 	 	10.10	  	CONFIDENTIALITY OF ENROLLEE INFORMATION	  	63
	 	 	10.11	  	MARKETING	  	64
	 	 	10.12	  	INFORMATION REQUIREMENTS FOR ENROLLEES AND POTENTIAL ENROLLEES	  	64
	 	 	10.13	  	PROHIBITION ON ENROLLEE CHARGES FOR COVERED SERVICES	  	67
	 	 	10.14	  	PROVIDER/ENROLLEE COMMUNICATION	  	67
	 	 	10.15	  	PROVIDER NONDISCRIMINATION	  	67
	 	 	10.16	  	EXPERIMENTAL AND INVESTIGATIONAL SERVICES	  	68
	 	 	10.17	  	ENROLLEE RIGHTS AND PROTECTIONS	  	69
	 	 	10.18	  	AUTHORIZATION OF SERVICES	  	70
	 	 	10.19	  	GRIEVANCE SYSTEM	  	72
	 	 	10.20	  	EPSDT	  	79
		
	11.    SCHEDULE OF BENEFITS	  	79
				
	 	 	11.1	  	COVERED SERVICES	  	79
	 	 	11.2	  	EXCLUSIONS	  	87

  

			
	 Exhibit A
	  	Quality Improvement Program Standards
		
	 Exhibit B
	  	Premiums, Service Areas, and Capacity

  

					
	 	 	 	 	     2003 – 2005 HO & SCHIP Contract
     Amendment 2

  

	1.	DEFINITIONS 

  
 The following definitions shall apply to this agreement: 
  

	 	1.1.	Action means the denial or limited authorization of a requested service, including the type or level of service; the reduction, suspension, or termination of a previously
authorized service; the denial, in whole or in part, of payment of a service; or the failure to provide services or act in a timely manner as required herein (42 CFR 438.400(b)). 

  

	 	1.2.	Advance Directive means a written instruction, such as a living will or durable power of attorney for health care, recognized under the laws of the state of Washington,
relating to the provision of health care when an individual is incapacitated (WAC 388-501-0125, 42 CFR 438.6, 42 CFR 438.10, 42 CFR 422.128, and 42 CFR 489 Subpart I). 

  

	 	1.3.	Ancillary Services means health services ordered by a provider including but not limited to, laboratory services, radiology services, and physical therapy.

  

	 	1.4.	Appeal means a request for review of an action (42 CFR 438.400(b)). 

  

	 	1.5.	Appeal Process means the Contractor’s procedures for reviewing an action. 

  

	 	1.6.	Children With Special Health Care Needs means children identified by DSHS to the Contractor as meeting federal guidelines for such children. For the term of this agreement,
DSHS will limit such identification to children served under the provisions of Title V of the Social Security Act. 

  

	 	1.7.	Cold Call Marketing means any unsolicited personal contact by the Contractor with a potential enrollee or an enrollee with another HO/SCHIP contracted managed care
organization for the purposes of marketing (42 CFR 438.104(a)). 

  

	 	1.8.	Comparable Coverage means an enrollee has other insurance that DSHS has determined provides a full scope of health care benefits. 

  

	 	1.9.	Continuity of Care means the provision of continuous care for chronic or acute medical conditions through enrollee transitions in providers, service areas and between
HO/SCHIP contractors in a manner that does not interrupt medically necessary care or jeopardize the enrollee’s health. 

  

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	 	 	 	 	     2003 – 2005 HO & SCHIP Contract
     Amendment 2

  

	 	1.10. 	Coordination of Care means the Contractor’s mechanisms to insure that the enrollee and providers have access to and take into consideration, all required information on
the enrollee’s conditions and treatments to ensure that the enrollee receives appropriate health care services. 

  

	 	1.11. 	Covered Services means medically necessary services, as set forth in Section 11, Schedule of Benefits, covered under the terms of this agreement. 

  

	 	1.12. 	Dual Coverage means an enrollee is privately enrolled on any basis with the Contractor and simultaneously enrolled with the Contractor under Healthy Options/SCHIP.

  

	 	1.13. 	EPSDT (Early, Periodic Screening, Diagnosis and Treatment) means a package of services in a preventive (well child) exam covered by Medicaid as defined in the Social Security
Act (SSA) Section 1905(r). Services covered by Medicaid include a complete health history and developmental assessment, an unclothed physical exam, immunizations, laboratory tests, health education and anticipatory guidance, and screenings for:
vision, dental, substance abuse, mental health and hearing, as well as any medically necessary services found to be necessary during the EPSDT exam. EPSDT services covered by the Contractor are described in Sections 10.20 and 11, Schedule of
Benefits. 

  

	 	1.14. 	Eligible Clients means DSHS clients certified eligible by the DSHS, living in the service area, and eligible to enroll for health care services under the terms of this
agreement, as described in Section 2.2. 

  

	 	1.15. 	Emergency Medical Condition means a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that a prudent layperson, who
possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in: (a) placing the health of the individual (or, with respect to a pregnant woman, the health of the woman or her
unborn child) in serious jeopardy; (b) serious impairment to bodily functions; or (c) serious dysfunction of any bodily organ or part (42 CFR 438.114(a)). 

  

	 	1.16. 	Emergency Services means covered inpatient and outpatient services that are furnished by a provider that is qualified to furnish the services and are needed to evaluate or
stabilize an emergency medical condition (42 CFR 438.114(a)). 

  

	 	1.17. 	Enrollee means an individual eligible for any medical program who is enrolled in Healthy Options/SCHIP managed care through a health care plan having an agreement with DSHS.

  

 2 

					
	 	 	 	 	     2003 – 2005 HO & SCHIP Contract
     Amendment 2

  

	 	1.18. 	Grievance means an expression of dissatisfaction about any matter other than an action. Possible subjects for grievances include, but are not limited to, the quality of care
or services provided, and aspects of interpersonal relationships such as rudeness of a provider or employee, or failure to respect the enrollee’s rights (42 CFR 438.400(b)). 

  

	 	1.19. 	Grievance Process means the procedure for addressing enrollees’ grievances. 

  

	 	1.20. 	Grievance System means the overall system that includes grievances and appeals handled by the Contractor and access to the DSHS fair hearing system (42 CFR 438.400).

  

	 	1.21. 	Health Care Professional means a physician or any of the following; a podiatrist, optometrist, chiropractor, psychologist, dentist, physician assistant, physical or
occupational therapist, therapist assistant, speech language pathologist, audiologist, registered or practical nurse (including nurse practitioner, clinical nurse specialist, certified registered nurse anesthetist, and certified nurse midwife),
licensed certified social worker, registered respiratory therapist, and certified respiratory therapy technician (42 CFR 438.2). 

  

	 	1.22. 	Managed Care means a prepaid, comprehensive system of medical and health care delivery, including preventive, primary, specialty and ancillary health services.

  

	 	1.23. 	Marketing means any communication from the Contractor to a potential enrollee or enrollees with another HO/SCHIP contracted managed care organization that can be reasonably
interpreted as intended to influence them to enroll with the Contractor or either to not enroll in, or to disenroll from, another HO/SCHIP Managed Care Organization’s Medicaid product (CFR 438.104(a)). 

  

	 	1.24. 	Marketing Materials means materials that are produced in any medium, by or on behalf of the Contractor, that can be reasonably interpreted as intended to market to potential
enrollees or enrollees with another HO/SCHIP contracted managed care organization (42 CFR 438.104(a)). 

  

	 	1.25. 	Medically Necessary Services means services that meet the definition in WAC 388-500-0005. 

  

	 	1.26. 	Participating Provider means a person, health care provider, practitioner, as defined in the Quality Improvement Program Standards, Exhibit A, or entity, acting within their
scope of practice, with a written agreement with the Contractor to provide services to enrollees under the terms of this agreement. 

  

 3 

					
	 	 	 	 	     2003 – 2005 HO & SCHIP Contract
     Amendment 2

  

	 	1.27. 	Peer-Reviewed Medical Literature means medical literature published in professional journals that submit articles for review by experts who are not part of the editorial
staff. It does not include publications or supplements to publications primarily intended as marketing material for pharmaceutical, medical supplies, medical devices, health service providers, or insurance carriers. 

  

	 	1.28. 	Physician Group means a partnership, association, corporation, individual practice association, or other group that distributes income from the practice among its members. An
individual practice association is a physician group only if it is composed of individual physicians and has no subcontracts with physician groups (42 CFR 434.70). 

  

	 	1.29. 	Physician Incentive Plan means any compensation arrangement between the Contractor and a physician or physician group that may directly or indirectly have the effect of
reducing or limiting services to enrollees under the terms of this agreement (42 CFR 434.70). 

  

	 	1.30. 	Post-stabilization Services means covered services, related to an emergency medical condition that are provided after an enrollee is stabilized in order to maintain the
stabilized condition or to improve or resolve the enrollee’s condition (42 CFR 438.114 and 42 CFR 422.113(c)). 

  

	 	1.31. 	Potential Enrollee means an individual eligible for enrollment in Healthy Options/SCHIP who is not enrolled with a health care plan having an agreement with DSHS (42 CFR
438.10). 

  

	 	1.32. 	Primary Care Provider (PCP) means a participating provider who has the responsibility for supervising, coordinating, and providing primary health care to enrollees,
initiating referrals for specialist care, and maintaining the continuity of enrollee care. PCPs include, but are not limited to Pediatricians, Family Practitioners, General Practitioners, Internists, Physician Assistants (under the supervision of a
physician), or Advanced Registered Nurse Practitioners (ARNP), as designated by the Contractor. The definition of primary care provider is inclusive of the definition of primary care physician in 42 CFR 400.203 and all Federal requirements for
primary care physicians will be applicable to primary care providers as the term is used in this agreement. 

  

	 	1.33. 	Risk means the possibility that a loss may be incurred because the cost of providing services may exceed the payments made for services (42 CFR 434.2). When applied to
subcontractors, loss includes the loss of potential payments made as part of a physician incentive plan, as defined herein. 

  

 4 

					
	 	 	 	 	     2003 – 2005 HO & SCHIP Contract
     Amendment 2

  

	 	1.34. 	Service Area means the geographic area covered by this agreement as described in Section 2.1. 

  

	 	1.35. 	SCHIP: State Children’s Health Insurance Program. 

  

	 	1.36. 	Subcontract means a written agreement between the Contractor and a subcontractor, or between a subcontractor and another subcontractor, to perform all or a portion of the
duties and obligations the Contractor is obligated to perform pursuant to this agreement. 

  

	2.	ENROLLMENT 

  

	 	2.1.	Service Areas: 

  

	 	2.1.1. 	The Contractor’s service areas are described in Exhibit B, Premiums, Service Areas, and Capacity. DSHS shall update Exhibit B, Premiums, Service Areas, and Capacity for service
area changes as describe herein. 

  

	 	2.1.2. 	Clients in the eligibility groups described in Section 2.2 are eligible to enroll with the Contractor if they reside in the Contractor’s service areas.

  

	 	2.1.3. 	Service Area Changes: 

  

	 	2.1.3.1. 	With the written approval of DSHS, the Contractor may expand into additional service areas at any time by giving written notice to DSHS, along with evidence, as DSHS may require,
demonstrating the Contractor’s ability to support the expansion. DSHS may withhold approval of a requested expansion, if, in DSHS’ sole judgment, the requested expansion is not in the best interest of DSHS. 

  

	 	2.1.3.2. 	The Contractor may decrease service areas by giving DSHS ninety (90) calendar days written notice. The decrease shall not be effective until the first day of the month that falls
after the ninety (90) calendar days has elapsed. 

  

	 	2.1.3.3. 	The Contractor shall notify enrollees affected by any service area decrease sixty (60) calendar days prior to the effective date. Notices shall have prior approval of DSHS. If the
Contractor fails to notify affected enrollees of a service area decrease sixty (60) calendar days prior to the effective date, the decrease shall not be effective until the first day of the month which falls sixty (60) calendar days from the date
the Contractor notifies enrollees. 

  

 5 

					
	 	 	 	 	     2003 – 2005 HO & SCHIP Contract
     Amendment 2

  

	 	2.1.4. 	If the U.S. Postal Service alters the zip code numbers or zip code boundaries within the Contractor’s service areas, DSHS shall alter the service area zip code numbers or the
boundaries of the service areas with input from the affected contractors. 

  

	 	2.1.5. 	DSHS shall determine, in its sole judgment, which zip codes fall within each service area. No zip code will be split between service areas. 

  

	 	2.1.6. 	DSHS will determine whether an enrollee resides within a service area. 

  

	 	2.2.	Eligible Client Groups: DSHS shall determine eligibility for enrollment under this agreement. Clients in the following eligibility groups at the time of enrollment are
eligible for enrollment under this agreement, and must enroll in Healthy Options/SCHIP unless the enrollee has dual coverage as defined herein, has comparable coverage as defined herein, or is exempted pursuant to Section 2.4.

  

	 	2.2.1. 	Clients receiving Medicaid under Social Security Act (SSA) provisions for coverage of families receiving Temporary Assistance for Needy Families and clients who are not eligible for
cash assistance who remain eligible for Medicaid. 

  

	 	2.2.2. 	Children, from birth through eighteen years of age, eligible for Medicaid under expanded pediatric coverage provisions of the Social Security Act (“H” Children).

  

	 	2.2.3. 	Pregnant Women, eligible for Medicaid under expanded maternity coverage provisions of the Social Security Act (“S” women). 

  

	 	2.2.4. 	Children eligible for SCHIP. 

  

	 	2.3.	Client Notification: DSHS shall notify eligible clients of their rights and responsibilities as Healthy Options/SCHIP enrollees at the time of initial eligibility
determination and at least annually. The Contractor shall provide enrollees with additional information as described in this agreement, including the Quality Improvement Program Standards, Exhibit A. 

  

	 	2.4.	Exemption from Enrollment: A client may request exemption from enrollment. Each request for exemption will be reviewed by DSHS pursuant to WAC 388-538 or WAC 388-542. When
the client is already enrolled with the Contractor and wishes to be exempted, the exemption request will be treated as a disenrollment request consistent with the provisions of Section 2.9. 

  

 6 

					
	 	 	 	 	     2003 – 2005 HO & SCHIP Contract
     Amendment 2

  

	 	2.5.	Enrollment Period: Subject to the provisions of Section 2.7, enrollment is continuously open. Enrollees shall have the right to change enrollment prospectively, from one
Healthy Options/SCHIP plan to another without cause, each month (42 CFR 434.27). 

  

	 	2.6.	Enrollment Process: To enroll with the Contractor, the client, his/her representative or his/her responsible parent or guardian must complete and submit a DSHS enrollment
form to DSHS, or call the DSHS, Medical Assistance Administration’s (MAA) toll-free enrollment number. If the client does not exercise his/her right to choose a Healthy Options/SCHIP plan, DSHS will assign the client, and all eligible family
members, to a Healthy Options/SCHIP plan in accord with Section 4.10 of this agreement. 

  
 DSHS will make every effort to enroll all family members with the same Healthy Options/SCHIP plan. If a family member is covered by the Basic Health Plan,
DSHS will make every effort to enroll the remainder of the family with the same managed care plan if the plan contracts with DSHS to provide Healthy Options/SCHIP. If the plan does not contract with DSHS, the remaining family members will be
enrolled with a single, but different Healthy Options/SCHIP plan of the client’s choice, or the client will be assigned as described above if they do not choose. 
  

	 	2.7.	Effective Date of Enrollment: 

  

	 	2.7.1. 	Except for newborns, enrollment with the Contractor shall be effective on the later of the following dates: 

  

	 	2.7.1.1. 	If the enrollment is processed on or before the DSHS cut-off date for enrollment, enrollment shall be effective the first day of the month following the month in which the
enrollment is processed; or 

  

	 	2.7.1.2. 	If the enrollment is processed after the DSHS cut-off date for enrollment, enrollment shall be effective the first day of the second month following the month in which the
enrollment is processed. 

  

	 	2.7.2. 	Newborns whose mothers are enrollees shall be deemed enrollees and enrolled beginning from the newborn’s date of birth or the mother’s date of enrollment, whichever is
later. If the mother is disenrolled before the newborn receives a separate client identifier from DSHS, the newborn’s coverage shall end when the mother’s coverage ends, except as provided in Section 3.7. 

  

	 	2.7.3. 	Adopted children shall be covered consistent with the provisions of Title 48 RCW. 

  

 7 

					
	 	 	 	 	     2003 – 2005 HO & SCHIP Contract
     Amendment 2

  

	 	2.7.4. 	No retroactive coverage is provided under this agreement, except as described in this section. 

  

	 	2.8.	Enrollment Listing and Requirements for Contractor’s Response: 

  

	 	2.8.1. 	Before the end of each month DSHS will provide the Contractor withan electronic file, via a Health Insurance Portability and Accountability Act (HIPAA) compliant secure
web-based transfer system, a list of enrollees whose enrollment is terminated by the end of that month, and a list of the Contractor’s enrollees for the following month. 

  

	 	2.8.2. 	The Contractor shall have ten (10) calendar days from the receipt of the enrollment listing to notify DSHS in writing of the refusal of an application for enrollment or any
discrepancy regarding DSHS’ proposed enrollment effective date. Written notice shall include the reason for refusal and must be agreed to by DSHS. The effective date of enrollment specified by DSHS shall be considered accepted by the Contractor
and shall be binding if the notice is not timely or DSHS does not agree with the reasons stated in the notice. Subject to DSHS approval, the Contractor may refuse to accept an enrollee for the following reasons: 

  

	 	2.8.2.1 	DSHS has enrolled the enrollee with the Contractor in a service area the Contractor is not contracted for. 

  

	 	2.8.2.2 	The enrollee is not eligible for enrollment under the terms of this agreement. 

  

	 	2.9.	Termination of Enrollment: 

  

	 	2.9.1. 	Voluntary Termination: Enrollees may request termination of enrollment by submitting a written request to terminate enrollment to DSHS or by calling the Medical Assistance
Customer Service Center (MACSC) toll-free enrollment number. Requests for termination of enrollment may be made to enroll with another Healthy Options plan, or to disenroll from Healthy Options as provided in WAC 388-538 or WAC 388-542. Except as
provided in WAC 388-538 or WAC 388-542, enrollees whose enrollment is terminated will be prospectively disenrolled. DSHS shall notify the Contractor of enrollee terminations pursuant to Section 2.8. The Contractor may not request voluntary
disenrollment on behalf of an enrollee. 

  
  

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	 	2.9.2. 	Involuntary Termination Initiated by DSHS for Ineligibility: The enrollment of any enrollee under this agreement shall be terminated if the enrollee becomes ineligible for
enrollment due to a change in eligibility status. 

  

	 	2.9.2.1. 	When an enrollee’s enrollment is terminated for ineligibility, the termination shall be effective: 

  

	 	2.9.2.1.1. 	The first day of the month following the month in which the termination is processed by DSHS if the termination is processed on or before the DSHS cut-off date for enrollment or the
Contractor is informed by DSHS of the termination prior to the first day of the month following the month in which the termination is processed by DSHS. 

  

	 	2.9.2.1.2. 	Effective the first day of the second month following the month in which the termination is processed if the termination is processed after the DSHS cut-off date for enrollment and
the Contractor is not informed by DSHS of the termination prior to the first day of the month following the month in which the termination is processed by DSHS. 

  

	 	2.9.2.2 	Enrollees Eligible for Social Security Income (SSI): 

  

	 	2.9.2.2.1. 	Newborn enrollees with a date-of-birth after calendar year 2003 who are determined by the Social Security Administration (SSA) to have an SSI eligibility effective date within the
first sixty-days of life, not counting the birth date, shall be ineligible for services under the terms of this agreement when DSHS receives the SSI eligibility information from the SSA through the State Data Exchange (SDX). Such newborn enrollees
will be disenrolled retroactively effective the date-of-birth. DSHS shall recoup premiums paid in accord with Section 3.5.5. 

  

	 	2.9.2.2.2. 	Except as provided in Section 2.9.2.2.1., enrollees determined by the SSA to be eligible for SSI shall be ineligible for services under the terms of this agreement when DSHS
receives the SSI eligibility information from the SSA through the electronic SDX. Such enrollees will be disenrolled prospectively as described in Section 2.9.2.1. DSHS shall not recoup any premiums for enrollees determined SSI eligible and the
Contractor shall be responsible for providing services under the terms of this agreement until the effective date of disenrollment. 

  

	 	2.9.2.2.3. 	 If the Contractor believes an enrollee has been determined by SSA to be eligible for SSI, the Contractor shall present documentation of such eligibility to DSHS,
DSHS will attempt to verify the eligibility and, if the enrollee is SSI 

  

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eligible, DSHS will act upon SSI eligibility in accord with this section. 

  

	 	2.9.3. 	Involuntary Termination Initiated by DSHS for Comparable Coverage or Dual Coverage: 

  

	 	2.9.3.1. 	The Contractor shall notify DSHS as set forth below when an enrollee has health care insurance coverage with the Contractor or any other carrier: 

  

	 	2.9.3.1.1. 	Within fifteen (15) working days when an enrollee is verified as having dual coverage, as defined herein. 

  

	 	2.9.3.1.2. 	Within sixty (60) calendar days of when the Contractor becomes aware that an enrollee has any health care insurance coverage with any other insurance carrier. The Contractor is not
responsible for the determination of comparable coverage, as defined herein. 

  

	 	2.9.3.2. 	DSHS will involuntarily terminate the enrollment of any enrollee with dual coverage or comparable coverage as follows: 

  

	 	2.9.3.2.1. 	When the enrollee has dual coverage that has been verified by DSHS, DSHS shall terminate enrollment retroactively to the beginning of the month of dual coverage and recoup premiums
as describe in Section 3.5. 

  

	 	2.9.3.2.2. 	When the enrollee has comparable coverage which has been verified by DSHS, DSHS shall terminate enrollment effective the first day of the second month following the month in which
the termination is processed if the termination is processed on or before the DSHS cut-off date for enrollment or, effective the first day of the third month following the month in which the termination is processed if the termination is processed
after the DSHS cut-off date for enrollment. 

  

	 	2.9.4. 	 Involuntary Termination Initiated by the Contractor: To request involuntary termination of an enrollee, the Contractor shall send written notice to DSHS as
described in Section 7.5. DSHS shall approve or disapprove the request for termination within thirty (30) working days of receipt of such notice. For the termination to be effective, DSHS must approve the termination request, notify the Contractor,
and disenroll the enrollee. The Contractor shall continue to provide services to the enrollee until s/he is disenrolled. DSHS will not disenroll an enrollee solely due to a request based on an adverse 

  

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change in the enrollee’s health status or the cost of meeting the enrollee’s health care needs (WAC 388-538-130). DSHS shall involuntarily
terminate the enrollee when the Contractor has substantiated in writing: 

  

	 	2.9.4.1. 	The enrollee’s behavior is inconsistent with the Contractor’s rules and regulations, such as intentional misconduct. 

  

	 	2.9.4.2. 	The Contractor has provided a clinically appropriate evaluation to determine whether there is a treatable condition contributing to the enrollee’s behavior and such evaluation
either finds no treatable condition to be contributing, or, after evaluation and treatment, the enrollee’s behavior continues to prevent the provider from safely or prudently providing medical care to the enrollee. 

  

	 	2.9.4.3. 	The enrollee received written notice from the Contractor of its intent to request the enrollee’s disenrollment, unless the requirement for notification has been waived by DSHS
because the enrollee’s conduct presents the threat of imminent harm to others. The Contractor’s notice to the enrollee shall include the enrollee’s right to use the Contractor’s grievance process to review the request to end the
enrollee’s enrollment. 

  

	 	2.9.5. 	An enrollee whose enrollment is terminated for any reason, other than incarceration, at any time during the month is entitled to receive covered services, as described in Section
10.1, at the Contractor’s expense, through the end of that month. 

  
 In no event will an enrollee be entitled to receive services and benefits under this agreement after the last day of the month in which his or her enrollment is terminated, except as provided in Section 3.7.

  

	 	2.10. 	Enrollment Not Discriminatory 

  

	 	2.10.1. 	The Contractor will not discriminate against enrollees or potential enrollees on the basis of health status or need for health care services (42 CFR 438.6 (d)(3)).

  

	 	2.10.2. 	The Contractor will not discriminate against enrollees or potential enrollees on the basis of race, color, or national origin, and will not use any policy or practice that has the
effect of discriminating on the basis of race, color, or national origin (42 CFR 438.6 (d)(4)). 

  

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	3.	PAYMENT 

  

	 	3.1.	Rates/Premiums: Subject to the provisions of Section 7.7, Intermediate Sanctions, DSHS shall pay a monthly premium for each enrollee in full consideration of the work to be
performed by the Contractor under this agreement. DSHS shall pay the Contractor, on or before the tenth (10th) working day of the month based on the DSHS list of enrollees whose enrollment is ongoing or effective on the first day of said calendar
month. Such payment will be denied for new enrollees when, and for so long as, payment for those enrollees is denied by the Centers for Medicare and Medicaid Services (CMS) under 42 CFR 438.726(b) and 42 CFR 438.730(e). 

  
 The Contractor shall reconcile the payment listing with remittance advice
information and submit a claim to DSHS for any amount due the Contractor within three hundred sixty five (365) calendar days of the month of service. When DSHS’ records confirm the Contractor’s claim, DSHS shall remit payment within thirty
(30) calendar days of the receipt of the claim. 
  

	 	3.1.1. 	The statewide Base Rate, Geographical Adjustment Factors, Risk Adjustment Factors and Age/Sex Factors are in Exhibit B, Premiums, Service Areas, and Capacity.

  

	 	3.1.2. 	The monthly premium payment will be calculated as follows: 

  
 Premium Payment = Base Rate x Age/Sex Factor x Risk Adjustment Factor x Geographical Adjustment Factor (X Quality Adjustment Factor as describe herein).

  

	 	3.1.3. 	Within thirty (30) calendar days following the end of the 2004 legislative session, DSHS will publish the Base Rate and Geographical Adjustment Factors for calendar year 2005. If
the Contractor will not continue to provide HO/SCHIP services in 2005, the Contractor shall so notify DSHS no later than September 2, 2004 under the provisions of Section 7.5 Notices. If the Contractor so notifies DSHS, this agreement shall
terminate, without penalty to either party, effective midnight, December 31, 2004. The termination will be considered a termination for convenience under the provisions of Section 9.2, Termination for Convenience, but neither party shall have the
right to assert a claim for costs. 

  

	 	3.1.4. 	 The Risk Adjustment Factor will be recalculated for premiums paid beginning in May for each year based on enrollment with the Contractor on March 1st of that year, using encounter data reported for the 12 months ending June 30 of the previous year. Risk Adjustment 

  

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Factors may also be recalculated by DSHS if, in DSHS’ sole judgment, changes in contractor participation in HO/SCHIP require rebalancing of the Risk
Adjustment Factors. 

  

	 	3.1.5. 	In 2004 DSHS will develop a Quality Adjustment Factor. In 2004 DSHS will separately report to the Contractor the affect such a Quality Adjustment Factor would have on the premium
payments to the Contractor. In 2004 the adjustment factor will not be applied to actual premium payments. In 2005 DSHS will begin implementation of a Quality Adjustment Factor and apply it to 2005 premium payments. At its sole discretion, DSHS may
choose not to implement the Quality Adjustment Factor in 2005 or implement the Quality Adjustment Factor later than January 1, 2005. The Quality Adjustment Factor will be provided to the Contractor at least one hundred and fifty (150) calendar days
before implementation. If the Contractor does not accept the Quality Adjustment Factor, the Contractor may terminate this agreement with one hundred and twenty (120) calendar days notice under the provision of Section 7.5 Notices. The termination
will be considered a termination for convenience under the provisions of Section 9.2, Termination for Convenience, but neither party shall have the right to assert a claim for costs. 

  

	 	3.1.6. 	DSHS will update Exhibit B, Premiums, Service Areas, and Capacity to add the Base Rate for 2005 and for changes in service areas, capacity and Risk Adjustment Factors as needed and
without amending this agreement. DSHS will provide such updates to the Contractor. 

  

	 	3.1.7. 	DSHS shall automatically generate newborn premiums whenever possible. For newborns whose premiums DSHS is not able to automatically generate the Contractor shall submit a
supplemental premium payment request to DSHS within 365 calendar days of the month of service. The Contractor shall be responsible for reviewing monthly listings provided by DSHS of the newborn premiums DSHS cannot generate automatically, as well as
remittance advice statements, to determine whether a supplemental premium request needs to be submitted. DSHS shall pay supplemental premiums through the end of the month in which the sixtieth (60th) day of life occurs. 

