Document:

Exhibit 10.3

 

HEALTH CARE AUTHORITY (HCA)

 

2006 – 2007 CONTRACT

 

FOR

 

BASIC HEALTH PLUS

 

AND

 

MATERNITY BENEFITS
PROGRAM

 

APPROVED AS TO FORM BY THE
ATTORNEY GENERAL’S OFFICE

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  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

  	
  Basic Health Plus and Maternity Benefits Program
  (BH)

  	
  1

  
	
  1.7

  	
  Children With Special Health Care Needs

  	
  1

  
	
  1.8

  	
  Cold Call Marketing

  	
  1

  
	
  1.9

  	
  Comparable Coverage

  	
  1

  
	
  1.10

  	
  Consumer Assessment of Health Plans Survey
  (CAHPS®)

  	
  1

  
	
  1.11

  	
  Continuity of Care

  	
  2

  
	
  1.12

  	
  Coordination of Care

  	
  2

  
	
  1.13

  	
  Covered Services

  	
  2

  
	
  1.14

  	
  Duplicate Coverage

  	
  2

  
	
  1.15

  	
  EPSDT

  	
  2

  
	
  1.16

  	
  Eligible Clients

  	
  2

  
	
  1.17

  	
  Emergency Medical Condition

  	
  2

  
	
  1.18

  	
  Emergency Services

  	
  2

  
	
  1.19

  	
  Enrollee

  	
  2

  
	
  1.20

  	
  Enrollee with Special Health Care Needs

  	
  3

  
	
  1.21

  	
  External Quality Review (EQR)

  	
  3

  
	
  1.22

  	
  External Quality Review Organization (EQRO)

  	
  3

  
	
  1.23

  	
  External Quality Review Protocols

  	
  3

  
	
  1.24

  	
  External Quality Review Report - (EQRR)

  	
  3

  
	
  1.25

  	
  Grievance

  	
  3

  
	
  1.26

  	
  Grievance Process

  	
  3

  
	
  1.27

  	
  Grievance System

  	
  3

  
	
  1.28

  	
  Health Care Professional

  	
  3

  
	
  1.29

  	
  Health Employer Data and Information Set -
  (HEDISâ)

  	
  4

  
	
  1.30

  	
  Health Employer Data and Information Set (HEDISâ) Compliance Audit  Program

  	
  4

  
	
  1.31

  	
  Managed Care

  	
  4

  
	
  1.32

  	
  Managed Care Organization (MCO)

  	
  4

  
	
  1.33

  	
  Marketing

  	
  4

  
	
  1.34

  	
  Marketing Materials

  	
  4

  
	
  1.35

  	
  Medically Necessary Services

  	
  4

  
	
  1.36

  	
  National CAHPS® Benchmarking Database - (NCBD)

  	
  4

  
	
  1.37

  	
  National Committee for Quality Assurance -
  (NCQA)

  	
  5

  
	
  1.38

  	
  Participating Provider

  	
  5

  
	
  1.39

  	
  Peer-Reviewed Medical Literature

  	
  5

  
	
  1.40

  	
  Physician Group

  	
  5

  
	
  1.41

  	
  Physician Incentive Plan

  	
  5

  
	
  1.42

  	
  Post-stabilization
  Services

  	
  5

  
				

 

i

 

	
  1.43

  	
  Potential Enrollee

  	
  5

  
	
  1.44

  	
  Primary Care Provider (PCP)

  	
  5

  
	
  1.45

  	
  Quality

  	
  6

  
	
  1.46

  	
  Risk

  	
  6

  
	
  1.47

  	
  Service Areas

  	
  6

  
	
  1.48

  	
  State Children’s Health Insurance Program
  (SCHIP)

  	
  6

  
	
  1.49

  	
  Subcontract

  	
  6

  
	
  1.50

  	
  Validation

  	
  6

  
	
  2.

  	
  ENROLLMENT

  	
  6

  
	
  2.1

  	
  Service Areas

  	
  6

  
	
  2.2

  	
  Eligible Client Groups

  	
  7

  
	
  2.3

  	
  Client Notification

  	
  7

  
	
  2.4

  	
  Exemption from Enrollment

  	
  8

  
	
  2.5

  	
  Enrollment Period

  	
  8

  
	
  2.6

  	
  Enrollment Process

  	
  8

  
	
  2.7

  	
  Effective Date of Enrollment

  	
  8

  
	
  2.8

  	
  Enrollment Listing and Requirements for
  Contractor’s Response

  	
  9

  
	
  2.9

  	
  Termination of Enrollment

  	
  9

  
	
  2.10

  	
  Enrollment Not Discriminatory

  	
  12

  
	
  3.

  	
  MARKETING AND INFORMATION REQUIREMENTS

  	
  12

  
	
  3.1

  	
  Marketing

  	
  12

  
	
  3.2

  	
  Information Requirements for Enrollees and
  Potential Enrollees

  	
  13

  
	
  3.3

  	
  Equal Access for Enrollees & Potential
  Enrollees with Communication Barriers

  	
  16

  
	
  4.

  	
  PAYMENT

  	
  18

  
	
  4.1

  	
  Rates/Premiums

  	
  18

  
	
  4.2

  	
  Delivery Case Rate Payment

  	
  20

  
	
  4.3

  	
  Renegotiation of Rates

  	
  20

  
	
  4.4

  	
  Reinsurance/Risk Protection

  	
  20

  
	
  4.5

  	
  Recoupments

  	
  20

  
	
  4.6

  	
  Rate Setting Methodology

  	
  21

  
	
  4.7

  	
  Information for Rate Setting

  	
  21

  
	
  4.8

  	
  Payments to Critical Access Hospitals (CAH)

  	
  21

  
	
  4.9

  	
  Stop Loss for Hemophiliac Drugs

  	
  22

  
	
  4.10

  	
  Encounter Data

  	
  22

  
	
  5.

  	
  ACCESS

  	
  22

  
	
  5.1

  	
  Network

  	
  22

  
	
  5.2

  	
  Service Delivery Network

  	
  23

  
	
  5.3

  	
  Timely Access to Care

  	
  23

  
	
  5.4

  	
  Hours of Operation for Network Providers

  	
  23

  
	
  5.5

  	
  24/7 Availability

  	
  24

  
	
  5.6

  	
  Appointment Standards

  	
  24

  
	
  5.7

  	
  Integrated Provider Network Database (IPND)

  	
  24

  
	
  5.8

  	
  Provider Network-Distance Standards

  	
  24

  
	
  5.9

  	
  Standards for Specialty and Primary Care
  Providers

  	
  25

  
	
  5.10

  	
  Access to Specialty Care

  	
  26

  
	
  5.11

  	
  Order of Acceptance

  	
  26

  
				

 

ii

 

	
  5.12

  	
  Provider Network Changes

  	
  26

  
	
  6.

  	
  QUALITY OF CARE

  	
  26

  
	
  6.1

  	
  Quality Assessment and Performance Improvement
  (QAPI) Program

  	
  26

  
	
  6.2

  	
  Performance Improvement Projects

  	
  28

  
	
  6.3

  	
  Performance Measures using Health Employer Data
  & Information Set (HEDISâ)

  	
  29

  
	
  6.4

  	
  Consumer Assessment of Health Plans Survey
  (CAHPS®)

  	
  32

  
	
  6.5

  	
  External Quality Review

  	
  34

  
	
  6.6

  	
  Enrollee Mortality

  	
  35

  
	
  6.7

  	
  Practice Guidelines

  	
  36

  
	
  6.8

  	
  Drug Formulary Review and Approval

  	
  36

  
	
  7.

  	
  SUBCONTRACTS

  	
  36

  
	
  7.1

  	
  Contractor Remains Legally Responsible

  	
  36

  
	
  7.2

  	
  Solvency Requirements for Subcontractors

  	
  36

  
	
  7.3

  	
  Provider Nondiscrimination

  	
  37

  
	
  7.4

  	
  Required Provisions

  	
  37

  
	
  7.5

  	
  Health Care Provider Subcontracts

  	
  38

  
	
  7.6

  	
  Health Care Provider Subcontracts Delegating
  Administrative Functions

  	
  40

  
	
  7.7

  	
  Excluded Providers

  	
  40

  
	
  7.8

  	
  Home Health Providers

  	
  41

  
	
  7.9

  	
  Physician Incentive Plans

  	
  41

  
	
  7.10

  	
  Payment to FQHCs/RHCs

  	
  44

  
	
  7.11

  	
  Provider Education

  	
  44

  
	
  7.12

  	
  Claims Payment Standards

  	
  44

  
	
  7.13

  	
  FQHC/RHC Report

  	
  45

  
	
  7.14

  	
  Provider Credentialing

  	
  45

  
	
  8.

  	
  ENROLLEE RIGHTS AND PROTECTIONS

  	
  47

  
	
  8.1

  	
  General Requirements

  	
  47

  
	
  8.2

  	
  Cultural Considerations

  	
  47

  
	
  8.3

  	
  Advance Directives

  	
  47

  
	
  8.4

  	
  Enrollee Choice of PCP

  	
  49

  
	
  8.5

  	
  Direct Access for Enrollees with Special Health
  Care Needs

  	
  49

  
	
  8.6

  	
  Prohibition on Enrollee Charges for Covered
  Services

  	
  50

  
	
  8.7

  	
  Provider/Enrollee Communication

  	
  50

  
	
  8.8

  	
  Enrollee Self-Determination

  	
  50

  
	
  9.

  	
  UTILIZATION MANAGEMENT  PROGRAM  AND AUTHORIZATION OF
  SERVICES

  	
  50

  
	
  9.1

  	
  Utilization Management Program

  	
  50

  
	
  9.2

  	
  Authorization of Services

  	
  52

  
	
  10.

  	
  GRIEVANCE SYSTEM

  	
  54

  
	
  10.1

  	
  General Requirements

  	
  54

  
	
  10.2

  	
  Grievance Process

  	
  55

  
	
  10.3

  	
  Appeal Process

  	
  56

  
	
  10.4

  	
  Expedited Appeal Process

  	
  57

  
	
  10.5

  	
  Hearings

  	
  58

  
	
  10.6

  	
  Independent Review

  	
  59

  
	
  10.7

  	
  Board of Appeals

  	
  59

  
	
  10.8

  	
  Continuation of Services

  	
  59

  
					

 

iii

 

	
  10.9

  	
  Effect of Reversed
  Resolutions of Appeals and Fair Hearings

  	
  60

  
	
  10.10

  	
  Actions, Grievances, Appeals and Independent
  Reviews

  	
  61

  
	
  11.

  	
  BENEFITS

  	
  63

  
	
  11.1

  	
  Scope of Services

  	
  63

  
	
  11.2

  	
  Medical Necessity Determination

  	
  65

  
	
  11.3

  	
  Enrollee Self-Referral

  	
  65

  
	
  11.4

  	
  Women’s Health Care Services

  	
  66

  
	
  11.5

  	
  Maternity Newborn Length of Stay

  	
  66

  
	
  11.6

  	
  Continuity of Care

  	
  66

  
	
  11.7

  	
  Coordination of Care

  	
  66

  
	
  11.8

  	
  Second Opinions

  	
  68

  
	
  11.9

  	
  Sterilizations and Hysterectomies

  	
  68

  
	
  11.10

  	
  Experimental and Investigational Services

  	
  68

  
	
  11.11

  	
  Enrollee Hospitalized at Enrollment

  	
  69

  
	
  11.12

  	
  Enrollee Hospitalized at Disenrollment

  	
  70

  
	
  11.13

  	
  General Description of Covered Services

  	
  70

  
	
  11.14

  	
  Exclusions

  	
  76

  
	
  11.15

  	
  Coordination of Benefits and Subrogation of
  Rights of Third Party Liability

  	
  80

  
	
  12.