  

	 	3.1.8. 	DSHS shall make a full monthly payment to the Contractor for the month in which an enrollee’s enrollment is terminated except as otherwise provided herein.

  

	 	3.1.9. 	The Contractor shall be responsible for covered medical services provided to the enrollee in any month for which DSHS paid the Contractor for the enrollee’s care under the
terms of this agreement. 

  

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	 	3.2.	Delivery Case Rate Payment: A one-time payment of $4,300.00 shall be made to the Contractor for labor and delivery expenses for enrollees enrolled with the Contractor during
the month of delivery. Delivery includes both live and stillbirths, but does not include miscarriage, induced abortion, or other fetal demise not requiring labor and delivery to terminate the pregnancy. The Contractor shall submit a supplemental
premium request for payment to DSHS after the enrollee delivers. 

  

	 	3.3.	Renegotiation of Rates: The base rate set forth herein shall be subject to renegotiation during the agreement period only if DSHS, in its sole judgment, determines that it is
necessary due to a change in federal or state law or other material changes, beyond the Contractor’s control, which would justify such a renegotiation. 

  

	 	3.4.	Reinsurance/Risk Protection: The Contractor may obtain reinsurance for coverage of enrollees only to the extent that it obtains such reinsurance for other groups enrolled by
the Contractor, provided that the Contractor remains ultimately liable to DSHS for the services rendered. 

  

	 	3.5.	Recoupments: Unless mutually agreed to by the parties, DSHS shall only recoup premium payments for enrollees who are: 

  

	 	3.5.1. 	Dually-covered with the Contractor. 

  

	 	3.5.2. 	Deceased prior to the month of enrollment. Premium payments shall be recouped effective the first day of the month following the enrollee’s date of death.

  

	 	3.5.3. 	Retroactively disenrolled as a result of the enrollee’s placement in foster care. 

  

	 	3.5.4. 	Retroactively disenrolled consistent with the provisions of Section 2.9.1. 

  

	 	3.5.5. 	Newborns determined to have an SSI eligibility effective date within the first sixty (60) days of life in accord with Section 2.9.2.2.1. DSHS shall recoup all premiums paid for the
enrollee, but not the birth mother, back to the date-of-birth. 

  

	 	3.5.6. 	Found ineligible for enrollment with the Contractor and DSHS so notifies the Contractor before the first day of the month for which the premium is paid. 

  

	 	3.5.7. 	 The Contractor may recoup payments made to providers for services provided to enrollees during the period for which DSHS recoups 

  

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premiums for those enrollees. If the Contractor recoups said payments, providers may submit appropriate claims for payment to DSHS through its FFS program.

  

	 	3.6.	Enrollee Hospitalized at Enrollment: 

  

	 	3.6.1. 	If an enrollee is in an acute care hospital at the time of enrollment and was not enrolled in Healthy Options/SCHIP on the day the enrollee is admitted to the hospital, DSHS shall
be responsible for payment of all inpatient facility and professional services provided from the date of admission until the date the enrollee is no longer confined to an acute care hospital. 

  

	 	3.6.2. 	If an enrollee is enrolled in Healthy Options/SCHIP on the day the enrollee was admitted to an acute care hospital, then the plan the enrollee is enrolled with on the date of
admission shall be responsible for payment of all inpatient facility and professional services provided from the date of admission until the date the enrollee is no longer confined to an acute care hospital. 

  

	 	3.6.3. 	Except as provided in Section 3.6.4., for newborns born while their mother is hospitalized, the party responsible for the payment for the mother’s hospitalization shall be
responsible for payment of all inpatient facility and professional services provided to the newborn from the date of admission until the date the newborn is no longer confined to an acute care hospital. 

  

	 	3.6.4. 	For newborns who are disenrolled retroactive to the date of birth and whose premiums are recouped as provided herein, DSHS shall be responsible for payment of all inpatient facility
and professional services provided to and associated with the newborn. The provisions of 3.6.1. or 3.6.2. shall apply for services provided to and associated with the mother. 

  

	 	3.6.5. 	If DSHS is responsible for payment of all inpatient facility and professional services provided to a mother, DSHS shall not pay the Contractor a Delivery Case Rate under the
provisions of Section 3.2. 

  

	 	3.7.	Enrollee Hospitalized at Disenrollment: If an enrollee is in an acute care hospital at the time of disenrollment and the enrollee was enrolled with the Contractor on the date
of admission, the Contractor shall be responsible for payment of all covered inpatient facility and professional services from the date of admission to the date the enrollee is no longer confined to an acute care hospital. 

 

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	 	3.8.	Third-Party Liability (TPL): Until such time as DSHS shall terminate the enrollment of an enrollee who has comparable coverage as described in Section 2.9.3., the
services and benefits available under this agreement shall be secondary to any other medical coverage. The Contractor shall: 

  

	 	3.8.1. 	Not refuse or reduce services provided under this agreement solely due to the existence of similar benefits provided under any other health care contracts (RCW 48.21.200), except in
accord with applicable coordination of benefits rules in WAC 284-51. 

  

	 	3.8.2. 	Attempt to recover any third-party resources available to enrollees (42 CFR 433 Subpart D) and shall make all records pertaining to TPL collections for enrollees available for audit
and review. 

  

	 	3.8.3. 	Pay claims for prenatal care and preventive pediatric care and then seek reimbursement from third parties (42 CFR 433.139(b)(3)). 

  

	 	3.8.4. 	Pay claims for covered services when probable third party liability has not been established or the third party benefits are not available to pay a claim at the time it is filed (42
CFR 433.139(c)). 

  

	 	3.8.5. 	Communicate the requirements of this section to subcontractors that provide services under the terms of this agreement, and assure compliance with them. 

  

	 	3.9.	Subrogation Rights of Third-Party Liability: Injured person means an enrollee covered by this agreement who sustains bodily injury. Contractor’s medical expense means
the expense incurred by the Contractor for the care or treatment of the injury sustained computed in accord with the Contractor’s fee-for-service schedule. 

  
 If an enrollee requires medical services from the Contractor as a result of an alleged act or omission by a third-party
giving rise to a claim of legal liability against the third-party, the Contractor shall have the right to obtain recovery of its cost of providing benefits to the injured person from the third-party. DSHS specifically assigns to the Contractor the
DSHS’ rights to such third party payments for medical care provided to an enrollee on behalf of DSHS, which the enrollee assigned to DSHS as provided in WAC 388-505-0540. 
  
 DSHS also assigns to the Contractor its statutory lien under RCW 43.20B.060. The Contractor shall be subrogated to the
DSHS’ rights and remedies under RCW 74.09.180 and RCW 43.20B.040 through RCW 43.20B.070 with respect to medical benefits provided to enrollees on behalf of DSHS under RCW 74.09. 
  
 The Contractor may obtain a signed agreement from the enrollee in which the enrollee agrees to fully cooperate in effecting
collection from persons 

  

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causing the injury. The agreement may provide that if an injured party settles a claim without protecting the Contractor’s interest, the injured party
shall be liable to the Contractor for the full cost of medical services provided by the Contractor. The Contractor shall notify DSHS of the name, address, and other identifying information of any enrollee and the enrollee’s attorney who settles
a claim without protecting the Contractor’s interest in contravention of RCW 43.20B.050. 
  

	 	3.10. 	Rate Setting Methodology: Managed care base rates are set based on the state allocation of program funding. For 2003 an additional increase was applied to account for a
policy change regarding enrollees who become eligible for SSI as discussed in more detail below. Many rating factors are reviewed to ensure that the rates are developed using actuarially sound methodology, including the following:

  

	 	3.10.1. 	Geographic area factors are reviewed and updated each year based on plan financial experience. 

  

	 	3.10.2. 	Using the CDPS risk adjustment model plan encounter data is used to generate plan specific risk scores which are periodically updated. 

  

	 	3.10.3. 	A policy change was made to the program effective January 1, 2003. Historically, retroactive SSI eligibility was recognized with the recoupment of capitation payments (managed care
premiums) with the associated payment of claims on a fee-for-service basis. The policy change removes the retroactive adjustments and simply disenrolls these members prospectively upon notification of SSI eligibility. A rate adjustment was made to
the capitation rates to account for this cost shift to the managed care plans. 

  

	 	3.11. 	Copayments: The Contractor may impose copayments for services to enrollees for the same services, populations and amounts that DSHS implements in its fee-for-service
program. 

  

	4.	ACCESS AND CAPACITY 

  

	 	4.1.	Network Capacity: 

  

	 	4.1.1. 	The Contractor agrees to maintain the support services and a provider network sufficient to serve the enrollee capacity stated in Exhibit B, Premiums, Service Areas, and Capacity,
consistent with the requirements of this agreement. 

  

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	 	4.1.2. 	The Contractor agrees to provide the medical services required by this agreement through non-participating providers, at a cost to the enrollee that is no greater than if the
services were provided by participating providers, if its network of participating providers is insufficient to meet the medical needs of enrollees in a manner consistent with this agreement. 

  

	 	4.1.3. 	With the written approval of DSHS, the Contractor may increase capacity at any time by giving written notice to DSHS, along with evidence, as DSHS may require, demonstrating the
Contractor’s ability to support the capacity increase. DSHS may withhold approval of a requested capacity increase, if, in DSHS’ sole judgment, the requested increase is not in the best interest of DSHS. The Contractor may decrease
capacity by giving DSHS ninety (90) calendar days written notice. The decrease shall not be effective until the first day of the month which falls after the ninety (90) calendar days has elapsed. Exhibit B, Premiums, Service Areas, and Capacity will
be updated by DSHS for increases and decreases in capacity. 

  

	 	4.2.	Accessibility of Services: The Contractor shall make services accessible consistent with the provisions in the Quality Improvement Program Standards, Exhibit A. The
Contractor shall make covered services as accessible to enrollees under this agreement as under its other state, federal, or private contracts. 

  

	 	4.3.	24/7 Availability: The Contractor shall have the following services available on a 24-hour-a-day, seven-day-a-week basis by telephone. These services may be provided directly
by the Contractor or may be delegated to subcontractors. 

  

	 	4.3.1. 	Medical advice for enrollees from licensed health care professionals concerning the emergent, urgent or routine nature of medical condition. 

  

	 	4.3.2. 	Authorization of services. 

  

	 	4.4.	Appointment Standards: The Contractor shall comply with appointment standards that are no longer than the following: 

  

	 	4.4.1. 	Non-symptomatic (i.e. preventive care) office visits shall be available from the enrollee’s PCP or an alternative practitioner within thirty (30) calendar days. A
non-symptomatic office visit may include, but is not limited to, well/preventive care such as physical examinations, annual gynecological examinations, or children and adult immunizations. 

  

	 	4.4.2. 	 Non-urgent, symptomatic (i.e., routine care) office visit shall be available from the enrollee’s PCP or an alternative practitioner within seven (7) 

  

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calendar days. A non-urgent, symptomatic office visit is associated with the presentation of medical signs not requiring immediate attention.

  

	 	4.4.3. 	Urgent, symptomatic office visits shall be available within 24 hours. An urgent, symptomatic visit is associated with the presentation of medical signs that require immediate
attention, but are not life threatening. 

  

	 	4.4.4. 	Emergency medical care shall be available 24 hours per day, seven days per week. 

  

	 	4.5.	Provider Network - Distance Standards: The Contractor network of providers shall meet the distance standards below in every service area. The designation of a zip code in a
service area as rural or urban is in Exhibit B, Premiums, Service Areas, and Capacity. DSHS may, at its sole discretion, grant exceptions to the distance standards. DSHS’ approval of an exception shall be in writing. The Contractor shall
request an exception in writing and shall provide evidence as DSHS may require to support the request. If the closest qualified provider is beyond the distance standard applicable to the zip code, the distance standard defaults to the distance to
that provider. The closest qualified provider may be a provider not participating with the Contractor. 

  

	 	4.5.1. 	PCP 

  
 Urban: 2 within 10 miles for 90% of Healthy Options enrollees in the Contractor’s service area. 
  
 Rural: 1 within 25 miles for 90% of Healthy Options enrollees in the Contractor’s service area. 
  

	 	4.5.2. 	Obstetrics 

  
 Urban: 2 within 10 miles for 90% of Healthy Options enrollees in the Contractor’s service area. 
  
 Rural: 1 within 25 miles for 90% of Healthy Options enrollees in the Contractor’s service area. 
  

	 	4.5.3. 	Pediatrician or Family Practice Physician Qualified to Provide Pediatric Services 

  
 Urban: 2 within 10 miles for 90% of Healthy Options enrollees in the Contractor’s service area. 
  
 Rural: 1 within 25 miles for 90% of Healthy Options enrollees in the
Contractor’s service area. 
  

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	 	4.5.4. 	Hospital 

  
 Urban/Rural: 1 within 25 miles for 90% of Healthy Options enrollees in the Contractor’s service area. 
  

	 	4.5.5. 	Pharmacy 

  
 Urban: 1 within 10 miles for 90% of Healthy Options enrollees in the Contractor’s service area. 
  
 Rural: 1 within 25 miles for 90% of Healthy Options enrollees in the Contractor’s service area. 
  

	 	4.6.	Access to Specialty Care: The Contractor shall provide all medically necessary specialty care for enrollees in a service area. If an enrollee needs specialty care from a
specialist who is not available within the Contractor’s provider network, the Contractor shall provide the necessary services with a qualified specialist outside the Contractor’s provider network. 

  

	 	4.7.	Equal Access for Enrollees and Potential Enrollees with Communication Barriers: The Contractor shall assure equal access for all enrollees and potential enrollees when oral
or written language creates a barrier to such access for enrollees and potential enrollees with communication barriers 

  

	 	4.7.1. 	Oral Information: 

  

	 	4.7.1.1. 	The Contractor shall assure that interpreter services are provided for enrollees and potential enrollees with a primary language other than English for all interactions between the
enrollee or potential enrollee and the Contractor or any of its providers including, but not limited to, customer services, all appointments with any provider for any covered service, emergency services, and all steps necessary to file grievances
and appeals. 

  

	 	4.7.1.2. 	The Contractor is responsible for payment for interpreter services for plan administrative matters including, but not limited to handling enrollee grievances and appeals.

  

	 	4.7.1.3. 	DSHS is responsible for payment for interpreter services provided by interpreter agencies contracted with the state for outpatient medical visits and DSHS fair hearings.

  

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	 	4.7.1.4. 	Hospitals are responsible for payment for interpreter services during inpatient stays. 

  

	 	4.7.1.5. 	Public entities are responsible for payment for interpreter services provided at their facilities or affiliated sites. 

  

	 	4.7.1.6. 	Interpreter services include the provision of interpreters for enrollees and potential enrollees who are deaf or hearing impaired. 

  

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	 	4.7.2. 	Written Information: 

  

	 	4.7.2.1. 	The Contractor shall provide all generally available and client specific written materials in a form which may be understood by each individual enrollee and potential enrollee. The
Contractor may meet this requirement by doing one of the following: 

  

	 	4.7.2.1.1. 	Translating the material into the enrollee’s or potential enrollee’s primary reading language. 

  

	 	4.7.2.1.2. 	Providing the material on tape in the enrollee’s or potential enrollee’s primary language. 

  

	 	4.7.2.1.3. 	Having an interpreter read the material to the enrollee or potential enrollee in the enrollee’s primary language. 

  

	 	4.7.2.1.4. 	Providing the material in another alternative medium or format acceptable to the enrollee or potential enrollee. The Contractor shall document the enrollee’s or potential
enrollee’s acceptance of the alternative. 

  

	 	4.7.2.1.5. 	Providing the material in English, if the Contractor documents the enrollee’s or potential enrollee’s preference for receiving material in English.

  

	 	4.7.2.2. 	The Contractor shall ensure that all written information provided to enrollees or potential enrollees is comprehensible to its intended audience, designed to provide the greatest
degree of understanding, and is written at the sixth grade reading level. Generally available, written materials shall be consumer tested. 

  

	 	4.8.	Americans with Disabilities Act: The Contractor shall make reasonable accommodation for enrollees with disabilities, in accord with the Americans with Disabilities Act, for
all covered services and shall assure physical and communication barriers shall not inhibit enrollees with disabilities from obtaining covered services. 

  

	 	4.9.	 Capacity Limits and Order of Acceptance: The Contractor shall provide care to enrollees up to the capacity limits in Exhibit B, Premiums, Service Areas, and
Capacity. The Contractor shall accept enrollees up to the total capacity limit in each service area, and enrollees will be accepted in the order in which they apply. DSHS shall enroll all eligible clients with the contractor of their choice if the
Contractor has not reached the capacity limit unless DSHS determines, in its sole judgment, that it is in DSHS’ best interest to withhold or limit enrollment with the Contractor. The Contractor shall accept clients who are assigned by DSHS in
accord with this 

  

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agreement, WAC 388-538, and WAC 388-542, except as specifically provided in Section 2.8. 

  
 No eligible client shall be refused enrollment or re-enrollment, have
his/her enrollment terminated, or be discriminated against in any way because of his/her health status, the existence of a pre-existing physical or mental condition, including pregnancy and/or hospitalization, or the expectation of the need for
frequent or high cost care. 
  

	 	4.10. 	Assignment of Enrollees: 

  

	 	4.10.1. 	Enrollees who do not select a plan in a service area identified by DSHS as having mandatory enrollment into managed care shall be assigned to a plan in the following manner:

  

	 	4.10.1.1. 	DSHS shall determine the total capacity of all contractors receiving assignments in each service area. 

  

	 	4.10.1.2. 	The Contractor’s capacity in each service area, as stated in Exhibit B, Premiums, Service Areas, and Capacity, modified by increases and decreases in capacity made in accord
with this agreement, shall be divided by the total capacity of all contractors receiving assignment in each service area. 

  

	 	4.10.1.3. 	The result of the calculation in 4.10.1.2. will be multiplied by the total of the households to be assigned. 

  

	 	4.10.1.4. 	DSHS shall assign the number of households determined in 4.10.1.3. to the Contractor. 

  

	 	4.10.2. 	DSHS shall not make any assignments of enrollees to the Contractor in a service area if the Contractor’s enrollment, when DSHS calculates assignments, is ninety percent (90%)
or more of its capacity in that service area. 

  

	 	4.10.3. 	The Contractor may choose not to receive assignments or limit assignments in any service area by so notifying DSHS in writing at least seventy-five (75) calendar days before the
first of the month it is requesting not to receive assignment of enrollees. 

  

	 	4.10.4. 	DSHS reserves the right to make no assignments, or to withhold or limit assignments to the Contractor, when, in its sole judgment, it is in the best interest of DSHS.

  

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	 	4.10.5. 	If either the Contractor or DSHS limits assignments as described herein, the Contractor’s capacity, only for the purposes of the calculation in 4.10.1.2., shall be that limit.

  

	 	4.10.6. 	Assigned enrollees are notified by DSHS of their assignment and may choose a different managed care organization prior to the effective date of their assignment.

  

	 	4.11.	  Provider Network Changes: 

  

	 	4.11.1. 	The Contractor shall give DSHS a minimum of ninety (90) calendar days prior written notice, in accord with Section 7.5, Notices, of the loss of a material provider. A material
provider is one whose loss would impair the Contractor’s ability to provide continuity of and access to care for the Contractor’s current enrollees and/or the number of enrollees the Contractor has agreed to serve in a service area.

  

	 	4.11.2. 	The Contractor shall make a good faith effort to notify enrollees affected by any provider termination within fifteen (15) calendar days after receiving or issuing a provider
termination notice (42 CFR 438.10(f)(5). Enrollee notices shall have prior approval of DSHS. If the Contractor fails to notify affected enrollees of a provider termination at least sixty (60) calendar days prior to the effective date of termination,
the Contractor shall allow affected enrollees to continue to receive services from the terminating provider, at the enrollees’ option, and administer benefits for the lesser of a period ending the last day of the month in which sixty (60)
calendar days elapses from the date the Contractor notifies enrollees or the enrollee’s effective date of enrollment with another plan. 

  

	 	4.12.	 Women’s Health Care Services: In the provision of women’s health care services, the Contractor shall comply with the provisions of WAC 284-43-250 and 42 CFR
438.206(b)(2). 

  

	 	4.13.	 Maternity Newborn Length of Stay: The Contractor shall ensure that hospital delivery maternity care is provided in accord with RCW 48.43.115. 

 

	 	4.14.	 Cultural Considerations: The Contractor shall participate in and cooperate with DSHS’ efforts to promote the delivery of services in a culturally competent manner
to all enrollees, including those with limited English proficiency and diverse cultural and ethnic backgrounds (42 CFR 438.206(c)(2)). 

  

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	5.	QUALITY OF CARE 

  

	 	5.1.	Quality Improvement Program: 

  

	 	5.1.1. 	The Contractor shall maintain a quality assessment and performance improvement (QAPI) program for the services it furnishes to its enrollees that meets the provisions of 42 CFR 438,
Subpart D, Medicaid Managed Care Protocols located at www.cms.hhs.gov/medicaid/managedcare/mceqrhmp.asp, the provisions of this agreement, and the Quality Improvement Program Standards, Exhibit A. 

  

	 	5.1.2. 	The Contractor shall, during an annual review or upon request by DSHS or its External Quality Review Organization (EQRO) contractor(s), provide evidence of how external quality
review findings, agency audits and contract monitoring activities, enrollee grievances, HEDIS® and CAHPS® results, are used to identify and correct problems and to improve care and services to enrollees. 

  

	 	5.1.3. 	The Contractor shall include the following basic elements in its Quality Improvement program (42 CFR 438.240(b)): 

  

	 	5.1.3.1. 	Conduct performance improvement projects described herein. 

  

	 	5.1.3.2. 	Have in effect mechanisms to detect both underutilization and overutilization of services. 

  

	 	5.1.3.3. 	Have in effect mechanisms to assess the quality and appropriateness of care furnished to enrollees with special health care needs. 

  

	 	5.2.	Accreditation: If the Contractor has had an accreditation review or visit by NCQA or another accrediting body, the Contractor shall provide the complete report from that
organization to DSHS. If permitted by the accrediting body, the Contractor shall allow a state representative to accompany any accreditation review team during the site visit in an official observer status. The state representative shall be allowed
to share information with DSHS, Department of Health (DOH), and Health Care Authority (HCA) as needed to reduce duplicated work for both the Contractor and the state. 

  

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	 	5.3.	Performance Improvement Projects: 

  

	 	5.3.1. 	The Contractor shall conduct at least five (5) Performance Improvement Projects (PIPs) of which at least three (3) are clinical and at least two (2) are non-clinical as described in
42 CFR 438.240 and as specified in the CMS protocol at: 

  
 www.cms.hhs.gov/medicaid/managedcare/mceqrhmp.asp. The projects must be designed to achieve, through ongoing measurements and intervention, significant improvement, sustained over time, in clinical and non-clinical areas that are expected
to have a favorable effect on health outcomes and enrollee satisfaction. Annually, the Contractor shall: 
  

	 	5.3.1.1. 	Implement a system of interventions to achieve improvement in quality. 

  

	 	5.3.1.2. 	Evaluate the effectiveness of the interventions. 

  

	 	5.3.1.3. 	Plan and initiate activities for increasing or sustaining improvement. 

  

	 	5.3.1.4. 	Report the status and results of each project to DSHS. 

  

	 	5.3.1.5. 	Complete projects in a reasonable time period as to allow aggregate information on the success of the projects to produce new information on the quality of care every year.

  

	 	5.3.2. 	If any of the Contractor’s Health Plan Employer Data and Information Set (HEDIS®) rates on Well Child Visits in the first 15 months (six (6) or more well child visits measure), Well Child Visits in the 3rd, 4th, 5th and 6th years of life, or Adolescent Well Care Visits are below 60%, the Contractor shall implement a DSHS approved clinical PIP designed to increase the rates. The Contractor may, at their option, count the
required project toward meeting the requirement for at least three (3) clinical PIPs in Section 5.3.1. 

  

	 	5.3.3. 	If any of the Contractor’s HEDIS® Childhood Immunization rates are below 65% in 2004 or below 70% in 2005, the Contractor shall implement a DSHS approved performance improvement project designed to increase the rates.
The Contractor may, at their option, count the required project toward meeting the requirement for at least three (3) clinical PIPs in Section 5.3.1. 

  

	 	5.3.4. 	If the Contractor is below DSHS designated National CAHPS Benchmarking Database (NCBD) benchmarks, the Contractor’s two non-clinical quality improvement projects shall be
specified by DSHS, based upon the most current results of the Consumer Assessment of Health Plans (CAHPS) survey data for either children or adults. Benchmarks will be determined by DSHS and published annually. 

  

	 	5.3.5. 	 In addition to the PIPs required under Sections 5.3.1 through 5.3.4., the Contractor shall participate in a yearly statewide quality assessment and performance
improvement project or research project 

  

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designed by DSHS. The study shall be designed to maximize resources and reduce cost to contractors 

  

	 	5.4.	Independent Quality Review Organization (EQRO): The Contractor shall allow a qualified External Quality Review Organization (EQRO), contracted by DSHS, to perform an annual
external independent review as described in 42 CFR 438, Subpart E. 

  

	 	5.5.	CAHPS®: 

  

	 	5.5.1. 	In 2004, the Contractor must create and submit the sampling frame file for the 2004 CAHPS Children and Children with Chronic Conditions Measurement set as specified by DSHS. A DSHS
designated EQRO Contractor will conduct the Children and Children with Chronic Conditions survey based upon 2004 HEDIS Specifications for Survey Measures. DSHS or their designated EQRO will send file specifications and instructions to all
Contractors regarding the format and other required information for the sample files by November 30, 2003. Contractors shall submit the eligible sample frames to DSHS’s designated EQRO by January 30, 2004. 

  

	 	5.5.1.1. 	The Contractor shall contract with Certified HEDIS Auditor to validate the sample frame file and submit the certified audit letter (or compliance audit letter) to DSHS’s
designated EQRO by January 30, 2004. 

  

	 	5.5.1.2. 	DSHS’ External Quality Review vendor will forward the Contractor’s 2004 data to the National CAHPS Benchmarking Database (NCBD) based on the 2004 NCBD guidelines.
Contractors will be responsible for filling out specific NCBD data submission forms as determined by DSHS and submitting those forms to DSHS’s designated EQRO by June 30, 2004. 

  

	 	5.5.2. 	In 2005, the contractor is required to conduct a CAHPS® survey of adult Medicaid members enrolled in Healthy Options. The Contractor shall: 

  

	 	5.5.2.1. 	Ensure the survey sample frame consists of all non-Medicare and non-commercial adult plan members (not just subscribers) 18 years and older, as of December 31 of the measurement
year, with Washington State addresses. 

  

	 	5.5.2.2. 	Contract with an NCQA certified vendor qualified to administer the CAHPS® survey and conduct the survey according to NCQA protocol. 

  

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	 	5.5.2.3. 	The Contractor shall contract with a Certified HEDIS Auditor to validate the sample frame file and submit the certified audit letter (or compliance audit letter) to DSHS’s
designated EQRO by January 31, 2005. 

  

	 	5.5.2.4. 	Submit the following information to DSHS’s designated EQRO: 

  

	 	5.5.2.4.1. 	Primary plan contact, vendor name and primary vendor contact. 

  

	 	5.5.2.4.2. 	Overall timeframe of vendor tasks 

  

	 	5.5.2.4.3. 	On a weekly basis - survey disposition reports and approximate response rates. 

  

	 	5.5.2.4.4. 	Final disposition report by June 30, 2005. 

  

	 	5.5.2.5. 	Conduct the mixed methodology (mail and phone surveys). 

  

	 	5.5.2.6. 	Submit a copy of the Washington State adult Medicaid response data set according to 2005 NCQA/CAHPS® standards to DSHS’s designated External Quality Review vendor by June 30, 2005. 

  

	 	5.5.2.7. 	Submit a copy of the Washington State adult Medicaid response data set according to 2005 NCBD/CAHPS standards to DSHS’s designated External Quality Review vendor by June 30,
2005. 

  

	 	5.5.2.8. 	DSHS’ External Quality Review vendor will forward the Contractor’s data to the NCBD based on the 2005 NCBD guidelines. Contractors will be responsible for filling out
specific NCBD data submission forms as determined by DSHS and submitting those forms to DSHS’s designated EQRO by June 30, 2005. 

  

	 	5.5.2.9. 	DSHS will determine the questionnaire format, questions and question placement, using the most recent HEDIS® version of the Medicaid adult questionnaire (currently 3.0H), plus approved supplemental and/or custom questions as
determined by DSHS. Contractors will receive the approved DSHS questionnaire by January 31, 2005. 