  	
  GENERAL TERMS AND CONDITIONS

  	
  81

  
	
  12.1

  	
  Amendment

  	
  81

  
	
  12.2

  	
  Assignment of this Contract

  	
  81

  
	
  12.3

  	
  Access to Facilities and Records

  	
  82

  
	
  12.4

  	
  Compliance with All Applicable Laws and
  Regulations

  	
  82

  
	
  12.5

  	
  Complete Contract

  	
  83

  
	
  12.6

  	
  Confidentiality

  	
  83

  
	
  12.7

  	
  Contractor Certification Regarding Ethics

  	
  85

  
	
  12.8

  	
  Covenant Against Contingent Fees

  	
  85

  
	
  12.9

  	
  Data Certification Requirements

  	
  85

  
	
  12.10

  	
  Disputes

  	
  86

  
	
  12.11

  	
  HCA and DSHS Not Guarantor

  	
  87

  
	
  12.12

  	
  Exclusions and Debarment

  	
  87

  
	
  12.13

  	
  Five Percent Equity

  	
  87

  
	
  12.14

  	
  Force Majeure

  	
  87

  
	
  12.15

  	
  Fraud and Abuse Requirements–Policies and
  Procedures

  	
  88

  
	
  12.16

  	
  Fraud and Abuse Reporting

  	
  89

  
	
  12.17

  	
  Governing Law and Venue

  	
  89

  
	
  12.18

  	
  Headings not Controlling

  	
  89

  
	
  12.19

  	
  Health and Safety

  	
  89

  
	
  12.20

  	
  Health Information Systems

  	
  89

  
	
  12.21

  	
  Independent Contractor

  	
  90

  
	
  12.22

  	
  Insolvency

  	
  90

  
	
  12.23

  	
  Insurance

  	
  91

  
	
  12.24

  	
  Mutual Indemnification and Hold Harmless

  	
  92

  
	
  12.25

  	
  No Federal or State Endorsement

  	
  92

  
	
  12.26

  	
  Notices

  	
  92

  
	
  12.27

  	
  Order of Precedence

  	
  93

  
						

 

iv

 

	
  12.28

  	
  Program Information

  	
  94

  
	
  12.29

  	
  Proprietary Rights

  	
  94

  
	
  12.30

  	
  Records Maintenance and Retention

  	
  94

  
	
  12.31

  	
  Sanctions

  	
  94

  
	
  12.32

  	
  Severability

  	
  96

  
	
  12.33

  	
  Solvency

  	
  96

  
	
  12.34

  	
  State Conflict of Interest Safeguards

  	
  97

  
	
  12.35

  	
  Survivability

  	
  97

  
	
  12.36

  	
  Termination by the Contractor for Default

  	
  97

  
	
  12.37

  	
  Termination by HCA for Default

  	
  97

  
	
  12.38

  	
  Termination for Reduction in Funding

  	
  98

  
	
  12.39

  	
  Termination - Information on Outstanding Claims

  	
  98

  
	
  12.40

  	
  Terminations-Pre-termination Processes

  	
  98

  
	
  12.41

  	
  Washington Public Disclosure Act

  	
  98

  
	
  12.42

  	
  Waiver

  	
  99

  
	
   

  	
   

  
	
  Attachment A

  	
  Schedule of Events and Website References

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Premiums, Service Areas and Capacity

  	
   

  
				

 

v

 

1.         DEFINITIONS

 

The following definitions
shall apply to this Contract:

 

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 for 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 care services which are
auxiliary, accessory, or secondary to a primary health care service.

 

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           Basic Health Plus and Maternity Benefits Program (BH)  means a federal aid medical care
program jointly administered by the HCA and Washington State Department of
Social and Health Services (DSHS) for certain children and pregnant women as
set forth in Eligible Client Groups, Section 2.2, of this agreement.

 

1.7           Children with Special Health Care Needs  means children identified by DSHS to the
Contractor as children served under the provisions of Title V of the Social
Security Act.

 

1.8           Cold Call Marketing means any unsolicited personal contact
by the Contractor or its designee, with a potential enrollee or an enrollee
with another BH or Healthy Options/State Children’s Health Insurance Program
(HO/SCHIP) contracted managed care organization for the purposes of marketing
(42 CFR 438.104(a)).

 

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

 

1.10         Consumer Assessment of Health Plans Survey (CAHPS®) means a
commercial and Medicaid standardized survey instrument used to measure client
experience of health care.

 

1

 

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

 

1.12         Coordination of Care means the Contractor’s mechanisms to assure
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 (42 CFR 438.208).

 

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

 

1.14         Duplicate Coverage means an enrollee is privately enrolled
on any basis with the Contractor and simultaneously enrolled with the Contractor
under BH.

 

1.15         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) and the
DSHS EPSDT program policy and billing instructions (see Attachment A for
website link).  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 Section 11,
Benefits.

 

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

 

1.17         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)).

 

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

 

1.19         Enrollee means a Medicaid recipient who is enrolled in BH
managed care through a Managed Care Organization (MCO) having a Contract with HCA
(42 CFR 438.10(a)).

 

2

 

1.20         Enrollee with Special Health Care Needs means an enrollee
who has chronic and disabling condition as defined in WAC 388-538-050.

 

1.21         External Quality Review (EQR) means the analysis and
evaluation by an EQRO of aggregated information on quality, timeliness and
access to the health care services that the Contractor or its subcontractors
furnish to Medicaid recipients (42 CFR 438.320).

 

1.22         External Quality Review Organization (EQRO) means an
organization that meets the competence and independence requirements set forth
in 42 CFR 438.354, and performs external quality review, other EQR-related
activities as set forth in 42 CFR 438.358, or both (42 CFR 438.320).

 

1.23         External Quality Review Protocols means a series of nine (9)
procedures or guidelines for validating performance.  Two of the nine protocols must be used by
state Medicaid agencies.  These are:  1) Determining Contractor compliance with
federal Medicaid managed care regulations; and 2) Validation of performance
improvement projects undertaken by the Contractor.  The current External Quality Review Protocols
can be found at the Centers for Medicare and Medicaid Services (CMS) website (see
Attachment A for website link).

 

1.24         External Quality Review Report - (EQRR) means a technical
report that describes the manner in which the data from all EQR activities are
aggregated and analyzed, and conclusions drawn as to the quality, timeliness,
and access to the care furnished by the Contractor.  DSHS will provide a copy of the EQRR to the
Contractor, through print or electronic media.

 

1.25         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)).

 

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

 

1.27         Grievance System means the overall system that includes
grievances and appeals handled by the Contractor and access to the hearing
system (42 CFR 438, Subpart F).

 

1.28         Health Care Professional means a physician or any of the
following acting within their scope of practice; 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, pharmacist and certified respiratory therapy technician (42 CFR
438.2).

 

3

 

1.29         Health Employer Data and Information Set - (HEDISâ)
means a set of standardized performance measures designed to ensure that
healthcare purchasers and consumers have the information they need to reliably
compare the performance of managed health care plans.  The performance measures in HEDISâ
are related to many significant public health issues such as immunizations,
smoking, asthma, and diabetes.  HEDISâ
also includes a standardized survey of consumers’ experiences that evaluates
plan performance in areas such as customer service, access to care and claims
processing.  HEDISâ
is sponsored, supported, and maintained by National Committee for Quality
Assurance (NCQA).

 

1.30         Health Employer Data and Information Set (HEDISâ)
Compliance Audit  Program means a
set of standards and audit methods used by an NCQA certified auditor to
evaluate information systems capabilities assessment (IS standards) and a
Contractor’s ability to comply with HEDISâ
specifications (HD standards).

 

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

 

1.32         Managed Care Organization (MCO) means an organization having
a certificate of authority or certificate of registration from the Office of
Insurance Commissioner that contracts with HCA under a comprehensive risk
contract to provide prepaid health care services to Eligible Clients under the BH
managed care programs.

 

1.33         Marketing means any communication from the Contractor to a
potential enrollee or enrollee with another BH contracted MCO 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 BH or DSHS
contracted MCO (CFR 438.104(a)).

 

1.34         Marketing Materials means materials that are produced in any
medium, by or on behalf of the Contractor that can be reasonably interpreted as
intended as marketing (42 CFR 438.104(a)).

 

1.35         Medically Necessary Services means services that are “medically
necessary” as is defined in WAC 388-500-0005. 
In addition, medically necessary services shall include services related
to the enrollee’s ability to achieve age-appropriate growth and development.

 

1.36         National CAHPS® Benchmarking Database - (NCBD) means a
national repository for data from the Consumer Assessment of Health Plans
Survey (CAHPS®).  The database
facilitates comparisons of CAHPS® survey results by survey sponsors.  Data is compiled into a single national
database, which enables NCBD participants to compare their own results to
relevant benchmarks (i.e., reference points such as national and regional
averages).  The NCBD also

 

4

 

offers an important
source of primary data for specialized research related to consumer assessments
of quality as measured by CAHPS®.

 

1.37         National Committee for Quality Assurance - (NCQA) means an
organization responsible for developing and managing health care measures that
assess the quality of care and services that commercial and Medicaid managed
care clients receive.

 

1.38         Participating Provider means a person, health care provider,
practitioner, 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 Contract.

 

1.39         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.

 

1.40         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.

 

1.41         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 Contract.

 

1.42         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).

 

1.43         Potential Enrollee means any Medicaid recipient eligible for
enrollment in BH who is not enrolled with a health care plan having a contract
with HCA (42 CFR 438.10(a)).

 

1.44         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 PCP is inclusive of primary care physician as it is
used in 42 CFR 438.  All Federal
requirements applicable to primary care physicians will also be applicable to
primary care providers as the term is used in this Contract.

 

5

 

1.45         Quality means the degree to which a Contractor increases the
likelihood of desired health outcomes of its enrollees through its structural
and operational characteristics and through the provision of health services
that are consistent with current professional knowledge (42 CFR 438.320).

 

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

 

1.47         Service Areas means the geographic areas covered by this
Contract as described in Section 2.1.

 

1.48         State Children’s Health Insurance Program (SCHIP) means a program to
provide access to medical care for children whose family income exceeds the
limit for Medicaid eligibility, but is not greater than two hundred fifty
percent (250%) of the federal poverty level (FPL).  SCHIP is authorized by Title XXI of the Social
Security Act and by RCW 74.09.450 (WAC 388-542).

 

1.49         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 Contract.

 

1.50         Validation means the review of information, data, and
procedures to determine the extent to which they are accurate, reliable, and
free from bias and in accord with standards for data collection and analysis
(42 CFR 438.320).

 

2.         ENROLLMENT

 

2.1           Service Areas:

 

2.1.1                The
Contractor’s service areas are described in Exhibit A, Premiums and Service
Areas.  HCA may modify Exhibit A,
Premiums and Service Areas, for service area changes as described in Section 2.1.3
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.  HCA may require Contractor to cover full ZIP
codes that cross county borders served by Contractor in order to assure
continuity of care or ready access to health care services.  Enrollees may be required by Contractor to
access care in the county where Contractor has been awarded a contract even
though the enrollee’s residence may be in the portion of the ZIP code which
crosses the county line.

 

6

 

2.1.3                Service
Area Changes:

 

2.1.3.1             The
Contractor shall not change its Service Area without prior approval of the
HCA.  With the written approval of HCA,
the Contractor may expand into additional service areas at any time by giving
written notice to HCA and DSHS, along with evidence, as HCA may require,
demonstrating the Contractor’s ability to support the expansion.  HCA may withhold approval of a requested
expansion, if, in HCA’s sole judgment, the requested expansion is not in the
best interest of HCA.

 

2.1.3.2             The
Contractor shall notify enrollees affected by any service area decrease sixty
(60) calendar days prior to the effective date.  Notices shall by approved in advance by HCA
and 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.

 

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

 

2.1.5                HCA
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                HCA
will determine whether an enrollee resides within a service area.

 

2.2           Eligible Client Groups:  DSHS shall determine eligibility for
enrollment under this Contract.  Clients
in the following eligibility groups at the time of enrollment are eligible for
enrollment under this Contract, and must enroll in BH unless the enrollee 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 (18) 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).

 

2.3            Client Notification:  HCA
shall notify eligible clients of their rights and responsibilities as BH
enrollees at the time of initial eligibility determination and

 

7

 

at least annually.  The Contractor shall provide enrollees with
additional information as described in this Contract.

 

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.

 

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 BH plan to another without cause, each
month.

 

2.6            Enrollment Process:  To
enroll with the Contractor, the client, the client’s representative or
responsible parent or guardian must complete and submit a BH application to HCA.

 

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 11.11, Enrollee Hospitalized at Disenrollment.  If the newborn does not receive a separate
client identifier by the sixtieth (60th) day of life, supplemental premiums and
coverage shall only be available through the end of the month in which the
sixtieth (60th) day of life falls in accord with Healthy Options Licensed
Health Carrier Billing Instructions, published by DSHS (see Attachment A for
website link).

 

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

 

2.7.4                No
retroactive coverage is provided under this Contract, except as described in
this Section.

 

8

 

2.8           Enrollment Listing and Requirements for Contractor’s Response:

 

2.8.1                Before
the end of each month, HCA will provide the Contractor with a data file with
the information needed to perform the health care services described in the
Contract necessary for managed care enrollees.

 

2.8.2                The
data file will be in the Health Insurance Portability and Accountability Act
(HIPAA) compliant 834 Benefit Enrollment and Maintenance format.

 

2.8.2.1             The
data file, in the 834 benefit enrollment and maintenance format, will list the enrollees
whose enrollment is terminated by the end of that month, and the enrollees for
the following month with the Contractor.

 

2.8.2.2             The
data file will include but not be limited to the following enrollee personal information:
 Name, address, SSN, age/sex, ethnicity,
race and language markers.

 

2.8.3                The
Contractor shall have ten (10) calendar days from the receipt of the enrollment
listing to notify HCA and 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:

 

2.8.3.1             HCA
has enrolled the enrollee with the Contractor in a service area the Contractor
is not contracted for (with the exception of those zip codes that may cross
county borders, pursuant to the terms set forth in section 2.1.2 of this
agreement).

 

2.8.3.2             The
enrollee is not eligible for enrollment under the terms of this Contract.

 

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 HCA or by calling the BH toll-free enrollment number.  Requests for termination of enrollment may be
made to enroll with another BH or Healthy Options plan, or to disenroll from BH
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.  HCA shall notify the Contractor of enrollee
terminations pursuant to Section 2.8. 
The Contractor may not request voluntary disenrollment on behalf of an
enrollee.

 

9

 

2.9.2                Involuntary
Termination Initiated by DSHS for Ineligibility:  The enrollment of any enrollee under this
Contract 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 HCA or 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 (60 days of life, not counting the birth date,
shall be ineligible for services under the terms of this Contract 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 4.5.1.5.

 

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
Contract 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.  Neither HCA nor DSHS shall
recoup any premiums for enrollees determined SSI eligible and the Contractor
shall be responsible for providing services under the terms of this Contract
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
eligible, DSHS will act upon SSI eligibility in accord with this Section.

 

10

 

2.9.3                Involuntary
Termination Initiated by DSHS for Comparable Coverage or Duplicate 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 duplicate
coverage, as defined herein.

 

2.9.3.1.2                  Within
sixty (60) calendar days of the date 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 duplicate
coverage or comparable coverage as follows:

 

2.9.3.2.1                  When
the enrollee has duplicate coverage that has been verified by DSHS, DSHS shall
terminate enrollment retroactively to the beginning of the month of duplicate
coverage and recoup premiums as describe in Section 4.5, Recoupments.

 

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 HCA and DSHS as described
in Section 12.26, Notices.  Involuntary
termination will occur only with written DSHS approval.  DSHS shall review each request on a case-by-case
basis, and approve or disapprove the request for termination within thirty (30)
working days of receipt of such notice and the documentation required to
substantiate the request.  For the
termination to be effective, DSHS must approve the termination request, notify
the Contractor and HCA, and disenroll the enrollee.  The Contractor shall continue to provide
services to the enrollee until they are disenrolled.  DSHS will not disenroll an enrollee solely
due to a request based on an adverse change in the enrollee’s health status,
the cost of meeting the enrollee’s health care needs, because of the enrollee’s utilization of medical services,
uncooperative or disruptive behavior resulting from his or her

 

11

 

special
needs or diminished mental capacity (WAC 388-538-130).  DSHS shall involuntarily terminate the
enrollee when the Contractor has substantiated in writing all of the following:

 

2.9.4.1             The
enrollee’s behavior is inconsistent with the Contractor’s policies and
procedures addressing unacceptable enrollee behavior.

 

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 11.1, Scope of Services, 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 Contract after
the last day of the month in which his or her enrollment is terminated, unless
the enrollee is hospitalized at disenrollment; in accord with Section 11.11, Enrollee
Hospitalized at Disenrollment.

 

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)).

 

3.         MARKETING AND INFORMATION REQUIREMENTS

 

3.1           Marketing:  The
Contractor, and any subcontractors, shall comply with the following
requirements regarding marketing (42 CFR 438.104):

 

12

 

3.1.1                All
marketing materials must be reviewed by and have the prior written approval of HCA
and DSHS prior to distribution.

 

3.1.2                Marketing
materials shall not contain misrepresentations, or false, inaccurate or
misleading information.

 

3.1.3                Marketing
materials must be distributed in all service areas the Contractor serves.

 

3.1.4                Marketing
materials must be in compliance with Section 3.3, Equal Access for Enrollees
and Potential Enrollees with Communication Barriers.

 

3.1.4.1             Marketing
materials in English must give directions in the Medicaid eligible population’s
primary languages for obtaining understandable materials.

 

3.1.4.2             HCA
and DSHS shall collaborate to determine, if materials that are primarily visual
meet the requirements of this Contract.

 

3.1.5                The
Contractor shall not offer anything of value as an inducement to enrollment.

 

3.1.6                The
Contractor shall not offer the sale of other insurance to attempt to influence
enrollment.

 

3.1.7                The
Contractor shall not directly or indirectly conduct door-to-door, telephonic or
other cold-call marketing of enrollment.

 

3.2           Information Requirements for Enrollees and Potential Enrollees:

 

3.2.1                The
Contractor shall provide sufficient, accurate oral and written information to
potential enrollees to assist them in making an informed decision about
enrollment in accord with Section 3.2.5 (SSA 1932(d)(2) and 42 CFR 438.10).

 

3.2.2                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 in accord with Section 3.2.5.

 

3.2.3                Prior
to distribution, all enrollee information shall be submitted to HCA and DSHS
for written approval.

 

3.2.4                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

 

13

 

significant in regard to
the enrollees’ quality of or access to care. 
HCA or DSHS shall notify the Contractor of any significant change in
writing.

 

3.2.5                The
Contractor’s written information to enrollees and potential enrollees shall
include:

 

3.2.5.1             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.

 

3.2.5.2             How
to change a PCP.

 

3.2.5.3             How
to access services outside the Contractor’s service area.

 

3.2.5.4             How
to access Emergency Services.

 

3.2.5.5             General
information about accessing hospital care and how to get a list of hospitals
that are available to enrollees.

 

3.2.5.6             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.

 

3.2.5.7             How
to obtain information regarding any limitations to the availability of or
referral to specialists to assist the enrollee in selecting a PCP.

 

3.2.5.8             How
to obtain information regarding Physician Incentive Plans (42 CFR 422.208 and 422.210),
and information on the Contractor’s structure and operations.

 

3.2.5.9             Informed
consent guidelines.

 

3.2.5.10           Information
regarding conversion rights under RCW 48.46.450 or RCW 48.44.370.

 

3.2.5.11           How
to request a disenrollment.

 

3.2.5.12           The
following information regarding advance directives:

 

3.2.5.12.1                A
statement about an enrollee’s right to make decisions concerning an enrollee’s
medical care, accept or refuse surgical or medical treatment, execute an
advance directive, and revoke an advance directive at any time.

 

3.2.5.12.2                The
written policies and procedures of the Contractor concerning advance
directives, including any policy that would preclude the

 

14

 

Contractor or
subcontractor from honoring an enrollee’s advance directive.

 

3.2.5.12.3                An
enrollee’s rights under state law, including the right to file a grievance with
the Contractor or DSHS in accord with Section 8.3.13 regarding compliance with
advance directive requirements.

 

3.2.5.13           How
to recommend changes in the Contractor’s policies and procedures.

 

3.2.5.14           Health
promotion, health education and preventive health services available.

 

3.2.5.15           Information
on the Contractor’s Grievance System including:

 

3.2.5.15.1                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).

 

3.2.5.15.2                The
enrollees’ right to and how to initiate a grievance or file an appeal, in accord
with the Contractor’s DSHS approved policies and procedures regarding grievances
and appeals.

 

3.2.5.15.3                The
enrollees’ right to and how to request a hearing after the Contractor’s appeal
process is exhausted, how to request a hearing and the rules that govern
representation at the hearing.

 

3.2.5.15.4                The
enrollees’ right to and how to request an independent review in accord with RCW
48.43.535 and WAC 246-305 after the hearing process is exhausted and how to
request an independent review.

 

3.2.5.15.5                The
enrollees’ right to appeal an independent review decision to the Board of Appeals
and how to request such an appeal.

 

3.2.5.15.6                The
requirements and timelines for grievances, appeals, hearings, independent
review and Board of Appeals.

 

3.2.5.15.7                The
enrollees’ rights and responsibilities, including potential payment liability,
regarding the continuation of services that are the subject of appeal or a hearing.

 

3.2.5.15.8                The
availability of toll-free numbers for information about grievances and appeals
and to file a grievance or appeal.