  

	 	5.5.2.10. 	Contractors will be allowed up to seven Contractor supplemental questions with written approval from DSHS for amount, content, and placement prior to December 31, 2004.

  

	 	5.5.2.11. 	Contractors are required to include performance guarantee language in their vendor subcontracts that require a vendor to achieve at least a 35% response rate.

  

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	 	5.5.3. 	If a Contractor cannot conduct the required annual CAHPS surveys (Children, Children with Chronic Conditions, or Adult) because of limited total enrollment and/or sample size, the
Contractor shall notify DSHS in writing whether they have a physician or physician group at substantial financial risk in accordance with the physician incentive plan requirements under Section 8.8. 

  

	 	5.6.	Provider Education: The Contractor shall maintain a system for keeping participating practitioners and providers informed about: 

  

	 	5.6.1. 	Covered services for enrollees served under this agreement; 

  

	 	5.6.2. 	Coordination of care requirements; and 

  

	 	5.6.3. 	DSHS policies as related to this agreement. 

  

	 	5.6.4. 	Interpretation of data from the quality improvement program (42 CFR 434.34(d)). 

  

	 	5.7.	Claims Payment Standards: The Contractor shall meet the timeliness of payment standards specified for Medicaid fee-for-service in Section 1902(a)(37)(A) of the Social
Security Act and specified for health carriers in WAC 284-43-321. To be compliant with both payment standards the Contractor shall pay or deny, and shall require subcontractors to pay or deny, 95% of clean claims within thirty (30) calendar days of
receipt, 95% of all claims within sixty (60) of receipt and 99% of clean claims within ninety (90) calendar days of receipt. The Contractor and its providers may agree to a different payment requirement in writing on an individual claim.

  

	 	5.7.1. 	A claim is a bill for services, a line item of service or all services for one enrollee within a bill. 

  

	 	5.7.2. 	A clean claim is a claim that can be processed without obtaining additional information from the provider of the service or from a third party. 

  

	 	5.7.3. 	The date of receipt is the date the Contractor receives the claim from the provider. 

  

	 	5.7.4. 	The date of payment is the date of the check or other form of payment. 

  

	 	5.8.	 Health Insurance Portability and Accountability Act (HIPAA): The Contractor and the Contractor’s subcontractors shall comply with the applicable
provisions of the Health Insurance Portability and Accountability Act (HIPAA) of 1996, codified at 42 USC 1320(d) et.seq. and 45 CFR parts 

  

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160, 162, and 164. The Contractor and the Contractor’s subcontractors shall fully cooperate with DSHS efforts to implement HIPAA requirements.

  

	 	5.9.	Practice Guidelines: The Contractor shall adopt practice guidelines that meet the following requirements (42 CFR 438.6): 

  

	 	5.9.1. 	Are based on valid and reliable clinical evidence or a consensus of health care professionals in the particular field. 

  

	 	5.9.2. 	Consider the needs of enrollees. 

  

	 	5.9.3. 	Are adopted in consultation with contracting health care professionals. 

  

	 	5.9.4. 	Are reviewed and updated periodically as appropriate. 

  

	 	5.9.5. 	Are disseminated to all affected providers and, upon request, to DSHS, enrollees and potential enrollees. 

  

	 	5.9.6. 	Are the basis for and are consistent with decisions for utilization management, enrollee education, coverage of services, and other areas to which the guidelines apply.

  

	 	5.10. 	Advance Directives: 

  

	 	5.10.1. 	The Contractor shall maintain written policies and procedures for advance directives that meet the requirements of WAC 388-501-0125, 42 CFR 438.6, 42 CFR 438.10, 42 CFR 422.128, and
42 CFR 489 Subpart I. The Contractor’s advance directive policies and procedure shall be disseminated to all affected providers, enrollees, DSHS, and, upon request, potential enrollees. 

  

	 	5.10.2. 	The Contractor’s written policies respecting the implementation of advance directive rights shall include a clear and precise statement of limitation if the Contractor cannot
implement an advance directive as a matter of conscience. At a minimum, this statement must do the following: 

  

	 	5.10.2.1. 	Clarify any differences between Contractor conscientious objections and those that may be raised by individual physicians. 

  

	 	5.10.2.2. 	Identify the state legal authority permitting such objection. 

  

	 	5.10.2.3. 	Describe the range of medical conditions or procedures affected by the conscience objection. 

  

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	 	5.10.3. 	If an enrollee is incapacitated at the time of initial enrollment and is unable to receive information (due to the incapacitating condition or a mental disorder) or articulate
whether or not he or she has executed an advance directive, the Contractor may give advance directive information to the enrollee’s family or surrogate in the same manner that it issues other materials about policies and procedures to the
family of the incapacitated enrollee or to a surrogate or other concerned persons in accord with State law. The Contractor is not relieved of its obligation to provide this information to the enrollee once he or she is no longer incapacitated or
unable to receive such information. Follow-up procedures must be in place to ensure that the information is given to the individual directly at the appropriate time. 

  

	 	5.10.4. 	The Contractor’s policies and procedures must require, and the Contractor must ensure, that the enrollee’s medical record documents, in a prominent part, whether or not
the individual has executed an advance directive. 

  

	 	5.10.5. 	The Contractor shall not condition the provision of care or otherwise discriminate against an enrollee based on whether or not the enrollee has executed an advance directive.

  

	 	5.10.6. 	The Contractor shall ensure compliance with requirements of State and Federal law (whether statutory or recognized by the courts of the State) regarding advance directives.

  

	 	5.10.7. 	The Contractor shall provide for education of staff concerning its policies and procedures on advance directives. 

  

	 	5.10.8. 	The Contractor shall provide for community education regarding advance directives that may include material required herein, either directly or in concert with other providers or
entities. Separate community education materials may be developed and used, at the discretion of the Contractor. The same written materials are not required for all settings, but the material should define what constitutes an advance directive,
emphasizing that an advance directive is designed to enhance an incapacitated individual’s control over medical treatment, and describe applicable State and Federal law concerning advance directives. The Contractor shall document its community
education efforts. 

  

	 	5.10.9. 	 The Contractor is not required to provide care that conflicts with an advance directive; and is not required to implement an advance directive if, as a matter of
conscience, the Contractor cannot implement an advance directive and State law allows the Contractor or 

  

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any subcontractor providing services under this agreement to conscientiously object. 

  

	 	5.10.10. 	The Contractor shall inform enrollees that they may file a grievance with the Contractor if the enrollee is dissatisfied with the Contractor’s advance directive policy and
procedure or the Contractor’s administration of those policies and procedures. The Contractor shall also inform enrollees that they may file a grievance with DSHS if they believe the Contractor is non-compliant with advance directive
requirements. 

  

	 	5.11. 	Health Information Systems: The Contractor shall maintain and shall require subcontractors to maintain a health information system that complies with the requirements of 42
CFR 438.242 and provides the information necessary to meet the Contractor’s obligations under this agreement. The Contractor shall have in place mechanisms to verify the health information received from subcontractors. Mechanisms shall include
the following: 

  

	 	5.11.1. 	A health information system that collects, analyze, integrates, and reports data. The system must provide information on areas including but not limited to, utilization, grievance,
and appeals, and disenrollments for other than loss of Medicaid eligibility. 

  

	 	5.11.2. 	Data received from providers is accurate and complete by: 

  

	 	5.11.2.1. 	Verifying the accuracy and timeliness of reported data; 

  

	 	5.11.2.2. 	Screening the data for completeness, logic, and consistency; and 

  

	 	5.11.2.3. 	Collecting service information on standardized formats to the extent feasible and appropriate. 

  

	 	5.11.3. 	The Contractor shall make all collected data available to DSHS and The Center for Medicare and Medicaid Services (CMS) upon request. 

  

	6.	REPORTING REQUIREMENTS: 

  

	 	6.1.	Certification Requirements: Any information and/or data required by this agreement and identified by DSHS as requiring certification shall be certified by the Contractor as
follows (42 CFR 438.600 through 42 CFR 438.606): 

  

	 	6.1.1. 	Source of certification: The information and/or data shall be certified by one of the following: 

  

	 	6.1.1.1. 	The Contractor’s Chief Executive Officer 

  

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	 	6.1.1.2. 	The Contractor’s Chief Financial Officer 

  

	 	6.1.1.3. 	An individual who has delegated authority to sign for, and who reports directly to, the Contractor’s Chief Executive Officer or Chief Financial Officer

  

	 	6.1.2. 	Content of certification: The Contractor’s certification shall attest, based on best knowledge, information, and belief, to the accuracy, completeness and truthfulness of the
information and/or data. 

  

	 	6.1.3. 	Timing of certification: The Contractor shall submit the certification concurrently with the certified information and/or data. 

  

	 	6.2.	HEDIS® Measures: In accordance with 7.5 Notices, the Contractor shall report to DSHS, the following HEDIS® measures using the current HEDIS® Technical Specifications and official corrections published by NCQA, unless directed
otherwise in writing by DSHS. 

  

	 	6.2.1. 	No later than June 15th of each year, the following HEDIS® measures shall be submitted electronically to DSHS and a second copy shall be submitted to the EQRO designated by DSHS, using the NCQA data submission
tool (DST): 

  

	 	6.2.1.1. 	Childhood Immunization Status 

  

	 	6.2.1.2. 	Prenatal and Postpartum Care 

  

	 	6.2.1.3. 	Well Child Visits in the First 15 Months of Life 

  

	 	6.2.1.4. 	Well Child Visits in the Third, Fourth, Fifth and Sixth Years of Life 

  

	 	6.2.1.5. 	Adolescent Well Child Visits 

  

	 	6.2.1.6. 	Use of Appropriate Medications for People with Asthma 

  

	 	6.2.1.7. 	Comprehensive Diabetes Care 

  

	 	6.2.1.8. 	Inpatient Utilization-General Hospital/Acute Care 

  

	 	6.2.1.9. 	Ambulatory Care 

  

	 	6.2.1.10. 	Birth and Average Length of Stay, Newborns 

  

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	 	6.2.2. 	All measures shall be audited, at Contractor expense, by an NCQA licensed organization in accord with the current HEDIS COMPLIANCE AUDITTM standards, policies and procedures. The signed and certified audit report shall be
submitted to DSHS no later than July 15th of each year. A second copy shall be submitted to the EQRO designated by
DSHS. 

  

	 	6.2.2.1. 	If the Contractor has current NCQA accreditation, including Medicaid, a full audit, as defined by NCQA, is allowed. 

  

	 	6.2.2.2. 	If the Contractor does not have current NCQA accreditation, including Medicaid, a partial audit, as defined by NCQA, must be conducted. 

  

	 	6.2.3. 	The Contractor may rotate HEDIS® measures only with the advance written permission of DSHS. The Contractor may request permission to rotate measures by making a written request to the DSHS contact named in the Notices section of this agreement.

  

	 	6.3.	Encounter Data: 

  

	 	6.3.1. 	Encounter data includes all services delivered to enrollees. DSHS collects and uses this data for many reasons such as: federal reporting; rate setting and risk adjustment; managed
care quality improvement program, utilization patterns and access to care; DSHS hospital rate setting; and research studies. The Contractor shall comply with the Encounter Data Guide for Managed Care Organizations published by DSHS.

  

	 	6.3.2. 	DSHS may change the Encounter Data Guide for Managed Care Organizations with one hundred and fifty (150) calendar days written notice to the Contractor. The Encounter Data Guide for
Managed Care Organizations may be changed with less than one hundred and fifty (150) calendar days notice by mutual agreement of the Contractor and DSHS. The Contractor shall, upon receipt of such notice from DSHS, provide notice of changes to
subcontractors. 

  

	 	6.4.	Integrated Provider Network Database (IPND): The Contractor shall report their complete provider network, to include all current contracted providers, monthly to DSHS through
the designated data management contact in accord with the Provider Network Reporting Requirements published by DSHS at http://maa.dshs.wa.gov/healthyoptions/IPND. 

  

	 	6.5.	 FQHC/RHC Report: The Contractor shall provide DSHS with information related to subcontracted federally-qualified health centers (FQHC) and rural 

  

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health clinics (RHC), as required by the DSHS Healthy Options Licensed Health Carrier Billing Instructions, published by DSHS. 

 

	 	6.6.	Enrollee Mortality: The Contractor shall maintain a record of known enrollee deaths, including the enrollee’s name, date of birth, age at death, location of death, and
cause(s) of death. This information shall be available to DSHS upon request. The Contractor shall assist DSHS in efforts to evaluate and improve the availability and utility of selected mortality information for quality improvement purposes.

  

	 	6.7.	Actions, Grievances and Appeals: The Contractor shall maintain a record of all actions, grievances and appeals, including actions, grievances and appeals handled by a
delegated entity and independent review of adverse decisions by an independent review organization. The Contractor shall provide a report of complete actions, grievances and appeals to DSHS biannually for the prior six months. The report for the six
months ending March 31st is due no later than June 1st and the report for the six months ending September 30th is due no later than November 1st. The Contractor is responsible
for maintenance of records for and reporting of any grievance, actions and appeals handled by delegated entities. Delegated actions, grievances and appeals are to be integrated into the Contractor’s report. Data shall be reported in the DSHS
and Contractor agreed upon format. The report medium shall be specified by DSHS. Reporting of actions shall include all denials or limited authorization of a requested service, including the type or level of service, and the reduction, suspension,
or termination of a previously authorized service but will not include denials of payment to providers. Reporting of grievances shall include all expressions of enrollee dissatisfaction not related to an action. The records shall be sorted using the
sort keys identified and shall include, at a minimum: 

  

	 	6.7.1. 	Name of Program: HO, CHIP, or BH+ (Primary Sort Key) 

  

	 	6.7.2. 	Name of the delegated entity, if any 

  

	 	6.7.3. 	Enrollee Identifier (three separate fields): 

  

	 	6.7.3.1. 	Patient Identification Code (PIC) (preferred) or 

  

	 	6.7.3.2. 	Enrollee Name and Enrollee Birthday: If PIC not reported 

  

	 	6.7.4. 	Name of Practitioner (Optional) 

  

	 	6.7.5. 	Type of Practitioner (Optional) 

  

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	 	6.7.6. 	Type (Secondary Sort Key): 

  

	 	6.7.6.1. 	Action 

  

	 	6.7.6.2. 	Grievance 

  

	 	6.7.6.3. 	Appeal - First Level 

  

	 	6.7.6.4. 	Appeal - Second Level 

  

	 	6.7.6.5. 	IRO 

  

	 	6.7.7. 	Expedited: Yes or No 

  

	 	6.7.8. 	Grievance, Appeal or IRO Issue 

  

	 	6.7.9. 	Category of Action or Grievance 

  

	 	6.7.10. 	Action Reason 

  

	 	6.7.11. 	Resolution of Grievance, Appeal or IRO 

  

	 	6.7.12. 	Action Date 

  

	 	6.7.13. 	Receipt Date of Grievance, Appeal or IRO 

  

	 	6.7.14. 	Date of Resolution of Grievance, Appeal, or IRO 

  

	 	6.7.15. 	Date written notification of Action or Grievance, Appeal or IRO outcome sent to enrollee and practitioner 

  

	 	6.8.	Drug Formulary Review and Approval: The Contractor shall submit its drug formulary, for use with enrollees covered under the terms of this agreement, to DSHS for review and
approval by January 31st of each year of this agreement. 

  

	 	6.9.	Fraud and Abuse: The Contractor shall report in writing all verified cases of fraud and abuse, including fraud and abuse by the Contractor’s employees and
subcontractors, within seven (7) calendar days to DSHS according to Section 7.5, Notices. The report shall include the following information: 

  

	 	6.9.1. 	Subject(s) of complaint by name and either provider/subcontractor type or employee position. 

  

	 	6.9.2. 	Source of complaint by name and provider/subcontractor type or employee position, if applicable. 

  

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	 	6.9.3. 	Nature of complaint. 

  

	 	6.9.4. 	Estimate of the amount of funds involved. 

  

	 	6.9.5. 	Legal and administrative disposition of case. 

  

	 	6.10. 	Five Percent Equity: The Contractor shall provide the DSHS, MAA, Division of Program Support, Contract Manager assigned to the Contractor a list of persons with a beneficial
ownership of more than 5% of the Contractor’s equity no later than February 28th of each year of this
agreement. 

  

	7.	GENERAL TERMS AND CONDITIONS 

  

	 	7.1.	Complete Agreement: This agreement incorporates Exhibits to this agreement and the DSHS billing instructions applicable to the Contractor. All terms and conditions of this
agreement are stated in this agreement and its incorporations. No other agreements, oral or written, are binding. 

  

	 	7.2.	Modification: This agreement may only be modified by mutual consent of the parties. All modifications shall be set forth in contract amendments issued by DSHS.

  

	 	7.3.	Waiver: The failure of either party to enforce any provision of this agreement shall not constitute a waiver of that or any other provision, and will not be construed to be a
modification of the terms and conditions of the agreement unless incorporated into the agreement with an amendment. 

  

	 	7.4.	Limitation of Authority: No alteration, modification, or waiver of any clause or condition of the agreement is binding unless made in writing and signed by a DSHS Contracting
Officer or their designee. 

  

	 	7.5.	Notices: Whenever one party is required to give notice to the other under this agreement, it shall be deemed given if mailed by United States Postal Service, registered or
certified mail, return receipt requested, postage prepaid and addressed as follows: 

  
 In the case of notice to the Contractor, notice will be sent to the point of contact identified on the signature page of the agreement. 
  
 In the case of notice to DSHS: 
  
 Peggy Wilson, Section Manager (or her successor) 
 Managed Care Contract Management Section 
 Division of Program Support 
 Medical Assistance Administration 
 Department of Social and Health Services 
 P.O. Box 45530 
 Olympia, WA 98504-5530 
  

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 Said notice shall become effective on the date delivered as evidenced by the return receipt or the
date returned to the sender for non-delivery other than for insufficient postage. Either party may at any time change its address for notification purposes by mailing as aforesaid a notice stating the change and setting forth the new address, which
shall be effective on the tenth day following the effective date of such notice unless a later date is specified. 
  

	 	7.6.	Force Majeure: If the Contractor is prevented from performing any of its obligations hereunder in whole or in part as a result of a major epidemic, act of God, war, civil
disturbance, court order, or any other cause beyond its control, such nonperformance shall not be a ground for termination for default. Immediately upon the occurrence of any such event, the Contractor shall commence to use its best efforts to
provide, directly or indirectly, alternate and, to the extent practicable, comparable performance. Nothing in this clause shall be construed to prevent DSHS from terminating this agreement for reasons other than for default during the period of
events set forth above, or for default, if such default occurred prior to such event. 

  

	 	7.7.	Sanctions: 

  

	 	7.7.1. 	DSHS will notify the Contractor in writing of the basis and nature of the any sanctions and, if applicable, provide a reasonable deadline for curing the cause for the sanction
before imposing sanctions. The Contractor may request a dispute resolution, as described in Section 7.23, Disputes, if the Contractor disagrees with DSHS’ position. 

  

	 	7.7.2. 	When the Contractor fails to meet its obligations under the terms of this agreement, DSHS may impose sanctions by withholding up to five percent of payments to the Contractor rather
than terminating the agreement. 

  
 DSHS may
withhold payment from the end the cure period until the default is cured or any resulting dispute is resolved in the Contractor’s favor. 
  

	 	7.7.3. 	DSHS, CMS or the Office of the Inspector General (OIG) may impose intermediate sanctions, in accord with 42 CFR 438.700, 42 CFR 438.702, 42 CFR 438.704, 45 CFR 92.36(i)(1), 42 CFR
422.208 and 42 CFR 422.210, against the Contractor for: 

  

	 	7.7.3.1. 	Failing to provide medically necessary services that the Contractor is required to provide, under law or under this agreement, to an enrollee covered under this agreement.

  

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	 	7.7.3.2. 	Imposing on enrollees premiums or charges that are in excess of the premiums or charges permitted under law or under this agreement. 

  

	 	7.7.3.3. 	Acting to discriminate among enrollees on the basis of their health status or need for health care services. This includes termination of enrollment or refusal to reenroll a
recipient, except as permitted under law or under this agreement, or any practice that would reasonably be expected to discourage enrollment by recipients whose medical condition or history indicates probable need for substantial future medical
services. 

  

	 	7.7.3.4. 	Misrepresenting or falsifying information that it furnishes to CMS or to the State. 

  

	 	7.7.3.5. 	Misrepresenting or falsifying information that it furnishes to an enrollee, potential enrollee, or health care provider. 

  

	 	7.7.3.6. 	Failing to comply with the requirements for physician incentive plans. 

  

	 	7.7.3.7. 	Distributing directly, or indirectly through any agent or independent contractor, marketing materials that have not been approved by the State or that contain false or materially
misleading information. 

  

	 	7.7.3.8. 	Violating any of the other requirements of Sections 1903(m) or 1932 of the Social Security Act, and any implementing regulations. 

  

	 	7.7.3.9. 	Intermediate sanctions may include: 

  

	 	7.7.3.9.1. 	Civil monetary penalties in the following amounts: 

  

	 	7.7.3.9.1.1. 	A maximum of $25,000 for each determination of failure to provide services; misrepresentation or false statements to enrollees, potential enrollees or healthcare providers; failure
to comply with physician incentive plan requirements; or marketing violations. 

  

	 	7.7.3.9.1.2. 	A maximum of $100,000 for each determination of discrimination; or misrepresentation or false statements to CMS or the State. 

  

	 	7.7.3.9.1.3. 	A maximum of $15,000 for each potential enrollee DSHS determines was not enrolled because of a discriminatory practice subject to the $100,000 overall limit.

  

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	 	7.7.3.9.1.4. 	A maximum of $25,000 or double the amount of the charges, whichever is greater, for charges to enrollees that are not allowed under HO or SCHIP. DSHS will deduct from the penalty
the amount charged and return it to the enrollee. 

  

	 	7.7.3.9.2. 	Appointment of temporary management for the Contractor as provided in 42 CFR 438.706. DSHS will only impose temporary management if it finds that the Contractor has repeatedly
failed to meet substantive requirements in Sections 1903(m) or 1932 of the Social Security Act. Either DSHS or the Contractor may terminate this agreement, as otherwise provided herein, prior to and as an alternative to appointment of temporary
management. 

  

	 	7.7.3.9.3. 	Suspension of all new enrollment, including default enrollment, after the effective date of the sanction. 

  

	 	7.7.3.9.4. 	Suspension of payment for enrollees enrolled after the effective date of the sanction and until CMS or DSHS is satisfied that the reason for imposition of the sanction no longer
exists and is not likely to recur. 

  

	 	7.8.	Assignment of this Agreement: This agreement, including the rights, benefits, and duties herein, shall be binding on the parties and their successors and assignees but shall
not be assignable by either party without the express written consent of the other. Nor shall any claim, pertinent to this agreement, against one of the parties be assignable without the express written consent of the other.

  

	 	7.9.	Headings Not Controlling: The headings and the index used herein are for reference and convenience only, and shall not enter into the interpretation thereof, or describe the
scope or intent of any provisions or sections of this agreement. 

  

	 	7.10. 	Order of Precedence: In the interpretation of this agreement and incorporated documents, the various terms and conditions shall be construed as much as possible to be
complementary. In the event that such interpretation is not possible the following order of precedence shall apply: 

  

	 	7.10.1. 	Federal statutes and regulations concerning the operation of Health Maintenance Organizations and the provisions of Title XIX of the federal Social Security Act.

  

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	 	7.10.2. 	State of Washington statutes and regulations concerning the operation of the DSHS’ Medical Assistance Program, including but not limited to WAC 388-538.

  

	 	7.10.3. 	State of Washington statutes and regulations concerning the operation of Health Maintenance Organizations and Health Care Service Contractors. 

  

	 	7.10.4. 	The terms and conditions of this agreement. 

  

	 	7.11. 	Proprietary Rights: DSHS recognizes that nothing in this agreement shall give DSHS rights to the systems developed or acquired by the Contractor during the performance of
this agreement. The Contractor recognizes that nothing in this agreement shall give the Contractor rights to the systems developed or acquired by DSHS during the performance of this agreement. 

  

	 	7.12. 	Covenant Against Contingent Fees: The Contractor promises that no person or agency has been employed or retained on a contingent fee for the purpose of seeking or obtaining
this agreement. This does not apply to legitimate employees or an established commercial or selling agency maintained by the Contractor for the purpose of securing business. In the event of breach of this clause by the Contractor DSHS may at its
discretion: a) annul the agreement without any liability; or b) deduct from the agreement price or consideration or otherwise recover the full amount of any such contingent fee. 

  

	 	7.13. 	Enrollees’ Right to Obtain a Conversion Agreement: The Contractor shall offer a conversion agreement to all enrollees whose enrollment is terminated due to loss of
eligibility for Medical Assistance in accord with RCW 48.46.450. 

  

	 	7.14. 	Records Maintenance and Retention: 

  

	 	7.14.1. 	Maintenance: The Contractor and its subcontractors shall maintain financial, medical and other records pertinent to this agreement. All financial records shall follow
generally accepted accounting principles. Medical records and supporting management systems shall include all pertinent information related to the medical management of each enrollee. Other records shall be maintained as necessary to clearly reflect
all actions taken by the Contractor related to this agreement. 

  

	 	7.14.2. 	 Retention: All records and reports relating to this agreement shall be retained by the Contractor and its subcontractors for a minimum of seven (7) years
after final payment is made under this agreement or, in the event that this agreement is renewed, seven (7) years after the renewal date. However, when an audit, litigation, or other action 

  

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involving records is initiated prior to the end of said period, records shall be maintained for a minimum of seven (7) years following resolution of such
action. 

  

	 	7.15. 	Access to Facilities and Records: The Contractor and its subcontractors shall cooperate with medical and financial audits performed by duly authorized representatives of
DSHS, the state of Washington Auditor’s Office, DHHS, and federal auditors from the United States government General Accounting Office and the Office of Management and Budget. With reasonable notice, generally thirty (30) calendar days, the
Contractor and its subcontractors shall provide access to its facilities and the financial and medical records pertinent to this agreement to monitor and evaluate performance under this agreement, including, but not limited to, the quality, cost,
use and timeliness of services (42 CFR 434.52), and assessment of the Contractor’s capacity to bear the potential financial losses (42 CFR 434.58). The Contractor and its subcontractors shall provide immediate access to facilities and records
pertinent to this agreement for Medicaid fraud investigators. 

  

	 	7.16. 	Solvency: 

  

	 	7.16.1. 	The Contractor shall have a Certificate of Registration as either a Health Maintenance Organization or a Health Care Service Contractor from the Office of the Insurance Commissioner
(OIC). The Contractor shall comply with the solvency provisions of RCW 48.44 or RCW 48.46, as amended. 

  

	 	7.16.2. 	The Contractor shall notify DSHS immediately upon being notified by OIC that they are to report financial information quarterly or monthly and provide DSHS with the same information
provided to OIC in response to any OIC request. The Contractor shall deliver all required information and notices to DSHS at the address listed in 7.5 Notices. The Contractor agrees that DSHS may at anytime access any information related to the
Contractor’s financial condition, or compliance with OIC requirements, from OIC and consult with OIC concerning such information. 

  

	 	7.16.3. 	The Contractor shall provide DSHS with the Contractor’s audited financial statements as soon as they become available to the Contractor. Financial statements shall be delivered
to the address list in 7.5 Notices. 

  

	 	7.16.4. 	If the Contractor becomes insolvent during the term of this agreement: 

  

	 	7.16.4.1. 	The state of Washington and enrollees shall not be in any manner liable for the debts and obligations of the Contractor. 

  

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	 	7.16.4.2. 	In accord with Section 10.13 Prohibition on Enrollee Charges for Covered Services, under no circumstances shall the Contractor, or any providers used to deliver services covered
under the terms of this agreement, charge enrollees for covered services. 

  

	 	7.16.4.3. 	The Contractor shall, in accord with RCW 48.44.055 or RCW 48.46.245, provide for the continuity of care for enrollees. 