 

15

 

3.2.5.16           The
enrollee’s rights and responsibilities with respect to receiving covered
services.

 

3.2.5.17           Information
about covered benefits and how to contact DSHS regarding services that may be
covered by DSHS, but are not covered benefits under this Contract.

 

3.2.5.18           Specific
information about EPSDT.

 

3.2.5.19           Information
regarding the availability of and how to access or obtain interpretation
services and translation of written information at no cost to the enrollee.

 

3.2.5.20           How
to obtain information in alternative formats.

 

3.2.5.21           The
enrollee’s right to and procedure for obtaining a second opinion free of charge.

 

3.2.5.22           The
prohibition on charging enrollees for covered services and circumstances under
which an enrollee might be charge for services.

 

3.2.6                HCA
agrees to provide the Contractor with copies of written client information,
which HCA intends to distribute to enrollees.

 

3.3           Equal Access for Enrollees & 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 (42 CFR 438.10).

 

3.3.1                Oral
Information:

 

3.3.1.1            The
Contractor shall assure that interpreter services are provided for enrollees
and potential enrollees with a primary language other than English, free of
charge, 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.

 

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

 

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

 

16

 

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

 

3.3.1.5            Public
entities, such as Public Health Departments, are responsible for payment for
interpreter services provided at their facilities or affiliated sites.

 

3.3.1.6            Interpreter
services include the provision of interpreters for enrollees and potential
enrollees who are deaf or hearing impaired at no cost to the enrollee or potential
enrollee (42 CFR 438.10(c)(4)).

 

3.3.2                Written
Information:

 

3.3.2.1             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.

 

3.3.2.1.1                 If
five percent (5%) or more of the Contractor’s enrollees speak a specific
language other than English, generally available materials will be translated
into that language.

 

3.3.2.1.2                 For
enrollees whose primary language is not translated as required by Section 3.3.2.1.1,
the Contractor may meet the requirement of this Section by doing any one of the
following:

 

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

 

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

 

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

 

3.3.2.1.2.4             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
material in an alternative medium or format (42 CFR 438.10(d)(1)(ii)).

 

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

 

3.3.2.2             The
Contractor shall ensure that all written information provided to enrollees or
potential enrollees is accurate, is not misleading, is comprehensible to its
intended audience, designed to provide the greatest degree of understanding,
and is written at the sixth grade

 

17

 

reading level and fulfils
other requirements of the Contract as may be applicable to the materials (42
CFR 438.10(b)(1) and SMD letter 02/20/98). 
This shall not be interpreted to include Disease Management materials,
preventative services or other education materials used by the Contractor for
health promotion efforts.  DSHS may make
exceptions to the sixth grade reading level when, in the sole judgment of DSHS,
the nature of the materials do not allow for a sixth grade reading level or the
enrollees’ needs are better served by allowing a higher reading level.  DSHS approval of exceptions to the sixth
grade reading level must be in writing.

 

3.3.2.3             All
written materials must have the written approval of DSHS prior to use.  For client-specific written materials, the
Contractor may use templates that have been pre-approved in writing by HCA and DSHS.  The Contractor must provide HCA and DSHS with
a copy of all approved materials in final form.

 

4.         PAYMENT

 

4.1            Rates/Premiums:

 

4.1.1                 Subject
to the provisions of Section 12.31, Sanctions, HCA shall pay a monthly premium
for each enrollee in full consideration of the work to be performed by the
Contractor under this Contract.  HCA shall
pay the Contractor, on or before the fifteenth (15th) working day of the month
based on the HCA 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).

 

4.1.2                 The
Contractor shall reconcile the electronic benefit enrollment listing with the
premium payment 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.

 

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

 

4.1.4                 DSHS
determines the BH premiums. 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 as described herein.

 

18

 

4.1.5                 Within
sixty (60) calendar days following the end of the annual legislative session,
DSHS will publish the Base Rate for the following calendar year.  If the Contractor will not continue to
provide HO/SCHIP services in the following calendar year, the Contractor shall
so notify DSHS no later than September 2, of the current year under the
provisions of Section 12.26 Notices.  If
the Contractor so notifies DSHS, this Contract shall terminate, without penalty
to either party, effective midnight, December 31, of the current year.  In case of termination under this subsection,
neither party shall have the right to assert a claim for costs.

 

4.1.6                 The
Geographical Adjustment Factors will be adjusted by DSHS for the period January
1, through December 31, of the following year for changes in utilization and to
provide for the payment of Critical Access Hospitals (CAH) as required in
Section 4.8, Payments to CAH.  Geographical
Adjustment Factors may be prospectively updated by DSHS if, in DSHS’ judgment,
there are material changes in rates or utilization related to CAH.

 

4.1.7                 The
Risk Adjustment Factor will be recalculated for premiums paid beginning in May
for each year based on enrollment with the Contractor on March 1 of that year,
using the most currently available twelve (12) months of reported encounter
data.  Risk Adjustment Factors may also
be recalculated by DSHS if, in DSHS’ sole judgment, changes in contractor participation
in Medicaid Programs require rebalancing of the Risk Adjustment Factors.

 

4.1.8                 Each
year DSHS will develop a Quality Incentive based on HEDIS® measures for
childhood immunizations and well child visits. 
If the Contractor will receive a Quality Incentive, the amount will be
stated in Exhibit A, Premiums, Service Areas, and Capacity and will be paid in
the first quarter of the year.

 

4.1.9                 Notwithstanding
Section 12.1, HCA may modify Exhibit A, Premiums and Service Areas, to add any
changes in service areas, the Base Rate, Geographical Adjustment Factors, and
Risk Adjustment Factors as needed.  HCA will
provide such modifications to the Contractor in writing.  If the Contractor does not disagree in
writing with the modifications within fifteen (15) calendar days of the date
the modifications are provided, the change will amend the Contract without any
further action.  If the Contractor does
not accept the modifications, HCA will terminate this Contract. In the case of
termination under this subsection, neither party shall have the right to assert
a claim for costs. If the modification changes the premium payments, the update
is subject to CMS approval.

 

4.1.10               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

 

19

 

newborn premiums DSHS
cannot generate automatically, as well as premium payment notices, 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.

 

4.1.11               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.

 

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

 

4.2            Delivery Case Rate Payment:  Pursuant to Exhibit A, a one-time payment of
$961.66 will be made to Contractor for prenatal and delivery expenses for
persons enrolled with the Contractor during the month of delivery.  In addition, a one-time payment of $4,323.60
shall be made to the Contractor for labor and delivery expenses for enrollees
enrolled with the Contractor during the month of delivery.  The Delivery Case Rate shall only be paid to
the Contractor if it has incurred expenses for and paid for labor and 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.

 

4.3            Renegotiation of Rates:  The base rate set forth herein shall be
subject to renegotiation during the Contract 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.

 

4.4            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 HCA and DSHS for the services rendered.

 

4.5            Recoupments:

 

4.5.1                 Unless
mutually agreed by the parties, DSHS shall only recoup premium payments and
retroactively disenroll for individual enrollees who are:

 

4.5.1.1             Covered
by the Contractor with duplicate coverage.

 

4.5.1.2             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.

 

20

 

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

 

4.5.1.4             Retroactively
disenrolled consistent with the provisions of Section 2.9.1.

 

4.5.1.5             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 month of birth.

 

4.5.1.6             Found
ineligible for enrollment with the Contractor, provided DSHS has notified the
Contractor before the first day of the month for which the premium was paid.

 

4.5.2                 The
Contractor may recoup payments made to providers for services provided to
enrollees during the period for which DSHS recoups premiums for those
enrollees.  If the Contractor recoups
said payments, providers may submit appropriate claims for payment to DSHS
through its fee-for-service program.

 

4.5.3                 When
DSHS recoups premiums and retroactively disenrolls an enrollee, DSHS will not
disenroll any other family member, except for newborns whose mother is
disenrolled for duplicate coverage.

 

4.6           Rate Setting Methodology:  DSHS
sets actuarially-sound managed care rates that:

 

4.6.1                 Have
been developed in accord with generally accepted actuarial principles and
practices;

 

4.6.2                Are
appropriate for the populations to be covered, and the services to be furnished
under the contract; and

 

4.6.3                Have
been certified, as meeting the requirements of 42 CFR 438.6(c), by actuaries
who meet the qualification standards established by the American Academy of
Actuaries and follow the practice standards established by the Actuarial
Standards Board.

 

4.7           Information for Rate Setting:  For
rate setting only, the Contractor shall annually provide information regarding
its cost experience related to the provision of the services required under
this Contract.  The experience
information shall be provided directly to an actuary designated by DSHS.  The designated actuary will determine the
timing, content, format and medium for such information.

 

4.8           Payments to Critical Access Hospitals (CAH):  For
services provided by CAH to enrollees, the Contractor shall pay the CAH the prospective Inpatient and

 

21

 

Outpatient Departmental Weighted Cost-to-Charge
rates published by DSHS (see Attachment A for website link).

 

4.9           Stop Loss for Hemophiliac Drugs: 
DSHS will provide stop loss protection for the Contractor for
paid claims for Factors VII, VIII and IX and the anti-inhibitor for enrollees
with a diagnosis of hemophilia as identified by diagnosis codes 286.0-286.3,
V83.01 and V83.02.  DSHS will reimburse
the Contractor seventy-five percent (75%) of all verifiable paid claims for the
identified hemophiliac drugs in excess of $250,000 for any single enrollee in
any calendar year beginning January 1, 2005. 
The Contractor must submit documentation of paid claims as required by
DSHS.

 

4.10         Encounter Data:  The
Contractor shall comply with the required format provided in the Encounter Data
Transaction Guide published by DSHS (see Attachment A for website link).  Encounter data includes claims paid by the
Contractor for services delivered to enrollees through the Contractor during a
specified reporting period.  DSHS
collects and uses this data for many reasons such as:  federal reporting; rate setting and risk
adjustment; service verification, managed care quality improvement program,
utilization patterns and access to care; DSHS hospital rate setting; and
research studies.

 

DSHS may change
the Encounter Data Transaction Guide with one hundred and fifty (150) calendar
days’ written notice to the Contractor.  The
Encounter Data Transaction Guide 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.

 

5.         ACCESS

 

5.1           Network:

 

5.1.1             The
Contractor agrees to maintain and monitor a provider network, supported by
written agreements, sufficient to serve BH enrollees in those service areas stated
in Exhibit A, Premiums and Service Areas consistent with the requirements of
this Contract.

 

5.1.2                The
Contractor agrees to provide medical services required by this Contract 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 Contract. 
The Contractor shall adequately and timely cover these services out of
network for as long as the Contractor’s network is inadequate to provide them
(42 CFR 438.206(b)(4)).  This provision
shall not be construed to require the Contractor to cover such services without
authorization except as required for emergency services.

 

22

 

5.1.3                The
Contractor must submit documentation regarding its maintenance and monitoring
of the network and services, as specified by HCA or DSHS, at any time upon request
by HCA or DSHS, or when there has been a change in the Contractor’s network or
operations that, in the judgment of HCA or DSHS, would adversely affect
adequate capacity and/or the Contractor’s ability to provide services.

 

5.2            Service Delivery Network:  In
the maintenance and monitoring of its network, the Contractor must consider the
following (42 CFR 438.206(b)):

 

5.2.1                Adequate
access to all services covered under this Contract.

 

5.2.2                The
expected utilization of services, taking into consideration the characteristics
and health care needs of the Medicaid population represented by the Contractor’s
enrollees.

 

5.2.3                The
number and types (in terms of training, experience and specialization) of
providers required to furnish the contracted services.

 

5.2.4                The
number of network providers who are not accepting new Medicaid enrollees.

 

5.2.5                The
geographic location of providers and enrollees, considering distance, travel
time, the means of transportation ordinarily used by potential enrollees, and
whether the location provides physical access for the Contractor’s enrollees
with disabilities.

 

5.2.6                The
cultural, ethnic, race and language needs of enrollees.

 

5.3           Timely Access to Care: 
The Contractor shall have contracts in place with all subcontractors
that meet state standards for access, taking into account the urgency of the
need for services.  The Contractor shall
ensure that:

 

5.3.1                Network
providers offer access comparable to that offered to commercial enrollees or
comparable to Medicaid fee-for-service, if the Contractor serves only Medicaid
enrollees (42 CFR 438.206(b)(1) & (c)(1)).

 

5.3.2                Mechanisms
are established to ensure compliance by providers.

 

5.3.3                Providers
are monitored regularly to determine compliance.

 

5.3.4                Corrective
action is initiated and documented if there is a failure to comply.

 

5.4           Hours of Operation for Network Providers:  The Contractor must require that network
providers offer hours of operation for enrollees that are no less than the hours
of operation offered to any other patient (42 CFR 438.206(c)(1)).

 

23

 

5.5           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 (42 CFR 438.206(c)(1)(iii)).

 

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

 

5.5.2                Authorization
of services.

 

5.6           Appointment Standards:  The
Contractor shall comply with appointment standards that are no longer than the
following (42 CFR 438.206(c)(1)(i)):

 

5.6.1                Non-symptomatic
(i.e., preventive care) office visits shall be available from the enrollee’s
PCP or another provider 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 child and adult immunizations.

 

5.6.2                Non-urgent,
symptomatic (i.e., routine care) office visits shall be available from the
enrollee’s PCP or another provider within ten (10) calendar days.  A non-urgent, symptomatic office visit is
associated with the presentation of medical signs not requiring immediate
attention.

 

5.6.3                Urgent,
symptomatic office visits shall be available from the enrollee’s PCP or another
provider within forty-eight (48) hours. 
An urgent, symptomatic visit is associated with the presentation of
medical signs that require immediate attention, but are not life threatening.

 

5.6.4                Emergency
medical care shall be available twenty-four (24) hours per day, seven (7) days
per week.

 

5.7           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 (see Attachment A for
website link).

 

5.8           Provider Network - Distance Standards:

 

5.8.1                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 A, Premiums and Service
Areas.

 

5.8.1.1             PCP

 

Urban:  2 within
10 miles for 90% of BH enrollees in the Contractor’s service area.

 

24

 

Rural:  1 within
25 miles for 90% of BH enrollees in the Contractor’s service area.

 

5.8.1.2             Obstetrics

 

Urban:  2 within
10 miles for 90% of BH enrollees in the Contractor’s service area.

 

Rural:  1 within
25 miles for 90% of BH enrollees in the Contractor’s service area.

 

5.8.1.3             Pediatrician
or Family Practice Physician Qualified to Provide Pediatric Services

 

Urban:  2 within
10 miles for 90% of BH enrollees in the Contractor’s service area.

 

Rural:  1 within
25 miles for 90% of BH enrollees in the Contractor’s service area.

 

5.8.1.4             Hospital

 

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

 

5.8.1.5             Pharmacy

 

Urban:  1 within
10 miles for 90% of BH enrollees in the Contractor’s service area.

 

Rural:  1 within
25 miles for 90% of BH enrollees in the Contractor’s service area.

 

5.8.2                DSHS
may, in 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 provider of
the type subject to the standards in this section is beyond the distance
standard applicable to the zip code, the distance standard defaults to the
distance to that provider.  The closest
provider may be a provider not participating with the Contractor.

 

5.9           Standards for Specialty and Primary Care Providers:  The Contractor shall establish and meet measurable
standards for the number of both PCPs and high volume Specialty Care Providers.  The Contractor shall analyze performance
against standards at minimum, annually.

 

25

 

5.10         Access to Specialty Care:

 

5.10.1             The
Contractor shall provide all medically necessary specialty care for enrollees
in a service area.  If an enrollee needs
specialty care from a type of 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.

 

5.10.2             The
Contractor shall maintain, and make readily available to providers, up-to-date
information on the Contractor available network of specialty providers and
shall provide any required assistance to providers in obtaining timely referral
to specialty care.

 

5.11         Order of Acceptance:  The Contractor shall maintain adequate
capacity to provide care to BH enrollees in the Service Areas as outlined in Exhibit
A, Premiums and Service Areas.

 

No eligible client shall be refused enrollment or re-enrollment, be
terminated from enrollment, or be discriminated against in any way because of
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 (42 CFR 438.6(d)(1&3)).

 

5.12         Provider Network Changes:

 

5.12.1             The
Contractor shall give HCA and DSHS a minimum of ninety (90) calendar days’
prior written notice, in accord with Section 12.26, 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.

 

5.12.2             The
Contractor shall make a good faith effort to provide written notification to
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 HCA and 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.

 

6.         QUALITY OF CARE

 

6.1           Quality Assessment and Performance Improvement (QAPI) Program:

 

26

 

6.1.1                The
Contractor shall have and maintain a quality assessment and performance improvement
(QAPI) program for the services it furnishes to its enrollees that meets the
provisions of 42 CFR 438.240.

 

6.1.1.1             The
Contractor shall define its QAPI program structure and processes and assign
responsibility to appropriate individuals.

 

6.1.1.2             The
QAPI program structure shall include the following elements:

 

6.1.1.2.1                  A
written description of the QAPI program including identification of designated
physician and behavioral health practitioners. 
The QAPI program description shall include:

 

6.1.1.2.1.1                A
listing of all quality-related committee(s);

 

6.1.1.2.1.2                Descriptions
of committee responsibilities;

 

6.1.1.2.1.3                Contractor
staff and practicing provider committee participant titles;

 

6.1.1.2.1.4                Meeting
frequency; and

 

6.1.1.2.1.5                Maintenance
of meeting minutes reflecting decisions made by each committee, as appropriate.

 

6.1.1.2.2                  A
Quality Improvement Committee that oversees the quality functions of the
Contractor.  The Quality Improvement
Committee will:

 

6.1.1.2.2.1               Recommend
policy decisions;

 

6.1.1.2.2.2               Analyze
and evaluate the results of QI activities;

 

6.1.1.2.2.3               Institute
actions; and

 

6.1.1.2.2.4               Ensure
appropriate follow-up.

 

6.1.1.2.3                  An
annual work plan.

 

6.1.1.2.4                  An
annual evaluation of the QAPI program to include an evaluation of performance
improvement projects, trending of performance measures and evaluation of the
overall effectiveness of the QI program.

 

6.1.2                The
Contractor shall make available the QAPI program description, and information
on the Contractor’s progress towards meeting its goals to providers and
enrollees upon request.

 

27

 

6.1.3                The
Contractor shall provide evidence of oversight of delegated entities
responsible for quality improvement. 
Oversight activities shall include evidence of:

 

6.1.3.1            A
delegation agreement with each delegated entity describing the responsibilities
of the Contractor and delegated entity;

 

6.1.3.2            Evaluation
of the delegated organization prior to delegation;

 

6.1.3.3            An
annual evaluation of the delegated entity;

 

6.1.3.4            Evaluation
of regular delegated entity reports; and

 

6.1.3.5            Follow-up
on issues out of compliance with delegated agreement or HCA contract
specifications.

 

6.1.4                The
Contractor shall have in effect mechanisms to assess the quality and
appropriateness of care furnished to enrollees with special health care needs.
(42 CFR 438.240 (b)(4)).

 

6.2           Performance Improvement Projects:

 

6.2.1                The
Contractor shall have an ongoing program of performance improvement projects
that focus on clinical and non-clinical areas. 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 (see Attachment A for website link).

 

6.2.2                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.  Through
implementation of performance improvement projects, the Contractor shall:

 

6.2.2.1             Measure
performance using objective, quality indicators.

 

6.2.2.2             Implement
system interventions to achieve improvement in quality.

 

6.2.2.3             Evaluate
the effectiveness of the interventions.

 

6.2.2.4             Plan
and initiate activities for increasing or sustaining improvement.

 

6.2.2.5             Report
the status and results of each project to DSHS and HCA.

 

6.2.2.6             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 (CFR 42 438.240).

 

28

 

6.2.3                Annually,
the Contractor shall submit to DSHS three (3) clinical and two (2) non-clinical
performance improvement projects which, in the judgment of the Contractor, best
meet the requirements of a performance improvement project.  Each project will be documented on a
performance improvement project worksheet found in the Conducting Performance
Improvement Projects (see Attachment A for website link).

 

6.2.4                If
any of the Contractor’s Health Plan Employer Data and Information Set (HEDIS®)
rates on Well Child Visits in the first fifteen (15) months, six (6) or more
well child visits measure), Well Child Visits in the third (3rd),
fourth (4th), fifth (5th) and sixth (6th) years
of life, or Adolescent Well Care Visits are below sixty percent (60%) in 2006
or 2007, the Contractor shall implement a 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 6.2.1.

 

6.2.5                If
any of the Contractor’s HEDIS® Combination 2, Childhood Immunization rates are
below seventy percent (70%) in 2006 or below seventy-five percent (75%) in
2007, the Contractor shall implement a 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 6.2.1.

 

6.2.6                The
Contractor shall continue the CAHPS® non-clinical performance improvement
project(s) required in the 2004-2005 HCA Contract for Basic Health Plus and
Maternity Benefits Program and communicated by DSHS to the Contractor in
February 2005 unless directed otherwise in writing by DSHS.

 

6.2.7                In
addition to the PIPs required under Sections 6.2.1 through 6.2.6. and upon
request of DSHS, the Contractor shall participate in a yearly statewide
performance measure reporting project, performance improvement project or
research project designed by DSHS.  The
study shall be designed to maximize resources and reduce cost to contractors.  The Contractor will receive copies of
aggregate data and reports produced from these projects.

 

6.3           Performance Measures using Health Employer Data & Information Set
(HEDISâ):

 

6.3.1                In
accord with Section 12.26, Notices, the Contractor shall report to HCA and DSHS
HEDISâ measures using the current HEDISâ
Technical Specifications and official corrections published by NCQA, unless
directed otherwise in writing by HCA or DSHS. 
For the 2006 and 2007 HEDIS® measures listed below, the Contractor shall
use the administrative or hybrid data collection methods, specified in the
current HEDISâ Technical Specifications, unless directed
otherwise by DSHS.

 

29

 

6.3.2                No
later than June 15 of each year, HEDISâ measures shall be
submitted electronically to HCA and DSHS using the NCQA data submission tool
(DST) or other NCQA-approved method.