  

	 	7.17. 	Compliance with All Applicable Laws and Regulations: In the provision of services under this agreement, the Contractor and its subcontractors shall comply with all applicable
federal and state statutes and regulations, and all amendments thereto, that are in effect when the agreement is signed or that come into effect during the term of the agreement (42 CFR 438.100(d). This includes, but is not limited to:

  

	 	7.17.1. 	Title XIX and Title XXI of the Social Security Act. 

  

	 	7.17.2. 	Title VI of the Civil Rights Act of 1964. 

  

	 	7.17.3. 	Title IX of the Education Amendments of 1972, regarding any education programs and activities. 

  

	 	7.17.4. 	The Age Discrimination Act of 1975. 

  

	 	7.17.5. 	The Rehabilitation Act of 1973 

  

	 	7.17.6. 	The Americans with Disabilities Act. 

  

	 	7.17.7. 	All applicable OIC statutes and regulations. 

  

	 	7.17.8. 	All local, state, and federal professional and facility licensing and accreditation requirements/standards that apply to services performed under the terms of this agreement,
including but not limited to: 

  

	 	7.17.8.1. 	All applicable standards, orders, or requirements issued under Section 306 of the Clean Air Act (42 US 1857(h)), Section 508 of the Clean Water Act (33 US 1368), Executive Order
11738, and Environmental Protection Agency (EPA) regulations (40 CFR Part 15), which prohibit the use of facilities included on the EPA List of Violating Facilities. Any violations shall be reported to DSHS, DHHS, and the EPA.

  

	 	7.17.8.2. 	 Any applicable mandatory standards and policies relating to energy efficiency that are contained in the State Energy 

  

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Conservation Plan, issued in compliance with the federal Energy Policy and Conservation Act. 

  

	 	7.17.8.3. 	Those specified for laboratory services in the Clinical Laboratory Improvement Amendments (CLIA). 

  

	 	7.17.8.4. 	Those specified in Title 18 for professional licensing. 

  

	 	7.17.9. 	Liability insurance requirements. 

  

	 	7.17.10. 	Reporting of abuse as required by RCW 26.44.030. 

  

	 	7.17.11. 	Industrial insurance coverage as required by Title 51 RCW. 

  

	 	7.17.12. 	Any other requirements associated with the receipt of federal funds. 

  

	 	7.18. 	Nondiscrimination: The Contractor shall comply with all federal and state nondiscrimination laws and regulations. 

  

	 	7.19. 	Review of Client Information: DSHS agrees to provide the Contractor with written client information, which DSHS intends to distribute to all or a class of clients.

  

	 	7.20. 	Contractor Not Employee of DSHS: The Contractor acknowledges and certifies that its directors, officers, partners, employees, and agents are not officers, employees, or
agents of DSHS or the state of Washington. The Contractor shall not hold itself out as or claim to be an officer, employee, or agent of DSHS or the state of Washington by reason of this agreement. The Contractor shall not claim any rights,
privileges, or benefits that would accrue to a civil service employee under RCW 41.06. 

  

	 	7.21. 	DSHS Not Guarantor: The Contractor acknowledges and certifies that neither DSHS nor the state of Washington are guarantors of any obligations or debts of the Contractor.

  

	 	7.22. 	Mutual Indemnification and Hold Harmless: The parties shall be responsible for and shall indemnify and hold each other harmless from all claims and/or damages to persons
and/or property resulting from its negligent acts and omissions. The Contractor shall indemnify and hold harmless DSHS from any claims by non-participating providers related to the provision to enrollees of covered services under this agreement.

  

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	 	7.23. 	Disputes: When a dispute arises over an issue concerning the terms of the agreement, the parties agree to the following process to address the dispute:

  

	 	7.23.1. 	The Contractor and DSHS shall attempt to resolve the dispute through informal means between the Contractor and the DSHS, MAA, Division of Program Support, Contract Manager assigned
to the Contractor. 

  

	 	7.23.2. 	If the Contractor is not satisfied with the outcome of the resolution with the Contract Manager, the Contractor may submit the disputed issue, in writing, for review, within ten
(10) working days of the outcome, to: 

  
 MaryAnne Lindeblad, Director (or her successor) 
 Division of Program Support 
 Medical Assistance Administration 
 Department of Social and Health Services 
 P.O. Box 45530 
 Olympia, WA 98504-5530 
  
 The Director may request additional information from the Contract Manager and/or the Contractor. The Director shall issue a written review decision to
the Contractor within thirty (30) calendar days of receipt of all information relevant to the issue. The review decision will be provided to the Contractor according to Section 7.5. 
  

	 	7.23.3. 	When the Contractor disagrees with the review decision of the Director, the Contractor may request independent mediation of the dispute. The request for mediation must be submitted
to the Director, in writing, within ten (10) working days of the Contractor’s receipt of the Director’s review decision. The Contractor and DSHS shall mutually agree on the selection of the independent mediator and shall bear all costs
associated with mediation equally. The results of mediation shall not be binding on either party. 

  

	 	7.23.4. 	Both parties agree to make their best efforts to resolve disputes arising from this agreement and agree that the dispute resolution process described herein shall precede any court
action. This dispute resolution process is the sole administrative remedy available under this agreement. 

  

	 	7.24. 	Governing Law and Venue: The laws of the state of Washington shall govern this agreement. In the event of a lawsuit involving this agreement, venue shall be proper only in
Thurston County, Washington. By execution of this agreement, the Contractor acknowledges the jurisdiction of the courts of the state of Washington regarding this matter. 

  

	 	7.25. 	Severability: If any provision of this agreement, including any provision of any document incorporated by reference, shall be held invalid, that invalidity shall not affect
the other provisions of the agreement. To that end, the provisions of this agreement are declared to be severable. 

  

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	 	7.26. 	Excluded Persons: 

  

	 	7.26.1. 	The Contractor may not knowingly have a director, officer, partner, or person with a beneficial ownership of more than 5% of the Contractor’s equity, or have an employee,
consultant or contractor who is significant or material to the provision of services under this agreement, who has been, or is affiliated with someone who has been, debarred, suspended, or otherwise excluded by any federal agency (SSA 1932(d)(1)). A
list of excluded parties is available on the following Internet website: www.arnet.gov/epls. 

  

	 	7.26.2. 	By entering into this agreement, the Contractor certifies that it does not knowingly have anyone who is an excluded person, or is affiliated with an excluded person, as a director,
officer, partner, employee, contractor, or person with a beneficial ownership of more than 5% of its equity. The Contractor is required to notify DSHS when circumstances change that affect such certification. 

  

	 	7.26.3. 	The Contractor is not required to consult the excluded parties list, but may instead rely on certifications from directors, officers, partners, employees, contractors, or persons
with beneficial ownership of more than 5% of the Contractor’s equity, that they are not debarred or excluded from a federal program. 

  

	 	7.27. 	Fraud and Abuse Requirements - Policies and Procedures: 

  

	 	7.27.1. 	The Contractor shall have administrative and management arrangements or procedures, and a mandatory compliance plan, that are designed to guard against fraud and abuse (42 CFR
438.608(a)). 

  

	 	7.27.2. 	The Contractor’s arrangements or procedures shall include the following (42 CFR 438.608(b)(1)): 

  

	 	7.27.2.1. 	Written policies, procedures, and standards of conduct that articulates the Contractor’s commitment to comply with all applicable Federal and State standards.

  

	 	7.27.2.2. 	The designation of a compliance officer and a compliance committee that are accountable to senior management. 

  

	 	7.27.2.3. 	Effective training for the compliance officer and the Contractor’s employees. 

  

	 	7.27.2.4. 	Effective lines of communication between the compliance officer and the Contractor’s staff. 

  

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	 	7.27.2.5. 	Enforcement of standards through well-publicized disciplinary guidelines. 

  

	 	7.27.2.6. 	Provision for internal monitoring and auditing. 

  

	 	7.27.2.7. 	Provision for prompt response to detected offenses, and for development of corrective action initiatives. 

  

	 	7.27.3. 	The Contractor shall submit a written copy of its administrative and management arrangements or procedures and mandatory compliance plan regarding fraud and abuse to DSHS for
approval, according to Section 7.5, Notices, by March 31st each year of this agreement. DSHS shall respond with
approval or denial with required modifications within thirty (30) calendar days of receipt. The Contractor shall have thirty (30) calendar days to resubmit the policies and procedures. 

  

	 	7.27.4. 	The Contractor may request a copy of the guidelines that DSHS will use in evaluating the Contractor’s written administrative and management arrangements or procedures and
mandatory compliance plan regarding fraud and abuse, and may request technical assistance in preparing the written administrative and management arrangements or procedures and mandatory compliance plan regarding fraud and abuse, by contacting the
DSHS, MAA, Division of Program Support Contract Manager assigned to the Contractor. 

  

	 	7.28. 	Insurance: The Contractor shall at all times comply with the following insurance requirements. 

  

	 	7.28.1. 	Commercial General Liability Insurance (CGL): The Contractor shall maintain Commercial General Liability Insurance, including coverage for bodily injury, property damage, and
contractual liability, with the following minimum limits: Each Occurrence - $1,000,000; General Aggregate - $2,000,000. The policy shall include liability arising out of premises, operations, independent contractors, products-completed operations,
personal injury, advertising injury, and liability assumed under an insured contract. The state of Washington, DSHS, its elected and appointed officials, agents, and employees shall be named as additional insureds expressly for, and limited to,
Contractor’s services provided under this contract. 

  

	 	7.28.2. 	 Professional Liability Insurance (PL): If the Contractor provides professional services, either directly or indirectly, the Contractor shall maintain Professional
Liability Insurance, including coverage for losses caused by errors and omissions, with the following minimum 

  

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limits: Each Occurrence - $1,000,000; General Aggregate - $2,000,000. 

  

	 	7.28.3. 	Worker’s Compensation: The Contractor shall comply with all applicable worker’s compensation, occupational disease, and occupational health and safety laws and
regulations. The state of Washington and DSHS shall not be held responsible as an employer for claims filed by the Contractor or its employees under such laws and regulations. 

  

	 	7.28.4. 	Employees and Volunteers: Insurance required of the Contractor under the Contract shall include coverage for the acts and omissions of the Contractor’s employees and
volunteers. 

  

	 	7.28.5. 	Subcontractors: The Contractor shall ensure that all subcontractors have and maintain insurance appropriate to the services to be performed. The Contractor shall make available
copies of Certificates of Insurance for subcontractors, to DSHS if requested. 

  

	 	7.28.6. 	Separation of Insureds: All insurance Commercial General Liability policies shall contain a “separation of insureds” provision. 

  

	 	7.28.7. 	Insurers: The Contractor shall obtain insurance from insurance companies authorized to do business within the state of Washington, with a “Best’s Reports” rating of
A-, Class VII or better. Any exception must be approved by the DSHS. Exceptions include placement with a “Surplus Lines” insurer or an insurer with a rating lower than A-, Class VII. 

  

	 	7.28.8. 	Evidence of Coverage: The Contractor shall submit Certificates of Insurance to the DSHS Central Contract Services, Insurance Services, PO Box 45811, Olympia, Washington 98504-5811,
for each coverage required of the Contractor under the Contract no later than January 15, 2004 DSHS in accord with the Notices section of this agreement. Each Certificate of Insurance shall be executed by a duly authorized representative of each
insurer. 

  

	 	7.28.9. 	Material Changes: The Contractor shall give DSHS, in accord with the Notices section of this agreement, 45 days advance notice of cancellation or non-renewal of any insurance in the
Certificate of Coverage. If cancellation is due to non-payment of premium, the Contractor shall give DSHS 10 days advance notice of cancellation. 

  

	 	7.28.10. 	 General: By requiring insurance, the state of Washington and DSHS do not represent that the coverage and limits specified will be adequate to protect the
Contractor. Such coverage and limits shall not 

  

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be construed to relieve the Contractor from liability in excess of the required coverage and limits and shall not limit the Contractor’s liability under
the indemnities and reimbursements granted to the State and DSHS in this Contract. All insurance provided in compliance with this Contract shall be primary as to any other insurance or self-insurance programs afforded to or maintained by the State.

  

	 	7.28.11. 	Contractor may waive the requirements contained in 7.28.1, 7.28.2, 7.28.7, and 7.28.8, if self-insured. In the event the Contractor is self insured, the Contractor must send to DSHS
by January 15, 2004, a signed written document, which certifies that the contractor is self insured, carries coverage adequate to meet the requirements of section 7.28, will treat DSHS as an additional insured, expressly for, and limited to, the
Contractor’s services provided under this Contract, and provides a point of contact for DSHS. 

  

	8.	SUBCONTRACTS 

  

	 	8.1.	Contractor Remains Legally Responsible: Subcontracts, as defined herein, may be used by the Contractor for the provision of any service under this agreement. However, no
subcontract shall terminate the Contractor’s legal responsibility to DSHS for any work performed under this agreement (42 CFR 434.6 (c)). 

  

	 	8.2.	Solvency Requirements for Subcontractors: For any subcontractor at financial risk, as described in Section 8.8.3. Substantial Financial Risk, or 1.17. Risk, the Contractor
shall establish, enforce and monitor solvency requirements that provide assurance of the subcontractor’s ability to meet its obligations. 

  

	 	8.3.	Required Provisions: Subcontracts shall be in writing, consistent with the provisions of 42 CFR 434.6. All subcontracts shall contain the following provisions:

  

	 	8.3.1. 	Identification of the parties of the subcontract and their legal basis for operation in the state of Washington. 

  

	 	8.3.2. 	Procedures and specific criteria for terminating the subcontract. 

  

	 	8.3.3. 	Identification of the services to be performed by the subcontractor and which of those services may be subcontracted by the subcontractor. 

  

	 	8.3.4. 	Reimbursement rates and procedures for services provided under the subcontract. 

  

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	 	8.3.5. 	Release to the Contractor of any information necessary to perform any of its obligations under this agreement. 

  

	 	8.3.6. 	Reasonable access to facilities and financial and medical records for duly authorized representatives of DSHS or DHHS for audit purposes, and immediate access for Medicaid fraud
investigators. 

  

	 	8.3.7. 	The requirement to completely and accurately report encounter data to the Contractor. Contractor shall ensure that all subcontractors required to report encounter data have the
capacity to comply with the Encounter Data Submission Requirements, Exhibit C-1. 

  

	 	8.3.8. 	The requirement to comply with the Contractor’s DSHS approved fraud and abuse policies and procedures. 

  

	 	8.3.9. 	No assignment of the subcontract shall take effect without the DSHS’ written agreement. 

  

	 	8.3.10. 	The subcontractor shall comply with the applicable state and federal rules and regulations as set forth in this agreement, including the applicable requirements of 42 CFR 438.6.

  

	 	8.3.11. 	Subcontracts shall set forth and require the subcontractor to comply with any term or condition of this agreement that is applicable to the services to be performed under the
subcontract. 

  

	 	8.3.12. 	The Contractor shall provide the following information regarding the grievance system to all subcontractors at the time that they enter into a contract or no later than January 15,
2004 for continuing subcontractors (42 CFR 438.414 and 42 CFR 438.10(g)(1)): 

  

	 	8.3.12.1. 	The enrollee’s right to a fair hearing, how to obtain a hearing, and representation rules at a hearing. 

  

	 	8.3.12.2. 	The enrollee’s right to file grievances and appeals and their requirements and timeframes for filing. 

  

	 	8.3.12.3. 	The availability of assistance in filing. 

  

	 	8.3.12.4. 	The toll-free numbers to file oral grievances and appeals. 

  

	 	8.3.12.5. 	The enrollee’s right to request continuation of benefits during an appeal or fair hearing and, if the Contractor’s action is upheld, the enrollee’s responsibility to
pay for the continued benefits. 

  

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	 	8.4.	Health Care Provider Subcontracts, including those for facilities, shall also contain the following provisions: 

  

	 	8.4.1. 	A quality improvement system tailored to the nature and type of services subcontracted, which affords quality control for the health care provided, including but not limited to the
accessibility of medically necessary health care, and which provides for a free exchange of information with the Contractor to assist the Contractor in complying with the requirements of this agreement. 

  

	 	8.4.2. 	A means to keep records necessary to adequately document services provided to enrollees. 

  

	 	8.4.3. 	Information about enrollees, including their medical records, shall be kept confidential in a manner consistent with state and federal laws and regulations.

  

	 	8.4.4. 	The subcontractor accepts payment from the Contractor as payment in full and shall not request payment from DSHS or any enrollee for covered services performed under the
subcontract. 

  

	 	8.4.5. 	The subcontractor agrees to hold harmless DSHS and its employees, and all enrollees served under the terms of this agreement in the event of non-payment by the Contractor. The
subcontractor further agrees to indemnify and hold harmless DSHS and its employees against all injuries, deaths, losses, damages, claims, suits, liabilities, judgments, costs and expenses which may in any manner accrue against DSHS or its employees
through the intentional misconduct, negligence, or omission of the subcontractor, its agents, officers, employees or contractors. 

  

	 	8.4.6. 	If the subcontract includes physician services, provisions for compliance with the PCP requirements stated in this agreement. 

  

	 	8.4.7. 	A ninety (90) day termination notice provision. 

  

	 	8.4.8. 	A specific termination provision for termination with short notice when a provider is excluded from participation in the Medicaid program. 

  

	 	8.4.9. 	The subcontractor agrees to comply with the appointment wait time standards of this agreement. The subcontract must provide for regular monitoring of timely access and corrective
action if the subcontractor fails to comply with the appointment wait time standards (42 CFR 438.206(c)(1). 

  

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	 	8.4.10. 	A provision for ongoing monitoring and periodic formal review that is consistent with industry standards and OIC regulations. Formal review must be completed no less than once every
three years and must identify deficiencies or areas for improvement and provide for corrective action (42 CFR 438.230(b)). 

  

	 	8.5.	Health Care Provider Subcontracts Delegating Administrative Functions: Subcontracts that delegate administrative functions under the terms of this agreement shall include the
following additional provisions: 

  

	 	8.5.1. 	For those subcontractors at financial risk, that the subcontractor shall maintain the Contractor’s solvency requirements throughout the term of the agreement.

  

	 	8.5.2. 	Clear descriptions of any administrative functions delegated by the Contractor in the subcontract, including but not limited to utilization/ medical management, claims processing,
enrollee grievances and appeals, and the provision of data or information necessary to fulfill any of the Contractor’s obligations under this agreement. 

  

	 	8.5.3. 	How frequently and by what means the Contractor will monitor compliance with solvency requirements and requirements related to any administrative function delegated in the
subcontract. 

  

	 	8.5.4. 	Whether referrals for enrollees will be restricted to providers affiliated with the group and, if so, a description of those restrictions. 

  

	 	8.6.	Excluded Providers: 

  

	 	8.6.1. 	Pursuant to Section 1128 of the Social Security Act, the Contractor may not subcontract with an individual practitioner or provider, or an entity with an officer, director, agent,
or manager, or an individual who owns or has a controlling interest in the entity, who has been: convicted of crimes as specified in Section 1128 of the Social Security Act, excluded from participation in the Medicare and Medicaid program, assessed
a civil penalty under the provisions of Section 1128, has a contractual relationship with an entity convicted of a crime specified in Section 1128, or is a person described in Section 7.26 of this agreement, Excluded Persons.

  

	 	8.6.2. 	In addition, if DSHS terminates a subcontractor from participation in the Medical Assistance program, the Contractor shall exclude the subcontractor from participation in Healthy
Options/SCHIP. The Contractor shall terminate subcontracts of excluded providers immediately when the Contractor becomes aware of such exclusion or when the Contractor receives notice from DSHS, whichever is earlier. 

  

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	 	8.7.	Home Health Providers: If the pending Medicaid home health agency surety bond requirement (Section 4708(d) of the Balanced Budget Act of 1997) becomes effective before or
during the term of this agreement, beginning on the effective date of the requirement the Contractor may not subcontract with a home health agency unless the state has obtained a surety bond from the home health agency in the amount required by
federal law. The Department will provide a current list of bonded home health agencies upon request to the Contractor. 

  

	 	8.8.	Physician Incentive Plans: Physician incentive plans, as defined herein, are subject to the conditions set forth in this section in accord with federal regulations (42 CFR
422.208 and 42 CFR 422.210). 

  

	 	8.8.1. 	Prohibited Payments: The Contractor shall make no payment to a physician or physician group, directly or indirectly, under a physician incentive plan as an inducement to
reduce or limit medically necessary services provided to an individual enrollee. 

  

	 	8.8.2. 	Disclosure Requirements: Risk sharing arrangements in subcontracts with physicians or physician groups are subject to review and approval by DSHS. The Contractor shall
provide the following information about its physician incentive plan, and the physician incentive plans of all its subcontractors in any tier, to the Department annually upon request: 

  

	 	8.8.2.1. 	Whether the incentive plan includes referral services. 

  

	 	8.8.2.2. 	If the incentive plan includes referral services: 

  

	 	8.8.2.2.1. 	The type of incentive plan (e.g. withhold, bonus, capitation) 

  

	 	8.8.2.2.2. 	For incentive plans involving withholds or bonuses, the percent that is withheld or paid as a bonus. 

  

	 	8.8.2.2.3. 	Proof that stop-loss protection meets the requirements of 8.8.4.1., including the amount and type of stop-loss protection. 

  

	 	8.8.2.2.4. 	 The panel size and, if commercial members and enrollees are pooled, a description of the groups pooled and the risk terms of each group. Medicaid, Medicare, and
commercial members in a physician’s or physician group’s panel may be pooled provided the terms of risk for the pooled enrollees and commercial members are comparable, and the incentive payments are not calculated separately for pooled
enrollees. 

  

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Commercial members include military and Basic Health Plan members. 

  

	 	8.8.3. 	Substantial Financial Risk: A physician, or physician group as defined herein, is at substantial financial risk when more than 25% of the total maximum potential payments to
the physician or physician group depend on the use of referral services. When the panel size is fewer than 25,000 members arrangements that cause substantial financial risk include, but are not limited to, the following: 

  

	 	8.8.3.1. 	Withholds greater than 25% of total potential payments 

  

	 	8.8.3.2. 	Withholds less than 25% of total potential payments but the physician or physician group is potentially liable for more than 25% of total potential payments.

  

	 	8.8.3.3. 	Bonuses greater than 33% of total potential payments, less the bonus. 

  

	 	8.8.3.4. 	Withholds plus bonuses if the withholds plus bonuses equal more than 25% of total potential payments. 

  

	 	8.8.3.5. 	Capitation arrangements if the difference between the minimum and maximum possible payments is more than 25% of the maximum possible payments, or the minimum and maximum possible
payments are not clearly explained in the contract. 

  

	 	8.8.4. 	Requirements if a Physician or Physician Group is at Substantial Financial Risk: If the Contractor, or any subcontractor (e.g. IPA, PHO), places a physician or physician
group at substantial financial risk, the Contractor shall assure that all physicians and physician groups have either aggregate or per member stop-loss protection for services not directly provided by the physician or physician group.

  

	 	8.8.4.1. 	If aggregate stop-loss protection is provided, it must cover 90% of the costs of referral services that exceed 25% of maximum potential payments under the subcontract.

  

	 	8.8.4.2. 	If stop-loss protection is based on a per-member limit, it must cover 90% of the cost of referral services that exceed the limit as indicated below based on panel size, and whether
stop-loss is provided separately for professional and institutional services or is combined for the two. 

  

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	 	8.8.4.2.1. 	1,000 members or fewer, the threshold is $3,000 for professional services and $10,000 for institutional services, or $6,000 for combined services. 

  

	 	8.8.4.2.2. 	1,001 - 5,000 members, the threshold is $10,000 for professional services and $40,000 for institutional services, or $30,000 for combined services. 

  

	 	8.8.4.2.3. 	5,001 - 8,000 members, the threshold is $15,000 for professional services and $60,000 for institutional services, or $40,000 for combined services. 

  

	 	8.8.4.2.4. 	8,001 - 10,000 members, the threshold is $20,000 for professional services and $100,000 for institutional services, or $75,000 for combined services. 

  

	 	8.8.4.2.5. 	10,001 - 25,000, the threshold is $25,000 for professional services and $200,000 for institutional services, or $150,000 for combined services. 

  

	 	8.8.4.2.6. 	25,001 members or more, there is no risk threshold. 

  

	 	8.8.4.3. 	For a physician or physician group at substantial financial risk, the Contractor shall periodically conduct surveys of enrollee satisfaction with the physician or physician group.
DSHS shall require such surveys annually. DSHS may, at its sole option, conduct enrollee satisfaction surveys that satisfy this requirement and waive the requirement for the Contractor to conduct such surveys. DSHS shall notify the Contractor in
writing if the requirement is waived. If DSHS does not waive the requirement, the Contractor shall provide the survey results to DSHS annually upon request. The surveys shall: 

  

	 	8.8.4.3.1. 	Include current enrollees, and enrollees who have disenrolled within 12 months of the survey for reasons other than loss of Medicaid eligibility or moving outside the
Contractor’s service area. 

  

	 	8.8.4.3.2. 	Be conducted according to commonly accepted principles of survey design and statistical analysis. 

  

	 	8.8.4.3.3. 	Address enrollees satisfaction with the physician or physician group’s: 

  

	 	8.8.4.3.3.1. 	Quality of services provided. 

  

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	 	8.8.4.3.3.2. 	Degree of access to services. 

  

	 	8.8.5. 	Sanctions and Penalties: DSHS or CMS may impose intermediate sanctions, as described in Section 7.7 of this agreement, for failure to comply with the rules in this section.

  

	 	8.9.	Payment to FQHCs/RHCs: The Contractor shall not pay a federally qualified health center or a rural health clinic less than the Contractor would pay non-FQHC/RHC providers for
the same services (42 USC 1396(m)(2)(A)(ix)). 

  

	9.	TERM AND TERMINATION 

  

	 	9.1.	Term: This agreement is effective from January 1, 2003 at 12:01 a.m. Pacific Standard Time (PST) through 12:00 a.m. December 31, 2005, PST. This agreement may be extended by
mutual agreement of the parties. 

  

	 	9.2.	Termination for Convenience: 

  

	 	9.2.1. 	Either party may terminate, upon one-hundred twenty (120) calendar days advance written notice, performance of work under this agreement in whole or in part, whenever, for any
reason, either party shall determine that such termination is in its best interest. 

  

	 	9.2.2. 	In the event DSHS terminates this agreement for convenience, the Contractor shall have the right to assert a claim for the Contractor’s direct termination costs. Such claim
must be: 

  

	 	9.2.2.1. 	Delivered to DSHS as provided in Section 7.5., Notices. 

  

	 	9.2.2.2. 	Asserted within ninety (90) calendar days of termination for convenience, or, in the event the termination was originally issued under the provisions of Section 9.3, Termination by
DSHS for Default, ninety (90) calendar days from the date the notice of termination was deemed to have been issued under this section. The Contracts Coordination Unit of MAA (CCU) may extend said ninety (90) calendar days if the Contractor makes a
written request to the CCU and CCU deems the grounds for the request to be reasonable. The CCU will evaluate the claim for termination costs and order DSHS to pay the claim or such amount, as s/he deems valid, or deny the claim. The CCU shall notify
the Contractor of CCU’s decision within sixty (60) calendar days of receipt of the claim. 

  

	 	9.2.3. 	In the event the Contractor terminates this agreement for convenience, DSHS shall have the right to assert a claim for DSHS’ direct termination costs. Such claim must be:

  

	 	9.2.3.1. 	Delivered to the Contractor as provided in Section 7.5., Notices. 

  

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	 	9.2.3.2. 	Asserted within ninety (90) calendar days of the date of termination for convenience. The CCU may extend said ninety (90) calendar days if DSHS makes a written request to the CCU
and CCU deems the grounds for the request to be reasonable. The CCU will evaluate the claim for termination costs and order the Contractor to pay the claim for such amount, as CCU deems valid, or deny the claim. 

  

	 	9.2.4. 	In the event the Contractor or DSHS disagrees with the CCU decision entered pursuant to this section, the Contractor or DSHS shall have the right to a dispute resolution as
described in Section 7.23, Disputes. 

  

	 	9.2.5. 	In no event shall the claim for termination costs exceed the average monthly amount paid to the Contractor for the twelve (12) months immediately prior to termination.

  

	 	9.2.6. 	In addition to DSHS’ or Contractor’s direct termination costs, the Contractor or DSHS shall be liable for administrative costs incurred by the other party in procuring
supplies or services similar to and/or replacing those terminated. 

  

	 	9.2.7. 	The Contractor or DSHS shall not be liable for any termination costs if it notifies the other party of its intent not to renew this agreement at least one hundred twenty (120)
calendar days prior to the renewal date. 

  

	 	9.2.8. 	In the event this agreement is terminated for the convenience of either party, the effective date of termination shall be the last day of the month in which the one hundred twenty
(120) day notification period is satisfied, or the last day of such later month as may be agreed upon by both parties. 

  

	 	9.3.	Termination by the Contractor for Default: The Contractor may terminate its performance under this agreement in whole or in part, whenever DSHS shall default in performance
of this agreement and shall fail to cure such default within a period of one hundred twenty (120) calendar days (or such longer period as the Contractor may allow) after receipt from the Contractor of a written notice specifying the default. In the
event it is determined that DSHS was not in default, DSHS may claim damages for wrongful termination. The procedure for determining damages shall be as stated in Section 9.2. 

  

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	 	9.4.	Termination by DSHS for Default: 

  

	 	9.4.1. 	DSHS may terminate performance of work under this agreement, in whole or in part, whenever the Contractor shall default in performance of this agreement and shall fail to cure such
default within a period of one hundred twenty (120) calendar days (or such longer period as the Contracting Officer may allow) after receipt from the Contracting Officer of a written notice specifying the default. Such termination shall be referred
to herein as “Termination for Default.” 

  

	 	9.4.2. 	If after notice of termination of this agreement for default it is determined by DSHS or a court of law that the Contractor was not in default or that the Contractor’s failure
to perform or make progress in performance was due to causes beyond the control and without the error or negligence of the Contractor, or any subcontractor, the Contractor may claim damages. The procedure for determining damages shall be as stated
in Section 9.2. 

  

	 	9.4.3. 	In the event DSHS terminates this agreement as provided in (a) above, DSHS may procure, upon such terms and in such manner as the Contracting Officer may deem appropriate, supplies
or services similar to those terminated, and if the Contractor is judged to be in default by a court of law, DSHS’ damages shall be measured by any excess costs for such similar supplies or services. In addition, DSHS’ damages may also
include reasonable administrative costs incurred in procuring such similar supplies or services. 

  

	 	9.5.	Mandatory Termination: DSHS will terminate this agreement in the event that the Secretary of DHHS determines that the Contractor does not meet the requirements for
participation in the Medicaid program pursuant to Title XIX of the Social Security Act and all amendments. 

  
 In addition, DSHS is required under federal law to either impose temporary management or terminate this agreement if the Contractor is repeatedly found to
not meet federal requirements for managed care Contractors, as specified in Section 1903(m) of the Social Security Act. Should this circumstance arise, DSHS will terminate this agreement consistent with Section 9.4, Termination by DSHS for Default.

  

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	 	9.6.	Termination for Reduction in Funding: In the event funding from state, federal, or other sources is withdrawn, reduced or limited in any way after the effective date of this
agreement and prior to the termination date, DSHS may terminate the agreement under the “Termination for Convenience” clause. 

  

	 	9.7.	Information on Outstanding Claims at Termination: In the event this agreement is terminated, the Contractor shall provide DSHS, within three hundred and sixty-five (365)
calendar days, all available information reasonably necessary for the reimbursement of any outstanding claims for services to enrollees (42 CFR 434.6(a)(6)). Information and reimbursement of such claims is subject to the provisions of Section 3,
Payment. 

  

	 	9.8.	Continued Responsibilities: After the termination of this agreement, the Contractor remains obligated to: 

  

	 	9.8.1. 	Cover hospitalized enrollees until discharge consistent with Section 3.7. 

  

	 	9.8.2. 	Submit reports required under Section 6. 

  

	 	9.8.3. 	Provide access to records as required in Section 7.15. 

  

	 	9.8.4. 	Provide the administrative services associated with covered services (e.g. claims processing, enrollee appeals) provided to enrollees under the terms of this agreement.

  

	 	9.9.	Enrollee Notice of Termination: DSHS shall inform enrollees when notice is given by either party of its intent to terminate this agreement as provided herein.

  

	 	9.10. 	Pre-termination Dispute Resolution: If the Contractor disagrees with a DSHS decision to terminate this agreement, other than a termination for convenience, the Contractor
will have the right to a dispute resolution as described in Section 7.23, Disputes. 

  

	10.	SERVICE DELIVERY 

  

	 	10.1. 	Scope of Services: The Contractor shall cover enrollees for preventive care and diagnosis and treatment of illness and injury as set forth in Section 11, Schedule of
Benefits. If a specific procedure or element of a covered service is covered by DSHS under its fee-for-service program as described in DSHS’ billing instructions, the Contractor shall cover it subject to the specific exclusions and limitations
in Section 11, Schedule of Benefits. Except as otherwise specifically provided in this agreement, the Contractor shall provide covered services in the amount, duration and scope described in the Medicaid State Plan. 

  

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 Except as specifically provided in Section 10.17, this shall not be construed to prevent the
Contractor from establishing utilization control measures as it deems necessary to assure that services are appropriately utilized, provided that utilization control measures do not deny medically necessary covered services to enrollees. The
Contractor may limit coverage of services to participating providers except as specifically provided in Section 4, Access and Capacity, Section 11, Schedule of Benefits, for emergency services, and as necessary to provide medically necessary
services as described in 10.1.2.2., Urgent Services. 
  

	 	10.1.1. 	In Service Area: In the service area, as defined in Section 2.1, the Contractor shall cover enrollees for all medically necessary services included in the scope of services
covered by this agreement. 

  

	 	10.1.2. 	Out of Service Area: The Contractor shall cover emergency, post-stabilization and urgent care services, for enrollees temporarily outside of the service area or who have
moved to another service area but are still enrolled with the Contractor. Urgent care is associated with the presentation of medical signs that require immediate attention, but are not life threatening. The Contractor may require pre-authorization
for urgent care services as long as the wait times specified in Section 4.4, Appointment Standards, are not exceeded.  

  
 For the enrollees temporarily outside of the service area or who have moved to another service area but are still enrolled with the Contractor, the
Contractor shall cover services that are neither emergent nor urgent but are medically necessary and cannot reasonably wait until enrollee’s return to the service area. The Contractor is not required to cover non-symptomatic (i.e. preventive
care) out of the service area. The contractor may request pre-authorization for such services as long as the wait times specified in Section 4.4, Appointment Standards, are not exceeded.  
  

	 	10.1.3. 	Coverage Limitation: When an enrollee moves out of a service area, or is temporarily staying with a parent or relative outside the service area, coverage shall be limited to
ninety (90) calendar days beginning with the first of the month following the month in which the enrollee changes residence. The Contractor is not responsible for coverage of any services when an enrollee is outside the United States of America and
its territories and possessions. 

  

	 	10.2. 	 Medical Necessity Determination: The Contractor shall determine which services are medically necessary, according to utilization management requirements
included in the Quality Improvement Program Standards, Exhibit A and according to the definition of Medically Necessary Services in this agreement. The Contractor’s determination of medical necessity in 

  

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specific instances shall be final except as specifically provided in this agreement regarding appeals, fair hearings and independent review.

  

	 	10.3. 	Enrollee Choice of PCP: The Contractor shall allow, to the extent possible and appropriate, each new enrollee to choose a participating PCP. In the case of newborns, the
parent shall choose the newborn’s PCP. If the enrollee does not make a choice at the time of enrollment, the Contractor shall assign the enrollee to a PCP or clinic, within reasonable proximity to the enrollee’s home, no later than fifteen
(15) working days after coverage begins. The Contractor shall allow an enrollee to change PCP or clinic at anytime with the change becoming effective no later than the beginning of the month following the enrollees request for the change (WAC
388-538-060 and WAC 284-43-251 (1)). 

  
 The
Contractor shall allow children with special health care needs who utilize a specialist frequently to retain the specialist as a PCP, or alternatively, be allowed direct access to specialists for needed care. The Contractor shall also allow
enrollees with special health care needs as defined in WAC 388-538-050 to retain a specialist as a PCP or be allowed direct access to a specialist if the assessment required under the provisions of this agreement demonstrates a need for a course of
treatment or regular monitoring by such specialist (42 CFR 438.208). 
  

	 	10.4. 	Continuity of Care: The Contract shall ensure the Continuity of Care, as defined herein, for enrollees in an active course of treatment for a chronic or acute medical
condition. The Contractor shall ensure that medically necessary care for enrollees is not interrupted. 

  

	 	10.4.1. 	For changes in the Contractor’s provider network or service areas, the Contractor shall comply with the provisions of Sections 2.1.3.3. and 4.11.2. 

  

	 	10.4.2. 	If possible and reasonable, the Contractor shall preserve enrollee provider relationships through transitions. 

  

	 	10.4.3. 	Where preservation of provider relationships is not possible and reasonable, the Contractor shall provide transition to a provider who will provide equivalent, uninterrupted care as
expeditiously as the enrollee’s medical condition requires. 

  

	 	10.4.4. 	The Contractor shall allow new enrollees with the Contractor to fill prescriptions written prior to enrollment for the lesser of: 

  

	 	10.4.4.1. 	30 calendar days after enrollment with the Contractor; 

  

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	 	10.4.4.2. 	Or prescription expiration; 

  

	 	10.4.4.3. 	Or a participating provider performs an examination of the enrollee to evaluate the need for the prescription. 

  

	 	10.5. 	Coordination of Care: The Contractor shall ensure that health care services are coordinated for enrollees, in accord with the provisions of the Quality Improvement Program
Standards, Exhibit A, and as follows: 

  

	 	10.5.1. 	The Contractor shall ensure that PCPs are responsible for the provision, coordination, and supervision of health care to meet the needs of each enrollee, including initiation and
coordination of referrals for medically necessary specialty care. The Contractor shall also provide or shall ensure PCPs provide ongoing coordination of community-based services required by enrollees, including but not limited to: First Steps
Maternity Services and Maternity Case Management, Transportation, Regional Support Networks for mental health services, developmental disability services, local health departments, Title V services, home and community services for older and
physically disabled individuals, alcohol and substance abuse services, and services for children with special health care needs. The Contractor shall provide support services to assist PCPs in providing such coordination of it is not provided
directly by the Contractor (42 CFR 438.208). The Contractor shall also ensure that enrollee health information is shared between providers in a manner that facilitates coordination of care while protecting confidentiality and enrollee rights.

  

	 	10.5.2. 	The Contractor shall ensure that PCPs, in consultation with other appropriate health care professionals, assess and develop individualized treatment plans for children with special
health care needs and enrollees with special health care needs as defined herein, which ensure integration of clinical and non-clinical disciplines and services in the overall plan of care. Documentation regarding the assessment and treatment plan
shall be in the enrollee’s case file, including enrollee participation in the development of the treatment plan. If the Contractor requires approval of the treatment plan, approval must be provided in a timely manner appropriate to the
enrollee’s health condition (42 CFR 438.208(c)). 

  

	 	10.5.3. 	The Contractor shall identify or shall ensure that practitioners identify enrollees with special health care needs as defined in WAC 388-538-050. The Contractor’s obligation
for identification of enrollees with special health care needs is limited to identification in the course of any health care visit initiated by the enrollee. 

  

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	 	10.6. 	Second Opinions: The Contractor must provide for a second opinion regarding the enrollee’s health care from a qualified health care professional within the
Contractor’s network, or arrange for the enrollee to obtain one outside the Contractor’s network, at no cost to the enrollee. 

  
 This section shall not be construed to require the Contractor to cover unlimited second opinions, nor to require the Contractor to cover any services
other than the professional services of the second opinion provider. 
  

	 	10.7. 	Enrollee Self-Determination: The Contractor shall ensure that all providers: obtain informed consent prior to treatment from enrollees, or persons authorized to consent on
behalf of an enrollee as described in RCW 7.70.065; comply with the provisions of the Natural Death Act (RCW 70.122) and state and federal Medicaid rules concerning advance directives (WAC 388-501-0125 & 42 CFR 438.6); and, when appropriate,
inform enrollees of their right to make anatomical gifts (RCW 68.50.540). 

  

	 	10.8. 	Compliance with Federal Regulations for Sterilizations and Hysterectomies: The Contractor shall assure that all sterilizations and hysterectomies performed under this
agreement are in compliance with 42 CFR 441 Subpart F, and that the DSHS Sterilization Consent Form (DSHS 13-364(x)) or its equivalent is used. 

  

	 	10.9. 	Program Information: At the Contractor’s request, DSHS shall provide the Contractor with pertinent documents including statutes, regulations, and current versions of
billing instructions and other written documents which describe DSHS policies and guidelines related to service coverage and reimbursement. 

  

	 	10.10. 	Confidentiality of Enrollee Information: The Contractor shall comply with all state and federal laws and regulations concerning the confidentiality of enrollee information.

  

	 	10.10.1. 	The use or disclosure of any information concerning an enrollee, including but not limited to medical records, by the Contractor and its subcontractors for any purpose not directly
connected with the provision of services under this agreement is prohibited, except by written consent of the enrollee, his/her representative, or his/her responsible parent or guardian, or as otherwise provided by law. 

  

	 	10.10.2. 	 The Contractor shall not require parental or guardian consent for, nor inform parents or guardians of, the following services provided to enrollees under age
eighteen (18): reproductive health (State v. Koome, 1975), sexually-transmitted diseases (RCW 70.24.110), drug and alcohol treatment (RCW 70.96A.095), and mental health (RCW 

  

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71.34.200), except as specifically provided in law. The Contractor shall suppress these services on any subscriber reports. 

  

	 	10.10.3. 	The Contractor and DSHS agree to share information regarding enrollees in a manner that complies with applicable state and federal law protecting confidentiality of such information
(42 CFR 431 Subpart F, RCW 5.60.060(4), RCW 70.02). 

  

	 	10.10.4. 	Retained client data shared by DSHS with the Contractor, due to the confidentiality of the information must be maintained throughout the life cycle of the data, to include any
record retention cycle, or archival period, in a manner that will retain its confidential nature regardless of the age or media format of the data. 

  

	 	10.11. 	Marketing: The Contractor, and any subcontractors through which the Contractor provides covered services, shall comply with the following requirements regarding marketing:

  

	 	10.11.1. 	All marketing materials must be reviewed by and have the prior written approval of DSHS. 

  

	 	10.11.2. 	Marketing materials shall not contain misrepresentations, or false, inaccurate or misleading information. 

  

	 	10.11.3. 	Marketing materials must be distributed in all services areas the Contractor serves. 

  

	 	10.11.4. 	Marketing materials must be in compliance with Section 4.7. Marketing materials in English must give directions in the Medicaid eligible population’s primary languages for
obtaining understandable materials in accord with contract Section 4.7.2. DSHS may determine, in its sole judgment, if materials that are primarily visual meet the requirements of contract Section 4.7. 

  

	 	10.11.5. 	The Contractor shall not offer anything of value as an inducement to enrollment. 

  

	 	10.11.6. 	The Contractor shall not use the sale of other insurance to attempt to influence enrollment. 

  

	 	10.11.7. 	The Contractor shall not directly or indirectly conduct door-to-door, telephonic or other cold-call marketing of enrollment. 

  

	 	10.12. 	 Information Requirements for Enrollees and Potential Enrollees: The Contractor shall provide sufficient, accurate oral and written information to potential
enrollees to assist them in making an informed decision about 

  

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enrollment (SSA 1932(d)(2) and 42 CFR 438.10). The Contractor shall provide to potential enrollees upon request and to each enrollee, within fifteen (15)
working days of enrollment, at any time upon request, and at least once a year, the information needed to understand benefit coverage and obtain care. All enrollee information shall have the prior written approval of DSHS. Changes to State or
Federal law shall be reflected in information to enrollees no more than ninety (90) calendar days after the effective date of the change and enrollees shall be notified at least thirty (30) calendar days prior to the effective date if, in the sole
judgment of DSHS, the change is significant in regard to the enrollees’ quality of or access to care. 

  
 The Contractor’s written information to enrollees and potential enrollees shall include: 
  

	 	10.12.1. 	How to choose a PCP, including general information on available PCPs and how to obtain specific information including a list of PCPs that includes their identity, location,
languages spoken, qualifications, practice restrictions, and availability. 

  

	 	10.12.2. 	General information regarding specialists available to enrollees and how to obtain specific information including a list of specialists that includes their identity, location,
languages spoken, qualifications, practice restrictions, and availability. 

  

	 	10.12.3. 	How to obtain information regarding any limitations to the availability of or referral to specialists to assist the enrollee in selecting a PCP. 

  

	 	10.12.4. 	How to obtain information regarding Physician Incentive Plans (42 CFR 422.210(b)), and information on the Contractor’s structure and operations. 

  

	 	10.12.5. 	How to change a PCP. 

  

	 	10.12.6. 	Informed consent guidelines. 

  

	 	10.12.7. 	Information regarding conversion rights under RCW 48.46.450 or RCW 48.44.370. 

  

	 	10.12.8. 	How to request a disenrollment. 

  

	 	10.12.9. 	The following Information regarding advance directives: 

  

	 	10.12.9.1. 	 A statement about an enrollee’s right to make decisions concerning an enrollee’s medical care, accept or refuse surgical 

  

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or medical treatment, execute an advance directive, and revoke an advance directive at any time. 

  

	 	10.12.9.2. 	The written policies and procedures of the Contractor concerning advance directives, including any policy that would preclude the Contractor or subcontractor from honoring an
enrollee’s advance directive. 

  

	 	10.12.9.3. 	An enrollee’s rights under state law. 

  

	 	10.12.10. 	How to recommend changes in the Contractor’s policies and procedures. 

  

	 	10.12.11. 	Health promotion, health education and preventive health services available. 

  

	 	10.12.12. 	How to obtain assistance from the Contractor in using the grievance, appeal and independent review processes (must assure enrollees that information will be kept confidential except
as needed to process the grievance, appeal or independent review). 

  

	 	10.12.13. 	The right to initiate a grievance or file an appeal, in accord with the Contractor’s DSHS approved policies and procedures regarding grievances and appeals.

  

	 	10.12.14. 	The right to request a DSHS Fair Hearing after the Contractor’s appeal process is exhausted, how to request a DSHS Fair Hearing, and the rules that govern representation at the
Fair Hearing. 

  

	 	10.12.15. 	The right to request an independent review in accord with RCW 48.43.535 and WAC 246-305 after the DSHS Fair Hearing process is exhausted and how to request an independent review.

  

	 	10.12.16. 	The right to appeal an independent review decision to the DSHS Board of Appeals and how to request such an appeal. 

  

	 	10.12.17. 	Requirements and timelines for grievances, appeals, fair hearings, independent review and DSHS Board of Appeals. 

  

	 	10.12.18. 	Rights and responsibilities, including potential payment liability, regarding the continuation of services that are the subject of appeal or fair hearing. 

 

	 	10.12.19. 	Availability of toll-free numbers for information on grievance, and appeals. 

  

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	 	10.12.20. 	The enrollee’s rights and responsibilities with respect to receiving covered services. 

  

	 	10.12.21. 	Information about covered benefits and how to contact DSHS regarding services that may be covered by DSHS, but are not covered benefits under this agreement.

  

	 	10.12.22. 	Information regarding the availability of and how to access or obtain interpretation services and translation of written information. 

  

	 	10.12.23. 	How to obtain information in alternative formats. 

  

	 	10.12.24. 	The enrollees right to and procedure for obtaining a second opinion. 

  

	 	10.13. 	Prohibition on Enrollee Charges for Covered Services: Under no circumstances shall the Contractor, or any providers used to deliver services covered under the terms of this
agreement, charge enrollees for covered services in excess of the copayments DSHS implements in its fee-for-service program as referenced in Section 3.11 (SSA 1932(b)(6), SSA 1128B(d)(1)). 

  

	 	10.14. 	Provider/Enrollee Communication: The Contractor may not prohibit, or otherwise restrict, a health care professional acting within their lawful scope of practice, from
advising or advocating on behalf of an enrollee who is his or her patient, for the following (42 CFR 438.102(a)(1)): 

  

	 	10.14.1. 	The enrollee’s health status, medical care, or treatment options, including any alternative treatment that may be self-administered. 

  

	 	10.14.2. 	Any information the enrollee needs in order to decide among all relevant treatment options. 

  

	 	10.14.3. 	The risks, benefits, and consequences of treatment or non-treatment. 

  

	 	10.14.4. 	The enrollee’s right to participate in decisions regarding his or her health care, including the right to refuse treatment, and to express preferences about future treatment
decisions. 

  

	 	10.15. 	Provider Nondiscrimination: 

  

	 	10.15.1. 	The Contractor shall not discriminate, with respect to participation, reimbursement, or indemnification, against providers practicing within their licensed scope of practice solely
on the basis of the type of license or certification they hold. 

  

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

  

	 	10.15.3. 	The Contractor’s provider selection policies and procedures shall not discriminate against particular providers that serve high-risk populations or specialize in conditions
that require costly treatment (42CFR 438.214(c)). 

  

	 	10.15.4. 	Consistent with the Contractors responsibilities to the enrollees, this section may not be construed to require the Contractor to contract with providers beyond the number necessary
to meet the needs of its enrollees; preclude the Contractor from using different reimbursement amounts for different specialties or for different practitioners in the same specialty; or preclude the Contractor from establishing measures that are
designed to maintain quality of services and control costs. 

  

	 	10.16. 	Experimental and Investigational Services: 

  

	 	10.16.1. 	If the Contractor excludes or limits benefits for any services for one or more medical conditions or illnesses because such services are deemed to be experimental or
investigational, the Contractor shall develop and follow policies and procedures for such exclusions and limitations. The policies and procedures shall identify the persons responsible for such decisions. The policies and procedures and any criteria
for making decisions shall be made available to DSHS upon request. 

  
 In making the determination, whether a service is experimental and investigational and, therefore, not a covered service, the Contractor shall consider the following: 
  

	 	10.16.1.1. 	Evidence in peer-reviewed, medical literature, as defined herein, and pre-clinical and clinical data reported to the National Institute of Health and/or the National Cancer
Institute, concerning the probability of the service maintaining or significantly improving the enrollee’s length or quality of life, or ability to function, and whether the benefits of the service or treatment are outweighed by the risks of
death or serious complications. 

  

	 	10.16.1.2. 	Whether evidence indicates the service or treatment is likely to be as beneficial as existing conventional treatment alternatives. 

  

	 	10.16.1.3. 	Any relevant, specific aspects of the condition. 

  

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	 	10.16.1.4. 	Whether the service or treatment is generally used for the condition in the state of Washington. 

  

	 	10.16.1.5. 	Whether the service or treatment is under continuing scientific testing and research. 

  

	 	10.16.1.6. 	Whether the service or treatment shows a demonstrable benefit for the condition. 

  

	 	10.16.1.7. 	Whether the service or treatment is safe and efficacious. 

  

	 	10.16.1.8. 	Whether the service or treatment will result in greater benefits for the condition than another generally available service. 

  

	 	10.16.1.9. 	If approval is required by a regulating agency, such as the Food and Drug Administration, whether such approval has been given before the date of service. 

 

	 	10.16.2. 	Criteria to determine whether a service is experimental or investigational shall be no more stringent for Healthy Options enrollees than that applied to any other enrollees. A
service or treatment that is not experimental for one enrollee with a particular medical condition cannot be determined to be experimental for another enrollee with the same medical condition and similar health status. 

  

	 	10.16.3. 	A service or treatment may not be determined to be experimental and investigational solely because it is under clinical investigation when there is sufficient evidence in
peer-reviewed medical literature to draw conclusions, and the evidence indicates the service or treatment will probably be of significant benefit to enrollees. 

  

	 	10.16.4. 	A determination made by the Contractor shall be subject to appeal through the Contractor’s appeal process, including independent review, through the DSHS fair hearing process
and independent review under WAC 246-305. 

  

	 	10.17. 	Enrollee Rights and Protections: 

  

	 	10.17.1. 	The Contractor shall have written policies regarding enrollee rights (42 CFR 438.100(a)(1)). 

  

	 	10.17.2. 	The Contractor shall comply with any applicable Federal and State laws that pertain to enrollee rights and ensure that its staff and affiliated providers take those rights into
account when furnishing services to enrollees (42 CFR 438.100(a)(2)). 

  

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	 	10.17.3. 	The Contractor shall guarantee each enrollee the following rights (42 CFR 438.100(b)(2)): 

  

	 	10.17.3.1. 	To be treated with respect and with consideration for their dignity and privacy. 

  

	 	10.17.3.2. 	To receive information on available treatment options and alternatives, presented in a manner appropriate to the enrollee’s ability to understand. 

  

	 	10.17.3.3. 	To participate in decisions regarding their health care, including the right to refuse treatment. 

  

	 	10.17.3.4. 	To be free from any form of restraint or seclusion used as a means of coercion, discipline, convenience, or retaliation. 

  

	 	10.17.3.5. 	To request and receive a copy of their medical records, and to request that they be amended or corrected, as specified in 45 CFR 164. 

  

	 	10.17.3.6. 	Each enrollee must be free to exercise their rights, and exercise of those rights must not adversely affect the way the Contractor or its subcontractors treat the enrollee (42 CFR
438.100(c)). 

  

	 	10.18. 	Authorization of Services: In regard to the authorization of services for enrollees, the Contractor shall have in place policies and procedures, and shall require that
subcontractors with delegated authority for authorization to comply with such policies and procedures, that comply with 42 CFR 438.210, WAC 388-538 and the provisions of this agreement. 

  

	 	10.18.1. 	The Contractor shall have in effect mechanisms to ensure consistent application of review criteria for authorization decisions. 

  

	 	10.18.2. 	The Contractor shall consult with the requesting provider when appropriate. 

  

	 	10.18.3. 	The Contractor shall require that any decision to deny a service authorization request or to authorize a service in an amount, duration, or scope that is less than requested, be
made by a health care professional who has appropriate clinical expertise in treating the enrollee’s condition or disease. 

  

	 	10.18.4. 	 The Contractor shall notify the requesting provider, and give the enrollee written notice of any decision by the Contractor to deny a service authorization request,
or to authorize a service in an amount, duration, or scope that is less than requested. The notice shall meet 

  

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the following requirements, except that the notice to the provider need not be in writing (42 CFR 438.404): 

  

	 	10.18.4.1. 	The notice to the enrollee shall be in writing and shall meet the requirements of Section 4.7 of this agreement to ensure ease of understanding. 

  

	 	10.18.4.2. 	The notice shall explain the following: 

  

	 	10.18.4.2.1. 	The action the Contractor has taken or intends to take. 

  

	 	10.18.4.2.2. 	The reasons for the action. 

  

	 	10.18.4.2.3. 	The enrollee’s right to file an appeal. 

  

	 	10.18.4.2.4. 	The procedures for exercising the enrollee’s rights. 

  

	 	10.18.4.2.5. 	The circumstances under which expedited resolution is available and how to request it. 

  

	 	10.18.4.2.6. 	The enrollee’s right to have benefits continue pending resolution of the appeal, how to request that benefits be continued, and the circumstances under which the enrollee may
be required to pay for these services. 

  

	 	10.18.5. 	The Contractor shall provide for the following timeframes for authorization decisions and notices: 

  

	 	10.18.5.1. 	For denial of payment that may result in payment liability for the enrollee, at the time of any action affecting the claim. 

  

	 	10.18.5.2. 	For termination, suspension, or reduction of previously authorized services, ten (10) calendar days prior to such termination, suspension, or reduction, except if the criteria
stated in 42 CFR 431.213 and 431.214 are met. The notice shall be mailed within this ten (10) calendar day period by a method that certifies receipt and assures delivery within three (3) calendar days. 

  

	 	10.18.5.3. 	For standard authorization decisions, provide notice as expeditiously as the enrollee’s health condition requires and within timeframes that may not exceed 14 calendar days
following receipt of the request for service, with a possible extension of up to 14 additional calendar days under the following circumstances: 

  

	 	10.18.5.3.1. 	The enrollee, or the provider, requests extension; or 

  

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	 	10.18.5.3.2. 	The Contractor justifies and documents a need for additional information and how the extension is in the enrollee’s interest. 

  

	 	10.18.5.3.3. 	If the Contractor extends that timeframe, it shall: 

  

	 	10.18.5.3.3.1. 	Give the enrollee written notice of the reason for the decision to extend the timeframe and inform the enrollee of the right to file a grievance if he or she disagrees with that
decision; and 

  

	 	10.18.5.3.3.2. 	Issue and carry out its determination as expeditiously as the enrollee’s health condition requires and no later than the date the extension expires. 

 

	 	10.18.5.4. 	For cases in which a provider indicates, or the Contractor determines, that following the timeframe for standard authorization decisions could seriously jeopardize the
enrollee’s life or health or ability to attain, maintain, or regain maximum function, the Contractor shall make an expedited authorization decision and provide notice as expeditiously as the enrollee’s health condition requires and no
later than three (3) working days after receipt of the request for service. The Contractor may extend the three (3) working days by up to 14 calendar days under the following circumstances: 

  

	 	10.18.5.4.1. 	The enrollee, or the provider, requests extension; or 

  

	 	10.18.5.4.2. 	The Contractor justifies and documents a need for additional information and how the extension is in the enrollee’s interest. 

  

	 	10.18.6. 	If the Contractor fails to comply with the timeframes in this section, the Contractor shall cover the services that are the subject of the authorization. 