 

6.3.3                The
following HEDIS® measures shall be submitted to HCA and DSHS in 2006:

 

6.3.3.1              Childhood
Immunization

 

6.3.3.2              Chlamydia
Screening in Women

 

6.3.3.3              Prenatal
and Postpartum Care

 

6.3.3.4              Well
Child Visits in the First 15 Months of Life

 

6.3.3.5              Well
Child Visits in the Third, Fourth, Fifth and Sixth Years of Life

 

6.3.3.6              Adolescent
Well Child Visits

 

6.3.3.7              Use
of Appropriate Medications for People with Asthma

 

6.3.3.8              Children
and Adolescents’ Access to Primary Care Practitioners

 

6.3.3.9              Practitioner
Turnover (for Primary Care Practitioners and OB/GYN and other Prenatal Care
Practitioners only)

 

6.3.3.10            Inpatient
Utilization-General Hospital/Acute Care

 

6.3.3.11            Ambulatory
Care

 

6.3.3.12            Birth
and Average Length of Stay, Newborns

 

6.3.4                The
following HEDIS® measures shall be submitted to HCA and DSHS in 2007:

 

6.3.4.1             Childhood
Immunization

 

6.3.4.2             Chlamydia
Screening in Women

 

6.3.4.3             Prenatal
and Postpartum Care

 

6.3.4.4             Well
Child Visits in the First 15 Months of Life

 

6.3.4.5             Well
Child Visits in the Third, Fourth, Fifth and Sixth Years of Life

 

6.3.4.6             Adolescent
Well Child Visits

 

6.3.4.7             Use
of Appropriate Medications for People with Asthma

 

6.3.4.8             Comprehensive
Diabetes Care

 

30

 

6.3.4.9             Children
and Adolescents’ Access to Primary Care Practitioners

 

6.3.4.10           Practitioner
Turnover (for Primary Care Practitioners and OB/GYN and other Prenatal Care
Practitioners only)

 

6.3.4.11           Inpatient
Utilization-General Hospital/Acute Care

 

6.3.4.12           Ambulatory
Care

 

6.3.4.13           Birth
and Average Length of Stay, Newborns

 

6.3.5                The
Contractor shall submit raw HEDIS® data for three measures:  Childhood Immunization, Use of Appropriate
Medication for People with Asthma, and Children and Adolescents’ Access to
Primary Care Practitioners, no later than June 30 of each year.  The Contractor shall submit the raw HEDIS®
data to HCA and DSHS electronically, according to specifications communicated
by DSHS to the Contractor no later than February of each year.

 

6.3.6                All
measures shall be audited, by a designated
certified HEDIS® Compliance Auditor a licensed organization in accord
with methods described in the current HEDIS® Compliance AuditTM Standards,
Policies and Procedures.  DSHS will fund
and the DSHS designated EQRO will conduct the audit.

 

6.3.7                The
Contractor shall cooperate with DSHS’ designated EQRO to validate the
Contractor’s Health Employer Data and Information Set (HEDIS®) performance
measures and CAHPS® sample frame.

 

6.3.7.1             If
the Contractor does not have NCQA accreditation for BH managed care from the
National Committee for Quality Assurance (NCQA), the Contractor shall receive a
partial audit.

 

6.3.7.2             If
the Contractor has NCQA accreditation for BH managed care or is seeking
accreditation with a scheduled NCQA visit in 2006 or 2007, the Contractor shall
receive a full audit.

 

6.3.7.3             Data
collected and the methods employed for HEDISâ
validation may be supplemented by indicators and/or processes published in the
Centers for Medicare and Medicaid (CMS) Validating Performance Measures
protocol identified by the DSHS designated EQRO.

 

6.3.8                The
Contractor shall provide evidence of trending of measures to assess performance
in quality and safety of clinical care and quality of non-clinical or
service-related care.

 

6.3.9                The
Contractor shall collect and maintain data on ethnicity, race and language
markers as established by DSHS on all enrollees by January 1, 2007.  The Contractor shall record and maintain enrollee
self-identified data as established by the Contractor.

 

31

 

6.3.10              The
Contractor shall 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 Contract,
Section 12.26.  Childhood Immunization
and well-child measures shall not be rotated.

 

6.4           Consumer Assessment of Health Plans Survey (CAHPS®):

 

6.4.1                In
2006, A DSHS designated EQRO shall conduct the CAHPS® Children and Children
with Chronic Conditions survey based upon 2006 HEDISâ
Specifications for Survey Measures.

 

6.4.1.1             The
Contractor shall create the sampling frame file.

 

6.4.1.1.1                  The
Contractor shall receive file specifications and instructions specifying the
format and other required information for the sample files from DSHS, or the DSHS
designated EQRO, by November 30, 2005.

 

6.4.1.1.2                  The
Contractor shall submit the eligible sample frames to the DSHS designated EQRO
by January 16, 2006.

 

6.4.1.1.3                  The
Contractor’s eligible sample frame file(s) will be certified by the DSHS EQRO,
a Certified HEDISâ Auditor.

 

6.4.1.1.4                  The
Contractor shall receive written notice of the sample frame file(s) compliance
audit certification from the DSHS designated EQRO by January 30, 2006.

 

6.4.1.2             The
Contractor will be allowed up to eight (8) Contractor—determined supplemental
questions and DSHS will also be allowed up to eight (8) supplemental
questions.  The Contractor will be
notified of DSHS selected eight (8) supplemental questions.

 

6.4.1.2.1                  The
Contractor shall submit the questions to DSHS for written approval for the
amount, content, and survey placement prior to December 15, 2005.

 

6.4.1.2.2                  The
Contractor shall receive a copy of the approved DSHS questionnaire for
informational purposes by January 30, 2006. 
DSHS EQRO shall determine the questionnaire format, questions and question
placement, using the most recent HEDIS® version of the Children and Children
with Chronic Conditions questionnaire, plus approved supplemental and/or custom
questions as determined by DSHS.

 

6.4.1.3             The
Contractor shall provide National CAHPS® Benchmarking Database (NCBD) submission
information as determined by DSHS.

 

32

 

6.4.1.3.1                  The
Contractor shall submit the information to the DSHS designated EQRO by April
14, 2006.  The DSHS designated EQRO shall
submit the data to the NCBD.

 

6.4.2                In
2007, the Contractor shall conduct the CAHPS® of adult Medicaid
members enrolled in BH.

 

6.4.2.1             The
Contractor shall contract with an NCQA certified HEDIS® survey vendor qualified
to administer the CAHPS® survey and conduct the survey according to NCQA
protocol.  The Contractor shall submit
the following information to the DSHS designated EQRO:

 

6.4.2.1.1                  Contractor
CAHPS® survey staff member contact, CAHPS® vendor name and CAHPS® primary
vendor contact by January 5, 2007.

 

6.4.2.1.2                  Timeline
for implementation of vendor tasks by February 15, 2007.

 

6.4.2.2             The
Contractor shall ensure the survey sample frame consists of all non-Medicare
and non-commercial adult plan members (not just subscribers) 18 (eighteen)
years and older with Washington State addresses.  The Contractor shall submit the survey sample
frame to DSHS by January 12, 2007.  In
administering the CAHPS® the Contractor shall:

 

6.4.2.2.1                  Be
allowed up to eight (8) Contractor-determined supplemental questions.

 

6.4.2.2.2                  Allow
DSHS up to eight (8) supplemental questions.

 

6.4.2.2.3                  Be
notified of DSHS’ selected eight (8) supplemental questions on or before
November 1, 2005.

 

6.4.2.2.4                  Submit
their questions to DSHS for written approval prior to December 15, 2006.

 

6.4.2.2.5                  Submit
the eligible sample frame file(s) for certification by the DSHS designated EQRO,
a Certified HEDISâ Auditor by January 12, 2007.

 

6.4.2.2.6                  Receive
written notice of the sample frame file(s) compliance audit certification from
the DSHS designated EQRO by January 31, 2007.

 

6.4.2.2.7                  Receive
the approved DSHS questionnaire by January 31, 2007.  DSHS EQRO shall determine the questionnaire
format, questions and question placement, using the most recent HEDIS® version
of the Medicaid adult questionnaire (currently 3.0H), plus

 

33

 

approved supplemental and/or custom questions as determined by DSHS.

 

6.4.2.2.8                  Conduct
the mixed methodology (mail and phone surveys) for CAHPS® survey administration.

 

6.4.2.2.9                  Submit
the final disposition report by June 10, 2007.

 

6.4.2.2.10                Submit
a copy of the Washington State adult Medicaid response data set according to
2007 NCQA/CAHPS® standards to the DSHS designated EQRO by June 10, 2007.

 

6.4.2.3             The
Contractor shall provide NCBD data submission information as determined by
DSHS.

 

6.4.2.3.1                  The
Contractor shall submit the information to the DSHS designated EQRO by April
14, 2007.

 

6.4.2.3.2                  The
DSHS designated EQRO shall submit the data to the NCBD.

 

6.4.2.4             The
Contractor is required to include performance guarantee language in their
vendor subcontracts that require a vendor to achieve at least a thirty-five
percent (35%) response rate.

 

6.4.3                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 accord
with the physician incentive plan requirements under Section 7.9.

 

6.5           External Quality Review:

 

6.5.1                Validation
Activities:  The Contractor’s quality
program shall be examined using a series of required validation procedures.  The examination shall be implemented and
conducted by DSHS, its agent, or an EQRO.

 

6.5.2                The
following required activities will be validated:

 

6.5.2.1             Performance
improvement projects;

 

6.5.2.2             Performance
measures; and

 

6.5.2.3             A
monitoring review of standards established by DSHS and included in this
Contract to comply with 42 CFR 438.204 (g) and a comprehensive review conducted
within the previous three-year period (42 CFR 438.358(b)(1)(2)(3)).

 

6.5.3                The
following optional activity will be validated annually:

 

34

 

6.5.3.1             Administration
and/or validation of consumer or provider surveys of quality of care, i.e., the
CAHPS® survey.

 

6.5.4                DSHS
reserves the right to include additional optional activities described in 42 CFR
438.358 if additional funding becomes available and as mutually negotiated between
DSHS and the Contractor.

 

6.5.5                The
Contractor shall submit to annual DSHS TeaMonitor and EQRO monitoring reviews. The
monitoring review process uses standard methods and data collection tools and
methods found in the CMS External Quality Review Protocols and assesses the
Contractor’s compliance with regulatory requirements and standards of the
quality outcomes and timeliness of, and access to, services provided by
Medicaid MCOs.

 

6.5.5.1             The
Contractor shall, during an annual monitoring review of the Contractor’s
compliance with contract standards or upon request by HCA, 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.

 

6.5.5.2             The
Contractor will provide data requested by the EQRO for purposes of completing
the External Quality Review Report (EQRR). 
The EQRR is a detailed technical report that describes the manner in
which the data from all activities described in Sections 6.5.1 through 6.5.3
and conducted in accord with CFR 42 438.358 were aggregated and analyzed and
conclusions drawn as to the quality, timeliness and access to the care
furnished by the MCO.

 

6.5.5.3             DSHS will provide a
copy of the EQRR to the Contractor, through print or electronic media and to
interested parties such as participating health care providers, enrollees and
potential enrollees of the Contractor, recipient advocacy groups, and members
of the general public.  DSHS must make
this information available in alternative formats for persons with sensory
impairments, when requested.