 

	 	10.19. 	Grievance System: The Contractor shall have a grievance system which complies with the requirements of 42 CFR 438 Subpart F, WAC 388-538 and, insofar as it is not in conflict
with 42 CFR 438 Subpart F or WAC 388-538, or WAC 284-43 Subpart F. The grievance system shall include a grievance process, an appeal process and access to the DSHS fair hearing process. 

  

	 	10.19.1. 	 The Contractor shall submit policies and procedures addressing the grievance system, which comply with the requirements of this 

  

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agreement to the DSHS, MAA, Division of Program Support, Contract Manager assigned to the Contractor by September 2, 2003 and upon change thereafter. The
Contractor shall include copies of all related notices to enrollees. DSHS must approve, in writing, all policies and procedures regarding the grievance system. Implementation of the grievance system requirements in this agreement shall be in place
by October 1, 2003. 

  

	 	10.19.2. 	The Contractor shall give enrollees any assistance necessary in completing forms and other procedural steps for grievances and appeals. 

  

	 	10.19.3. 	The Contractor shall acknowledge receipt of each grievance, either orally or in writing, and appeal, in writing, within five (5) working days. 

  

	 	10.19.4. 	The Contractor shall ensure that decision makers on grievances and appeals were not involved in previous levels of review or decision-making. 

  

	 	10.19.5. 	Decisions regarding grievances and appeals shall be made by health care professionals with clinical expertise in treating the enrollee’s condition or disease if any of the
following apply: 

  

	 	10.19.5.1. 	If the enrollee is appealing an action concerning medical necessity. 

  

	 	10.19.5.2. 	If an enrollee grievance concerns a denial of expedited resolution of an appeal. 

  

	 	10.19.5.3. 	If the grievance or appeal involves any clinical issues. 

  

	 	10.19.6. 	Grievance Process: The following requirements are specific to the grievance process: 

  

	 	10.19.6.1. 	Only an enrollee may file a grievance with the Contractor; a provider may not file a grievance on behalf of an enrollee. 

  

	 	10.19.6.2. 	Enrollees may file a grievance orally or in writing. 

  

	 	10.19.6.3. 	The Contractor shall complete the disposition of a grievance and notice to the affected parties within ninety (90) calendar days of receiving the grievance.

  

	 	10.19.6.4. 	The Contractor may notify enrollees of the disposition of grievances orally or in writing for grievances not involving clinical issues. Notices of disposition for clinical issues
must be in writing. 

  

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	 	10.19.6.5. 	Enrollees do not have the right to a fair hearing in regard to the disposition of a grievance. 

  

	 	10.19.7. 	Appeal Process: The following requirements are specific to the appeal process: 

  

	 	10.19.7.1. 	If the Contractor fails to meet the timeframes in this section concerning any appeal, including timely notice of actions, the Contractor shall cover the services that are the
subject of the appeal. 

  

	 	10.19.7.2. 	An enrollee, or a provider acting on behalf of the enrollee and with the enrollee’s written consent, may appeal a Contractor action. 

  

	 	10.19.7.3. 	For appeals of standard service authorization decisions, an enrollee must file an appeal, either orally or in writing, within ninety (90) calendar days of the date on the
Contractor’s notice of action. This also applies to an enrollee’s request for an expedited appeal. 

  

	 	10.19.7.4. 	For appeals for termination, suspension, or reduction of previously authorized services when the enrollee requests continuation of such services, an enrollee must file an appeal
within ten (10) calendar days of the date of the Contractor’s mailing of the notice of action. If the enrollee is notified in a timely manner and the enrollee’s request for continuation of services is not timely, the Contractor is not
obligated to continue services and the timeframes for appeals of standard service authorization apply. 

  

	 	10.19.7.5. 	Oral inquiries seeking to appeal an action shall be treated as appeals and be confirmed in writing, unless the enrollee or provider requests an expedited resolution.

  

	 	10.19.7.6. 	The appeal process shall provide the enrollee a reasonable opportunity to present evidence, and allegations of fact or law, in person as well as in writing. The Contractor shall
inform the enrollee of the limited time available for this in the case of expedited resolution. 

  

	 	10.19.7.7. 	The appeal process shall provide the enrollee and the enrollee’s representative opportunity, before and during the appeals process, to examine the enrollee’s case file,
including medical records, and any other documents and records considered during the appeal process. 

  

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	 	10.19.7.8. 	The appeal process shall include as parties to the appeal, the enrollee and the enrollee’s representative, or the legal representative of the deceased enrollee’s estate.

  

	 	10.19.7.9. 	The Contractor shall resolve each appeal and provide notice, as expeditiously as the enrollee’s health condition requires, within the following timeframes:

  

	 	10.19.7.9.1. 	For standard resolution of appeals and for appeals for termination, suspension, or reduction of previously authorized services and notice to the affected parties, no longer than
forty-five (45) calendar days from the day the Contractor receives the appeal. This timeframe may not be extended. 

  

	 	10.19.7.9.2. 	For expedited resolution of appeals, including notice to the affected parties, no longer than three (3) calendar days after the Contractor receives the appeal. This timeframe may
not be extended. 

  

	 	10.19.7.10. 	The notice of the resolution of the appeal shall: 

  

	 	10.19.7.10.1. 	Be in writing. For notice of an expedited resolution, the Contractor shall also make reasonable efforts to provide oral notice. 

  

	 	10.19.7.10.2. 	Include the results of the resolution process and the date it was completed. 

  

	 	10.19.7.10.3. 	For appeals not resolved wholly in favor of the enrollee: 

  

	 	10.19.7.10.3.1. 	Include information on the enrollee’s right to request a DSHS fair hearing and how to do so. 

  

	 	10.19.7.10.3.2. 	Include information on the enrollee’s right to receive services while the hearing is pending and how to make the request. 

  

	 	10.19.7.10.3.3. 	Inform the enrollee that the enrollee may be held liable for the amount the Contractor pays for services received while the hearing is pending, if the hearing decision upholds the
Contractor’s action. 

  

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	 	10.19.7.11. 	Expedited Appeal Process: 

  

	 	10.19.7.11.1. 	The Contractor shall establish and maintain an expedited appeal review process for appeals when the Contractor determines, for a request from the enrollee, or the provider
indicates, in making the request on the enrollee’s behalf or supporting the enrollee’s request, that taking the time for a standard resolution could seriously jeopardize the enrollee’s life or health or ability to attain, maintain, or
regain maximum function. 

  

	 	10.19.7.11.2. 	The Contractor shall make a decision on the enrollee’s request for expedited appeal and provide notice, as expeditiously as the enrollee’s health condition requires,
within three (3) calendar days after the Contractor receives the appeal. The Contractor shall also make reasonable efforts to provide oral notice. 

  

	 	10.19.7.11.3. 	The Contractor shall ensure that punitive action is neither taken against a provider who requests an expedited resolution or supports an enrollee’s appeal.

  

	 	10.19.7.11.4. 	If the Contractor denies a request for expedited resolution of an appeal, it shall transfer the appeal to the timeframe for standard resolution and make reasonable efforts to give
the enrollee prompt oral notice of the denial, and follow up within two (2) calendar days with a written notice. 

  

	 	10.19.8. 	Fair Hearing: 

  

	 	10.19.8.1. 	A provider may not request a state fair hearing on behalf of an enrollee. 

  

	 	10.19.8.2. 	If an enrollee does not agree with the Contractor’s resolution of the appeal, the enrollee may file a request for a DSHS fair hearing within the following time frames (see WAC
388-538-112 for the fair hearing process for enrollees): 

  

	 	10.19.8.2.1. 	For appeals regarding a standard service, within ninety (90) calendar days of the date on the Contractor’s mailing of the notice of the resolution of the appeal.

  

	 	10.19.8.2.2. 	 For appeals regarding termination, suspension, or reduction of a previously authorized service, if the enrollee requests continuation of services, within ten (10)
calendar days of the date on the Contractor’s mailing of the notice of the resolution of the appeal. If the enrollee is notified in a timely manner and the enrollee’s request for continuation of 

  

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services is not timely, the Contractor is not obligated to continue services and the timeframes for appeals of standard service authorization apply.

  

	 	10.19.8.3. 	If the enrollee requests a fair hearing, the Contractor shall provide to DSHS upon request and within three (3) working days, all Contractor-held documentation related to the
appeal, including but not limited to, any transcript(s), records, or written decision(s) from participating providers or delegated entities. 

  

	 	10.19.8.4. 	The Contractor will have the opportunity to present its position at the fair hearing. 

  

	 	10.19.8.5. 	The Contractor’s medical director or designee shall review all cases where a fair hearing is requested and any related appeals, when medical necessity is an issue.

  

	 	10.19.8.6. 	The enrollee must exhaust all levels of resolution and appeal within the Contractor’s grievance system prior to filing a request for a fair hearing with DSHS.

  

	 	10.19.8.7. 	DSHS will notify the Contractor of fair hearing determinations. The Contractor will be bound by the fair hearing determination, whether or not the fair hearing determination upholds
the Contractor’s decision. Implementation of such fair hearing decision shall not be the basis for disenrollment of the enrollee by the Contractor. 

  

	 	10.19.8.8. 	If the fair hearing decision is not within the purview of this agreement, then DSHS will be responsible for the implementation of the fair hearing decision.

  

	 	10.19.9. 	Independent Review: After exhausting both the Contractor’s appeal process and the fair hearing process an enrollee has a right to independent review in accord with RCW
48.43.535 and WAC 284-483-630. 

  

	 	10.19.10. 	An enrollee who is aggrieved by the final decision of an independent review may appeal the decision to the DSHS Board of Appeals in accord with WAC 388-02-560 through 388-02-590.
Notice of this right will be included in the written determination from the Contractor or Independent Review Organization. 

  

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	 	10.19.11. 	Continuation of Services: 

  

	 	10.19.11.1. 	The Contractor shall continue the enrollee’s services if all of the following apply: 

  

	 	10.19.11.1.1. 	The enrollee or the provider files for an appeal, fair hearing or independent review on or before the later of the following: 

  

	 	10.19.11.1.1.1. 	Within ten (10) calendar days of the Contractor mailing the notice of action, which for actions involving services previously authorized, shall be delivered by a method that
certifies receipt and assures delivery within three (3) calendar days. 

  

	 	10.19.11.1.1.2. 	The intended effective date of the Contractor’s proposed action. 

  

	 	10.19.11.1.2. 	The appeal involves the termination, suspension, or reduction of a previously authorized course of treatment. 

  

	 	10.19.11.1.3. 	The services were ordered by an authorized provider. 

  

	 	10.19.11.1.4. 	The original period covered by the original authorization has not expired. 

  

	 	10.19.11.1.5. 	The enrollee requests an extension of services. 

  

	 	10.19.11.2. 	If, at the enrollee’s request, the Contractor continues or reinstates the enrollee’s services while the appeal, fair hearing, independent review or DSHS Board of Appeals
is pending, the services shall be continued until one of the following occurs: 

  

	 	10.19.11.2.1. 	The enrollee withdraws the appeal, fair hearing or independent review request. 

  

	 	10.19.11.2.2. 	Ten (10) calendar days pass after the Contractor mails the notice of the resolution of the appeal and the enrollee has not requested a state fair hearing (with continuation of
services until the state fair hearing decision is reached) within the ten (10) calendar days. 

  

	 	10.19.11.2.3. 	Ten (10) calendar days pass after DSHS mails the notice of resolution of the state fair hearing and the enrollee has not requested an independent review (with continuation of
services until the independent review decision is reached) within the ten (10) calendar days. 

  

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	 	10.19.11.2.4. 	Ten (10) calendar days pass after the Contractor mails the notice of the resolution of the independent review and the enrollees has not requested a DSHS Board of Appeals (with
continuation of services until the DSHS Board of Appeals decision is reached) within ten calendar days. 

  

	 	10.19.11.2.5. 	The time period or service limits of a previously authorized service has been met. 

  

	 	10.19.11.3. 	If the final resolution of the appeal upholds the Contractor’s action, the Contractor may recover the amount paid for the services provided to the enrollee while the appeal was
pending, to the extent that they were provided solely because of the requirement for continuation of services. 

  

	 	10.19.12. 	Effect of Reversed Resolutions of Appeals and Fair Hearings: 

  

	 	10.19.12.1. 	If the Contractor, DSHS Office of Administrative Hearings (OAH), independent review organization (IRO) or DSHS Board of Appeals reverses a decision to deny, limit, or delay services
that were not provided while the appeal was pending, the Contractor shall authorize or provide the disputed services promptly, and as expeditiously as the enrollee’s health condition requires. 

  

	 	10.19.12.2. 	If the Contractor, OAH, IRO or DSHS Board of Appeals reverses a decision to deny authorization of services, and the enrollee received the disputed services while the appeal was
pending, the Contractor shall pay for those services. 

  

	 	10.20. 	EPSDT: The Contractor shall meet all requirements under the DSHS EPSDT program policy and billing instructions. These are available at
http://fortress.wa.gov/dshs/maa/Download/Billinginstructions.html and in alternative formats when requested. 

  

	11.	SCHEDULE OF BENEFITS 

  

	 	11.1. 	Covered Services: 

  

	 	11.1.1. 	The Contractor shall cover the services described in this section when medically necessary. The amount and duration of covered services that are medically necessary depends on the
enrollee’s condition. The Contractor shall not arbitrarily deny or reduce the amount, duration or scope of required services solely because of the enrollee’s diagnosis, type of illness or condition. 

  

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	 	11.1.2. 	Except as specifically provided herein, the scope of covered services shall be comparable to the DSHS Medicaid fee-for-service program. For specific covered services, this shall not
be construed as requiring the Contractor to cover the specific items covered by DSHS under its fee-for-service program, but shall rather be construed to require the Contractor to cover the same scope of services. 

  

	 	11.1.3. 	Enrollees have the right to self-refer for certain services to providers paid through separate arrangements with the state of Washington. The Contractor is not responsible for the
coverage of the services provided through such separate arrangements. The enrollees also may choose to receive such services from the Contractor. The Contractor shall assure that enrollees are informed, whenever appropriate, of all options in such a
way as not to prejudice or direct the enrollee’s choice of where to receive the services. If the Contractor in any manner deprives enrollees of their free choice to receive services through the Contractor, the Contractor shall pay the local
health department, family planning facility, or RSN for such services up to the limits described herein. The services to which an enrollee may self-refer are: 

  

	 	11.1.3.1. 	Outpatient mental health services to community mental health providers of the Regional Support Network for Prepaid Health Plan. 

  

	 	11.1.3.2. 	Family planning services and sexually transmitted disease screening and treatment services provided at family planning facilities, such as Planned Parenthood.

  

	 	11.1.3.3. 	Immunizations, sexually-transmitted disease screening and follow-up, immunodeficiency virus (HIV) screening, tuberculosis screening and follow-up, and family planning services
through the local health department. 

  

	 	11.1.3.4. 	Medical services provided to enrollees who have a diagnosis of alcohol and/or chemical dependency or mental health diagnosis are covered when those services are otherwise covered
services. 

  

	 	11.1.4. 	Inpatient Services: Provided by acute care hospitals (licensed under RCW 70.41), or nursing facilities (licensed under RCW 18-51) when nursing facility services are not
covered by the Department’s Aging and Disability Services Administration and the Contractor determines that nursing facility care is more appropriate than acute hospital care. Inpatient physical rehabilitation services are included.

  

	 	11.1.5. 	Outpatient Hospital Services: Provided by acute care hospitals (licensed under RCW 70.41). 

  

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	 	11.1.6. 	Emergency Services and Post-stabilization Services: 

  

	 	11.1.6.1. 	Emergency Services: Emergency services are defined herein. 

  

	 	11.1.6.1.1. 	The Contractor will provide all inpatient and outpatient emergency services in accord with the requirements of 42 CFR 438.114. 

  

	 	11.1.6.1.2. 	The Contractor shall cover all emergency services provided by a provider who is qualified to furnish Medicaid services, without regard to whether the provider is a participating or
non-participating provider. 

  

	 	11.1.6.1.3. 	Emergency services shall be provided without requiring prior authorization. 

  

	 	11.1.6.1.4. 	What constitutes an emergency medical condition may not be limited on the basis of lists of diagnoses or symptoms (42 CFR 438.114 (d)(i)). 

  

	 	11.1.6.1.5.	The Contractor shall cover treatment obtained under the following circumstances: 

  

	 	11.1.6.1.5.1. 	An enrollee had an emergency medical condition, including cases in which the absence of immediate medical attention would not have had the outcomes specified in the definition of an
emergency medical condition. 

  

	 	11.1.6.1.5.2. 	A plan provider or other Contractor representative instructs the enrollee to seek emergency services. 

  

	 	11.1.6.1.6. 	If there is a disagreement between a hospital and the Contractor concerning whether the patient is stable enough for discharge or transfer, or whether the medical benefits of an
unstabilized transfer outweigh the risks, the judgment of the attending physician(s) actually caring for the enrollee at the treating facility prevails and is binding on the Contractor. 

  

	 	11.1.6.2. 	Post-stabilization Services: Post-stabilization services are defined herein. 

  

	 	11.1.6.2.1. 	The Contractor will provide all inpatient and outpatient post-stabilization services in accord with the requirements of 42 CFR 438.114 and 42 CFR 422.113(c).

  

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	 	11.1.6.2.2. 	The Contractor shall cover all post-stabilization services provided by a provider who is qualified to furnish Medicaid services, without regard to whether the provider is a
participating or non-participating provider. 

  

	 	11.1.6.2.3. 	The Contractor shall cover post-stabilization services under the following circumstances: 

  

	 	11.1.6.2.3.1. 	The services are pre-approved by a plan provider or other Contractor representative. 

  

	 	11.1.6.2.3.2. 	The services are not pre-approved by a plan provider or other Contractor representative, but are administered to maintain the enrollee’s stabilized condition within 1 hour of a
request to the Contractor for pre-approval of further post-stabilization care services. 

  

	 	11.1.6.2.3.3. 	The services are not pre-approved by a plan provider or other Contractor representative, but are administered to maintain, improve, or resolve the enrollee’s stabilized
condition and: 

  

	 	11.1.6.2.3.3.1. 	The Contractor does not respond to a request for pre-approval within thirty (30) minutes (RCW 48.43.093(d)); 

  

	 	11.1.6.2.3.3.2. 	The Contractor cannot be contacted; or 

  

	 	11.1.6.2.3.3.3. 	The Contractor representative and the treating physician cannot reach an agreement concerning the enrollee’s care and a Contractor physician is not available for consultation.
In this situation, the Contractor shall give the treating physician the opportunity to consult with a Contractor physician and the treating physician may continue with care of the enrollee until a Contractor physician is reached or one of the
criteria in Section 11.1.6.2.4. is met. 

  

	 	11.1.6.2.4. 	The Contractor’s responsibility for post-stabilization services it has not pre-approved ends when: 

  

	 	11.1.6.2.4.1. 	A participating provider with privileges at the treating hospital assumes responsibility for the enrollee’s care; 

  

	 	11.1.6.2.4.2. 	A participating provider assumes responsibility for the enrollee’s care through transfer; 

  

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	 	11.1.6.2.4.3. 	A Contractor representative and the treating physician reach an agreement concerning the enrollee’s care; or 

  

	 	11.1.6.2.4.4. 	The enrollee is discharged. 

  

	 	11.1.7. 	Ambulatory Surgery Center: Services provided at ambulatory surgery centers. 

  

	 	11.1.8. 	Provider Services: Services provided in an inpatient or outpatient (e.g., office, clinic, emergency room or home) setting by licensed professionals including, but not limited
to, physicians, physician assistants, advanced registered nurse practitioners, midwives, podiatrists, audiologists, registered nurses, and certified dietitians. 

  
 Provider Services include, but are not limited to: 
  

	 	11.1.8.1. 	Medical examinations, including wellness exams for adults and EPSDT for children 

  

	 	11.1.8.2. 	Immunizations 

  

	 	11.1.8.3. 	Maternity care 

  

	 	11.1.8.4. 	Family planning services provided or referred by a participating provider or practitioner 

  

	 	11.1.8.5. 	Performing and/or reading diagnostic tests 

  

	 	11.1.8.6. 	Private duty nursing 

  

	 	11.1.8.7. 	Surgical services 

  

	 	11.1.8.8. 	Surgery to correct defects from birth, illness, or trauma, or for mastectomy reconstruction 

  

	 	11.1.8.9. 	Anesthesia 

  

	 	11.1.8.10. 	Administering pharmaceutical products 

  

	 	11.1.8.11. 	Fitting prosthetic and orthotic devices 

  

	 	11.1.8.12. 	Rehabilitation services 

  

	 	11.1.8.13. 	Enrollee health education 

  

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	 	11.1.8.14. 	Nutritional counseling for specific conditions such as diabetes, high blood pressure, and anemia 

  

	 	11.1.8.15. 	Nutritional counseling when referred as a result of an EPSDT exam 

  

	 	11.1.9. 	Tissue and Organ Transplants: Heart, kidney, liver, bone marrow, lung, heart-lung, pancreas, kidney-pancreas, cornea, and peripheral blood stem cell.

  

	 	11.1.10. 	Laboratory, Radiology, and Other Medical Imaging Services: Screening and diagnostic services and radiation therapy. 

  

	 	11.1.11. 	Vision Care: Eye examinations for visual acuity and refraction once every twenty-four (24) months for adults and once every twelve (12) months for children under age
twenty-one (21). These limitations do not apply to additional services needed for medical conditions. The Contractor may restrict non-emergent care to participating providers. Enrollees may self-refer to participating providers for these services.

  

	 	11.1.12. 	Outpatient Mental Health: 

  

	 	11.1.12.1. 	Psychiatric and psychological testing, evaluation and diagnosis: 

  

	 	11.1.12.1.1. 	Once every twelve (12) months for adults twenty-one (21) and over 

  

	 	11.1.12.1.2. 	Unlimited for children under age twenty-one (21) when identified in an EPSDT visit 

  

	 	11.1.12.2. 	Unlimited medication management: 

  

	 	11.1.12.2.1. 	Provided by the PCP or by PCP referral 

  

	 	11.1.12.2.2. 	Provided in conjunction with mental health treatment covered by the Contractor 

  

	 	11.1.12.3. 	Twelve hours per calendar year for treatment 

  

	 	11.1.12.4. 	Transition to the RSN, as needed to assure continuity of care, when the enrollee has exhausted the benefit covered by the Contractor or when enrollee request such transition

  

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	 	11.1.12.5. 	Referrals To and From the RSN: 

  

	 	11.1.12.5.1. 	The Contractor shall cover mental health services provided by the RSN, up to the limits described herein, if the Contractor refers an enrollee to the RSN for those services.

  

	 	11.1.12.5.2. 	The Contractor may, but is not required to, accept referrals from the RSN for the mental health services described herein. 

  

	 	11.1.12.6. 	The Contractor may subcontract with RSNs to provide the outpatient mental health services that are the responsibility of the Contractor. Such agreements shall not be written or
construed in a manner that provides less than the services otherwise described in this section as the Contractor’s responsibility for outpatient mental health services. 

  

	 	11.1.12.7. 	The DSHS Mental Health Division (MHD) and Medical Assistance Administration (MAA) shall each appoint a Mental Health Care Coordinator (MHCC). The MHCCs shall be empowered to decide
all Contractor and RSN issues regarding outpatient mental health coverage that cannot be otherwise resolved between the Contractor and the RSN. The MHCCs will also undertake training and technical assistance activities that further coordination of
care between MAA, MHD, Healthy Options contractors and RSNs. The Contractor shall cooperate with the activities of the MHCCs. 

  

	 	11.1.13. 	Occupational Therapy, Speech Therapy, and Physical Therapy: Services for the restoration or maintenance of a function affected by an enrollee’s illness, disability,
condition or injury, or for the amelioration of the effects of a developmental disability. 

  

	 	11.1.14. 	Pharmaceutical Products: Prescription drug products according to a Department approved formulary, which includes both legend and over-the-counter (OTC) products. The
Contractor’s formulary shall include all therapeutic classes in DSHS’ fee-for-service drug file and a sufficient variety of drugs in each therapeutic class to meet medically necessary health needs. The Contractor shall provide
participating pharmacies and participating providers with its formulary and information about how to request non-formulary drugs. The Contractor shall approve or deny all requests for non-formulary drugs by the business day following the day of
request. 

  
 Covered drug products shall include:

  

	 	11.1.14.1. 	Oral, enteral and parenteral nutritional supplements and supplies, including prescribed infant formulas 

  

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	 	11.1.14.2. 	All Food and Drug Administration (FDA) approved contraceptive drugs, devices, and supplies; including but not limited to Depo-Provera, Norplant, and OTC products

  

	 	11.1.14.3. 	Antigens and allergens 

  

	 	11.1.14.4. 	Therapeutic vitamins and iron prescribed for prenatal and postnatal care. 

  

	 	11.1.15. 	Home Health Services: Home health services through state-licensed agencies. 

  

	 	11.1.16. 	Durable Medical Equipment (DME) and Supplies: Including, but not limited to: DME; surgical appliances; orthopedic appliances and braces; prosthetic and orthotic devices;
breast pumps; incontinence supplies for enrollees over three (3) years of age; and medical supplies. Incontinence supplies shall not include non-disposable diapers unless the enrollee agrees. 

  

	 	11.1.17. 	Oxygen and Respiratory Services: Oxygen, and respiratory therapy equipment and supplies. 

  

	 	11.1.18. 	Hospice Services: When the enrollee elects hospice care. 

  

	 	11.1.19. 	Blood, Blood Components and Human Blood Products: Administration of whole blood and blood components as well as human blood products. In areas where there is a charge for
blood and/or blood products the Contractor shall cover the cost of the blood or blood products. 

  

	 	11.1.20. 	Treatment for Renal Failure: Hemodialysis, or other appropriate procedures to treat renal failure, including equipment needed in the course of treatment.

  

	 	11.1.21. 	Ambulance Transportation: The Contractor shall cover ground and air ambulance transportation for emergency medical conditions, as defined herein, including, but not limited
to, Basic and Advanced Life Support Services, and other required transportation costs, such as tolls and fares. In addition, the Contractor shall cover ambulance services under two circumstances for non-emergencies: 

  

	 	11.1.21.1. 	When it is necessary to transport an enrollee between facilities to receive a covered services; and, 

  

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	 	11.1.21.2. 	When it is necessary to transport an enrollee, who must be carried on a stretcher, or who may require medical attention en route (RCW 18.73.180) to receive a covered service.

  

	 	11.1.22. 	Chiropractic Services: For children when they are referred during an EPSDT exam. 

  

	 	11.1.23. 	Neurodevelopmental Services: When provided by a facility that is not a DSHS recognized neurodevelopmental center. 

  

	 	11.1.24. 	Smoking Cessation Services: For pregnant women through sixty (60) calendar days post pregnancy. 

  

	 	11.2.	 Exclusions: 

  
 The following services and supplies are excluded from coverage under this agreement. This shall not be construed to prevent the Contractor from covering
any of these services when the Contractor determines it is medically necessary. Unless otherwise required by this agreement, ancillary services resulting from excluded services are also excluded. 
  

	 	11.2.1. 	Services Covered By DSHS Fee-For-Service Or Through Selective Contracts:  

  

	 	11.2.1.1. 	School Medical Services for Special Students as described in the DSHS billing instructions for School Medical Services. 

  

	 	11.2.1.2. 	Eyeglass Frames, Lenses, and Fabrication Services covered under DSHS’ selective contract for these services, and associated fitting and dispensing services.

  

	 	11.2.1.3. 	Voluntary Termination of Pregnancy, including complications. 

  

	 	11.2.1.4. 	Transportation Services other than Ambulance: Taxi, cabulance, voluntary transportation, and public transportation. 

  

	 	11.2.1.5. 	Dental Care, Prostheses and Oral Surgery, including physical exams required prior to hospital admissions for oral surgery. 

  

	 	11.2.1.6. 	Hearing Aid Devices, including fitting, follow-up care and repair. 

  

	 	11.2.1.7. 	First Steps Maternity Case Management and Maternity Support Services. 

  

	 	11.2.1.8. 	Sterilizations for enrollees under age 21, or those that do not meet other federal requirements. 

  

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	 	11.2.1.9. 	Health care services provided by a neurodevelopmental center recognized by DSHS. 

  

	 	11.2.1.10. 	Certain services provided by a health department or family planning clinic when a client self-refers for care. 

  

	 	11.2.1.11. 	Inpatient psychiatric professional services. 

  

	 	11.2.1.12. 	Pharmaceutical products prescribed by any provider related to services provided under a separate agreement with DSHS or related to services not covered by the Contractor.

  

	 	11.2.1.13. 	Laboratory services required for medication management of drugs prescribed by community mental health providers whose services are purchased by the Mental Health Division.

  

	 	11.2.1.14. 	Protease Inhibitors 

  

	 	11.2.1.15. 	Services ordered as a result of an EPSDT exam that are not otherwise covered services. 

  

	 	11.2.1.16. 	Gastroplasty, when approved by DSHS in accord with WAC 388-531. The Contractor has no obligation to cover gastroplasty. 

  

	 	11.2.1.17. 	Prenatal Diagnosis Genetic Counseling provided to enrollees to allow enrollees and their PCPs to make informed decisions regarding current genetic practices and testing. Genetic
services beyond Prenatal Diagnosis Genetic Counseling are covered as maternity care when medically necessary, see Section 11.1.8.3. 

  

	 	11.2.1.18. 	Gender dysphoria surgery and related procedures, treatment, prosthetics, or supplies when approved by DSHS in accord with WAC 388-531. 

  

	 	11.2.2. 	Services Covered By Other Divisions In The Department Of Social And Health Services: 

  

	 	11.2.2.1. 	Substance abuse treatment services covered through the Division of Alcohol and Substance Abuse (DASA), including inpatient detoxification services for alcohol (3-day) and drugs
(5-day) with no complicating medical conditions. 

  

	 	11.2.2.2. 	Nursing facility and community based services (e.g. COPES and Personal Care Services) covered through the Aging and Disability Services Administration. 

  

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	 	11.2.2.3. 	Mental health services separately purchased for all Medicaid clients by the Mental Health Division, including 24-hour crisis intervention, outpatient mental health treatment
services, and inpatient psychiatric services. This shall not be construed to prevent the Contractor from purchasing covered outpatient mental health services from community mental health providers. 

  

	 	11.2.2.4. 	Health care services covered through the Division of Developmental Disabilities for institutionalized clients. 

  

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     Amendment 2

  

	 	11.2.3. 	Service Covered By Other State Agencies: 

  
 Infant formula for oral feeding provided by the Women, Infants and Children (WIC) program in the Department of Health. Medically necessary nutritional
supplements for infants are covered under the pharmacy benefit. 
  

	 	11.2.4. 	Services Not Covered by Either DSHS or the Contractor: 

  

	 	11.2.4.1. 	Medical examinations for Social Security Disability. 

  

	 	11.2.4.2. 	Services for which plastic surgery or other services are indicated primarily for cosmetic reasons. 

  

	 	11.2.4.3. 	Physical examinations required for obtaining continuing employment, insurance or governmental licensing. 

  

	 	11.2.4.4. 	Experimental and Investigational Treatment or Services, determined in accord with Section 10.16, Experimental and Investigational Services, and services associated with experimental
or investigational treatment or services. 

  

	 	11.2.4.5. 	Reversal of voluntary surgically induced sterilization. 

  

	 	11.2.4.6. 	Personal Comfort Items, including but not limited to guest trays, television and telephone charges. 

  

	 	11.2.4.7. 	Biofeedback Therapy. 

  

	 	11.2.4.8. 	Diagnosis and treatment of infertility, impotence, and sexual dysfunction. 

  

	 	11.2.4.9. 	Orthoptic (eye training) care for eye conditions. 

  

	 	11.2.4.10. 	Tissue or organ transplants that are not specifically listed as covered. 

  

	 	11.2.4.11. 	Immunizations required for international travel purposes only. 

  

	 	11.2.4.12. 	Court-ordered services. 

  

	 	11.2.4.13. 	Any service provided to an incarcerated enrollee, beginning when a law enforcement officer takes the enrollee into legal custody and ending when the enrollee is no longer in legal
custody . 

  

 90 

					
	 	 	 	 	     2003 – 2005 HO & SCHIP Contract
     Amendment 2

  

	 	11.2.4.14.	 Any service, product, or supply paid for by DSHS under its fee-for-service program only on an exception to policy basis. The Contractor may also make exceptions and pay for
services it is not required to cover under this agreement. 

  

	 	11.2.4.15. 	Any other service, product, or supply not covered by DSHS under its fee-for-service program. 

  

 91 

 Quality Improvement Program Standards 
 Exhibit A 
  
 The Contractor
shall comply with the Quality Improvement Program Standards. In the event of conflict between the Quality Improvement Program Standards and the standards in Balance Budget Act Final Rules (BBA), Washington State Patient Bill of Rights (PBOR), Health
Insurance Portability and Accountability Act (HIPAA), or any other applicable state or federal statutes or regulations, the standards in BBA, PBOR, HIPAA, or any other applicable state or federal statutes or regulations, and any provision elsewhere
in this agreement that implements such statutes or regulations, shall have precedence. Also see Section 7.10 Order of Precedence. 
  
 The following NCQA definitions apply to terms used in this document: 
  
 Complaint: A complaint is the same as “grievance.” See 1. Definitions. 
  
 Denial a denial is the same as “action.” See 1. Definitions. 
  
 These Standards are Copyright (July 1, 2003 – June 30, 2004) by the National Committee for Quality Assurance (NCQA) and protected by
international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved. Used with
permission. 
  

 1 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
	QUALITY MANAGEMENT AND IMPROVEMENT
		
	 QI 1
	  	PROGRAM STRUCTURE
		
	 	  	The organization clearly defines its quality improvement (QI) structures and processes and assigns responsibility to appropriate individuals.
	
	ELEMENT A: Quality Improvement Program Structure
		
	 	  	The organization’s QI program structure includes the following factors:
		
	 1
	  	a written description of the QI program
		
	 3
	  	patient safety is specifically addressed in the program description
		
	 4
	  	the QI program accountable to the governing body
		
	 5
	  	an annual evaluation of the program description and updates, as necessary
		
	 6
	  	a designated physician has substantial involvement in the QI program
		
	 7
	  	a designated behavioral health practitioner is involved in the implementation of the behavioral health care aspects of the QI program.
		
	 8
	  	a QI committee oversees the QI functions of the organization
		
	 9
	  	The specific role, structure, and function of the QI committee and other committees, including meeting frequency, are addressed in the program description
		
	 10
	  	an annual work plan
		
	 11
	  	A description of resources that the organization devotes to the needs of the QI program.
	
	ELEMENT C: Annual Evaluation of Quality Improvement Program
		
	 	  	There is an annual written evaluation of the QI program that includes:
		
	 1
	  	a description of completed and ongoing QI activities that address the quality and safety of clinical care and quality of service
		
	 2
	  	trending of measures to assess performance in the quality and safety of clinical care and quality of service
		
	 3
	  	analysis of the results of QI initiatives, including barrier analysis
		
	 4
	  	evaluation of the overall effectiveness of the QI program, including progress toward influencing network-wide safe clinical practices.
		
	 QI 2    
	  	PROGRAM OPERATIONS
		
	 	  	The organization’s quality improvement program is fully operational.

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 2 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
	
	ELEMENT A: The QI Committee
		
	 	  	The organization’s QI committee:
		
	 1
	  	recommends policy decisions
		
	 2
	  	analyzes and evaluates the results of QI activities
		
	 3
	  	institutes needed actions
		
	 4
	  	ensures follow-up, as appropriate.
	
	ELEMENT B: QI Committee Meeting Minutes
		
	 	  	QI committee meeting minutes reflect all committee decisions
	
	ELEMENT C: Practitioner Participation
		
	 	  	Practitioners participate in the QI program through planning, design, implementation or review
	
	ELEMENT D: QI Program Information for Practitioners and Members
		
	 	  	Upon request, the organization makes information about its QI program available to its practitioners and members, including a description of the QI program and a report on the
organization’s progress in meeting its goals.
		
	 QI 3    
	  	HEALTH SERVICES CONTRACTING
		
	 	  	The organization’s contracts with individual practitioners and providers, including those making UM decisions, specify that contractors cooperate with the organization’s QI
program.
	
	ELEMENT A: Practitioner Contracts
		
	 	  	Contracts with practitioners specifically require that:
		
	 1
	  	practitioners cooperate with QI activities
		
	 2
	  	the organization has access to practitioner medical records, to the extent permitted by state and federal law
		
	 3
	  	practitioners maintain the confidentiality of member information and records
	
	ELEMENT B: Practitioner – Patient Communication
		
	 	  	Contracts with practitioners allow open practitioner-patient communication regarding appropriate treatment alternatives. The organization does not penalize practitioners for discussing
medically necessary or appropriate patient care.
	
	ELEMENT C: Affirmative Statement
		
	 	  	Contracts with practitioners and providers include an affirmative statement indicating that practitioners may freely communicate with patients about their treatment, regardless of benefit
coverage limitations.
	
	ELEMENT D: Provider Contracts
		
	 	  	Contracts with organization providers specifically require that:
		
	 1
	  	providers cooperate with QI activities
		
	 2
	  	the organization has access to provider medical records, to the extent permitted by state and federal law.
		
	 3
	  	providers maintain the confidentiality of member information and records

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 3 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
	
	ELEMENT E: Notification of Specialist Termination
		
	 	  	Contracts with specialists and specialty group practitioners require timely notification to organization members affected by the termination of a specialist or the entire specialty
group.
		
	 QI 4
	  	AVAILABILITY OF PRACTITIONERS
		
	 	  	The organization ensures that its network is sufficient in numbers and types of primary care and specialty care practitioners.
	
	ELEMENT A: Cultural Needs and Preferences
		
	 	  	The organization assesses the cultural, ethnic, racial, and linguistic needs of its members and adjusts the availability of practitioners within its network, if necessary.
	
	ELEMENT B: Defining Primary Care Practitioners
		
	 	  	The organization defines the practitioners who serve as primary care practitioners (PCP) within its delivery system.
	
	ELEMENT C: Number and Geographic Distribution of Primary Care Practitioners
		
	 	  	The organization has quantifiable and measurable standards for:
		
	 1
	  	the number of PCPs
		
	 2
	  	the geographic distribution of PCPs.
	
	ELEMENT D: Annual Performance Assessment of Primary Care Practitioners
		
	 	  	The organization annually assesses its performance against the standards established for the availability of PCPs.
	
	ELEMENT E: Defining Specialty Care Practitioners
		
	 	  	The organization defines which practitioners serve as high-volume specialty care practitioners (SCP).
	
	ELEMENT F: Number and Geographic Distribution of Specialists
		
	 	  	The organization has quantifiable and measurable standards for:
		
	 1
	  	the number of high-volume SCPs
		
	 2
	  	the geographic distribution of high-volume SCPs.
	
	ELEMENT G: Annual Performance Assessment of Specialists
		
	 	  	The organization annually analyzes its performance against the standards established for the availability of high-volume SCPs.
		
	 QI 5    
	  	ACCESSIBILITY OF SERVICES
		
	 	  	The organization establishes mechanisms to assure the accessibility of primary care services, behavioral health services and member/enrollee services.

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 4 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
	
	ELEMENT A: Standards for Medical Care Access
		
	 	  	The organization has standards for access to:
		
	 1
	  	regular and routine care appointments
		
	 2
	  	urgent care appointments;
		
	 3
	  	after-hours care.
		
	 4
	  	telephone service.
	
	ELEMENT B: Assessment Against Medical Access Standards
		
	 	  	The organization collects and performs an annual analysis of data to measure its performance against standards for access to:
		
	 1
	  	regular and routine care appointments
		
	 2
	  	urgent care appointments;
		
	 3
	  	after-hours care.
		
	 4
	  	telephone service.
	 QI 6
	  	MEMBER SATISFACTION
		
	 	  	The organization implements mechanisms to assure member satisfaction.
	
	ELEMENT A: Annual Assessment
		
	 	  	To assess member satisfaction, the organization conducts annual evaluations of member complaints and appeals.
	
	ELEMENT B: Data Collection Methodology
		
	 	  	The organization’s complaint and appeal data collection methodology:
		
	 1
	  	identifies the appropriate population
		
	 2
	  	draws appropriate samples from the affected population, if a sample is used
		
	 3
	  	collects valid data.
	
	ELEMENT C: Identifying Opportunities for Improvement
		
	 	  	The organization identifies opportunities for improvement, sets priorities and decides which opportunities to pursue based upon the analysis of:
		
	 1
	  	member complaint and appeal data
		
	 2
	  	The CAHPS® 3.0H Survey.
	
	ELEMENT D: Reporting to Practitioners
		
	 	  	The organization shares the results of its improvement and member satisfaction activities with practitioners and providers.
		
	 QI 7    
	  	DISEASE MANAGEMENT
		
	 	  	The organization actively works to improve the health status of its members with chronic conditions.
	
	ELEMENT A: Identifying Chronic Conditions
		
	 	  	The organization identifies the two chronic conditions that its disease management (DM) programs address.

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 5 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
	
	ELEMENT B: Program Content
		
	 	  	The content of the organization’s programs address the following for each condition:
		
	 1
	  	condition monitoring
		
	 2
	  	patient adherence to the program’s treatment plans
		
	 3
	  	consideration of other health conditions
		
	 4
	  	lifestyle issues as indicated by practice guidelines (e.g. goal-setting techniques, problem solving).
	
	ELEMENT C: Identifying Eligible Members
		
	 	  	Annually, the organization systematically identifies members who qualify for its programs.
	
	ELEMENT D: Providing Eligible Members With Information
		
	 	  	The organization provides eligible members with written program information regarding:
		
	 1
	  	how to use the services
		
	 2
	  	how members become eligible to participate
		
	 3
	  	how to opt in or opt out.
	
	ELEMENT E: Interventions Based on Stratification
		
	 	  	The organization provides interventions to members based on stratification.
	
	ELEMENT F: Eligible Member Participation
		
	 	  	The organization annually measures and reports member participation rates
	
	ELEMENT G: Informing and Educating Practitioners About Disease Management Programs
		
	 	  	The organization has a documented process for providing practitioners with written program information, including:
		
	 1
	  	instructions on how to use the DM services
		
	 2
	  	how the organization works with a practitioner’s members in the program.
	
	ELEMENT H: Measuring Effectiveness
		
	 	  	The organization employs and tracks one performance measure for each DM program. Each measurement:
		
	 1
	  	addresses a relevant process or outcome
		
	 2
	  	produces a quantitative result
		
	 3
	  	is population based
		
	 4
	  	uses data and methodology that are valid for the process or outcome measured
		
	 5
	  	has been analyzed in comparison to a benchmark or goal.
		
	 QI 8    
	  	CLINICAL PRACTICE GUIDELINES
		
	 	  	Guidelines removed, not applicable to Healthy Options or the State Children’s Health Insurance Plan.

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 6 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
		
	 QI 9
	  	CONTINUITY AND COORDINATION OF MEDICAL CARE
		
	 	  	The organization monitors the continuity and coordination of care that members receive and takes actions, as necessary, to ensure and improve continuity and coordination of care across the
health care network.
	
	ELEMENT A: Continuity and Coordination of Medical Care
		
	 	  	The organization annually collects data about the coordination of medical care across settings or transitions in care.
	
	ELEMENT B: Identifying Opportunities for Improvement of Medical Care Coordination
		
	 	  	The organization identifies opportunities to improve coordination of medical care. There is documentation of the following factors:
		
	 1
	  	quantitative and causal analysis of data to identify improvement opportunities
		
	 2
	  	identification and selection of at least two opportunities for improvement.
	
	ELEMENT C: Medical Coordination Issues
		
	 	  	The organization takes action to improve coordination of medical care.
	
	ELEMENT D: Notification of Primary Care Practitioner Termination
		
	 	  	Requirement removed, not applicable to Healthy Options or the State Children’s Health Insurance Plan.
		
	 QI 11
	  	CLINICAL QUALITY IMPROVEMENTS
		
	 	  	Requirement removed, not applicable to Healthy Options or the State Children’s Health Insurance Plan.
		
	 QI 12
	  	SERVICE QUALITY IMPROVEMENTS
		
	 	  	Requirement removed, not applicable to Healthy Options or the State Children’s Health Insurance Plan.
		
	 QI 13    
	  	STANDARDS FOR MEDICAL RECORD DOCUMENTATION
		
	 	  	The organization requires medical records to be maintained in a manner that is current, detailed and organized, and which permits effective and confidential patient care and quality
review.
	
	ELEMENT A: Medical Record Criteria
		
	 	  	The organization has policies and distributes the policies to practice sites that address:
		
	 1
	  	confidentiality of medical records
		
	 2
	  	medical record documentation standards
		
	 3
	  	an organized medical record keeping system and standards for availability of medical records
		
	 4
	  	performance goals to assess the quality of medical record keeping.
	
	ELEMENT B: Documentation Standards
		
	 	  	The organization’s medical record standards or their predecessors have been in place for at least 12 months
	
	ELEMENT C: Improving Medical Record Keeping
		
	 	  	The organization implements a method(s) to improve medical record keeping

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 7 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
		
	 QI 14    
	  	DELEGATION OF QI
		
	 	  	If the organization delegates any QI activities, there is evidence of oversight of the delegated activity.
	
	ELEMENT A: Written Delegation Agreement
		
	 	  	There is a mutually agreed-upon document that describes all delegated activities
	
	ELEMENT B: Specific Delegated Activities
		
	 	  	The delegation document describes:
		
	 1
	  	the responsibilities of the organization and the delegated entity
		
	 2
	  	the delegated activities
		
	 3
	  	at least semiannual reporting to the organization
		
	 4
	  	the process by which the organization evaluates the delegated entity’s performance
		
	 5
	  	the remedies, including revocation of the delegation, available to the organization if the delegated entity does not fulfill its obligations.
	
	ELEMENT C: Provisions for Protected Health Information
		
	 	  	If the delegation arrangement includes the use of protected health information by the delegate, the delegation document also includes the following provisions:
		
	 1
	  	a list of the allowed uses of protected health information
		
	 2
	  	a description of delegate safeguards to protect the information from inappropriate use of further disclosure
		
	 3
	  	a stipulation that the delegate ensures that subdelegates have similar safeguards
		
	 4
	  	a stipulation that the delegate provide individuals with access to their protected health information
		
	 5
	  	a stipulation that the delegate informs the organization if inappropriate uses of the information occur
		
	 6
	  	a stipulation that the delegate ensures protected health information is returned, destroyed or protected if the delegation agreement ends.
	
	ELEMENT D: Approval of QI Program
		
	 	  	Annually, the organization approves its delegates QI program.
	
	ELEMENT E: Pre-Delegation Evaluation
		
	 	  	For delegation agreements that have been in effect for less than 12 months, the organization evaluated delegate capacity before delegation began.
	
	ELEMENT F: Annual Evaluation
		
	 	  	For delegation arrangements in effect for 12 months or longer, the organization annually evaluated delegate performance against its expectations and NCQA standards.
	
	ELEMENT G: Reporting
		
	 	  	For delegation arrangements in effect 12 months or longer, the organization evaluated regular reports, as specified in Element B.

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 8 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
	
	ELEMENT H: Opportunities for Improvement
		
	 	  	For delegation arrangements that have been in effect for more than 12 months, at least once each of the past 2 years that delegation has been in effect, the organization has identified and
followed up on opportunities for improvement, if applicable.
	UTILIZATION MANAGEMENT
		
	UM 1    	  	Utilization Management Structure
		
	 	  	The organization clearly defines the structures and processes within its utilization management (UM) program and assigns responsibility appropriate individuals.
	
	ELEMENT A: Written Program Description
		
	 	  	The organization’s UM program description includes the following factors:
		
	1	  	program structure
		
	2	  	behavioral health care aspects of the program
		
	3	  	involvement of a designated senior physician in UM program implementation
		
	4	  	involvement of a designated behavioral health care practitioner in the implementation of the behavioral health care aspects of the UM program
		
	5	  	scope of the program and the processes and information sources used to make determinations of benefit coverage and medical necessity.
	
	ELEMENT C: Physician Involvement
		
	 	  	A senior physician is actively involved in implementing the organization’s UM program.
	
	ELEMENT D: Behavioral Health Practitioner Involvement
		
	 	  	A behavioral health practitioner is actively involved in implementing the behavioral health aspects of the UM program.
	
	ELEMENT E: Annual Evaluation
		
	 	  	The organization annually evaluates and updates the UM program, as necessary.
		
	UM 2	  	Clinical Criteria for UM Decisions
		
	 	  	To make utilization decisions, the organization uses written criteria based on sound clinical evidence and specifies procedures for appropriately applying the criteria.
	
	ELEMENT A: Evidence-Based, Written Criteria
		
	 	  	The organization has written UM decision-making criteria that are objective and based on medical evidence.

  
 These Standards are Copyright (July 1,
2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated,
without express written permission of or license from NCQA. All Rights Reserved. Used with permission. 
  

 9 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
	
	ELEMENT B: Applying Utilization Management Criteria
		
	 	  	The organization has written procedures for applying UM criteria based on:
		
	1	  	individual needs
		
	2	  	assessment of the local delivery system.
	
	ELEMENT C: Involvement of Appropriate Practitioners
		
	 	  	The organization involves appropriate practitioners in developing, adopting and reviewing criteria applicability
	
	ELEMENT D: Length of Time Criteria Are in Place
		
	 	  	The organization’s UM criteria have been in place for at least 12 months
	
	ELEMENT E: Reviewing and Updating Criteria
		
	 	  	The organization has a process for periodically reviewing and updating UM criteria and the procedures for applying them.
	
	ELEMENT F: Availability of Criteria
		
	 	  	The organization states in writing how practitioners can obtain UM criteria, and makes the criteria available to its practitioners upon request.
	
	ELEMENT G: Consistency in Applying Criteria
		
	 	  	The organization annually evaluates the consistency with which health care professionals involved in UM apply criteria in decision making and acts on opportunities for improvement, if
applicable.
		
	UM 4    	  	Appropriate Professionals
		
	 	  	Qualified licensed health professionals assess the clinical information used to support UM decisions.
	
	ELEMENT A: Licensed Health Professionals
		
	 	  	The organization has written procedures:
		
	1	  	requiring appropriately licensed professionals to supervise all medical necessity decisions
	
	ELEMENT B: Use of Practitioners for UM Decisions
		
	 	  	The organization has a written job description with qualifications for practitioners who review denials of care based on medical necessity that requires:
		
	1	  	education, training or professional experience in medical or clinical practice
		
	2	  	current license to practice without restriction.
	
	ELEMENT C: Non-Behavioral Health Practitioner Review of Denials
		
	 	  	The organization ensures that a physician, dentist or pharmacist, as appropriate, reviews any non-behavioral health denial of care based on medical necessity.
	
	ELEMENT D: Behavioral Health Practitioner Review of Denials
		
	 	  	The organization ensures that a physician, appropriate behavioral health practitioner or pharmacist, as appropriate, reviews any behavioral health denial of care based on medical
necessity.

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 10 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
	
	ELEMENT E: Use of Board-Certified Consultants
		
	 	  	The organization has written procedures for using board-certified consultants to assist in making medical necessity determinations.
		
	UM 5    	  	Timeliness of UM Decisions
		
	 	  	The organization makes utilization decisions in a timely manner to accommodate the clinical urgency of the situation.
	
	ELEMENT A: Timeliness of Decision Making for Non-Behavioral Health UM Decisions
		
	 	  	The organization adheres to the following standards for timeliness of UM decision making:
		
	1	  	for nonurgent pre-service decisions, the organization makes decisions within 15 calendar days of receipt of the request [HCA & MAA require nonurgent, pre-service decisions within 14
calendar days]
		
	2	  	for urgent pre-service decisions, the organization makes decisions within 72 hours of receipt of the request
		
	3	  	for urgent concurrent review, the organization makes decisions within 24 hours of receipt of the request
		
	4	  	for post-service decisions, the organization makes decisions within 30 calendar days of receipt of the request.
	
	ELEMENT B: Notification of Non-Behavioral Health Decisions
		
	 	  	The organization adheres to the following standards for notification of non-behavioral health UM decision making:
		
	1	  	for nonurgent pre-service approval decisions, the organization gives oral, electronic or written notification of the decision to practitioners and members within 15 calendar days of the
request [HCA & MAA require nonurgent, pre-service decisions within 14 calendar days]
		
	2	  	for nonurgent pre-service denial decisions, the organization gives electronic or written notification of the decision to practitioners and members within 15 calendar days of the
request
		
	3	  	for urgent pre-service approval decisions, the organization gives oral, electronic or written notification of the decision to practitioners and members within 72 hours of the
request
		
	4	  	for urgent pre-service denial decisions, the organization gives electronic or written notification of the decision to practitioners and members within 72 hours of the request
		
	5	  	for urgent concurrent approval decisions, the organization gives oral, electronic or written notification of the decision to practitioners and members within 24 hours of the
request
		
	6	  	for urgent concurrent denial decisions, the organization gives electronic or written notification of the decision to practitioners and members within 24 hours of the request
		
	7	  	for post-service denial decisions, the organization gives electronic or written notification of the decision to practitioners and members within 30 calendar days of the
request.
	
	ELEMENT C: Timeliness of Decision Making for Behavioral Health UM Decisions
		
	 	  	The organization adheres to the following standards for timeliness of behavioral health UM decision making:
		
	1	  	for nonurgent pre-service decisions, the organization makes decisions within 15 calendar days of receipt of the request [HCA & MAA require nonurgent, pre-service decisions within 14
calendar days]

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 11 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
		
	 2
	  	for urgent pre-service decisions, the organization makes decisions within 72 hours of receipt of the request
		
	3	  	for urgent concurrent review, the organization makes decisions within 24 hours of receipt of the request
		
	4	  	for post-service decisions, the organization makes decisions within 30 calendar days of receipt of the request.
	
	ELEMENT D: Notification of Behavioral Health Decisions
		
	 	  	The organization adheres to the following standards for notification of behavioral health UM decision making:
		
	1	  	for nonurgent pre-service approval decisions, the organization gives oral, electronic or written notification of the decision to practitioners and members within 15 calendar days of the
request
		
	2	  	for nonurgent pre-service denial decisions, the organization gives electronic or written notification of the decision to practitioners and members within 15 calendar days of the
request
		
	3	  	for urgent pre-service approval decisions, the organization gives oral, electronic or written notification of the decision to practitioners and members within 72 hours of the
request
		
	4	  	for urgent pre-service denial decisions, the organization gives electronic or written notification of the decision to practitioners and members within 72 hours of the request
		
	5	  	for urgent concurrent approval decisions, the organization gives oral, electronic or written notification of the decision to practitioners and members within 24 hours of the
request
		
	6	  	for urgent concurrent denial decisions, the organization gives electronic or written notification of the decision to practitioners and members within 24 hours of the request
		
	7	  	for post-service denial decisions, the organization gives electronic or written notification of the decision to practitioners and members within 30 calendar days of the
request.
		
	UM 6    	  	Clinical Information
		
	 	  	When making a determination of coverage based on medical necessity, the organization obtains relevant clinical information and consults with the treating physician.
	
	ELEMENT A: Information for UM Decision Making
		
	 	  	The organization has a written description that identifies the information that is needed to support UM decision making in place for at least 12 months.
	
	ELEMENT C: Non-Behavioral Health Documentation of Relevant Information
		
	 	  	There is documentation that relevant clinical information is gathered consistently to support non-behavioral health UM decision making.
	
	ELEMENT D: Behavioral Health Documentation of Relevant Information
		
	 	  	There is documentation that relevant clinical information is gathered consistently to support behavioral health UM decision making.

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 12 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
	
	ELEMENT E: Transition to Other Care
		
	 	  	The organization assists with a member’s transition to other care, if necessary, when benefits end.
		
	UM 7    	  	Denial Notices
		
	 	  	The organization clearly documents and communicates the reasons for each denial.
	
	ELEMENT A: Notification of the Availability of Physician, Appropriate Behavioral Health or Pharmacist Reviewers
		
	 	  	The organization notifies practitioners of:
		
	1	  	its policy for making a reviewer available to discuss any UM denial decision
		
	2	  	how to contact a reviewer.
	
	 ELEMENT B: Providing Practitioners the Opportunity to Discuss Non-Behavioral Health Denial Decisions with a
                          Physician or
Pharmacist Reviewer

		
	 	  	The organization provides practitioners with the opportunity to discuss any non-behavioral health UM denial decision with a physician or pharmacist reviewer.
	
	ELEMENT C: Reason for Non-Behavioral Health Denial
		
	 	  	The organization provides written notification that contains the following:
		
	1	  	the specific reason(s) for the denial, in easily understandable language
		
	2	  	a reference to the benefit provision, guideline, protocol or other similar criterion on which the denial decision is based
		
	3	  	notification that the member can obtain a copy of the actual benefit provision, guideline, protocol or other similar criterion on which the denial decision was based, upon
request.
	