 

6.5.5.4             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 HCA and 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 HCA, DSHS and
Department of Health (DOH), as needed to reduce duplicated work for both the
Contractor and the state.

 

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

 

35

 

death, and cause(s) of death. 
This information shall be available to HCA or DSHS upon request.  The Contractor shall assist HCA or DSHS in
efforts to evaluate and improve the availability and utility of selected
mortality information for quality improvement purposes.

 

6.7           Practice Guidelines:  The Contractor shall adopt practice
guidelines.  The Contractor may develop
or adopt guidelines developed by organizations such as the American Diabetes
Association or the American Lung Association. 
Practice guidelines shall meet the following requirements (42 CFR 438.236):

 

6.7.1                Are based on valid and reliable clinical evidence or a consensus
of health care professionals in the particular field;

 

6.7.2                Consider the needs of enrollees and support
client and family involvement in care plans;

 

6.7.3                Are adopted in consultation with contracting
health care professionals;

 

6.7.4                Are reviewed and updated at least every two
years and as appropriate;

 

6.7.5                Are disseminated to all affected providers and,
upon request, to HCA, DSHS, enrollees and potential enrollees; and

 

6.7.6                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.

 

6.8           Drug Formulary Review and Approval:  The Contractor shall submit its drug
formulary, for use with enrollees covered under the terms of this Contract, to
DSHS for review and approval by January 31 of each year of this Contract.  The formulary shall be submitted to:

 

Siri Childs, Pharm D, Pharmacy Policy Manager (or her successor)

Department of Social and Health Services

Division of Medical Management

P.O. Box 45506

Olympia, WA  98504-5506

E-mail:  childsa@dshs.wa.gov

 

7.         SUBCONTRACTS

 

7.1           Contractor Remains Legally Responsible:  Subcontracts, as defined herein, may be used
by the Contractor for the provision of any service under this Contract.  However, no subcontract shall terminate the
Contractor’s legal responsibility to HCA or DSHS for any work performed under
this Contract (42 CFR 434.6 (c)).

 

7.2           Solvency Requirements for Subcontractors:  For any subcontractor at financial risk, as
described in Section 7.9.3 Substantial Financial Risk, or Section 1.45,

 

36

 

Risk, the Contractor shall establish, enforce and monitor solvency
requirements that provide assurance of the subcontractor’s ability to meet its
obligations.

 

7.3           Provider Nondiscrimination:

 

7.3.1                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.

 

7.3.2                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.

 

7.3.3                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)).

 

7.3.4                Consistent
with the Contractor’s 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 providers in the same specialty; or preclude the Contractor from
establishing measures that are designed to maintain quality of services and
control costs.

 

7.4           Required Provisions: Subcontracts shall be in writing,
consistent with the provisions of 42 CFR 434.6. 
All subcontracts shall contain the following provisions:

 

7.4.1                Identification
of the parties of the subcontract and their legal basis for operation in the State
of Washington.

 

7.4.2                Procedures
and specific criteria for terminating the subcontract.

 

7.4.3                Identification
of the services to be performed by the subcontractor and which of those
services may be subcontracted by the subcontractor.

 

7.4.4                Reimbursement
rates and procedures for services provided under the subcontract.

 

7.4.5                Release
to the Contractor of any information necessary to perform any of its
obligations under this Contract.

 

7.4.6                Reasonable
access to facilities and financial and medical records for duly authorized
representatives of HCA, DSHS or DHHS for audit purposes, and immediate access
for Medicaid fraud investigators.

 

37

 

7.4.7                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 submit
all DSHS required data to enable the Contractor to meet the reporting
requirements in the Encounter Data Transaction Guide published by DSHS.

 

7.4.8                The
requirement to comply with the Contractor’s DSHS approved fraud and abuse
policies and procedures.

 

7.4.9                No
assignment of the subcontract shall take effect without the HCA’s written
agreement.

 

7.4.10              The
subcontractor shall comply with the applicable state and federal rules and
regulations as set forth in this Contract, including the applicable
requirements of 42 CFR 438.6(1).

 

7.4.11              Subcontracts
shall set forth and require the subcontractor to comply with any term or
condition of this Contract that is applicable to the services to be performed
under the subcontract.

 

7.4.12              The
Contractor shall provide the following information regarding the grievance
system to all subcontractors (42 CFR 438.414 and 42 CFR 438.10(g)(1)):

 

7.4.12.1           The
toll-free numbers to file oral grievances and appeals.

 

7.4.12.2           The
availability of assistance in filing a grievance or appeal.

 

7.4.12.3           The
enrollee’s right to request continuation of benefits during an appeal or
hearing and, if the Contractor’s action is upheld, the enrollee’s
responsibility to pay for the continued benefits.

 

7.4.12.4           The
enrollee’s right to file grievances and appeals and their requirements and
timeframes for filing.

 

7.4.12.5           The
enrollee’s right to a hearing, how to obtain a hearing, and representation
rules at a hearing.

 

7.5           Health Care Provider Subcontracts, including those for
facilities and pharmacy benefit management, shall also contain the following
provisions:

 

7.5.1                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 Contract.

 

38

 

7.5.2                A
statement that primary care and specialty care provider subcontractors shall
cooperate with QI activities.

 

7.5.3                A
means to keep records necessary to adequately document services provided to
enrollees for all delegated activities including Quality Improvement,
Utilization Management, Member Rights and Responsibilities, and Credentialing
and Recredentialing.

 

7.5.3.1             Delegated
activities are documented and agreed upon between Contractor and
subcontractor.  The document must
include:

 

7.5.3.1.1                  Assigned
responsibilities;

 

7.5.3.1.2                  Delegated
activities;

 

7.5.3.1.3                  A
mechanism for evaluation; and

 

7.5.3.1.4                  Corrective
action policy and procedure.

 

7.5.4                Information
about enrollees, including their medical records, shall be kept confidential in
a manner consistent with state and federal laws and regulations.

 

7.5.5                The
subcontractor accepts payment from the Contractor as payment in full and shall
not request payment from HCA, DSHS or any enrollee for covered services
performed under the subcontract.

 

7.5.6                The
subcontractor agrees to hold harmless HCA and its employees and DSHS and its
employees, and all enrollees served under the terms of this Contract in the
event of non-payment by the Contractor. 
The subcontractor further agrees to indemnify and hold harmless HCA and
its employees and DSHS and its employees against all injuries, deaths, losses,
damages, claims, suits, liabilities, judgments, costs and expenses which may in
any manner accrue against HCA and its employees and DSHS or its employees
through the intentional misconduct, negligence, or omission of the
subcontractor, its agents, officers, employees or contractors.

 

7.5.7                If
the subcontract includes physician services, provisions for compliance with the
PCP requirements stated in this Contract.

 

7.5.8                A
ninety (90) day termination notice provision.

 

7.5.9                A
specific termination provision for termination with short notice when a
provider is excluded from participation in the Medicaid program.

 

7.5.10              The
subcontractor agrees to comply with the appointment wait time standards of this
Contract.  The subcontract must provide
for regular

 

39

 

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)).

 

7.5.11              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)).

 

7.6           Health Care Provider Subcontracts Delegating Administrative Functions:  Subcontracts that delegate administrative
functions under the terms of this Contract shall include the following additional
provisions:

 

7.6.1                For
those subcontractors at financial risk, that the subcontractor shall maintain
the Contractor’s solvency requirements throughout the term of the Contract.

 

7.6.2                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 Contract.

 

7.6.3                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.

 

7.6.4                Provisions
for revoking delegation or imposing sanctions if the subcontractor’s
performance is inadequate.

 

7.6.5                Whether
referrals for enrollees will be restricted to providers affiliated with the
group and, if so, a description of those restrictions.

 

7.7           Excluded Providers:

 

7.7.1                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 12.12 of this Contract, Exclusions and Debarment.  The Contractor shall terminate subcontracts
of excluded providers immediately with the Contractor becomes aware of such
exclusion or when the Contractor receives notice from HCA or DSHS, whichever is
earlier.

 

40

 

7.7.2                In
addition, if DSHS terminates a subcontractor from participation any DSHS
program, the Contractor shall exclude the subcontractor from participation in BH.  The Contractor shall terminate subcontracts
of excluded providers immediately when the Contractor becomes aware of such
exclusion or when the Contractor receives notice from HCA or DSHS, whichever is
earlier (WAC 388-502-0030).

 

7.7.3                If
the Contractor terminates a subcontractor for cause, the Contractor shall
notify HCA and DSHS, within thirty (30) calendar days, in writing, as provided
in the Notices Section of this Contract, Section 12.26, and explain the circumstances
regarding the termination.

 

7.8           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 Contract, 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.  DSHS will provide a current list of bonded
home health agencies upon request to the Contractor.

 

7.9           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 438.6(h), 42 CFR 422.208 and 42 CFR 422.210).

 

7.9.1                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.

 

7.9.2                Disclosure
Requirements:  Risk sharing arrangements
in subcontracts with physicians or physician groups are subject to review and
approval by HCA and 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 HCA and
DSHS annually upon request:

 

7.9.2.1             Whether
the incentive plan includes referral services.

 

7.9.2.2             If
the incentive plan includes referral services:

 

7.9.2.2.1                  The
type of incentive plan (e.g. withhold, bonus, capitation).

 

7.9.2.2.2                  For
incentive plans involving withholds or bonuses, the percent that is withheld or
paid as a bonus.

 

7.9.2.2.3                  Proof
that stop-loss protection meets the requirements of Section 7.9.4.1, including
the amount and type of stop-loss protection.

 

41

 

7.9.2.2.4                  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.  Commercial members include military and non-Medicaid
Basic Health members.

 

7.9.3                Substantial
Financial Risk:  A physician, or
physician group as defined herein, is at substantial financial risk when more
than twenty-five percent (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 enrollees,
arrangements that cause substantial financial risk include, but are not limited
to, the following:

 

7.9.3.1             Withholds
greater than twenty-five percent (25%) of total potential payments.

 

7.9.3.2             Withholds
less than twenty-five percent (25%) of total potential payments but the
physician or physician group is potentially liable for more than twenty-five
percent (25%) of total potential payments.

 

7.9.3.3             Bonuses
greater than thirty-three percent (33%) of total potential payments, less the
bonus.

 

7.9.3.4             Withholds
plus bonuses if the withholds plus bonuses equal more than twenty-five percent
(25%) of total potential payments.

 

7.9.3.5             Capitation
arrangements if the difference between the minimum and maximum possible
payments is more than twenty-five percent (25%) of the maximum possible
payments, or the minimum and maximum possible payments are not clearly
explained in the Contract.

 

7.9.4                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.

 

7.9.4.1             If
aggregate stop-loss protection is provided, it must cover ninety percent (90%)
of the costs of referral services that exceed twenty-five percent (25%) of
maximum potential payments under the subcontract.

 

7.9.4.2             If
stop-loss protection is based on a per-member limit, it must cover ninety
percent (90%) of the cost of referral services that exceed the limit as
indicated below based on panel size, and whether stop-loss is

 

42

 

provided separately for professional and institutional services or is
combined for the two.

 

7.9.4.2.1                  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.

 

7.9.4.2.2                  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.

 

7.9.4.2.3                  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.

 

7.9.4.2.4                  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.