	ELEMENT D: Non-Behavioral Health Notification of Appeal Rights and Process
		
	 	  	The organization provides written notification that contains the following:
		
	1	  	description of appeal rights, including the right to submit written comments, documents or other information relevant to the appeal
		
	2	  	explanation of the appeal process, including the right to member representation and time frames for deciding appeals
		
	3	  	if a denial is an urgent pre-service or urgent concurrent denial, a description of the expedited appeal process.
	
	 ELEMENT E: Providing Practitioners the Opportunity to Discuss Behavioral Health Denial Decisions with a
                          Physician,
Appropriate Behavioral Health or Pharmacist Reviewer.

		
	 	  	The organization provides practitioners with the opportunity to discuss any behavioral health UM denial decision with a physician, appropriate behavioral health or pharmacist
reviewer.

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 13 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
	
	ELEMENT F: Reason for Behavioral Health Denial
		
	 	  	The organization provides written notification that contains the following:
		
	1	  	the specific reason(s) for the denial, in easily understandable language
		
	2	  	a reference to the benefit provision, guideline, protocol or other similar criterion on which the denial decision was based
		
	3	  	notification that the member can obtain a copy of the actual benefit provision, guideline, protocol or other similar criterion on which the denial decision was based, upon
request.
	
	ELEMENT G: Behavioral Health Notification of Appeal Rights and Appeal process
		
	 	  	The organization provides written notification that contains the following:
		
	1	  	description of appeal rights, including the right to submit written comments, documents or other information relevant to the appeal
		
	2	  	explanation of the appeal process, including the right to member representation and time frames for deciding appeals
		
	3	  	if a denial is an urgent pre-service or urgent concurrent denial, a description of the expedited appeal process.
		
	UM 8	  	Policies for Appeals
		
	 	  	The organization has written policies and procedures for the thorough, appropriate, and timely resolution of member appeals. Note: For BH & PEBB, Contractors are required to follow the
Washington State “Patient Bill of Rights” (PBOR).
		
	UM 9	  	Appropriate Handling of Appeals
		
	 	  	The organization adjudicates member appeals in a thorough, appropriate and timely manner. Note: For BH & PEBB, Contractors are required to follow the Washington State “Patient Bill
of Rights” (PBOR).
		
	UM 10    	  	Evaluation of New Technology
		
	 	  	The organization evaluates the inclusion of new technologies and the new application of existing technologies in the benefit package. This includes medical and behavioral procedures,
pharmaceuticals and devices.
	
	ELEMENT A: Written Process
		
	 	  	The organization’s written process for evaluating new technologies and the new application of existing technologies for inclusion in its benefit package includes an evaluation of the
following factors:
		
	1	  	medical technologies
		
	2	  	behavioral health procedures
		
	3	  	pharmaceuticals
		
	4	  	devices.
	
	ELEMENT C: Implementation of Evaluated New Technology
		
	 	  	The organization implements a decision on coverage from its assessment of new technologies and new applications of existing technologies or from review of special cases.

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 14 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
		
	UM 12	  	Emergency Services
		
	 	  	The organization provides, arranges for or otherwise facilitates all needed emergency services, including appropriate coverage of costs.
	
	ELEMENT A: Emergency Services Policies and Procedures
		
	 	  	The organization’s policies and procedures require:
		
	1	  	coverage of emergency services to screen and stabilize the member without prior approval where a prudent layperson, acting reasonably, would have believed an emergency medical condition
existed
		
	2	  	coverage of emergency services if an authorized representative, acting for the organization, has authorized the provision of emergency services.
		
	UM 13	  	Procedures for Pharmaceutical Management
		
	 	  	The organization ensures that its procedures for pharmaceutical management, if any, promote the clinically appropriate use of pharmaceuticals.
		
	 	  	ELEMENT A: Pharmaceutical Management Policies and Procedures
		
	 	  	The organization’s policies and procedures for pharmaceutical management include:
		
	1	  	the criteria used to adopt pharmaceutical management procedures
		
	2	  	a process that uses clinical evidence from appropriate external organizations.
		
	UM 14    	  	Ensuring Appropriate Utilization
		
	 	  	The organization facilitates the delivery of appropriate care and monitors the impact of its utilization management program to detect and correct potential under - and overutilization of
services.
	
	ELEMENT A: Relevant Utilization Data
		
	 	  	The organization chooses at least four relevant types of utilization data, including one type related to behavioral health to monitor for each product line.
	
	ELEMENT B: Under/Overutilization Thresholds
		
	 	  	The organization sets thresholds to identify under - and overutilization for the four chosen data types, including behavioral health data, by product line.
	
	ELEMENT C: Monitoring Data
		
	 	  	Annually, the organization monitors the performance of the four chosen data types, including behavioral health data, against established thresholds for each product line to detect under - and
overutilization.
	
	ELEMENT D: Quantitative Data Analysis
		
	 	  	Annually, the organization analyzes the performance of the four chosen data types, including behavioral health data, against established thresholds for each product line to detect under - and
overutilization.

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 15 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
	
	ELEMENT E: Qualitative Data Analysis
		
	 	  	The organization conducts qualitative analysis to determine the cause and effect of all data not within thresholds.
	
	ELEMENT F: Site-Level Monitoring
		
	 	  	The organization analyzes data not within threshold by practice sites.
	
	ELEMENT G: Interventions
		
	 	  	The organization takes action to address identifies problems of under - and overutilization.
	
	ELEMENT H: Evaluating the Effectiveness of Interventions
		
	 	  	The organization measures the effectiveness of interventions to address under - and overutilization.
	
	ELEMENT I: Affirmative Statement Regarding Incentives
		
	 	  	The organization distributes a statement to all its practitioners, providers, members and employees affirming that:
		
	1	  	UM decision making is based only on appropriateness of care and service and existence of coverage
		
	2	  	the organization does not specifically reward practitioners or other individuals for issuing denials of coverage or service care
		
	3	  	financial incentives for UM decision makers do not encourage decisions that result in underutilization.
		
	UM 16    	  	Delegation of UM
		
	 	  	If the managed care organization delegates any UM activities, there is evidence of oversight of the delegated activity.
	
	ELEMENT A: Written Delegation Agreement
		
	 	  	There is a mutually agreed-upon document that describes all delegated activities.
	
	ELEMENT B: Specific Delegated Activities
		
	 	  	The delegation document describes:
		
	1	  	the responsibilities of the organization and the delegated entity
		
	2	  	the delegated activities
		
	3	  	at least semi-annual reporting to the organization
		
	4	  	the process by which the organization evaluates the delegated entity’s performance
		
	5	  	the remedies, including revocation of the delegation, available to the organization if the delegated entity does not fulfill its obligations.
	
	ELEMENT C: Provision for Protected Health Information
		
	 	  	If the delegation arrangement includes the use of protected health information by the delegate, the delegation document also includes the following provisions:
		
	1	  	a list of the allowed uses of protected health information
		
	2	  	a description of delegate safeguards to protect the information from inappropriate use or further disclosure
		
	3	  	a stipulation that the delegate will ensure that subdelegates have similar safeguards

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 16 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
		
	4	  	a stipulation that the delegate will provide individuals with access to their protected health information
		
	5	  	a stipulation that the delegate will inform the organization if inappropriate uses of the information occur
		
	6	  	a stipulation that the delegate will ensure protected health information is returned, destroyed or protected if the delegation agreement ends.
	
	ELEMENT D: Approval of UM Program
		
	 	  	Annually, the organization approves its delegate’s UM program.
	
	ELEMENT E: Pre-Delegation Evaluation
		
	 	  	For delegation agreements that have been in effect for less than 12 months, the organization evaluated delegate capacity before delegation began.
	
	ELEMENT F: Annual Evaluation
		
	 	  	For delegation arrangements in effect 12 months or longer, the organization annually evaluated delegate performance against its expectations and NCQA standards.
	
	ELEMENT G: Reporting
		
	 	  	For delegation arrangements in effect 12 months or longer, the organization evaluated regular reports, as specified in Element B.
	
	ELEMENT H: Opportunities for Improvement
		
	 	  	For delegation arrangements that have been in effect for more than 12 months, at least once in each of the past 2 years that delegation has been in effect, the organization has identifies and
followed up on opportunities for improvement, if applicable.
	
	CREDENTIALING AND RECREDENTIALING
		
	CR 1    	  	Credentialing Policies
		
	 	  	The organization documents the mechanisms for the credentialing and recredentialing of licensed independent practitioners with whom it contracts or employs and who fall within its scope of
authority and action.
	
	ELEMENT A: Practitioner Credentialing Guidelines
		
	 	  	The organization’s credentialing policies and procedures specify the types of practitioners to credential and recredential.
	
	ELEMENT B: Criteria and Verification Sources
		
	 	  	The organization’s policies and procedures specify:
		
	1	  	the criteria for credentialing and recredentialing
		
	2	  	the verification sources used.

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 17 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
	
	ELEMENT C: Policies and Procedures
		
	 	  	The organization’s policies and procedures include the following factors:
		
	1	  	the process to delegate credentialing or recredentialing;
		
	2	  	the process used to ensure that credentialing and recredentialing are conducted in a non-discriminatory manner
		
	3	  	the process for notifying a practitioner about any information obtained during the organization’s credentialing process that varies substantially from the information provided to the
organization by the practitioner
		
	4	  	the process to ensure that practitioners are notified of the credentialing or recredentialing decision within 60 calendar days of the committee’s decision
		
	5	  	the medical director’s or other designated physician’s direct responsibility and participation in the credentialing program
		
	6	  	the process used to ensure the confidentiality of all information obtained in the credentialing process, except as otherwise provided by law
		
	7	  	the process for making credentialing and recredentialing decisions.
	
	ELEMENT D: Practitioners Rights
		
	 	  	The organization’s policies and procedures include the following practitioner rights:
		
	1	  	the right of practitioners to review information submitted to support their credentialing applications
		
	2	  	the right of practitioner’s to correct erroneous information;
		
	3	  	the right of practitioners, upon request, to be informed of the status of their credentialing or recredentialing application
		
	4	  	notification of these rights.
		
	CR 2	  	Credentialing Committee
		
	 	  	The organization designates a credentialing committee that uses a peer review process to make recommendations regarding credentialing decisions.
	
	ELEMENT A: Credentialing Committee
		
	 	  	The Credentialing Committee includes representation from a range of participating practitioners.
	
	ELEMENT B: Credentialing Committee Decisions
		
	 	  	The Credentialing Committee has the opportunity to review the credentials of all practitioners and offer advice, which the organization considers.
		
	CR 3    	  	Initial Credentialing Verification
		
	 	  	The organization verifies credentialing information through primary sources, unless otherwise indicated.
	
	ELEMENT A: Initial Primary Source Verification
		
	 	  	The organization verifies that the following factors are present and within the prescribed time limits:
		
	1	  	a current, valid license to practice
		
	2	  	a valid DEA or CDS certificate, if applicable
		
	3	  	education and training including board certification if the practitioner states on the application that he/she is board certified

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 18 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
		
	4	  	work history
		
	5	  	history of professional liability claims that resulted in settlements or judgments paid by on behalf of the practitioner.
		
	CR 4	  	Application and Attestation
		
	 	  	The applicant completes an application for membership that includes a current and signed attestation regarding the applicant’s health status and any history of loss or limitation of
licensure or privileges:.
	
	ELEMENT A: Contents of the Application
		
	 	  	The application includes a current and signed attestation and addresses:
		
	1	  	reasons for any inability to perform the essential functions of the position, with or without accommodation
		
	2	  	lack of present illegal drug use
		
	3	  	history of loss of license and felony convictions
		
	4	  	history of loss or limitation of privileges or disciplinary activity
		
	5	  	current malpractice insurance coverage
		
	6	  	the correctness and completeness of the application.
		
	CR 5    	  	Initial Sanction Information
		
	 	  	There is documentation that before making a credentialing decision the organization has received information on sanctions.
	
	ELEMENT A: Sanctions
		
	 	  	In an NCQA review of credentialing files, two factors are present and within 180 calendar day time limit:
		
	1	  	state sanctions, restrictions on licensure and/ or limitations on scope of practice
		
	2	  	Medicare and Medicaid sanctions.
		
	CR 7	  	Recredentialing Verification
		
	 	  	The organization formally recredentials its practitioners at least every 36 months through information verified from primary sources, unless otherwise indicated.
	
	ELEMENT A: Recredentialing Verification
		
	 	  	The organization verifies the following factors within the prescribed time limits:
		
	1	  	a current valid state license to practice
		
	2	  	a valid DEA or CDS certificate, as applicable
		
	3	  	board certification, if the practitioner states that he/she is board certified
		
	4	  	history of professional liability claims that resulted in settlements or judgments paid by or on behalf of the practitioner.

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 19 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
	
	 ELEMENT B: Correctness/Completeness of the Application

		
	 	  	An applicant completes an application for membership that includes a current and signed attestation with the following factors:
		
	 1
	  	reasons for any inability to perform the essential functions of the position, with or without accommodation
		
	 2
	  	lack of present illegal drug use
		
	 3
	  	history of loss or limitation of privileges or disciplinary activity
		
	 4
	  	current malpractice insurance coverage
		
	 5
	  	correctness and completeness of the application.
	
	 ELEMENT C: Recredentialing Cycle Length

		
	 	  	The length of the recredentialing cycle is within the required 36 month time frame.
		
	 CR 8
	  	Recredentialing Sanction Information
		
	 	  	There is documentation that before making a recredentialing decision, the organization has received information on sanctions.
	
	 ELEMENT A: Sanction Information

		
	 	  	In an NCQA review of recredentialing files, two elements are present and within 180 calendar day time limit:
		
	 1
	  	state sanctions, restrictions on licensure and/or limitations on scope of practice
		
	 2
	  	Medicare and Medicaid sanctions.
	
	 ELEMENT B: Recredentialing Cycle Length

		
	 	  	In a review of a sample of the organization’s recredentialing files, the length of the recredentialing cycle is within the 3 year (36 month) time frame.
		
	 CR 9
	  	Performance Monitoring
		
	 	  	The organization incorporates information from quality improvement activities and member complaints in its recredentialing decision-making process for primary care practitioners and
high-volume behavioral health care practitioners.
	
	 ELEMENT A: Decision-Making Process

		
	 	  	The organization includes information from quality improvement activities and member complaints in its recredentialing decision-making process for PCPs and high-volume behavioral health care
practitioners.
		
	 CR 10    
	  	Ongoing Monitoring of Sanctions and Complaints
		
	 	  	The organization develops and implements policies and procedures for ongoing monitoring of practitioner sanctions and complaints between recredentialing cycles and takes appropriate action
against practitioners when it identifies occurrences of poor quality.
	
	 ELEMENT A: Written Policy and Procedures

		
	 	  	The organization has a written policy and procedure that addresses the ongoing monitoring of:
		
	 1
	  	Medicare and Medicaid sanctions

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 20 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
		
	 2
	  	sanctions and limitations on licensure
		
	 3
	  	complaints.
	
	 ELEMENT C: Implementing ongoing Monitoring

		
	 	  	The organization collects and reviews information from:
		
	 1
	  	Medicare and Medicaid sanctions
		
	 2
	  	sanctions and limitations on licensure
		
	 3
	  	complaints.
	
	 ELEMENT D: Appropriate Interventions

		
	 	  	The organization implements appropriate interventions when it identifies occurrences of poor quality, when appropriate.
		
	 CR 11
	  	Notification to Authorities and Practitioner Appeal Right
		
	 	  	When an organization has taken actions against a practitioner for quality reasons, it offers the practitioner a formal appeal process and reports the action to the appropriate
authorities.
	
	 ELEMENT A: Written Policy and Procedures

		
	 	  	The organization has policies and procedures for:
		
	 1
	  	the range of actions available to the organization
		
	 2
	  	procedures for reporting to authorities
		
	 3
	  	a well-defined appeal process
		
	 4
	  	making the appeal process known to practitioners.
	
	 ELEMENT B: Contract Suspension or Termination

		
	 	  	There is documentation that the organization reports practitioner suspension or termination to the appropriate authorities.
	
	 ELEMENT C: Practitioner Approval Process

		
	 	  	The organization has an appeal process for instances in which it chooses to alter the condition of the practitioner’s participation based on issues of quality of care and/or service. The
organization informs practitioners of the appeal process.
		
	 CR 12    
	  	Assessment of Organizational Providers
		
	 	  	The organization has written policies and procedures for the initial and ongoing assessment of providers with which it intends to contract.
	
	 ELEMENT A: Review and Approval of Provider

		
	 	  	The organization’s policy for credentialing of health care delivery providers specifies that it:
		
	 1
	  	confirms that the provider is in good standing with state and federal regulatory bodies
		
	 2
	  	confirms that the provider has been reviewed and approved by an accrediting body

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 21 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
		
	 3
	  	conducts an on-site quality assessment, if there is no accreditation status
		
	 4
	  	confirms that the provider continues to be in good standing with state and federal regulatory bodies and, if applicable, is reviewed and approved by an accrediting body at least every 3
years.
	
	 ELEMENT B: Medical Providers

		
	 	  	The organization includes at least the following medical providers:
		
	 1
	  	hospitals
		
	 2
	  	home health agencies
		
	 3
	  	skilled nursing facilities
		
	 4
	  	free-standing surgical centers.
	
	 ELEMENT D: Assessing Medical Care Providers

		
	 	  	The organization has documentation of assessment of contracted medical health care delivery providers.
		
	 CR 13    
	  	Delegation of Credentialing
		
	 	  	If the organization delegates any credentialing and recredentialing activities, there is evidence of oversight of the delegated activity.
	
	 ELEMENT A: Written Delegation Agreement

		
	 	  	There is a mutually agreed-upon document that describes all delegated activities.
	
	 ELEMENT B: Specific Delegated Activities

		
	 	  	The delegation document describes:
		
	 1
	  	the responsibilities of the organization and the delegated entity
		
	 2
	  	the delegated activities
		
	 3
	  	at least semi-annual reporting to the organization
		
	 4
	  	the process by which the organization evaluates delegated entity’s performance
		
	 5
	  	the remedies, including revocation of the delegation, available to the organization if the delegated entity does not fulfill its obligations.
	
	 ELEMENT C: Provisions for Protected Health Information

		
	 	  	If the delegation arrangement includes the use of protected health information by the delegate, the delegation document also includes the following provisions:
		
	 1
	  	a list of the allowed uses of protected health information
		
	 2
	  	a description of delegate safeguards to protect the information from inappropriate use or further disclosure
		
	 3
	  	a stipulation that the delegate will ensure that subdelegates have similar safeguards
		
	 4
	  	a stipulation that the delegate will provide individuals with access to their protected health information

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 22 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
		
	 5
	  	a stipulation that the delegate will inform the organization if inappropriate uses of the information occur
		
	 6
	  	a stipulation that the delegate will ensure protected health information is returned, destroyed or protected if the delegation agreement ends.
	
	 ELEMENT D: Right to Approve and to Terminate

		
	 	  	The organization retains the right, based on quality issues, to approve, suspend and terminate individual practitioners, providers and sites in situations where it has delegated decision
making. This right is reflected in the delegation documents.
	
	 ELEMENT E: Pre-Delegation Evaluation

		
	 	  	For delegation agreements that have been in effect for less than 12 months, the organization evaluated delegate capacity before delegation began.
	
	 ELEMENT F: Annual File Audit

		
	 	  	For delegation arrangements in effect for 12 months or longer, the organization has audited files against NCQA standards for each year that the delegation has been in effect.
	
	 ELEMENT G: Annual Evaluation

		
	 	  	For delegation arrangements in effect for more than 12 months, the organization has performed an annual substantive evaluation of delegated activities against delegated NCQA standards and
organizational expectations.
	
	 ELEMENT H: Reporting

		
	 	  	For delegation arrangements in effect for 12 months or longer, the organization evaluated regular reports, as specified in Element B.
	
	 ELEMENT I: Opportunities for Improvement

		
	 	  	For delegation arrangements that have been in effect for more than 12 months, at least once in each of the past 2 years that delegation has been in effect, the organization has identifies and
followed up on opportunities for improvement, if applicable.
	
	MEMBERS’ RIGHTS AND RESPONSIBILITIES
		
	 RR 1    
	  	Statement of Members’ Rights and Responsibilities
		
	 	  	The organization has a written policy that states its commitment to treating members in a manner that respects their rights and its expectations of members’
responsibilities.
	
	 ELEMENT B: Statement of Members’ Rights and Responsibilities

		
	 	  	The organization’s members’ rights and responsibilities policy states that members have:
		
	 1
	  	a right to receive information about the organization, its services, its practitioners and providers and members’ rights and responsibilities

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 23 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
		
	 2
	  	a right to be treated with respect and recognition of their dignity and right to privacy
		
	 3
	  	a right to participate with practitioners in decision-making regarding their health care
		
	 4
	  	a right to a candid discussions of appropriate or medically necessary treatment options for their conditions, regardless of cost or benefit coverage
		
	 5
	  	a right to voice complaints or appeals about the organization or the care provided
		
	 7
	  	a responsibility to provide information (to the extent possible) that the organization and its practitioners and providers need in order to care
		
	 8
	  	a responsibility to follow plans and instructions for care that they have agreed on with their practitioners
		
	 9
	  	a responsibility to understand their health care problems and participate in developing mutually agreed upon treatment goals to the degree possible.
		
	 RR 2
	  	Distribution of Rights Statements to Members and Practitioners
		
	 	  	The organization distributes its policy on members’ rights and responsibilities to its members and participating practitioners.
	
	 ELEMENT A: Distribution of Rights Statement to Members and Practitioners

		
	 	  	The organization distributes its members’ rights and responsibilities statement to:
		
	 1
	  	existing members
		
	 2
	  	new members
		
	 3
	  	existing practitioners
		
	 4
	  	new practitioners.
		
	 RR 3
	  	Policies for Complaints and Appeals
		
	 	  	The organization has written policies and procedures for the thorough, appropriate and timely resolution of member complaints and appeals. Note: For BH & PEBB, Contractors are required to
follow the Washington State “Patient Bill of Rights” (PBOR).
		
	 RR 4    
	  	Subscriber Information
		
	 	  	The organization provides each subscriber with information needed to understand benefit coverage and obtain care.
	
	 ELEMENT A: Subscriber Information

		
	 	  	The organization provides written information to its subscriber addresses the following factors:
		
	 1
	  	benefits and services included in, and excluded from, coverage
		
	 2
	  	pharmaceutical management procedures, if they exist
		
	 3
	  	copayments and other charges for which the member is responsible
		
	 4
	  	restrictions on benefits that apply to services obtained outside the organization’s system or service area
		
	 6
	  	how to obtain information about practitioners who participate in the organization

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 24 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
		
	 7
	  	how to obtain primary care services, including points of access
		
	 8
	  	how to obtain specialty care, behavioral health services and hospital services
		
	 9
	  	how to obtain care after normal office hours
		
	 10
	  	how too obtain emergency care, including the organization’s policy on when to directly access emergency care or use 911 services
		
	 11
	  	how to obtain care and coverage when out of the organization’s service area
		
	 13
	  	Requirement removed, not applicable to Healthy Options or the State Children’s Health Insurance Plan.
		
	 14
	  	how the MCO evaluates new technology for inclusion as a covered benefit.
	
	 ELEMENT B: Translation Services

		
	 	  	The organization provides translation services within its member services telephone function based on the linguistic needs of its members.
		
	 RR 5    
	  	Privacy and Confidentiality
		
	 	  	The organization protects the confidentiality of member information and records.
	
	 ELEMENT A: Adopting Written Policies

		
	 	  	The organization adopts written policies and procedures regarding protected health information (PHI) that addresses:
		
	 1
	  	information included in notifications of privacy practices
		
	 2
	  	access to PHI
		
	 3
	  	the process for members to request restrictions on use/disclosure of PHI
		
	 4
	  	the process for members to request amendments to PHI
		
	 5
	  	the process for members to request an accounting of disclosures of PHI
		
	 6
	  	internal protection of oral, written and electronic information across the organization.
	
	 ELEMENT B: Special Protection for PHI Sent to Plan Sponsors

		
	 	  	The organization’s policies and procedures prohibit sharing members’ PHI with any sponsor without certification that the plan sponsor’s documents have been amended to
incorporate the following provisions and the plan sponsor agrees to:
		
	 1
	  	not use or disclose PHI other than as permitted by the plan documents or required by law
		
	 2
	  	ensure that agents and subcontractors of the employer or plan sponsor agree to the same restrictions and conditions as the employer or plan sponsor with regard to PHI
		
	 RR 6
	  	Marketing Information
		
	 	  	The organization ensures that communications with prospective members correctly and thoroughly represent the benefits and operating procedures of the organization.

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 25 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
	
	 ELEMENT A: Summary Statement of UM

		
	 	  	Marketing materials for prospective members contain a summary statement of how the organization’s utilization management UM procedures work.
	
	 ELEMENT B:

		
	 	  	All organization materials and presentations accurately describe:
		
	 1
	  	covered benefits
		
	 2
	  	noncovered benefits
		
	 3
	  	practitioner and provider availability
		
	 4
	  	potential restrictions
	
	 ELEMENT C: Communicating with Prospective Members

		
	 	  	The organization communicates to prospective members, in easy-to-understand language, a summary of its policies and practices regarding the collection, use and disclosure of protected health
information. Communication with prospective members includes the following six factors:
		
	 1
	  	inclusions in routine notifications of privacy practices
		
	 2
	  	the right to approve release of information (use of authorization)
		
	 3
	  	access to medical records
		
	 4
	  	protection of oral, written and electronic information across the organization
		
	 5
	  	the use of measurement data
		
	 6
	  	information for employers.
		
	 RR 7    
	  	Delegation of RR
		
	 	  	If the managed care organization delegates any RR activities, there is evidence of oversight of the delegated activity.
	
	 ELEMENT A: Written Delegation Agreement

		
	 	  	There is a mutually agreed-upon document that describes all delegated activities.
	
	 ELEMENT B: Specific Delegated Activities

		
	 	  	The delegation document describes:
		
	 1
	  	the responsibilities of the organization and the delegated entity
		
	 2
	  	the delegated activities
		
	 3
	  	at least semi-annual reporting to the organization
		
	 4
	  	the process by which the organization evaluates delegated entity’s performance
		
	 5
	  	the remedies, including revocation of the delegation, available to the organization if the delegated entity does not fulfill its obligations.

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 26 

 Quality Improvement Program Standards 
 Exhibit A 
  

			
	NCQA STANDARDS
	
	 ELEMENT C: Provisions for Protected Health Information

		
	 	  	If the delegation arrangement includes the use of protected health information by the delegate, the delegation document also includes the following provisions:
		
	1	  	a list of the allowed uses of protected health information
		
	2	  	a description of delegate safeguards to protect the information from inappropriate use or further disclosure
		
	3	  	a stipulation that the delegate will ensure that subdelegates have similar safeguards
		
	4	  	a stipulation that the delegate will provide individuals with access to their protected health information
		
	5	  	a stipulation that the delegate will inform the organization if inappropriate uses of the information occur
		
	            6	  	a stipulation that the delegate will ensure protected health information is returned, destroyed or protected if the delegation agreement ends.
	
	ELEMENT D: Pre-Delegation Evaluation
		
	 	  	For delegation agreements that have been in effect for less than 12 months, the organization evaluated delegate capacity before delegation began.
	
	ELEMENT E: Annual Evaluation
		
	 	  	For delegation arrangements in effect for more than 12 months, the organization has performed an annual substantive evaluation of delegated activities against delegated NCQA standards and
organizational expectations.
	
	ELEMENT F: Reporting
		
	 	  	For delegation arrangements in effect for 12 months or longer, the organization evaluated regular reports, as specified in Element B.
	
	ELEMENT G: Opportunities for Improvement
		
	 	  	For delegation arrangements that have been in effect for more than 12 months, at least once in each of the past 2 years that delegation has been in effect, the organization has identifies and
followed up on opportunities for improvement, if applicable.
	
	PREVENTIVE HEALTH SERVICES - Requirement removed, not applicable to Healthy Options or the State Children’s Health Insurance Plan.

  

 These Standards are Copyright (July 1, 2003 - June 30, 2004) by the National Committee for Quality Assurance (NCQA) and
protected by international and national copyright law. This material may not be copied, reproduced, distributed, modified, published, adapted, edited or translated, without express written permission of or license from NCQA. All Rights Reserved.
Used with permission. 
  
 27 

			
	 	  	HO & SCHIP Contract
Exhibit B

  
 Exhibit B PLACEHOLDER

  

 1

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