 

7.9.4.2.5                  10,001
- 25,000, the threshold is $25,000 for professional services and $200,000 for
institutional services, or $150,000 for combined services.

 

7.9.4.2.6                  25,001
members or more, there is no risk threshold.

 

7.9.4.3             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 HCA and DSHS annually upon request. 
The surveys shall:

 

7.9.4.3.1                  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.

 

7.9.4.3.2                  Be
conducted according to commonly accepted principles of survey design and
statistical analysis.

 

7.9.4.3.3                  Address
enrollees satisfaction with the physician or physician groups:

 

7.9.4.3.3.1    Quality
of services provided.

 

43

 

7.9.4.3.3.2    Degree
of access to services.

 

7.9.5                Sanctions
and Penalties:  DSHS or CMS may impose
intermediate sanctions, as described in Section 12.31, Sanctions, of this
Contract, for failure to comply with the rules in this Section.

 

7.10         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)).

 

7.11         Provider Education: 
The Contractor will maintain records of the number and type of providers
and support staff participating in provider education, including evidence of
assessment of participant satisfaction with the training process.

 

The Contractor shall maintain a system for keeping participating
practitioners and providers informed about:

 

7.11.1              Covered
services for enrollees served under this Contract;

 

7.11.2              Coordination
of care requirements;

 

7.11.3              HCA
and DSHS policies as related to this Contract;

 

7.11.4              Interpretation
of data from the quality improvement program; and

 

7.11.5              Practice
guidelines (see Section 6.7).

 

7.12         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, ninety-five percent (95%) of clean claims within
thirty (30) calendar days of receipt, ninety-five percent (95%) of all claims
within sixty (60) of receipt and ninety-nine percent (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.

 

7.12.1              A
claim is a bill for services, a line item of service or all services for one
enrollee within a bill.

 

7.12.2              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.

 

7.12.3              The
date of receipt is the date the Contractor receives the claim from the provider.

 

7.12.4              The
date of payment is the date of the check or other form of payment.

 

44

 

7.13         FQHC/RHC Report:  The
Contractor shall provide DSHS with information related to subcontracted
federally-qualified health centers (FQHC) and rural health clinics (RHC), as
required by the DSHS Healthy Options Licensed Health Carrier Billing
Instructions, published by DSHS (see Attachment A for website link).

 

7.14         Provider Credentialing: 
The Contractor must have written policies and procedures for
credentialing and recredentialing providers who have signed contracts or
participation agreements with the Contractor.

 

7.14.1              The
Contractor’s medical director or other designated physician’s shall have direct
responsibility and participation in the credentialing process.

 

7.14.2              The
Contractor shall have a designated Credentialing Committee to oversee the
credentialing process.

 

7.14.3              The
Contractor’s written Credentialing policies and procedures must specify at a
minimum:

 

7.14.3.1           Type
of providers that are credentialed and recredentialed;

 

7.14.3.2           Verification
sources used to make credentialing decisions, including any evidence of provider
sanctions; and

 

7.14.3.3           Prohibition
against employment or contracting with providers excluded from participation in
Federal health care programs under federal law and as described in Section 7.7,
Excluded Providers.

 

7.14.4              The
criteria used by the Contractor to credential and recredential providers shall
include:

 

7.14.4.1           Evidence
of a current valid license to practice;

 

7.14.4.2           A
valid DEA or CDS certificate if applicable;

 

7.14.4.3           Evidence
of appropriate education and training;

 

7.14.4.4           Board
certification if applicable;

 

7.14.4.5           An
Evaluation of work history; and

 

7.14.4.6           A
review of any liability claims resulting in settlements or judgments paid on or
on behalf of the provider.

 

7.14.5              The
Contractor’s process for making credentialing determinations, to include a
signed, dated attestation statement from the provider that addresses:

 

45

 

7.14.5.1           The
lack of present illegal drug use;

 

7.14.5.2           A
history of loss of license and felony convictions;

 

7.14.5.3           A
history of loss or limitation of privileges or disciplinary activity;

 

7.14.5.4           Current
malpractice coverage; and

 

7.14.5.5           Accuracy
and completeness of the application.

 

7.14.6              The
Contractor’s process for delegation of credentialing or recredentialing.

 

7.14.7              The
Contractor’s provider selection policies and procedures that are consistent
with 42 CFR 438.12, and must not discriminate against particular providers that
serve high-risk populations or specialize in conditions that require costly
treatment, and any other methods for assuring nondiscrimination.

 

7.14.8              The
Contractor’s process for communicating findings to the provider that differ
from the provider’s submitted materials, including:

 

7.14.8.1           Communication
of the provider’s right to review materials;

 

7.14.8.2           Correct
incorrect or erroneous information;

 

7.14.8.3           Be
informed of their credentialing status; and

 

7.14.8.4           The
ability to appeal an adverse determination by the Contractor.

 

7.14.9              The
Contractor’s process for notifying providers within sixty (60) days of the
credentialing committee’s decision.

 

7.14.10            The
Contractor a process to ensure confidentiality.

 

7.14.11            The
Contractor’s process to ensure listings in provider directories for enrollees
are consistent with credentialing file content, including education, training,
certification and specialty designation.

 

7.14.12            The
Contractor’s process for recredentialing providers at minimum every thirty-six
(36) months through information verified from primary sources, unless otherwise
indicated.

 

7.14.13            The
Contractor’s process to ensure that offices of all primary care providers, obstetricians/gynecologists
and high volume providers meet office site standards established by the
Contractor.

 

7.14.14            A
system for monitoring sanctions or limitations on licensure, complaints and
quality issues or information from identified adverse events and

 

46

 

provides evidence of action, as appropriate based on defined methods or
criteria.

 

8.         ENROLLEE RIGHTS AND PROTECTIONS:

 

8.1           General Requirements: The Contractor shall have written
policies and procedures regarding all enrollee rights (42 CFR 438.100(a)(1)).

 

8.1.1                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)).

 

8.1.2                The
Contractor shall guarantee each enrollee the following rights (42 CFR
438.100(b)(2)):

 

8.1.2.1             To
be treated with respect and with consideration for their dignity and privacy.

 

8.1.2.2             To
receive information on available treatment options and alternatives, presented
in a manner appropriate to the enrollee’s ability to understand.

 

8.1.2.3             To
participate in decisions regarding their health care, including the right to
refuse treatment.

 

8.1.2.4             To
be free from any form of restraint or seclusion used as a means of coercion,
discipline, convenience, or retaliation.

 

8.1.2.5             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.

 

8.1.2.6             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)).

 

8.2           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)).

 

8.3           Advance Directives:

 

8.3.1                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

 

47

 

disseminated to all affected
providers, enrollees, DSHS, and, upon request, potential enrollees.

 

8.3.2                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:

 

8.3.3                Clarify
any differences between Contractor conscientious objections and those that may
be raised by individual physicians.

 

8.3.4                Identify
the state legal authority permitting such objection.

 

8.3.5                Describe
the range of medical conditions or procedures affected by the conscience
objection.

 

8.3.6                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.

 

8.3.7                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.

 

8.3.8                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.

 

8.3.9                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.

 

8.3.10              The
Contractor shall provide for education of staff concerning its policies and
procedures on advance directives.

 

8.3.11              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.

 

48

 

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.

 

8.3.12              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 any subcontractor providing services under
this Contract to conscientiously object.

 

8.3.13              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.

 

8.4           Enrollee Choice of PCP:

 

8.4.1                The
Contractor must implement procedures to ensure each enrollee has a source of
primary care appropriate to their needs.

 

8.4.2                The
Contractor shall allow, to the extent possible and appropriate, each new
enrollee to choose a participating PCP.

 

8.4.3                In
the case of newborns, the parent shall choose the newborn’s PCP.

 

8.4.4                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.

 

8.4.5                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)).

 

8.5           Direct Access for Enrollees with Special Health Care Needs: 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 Contract demonstrates a need
for a course

 

49

 

of treatment or regular monitoring by such specialist (42 CFR 438.208
and 438.6(m)).

 

8.6           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 Contract, charge enrollees for covered
services (SSA 1932(b)(6), SSA 1128B(d)(1)) and WAC 388-502-0160).

 

8.7           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)):

 

8.7.1                The enrollee’s health status, medical care, or treatment
options, including any alternative treatment that may be self-administered.

 

8.7.2                Any information the enrollee needs in order to
decide among all relevant treatment options.

 

8.7.3                The risks, benefits, and
consequences of treatment or non-treatment.

 

8.7.4                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.

 

8.8           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 and 42 CFR 438.6(m)); and, when appropriate, inform enrollees of
their right to make anatomical gifts (RCW 68.50.540).

 

9.         UTILIZATION MANAGEMENT  PROGRAM  AND AUTHORIZATION OF SERVICES

 

9.1           Utilization Management  Program:

 

9.1.1                The
Contractor shall have and maintain a Utilization Management Program (UMP) for
the services it furnishes its enrollees.

 

9.1.2                The
Contractor shall define its UMP structure and assign responsibility to
appropriate individuals.

 

9.1.3                Upon
request by HCA or DSHS the Contractor shall provide the requesting party with a
written description of the UMP that includes identification of designated
physician and behavioral health practitioner’s and evidence of the physician
and behavioral health practitioner’s involvement in program

 

50

 

development and implementation The UMP program description shall
include:

 

9.1.3.1              A
written description of all UM-related committee(s);

 

9.1.3.2              Descriptions
of committee responsibilities;

 

9.1.3.3              Contractor
staff and practicing provider committee participant title(s);

 

9.1.3.4              Meeting
frequency;

 

9.1.3.5              Maintenance
of meeting minutes reflecting decisions made by each committee, as appropriate.

 

9.1.4                UMP
behavioral health and non-behavioral health policies and procedures at minimum,
shall include the following content:

 

9.1.4.1              Documentation
of use and periodic review of written clinical decision-making criteria based
on clinical evidence, including policies and procedures for appropriate
application of the criteria.

 

9.1.4.2              Mechanisms
for providers and enrollees on how they can obtain the UM decision-making
criteria upon request, including UM action or denial determination letter
template language reflecting same.

 

9.1.4.3              Mechanisms
for assessment of inter-rater reliability of all clinical professionals and as
appropriate, non-clinical staff responsible for UM decisions.

 

9.1.4.4              Written
job descriptions with qualification for providers who review denials of care
based on medical necessity that requires education, training or professional
experience in medical or clinical practice and current non-restricted license.

 

9.1.4.5              Mechanisms
to verify that claimed services were
actually provided.

 

9.1.4.6              Mechanisms to detect both underutilization and over utilization of services
and produce a yearly report which identifies and reports findings on
utilization measures and includes completed or planned interventions to address
under or over-utilization patterns of care.

 

9.1.4.6.1              Specify
the type of personnel responsible for each level of UM decision-making.

 

9.1.4.6.2              A
physician or behavioral health practitioner or pharmacist as appropriate
reviews any behavioral health denial of care based on medical necessity.

 

51

 

9.1.4.6.3              Use
of board certified consultants to assist in making medical necessity
determinations.

 

9.1.4.6.4              Appeals
of adverse determinations evaluated by health care providers who were not
involved in the initial decision and who have appropriate expertise in the
field of medicine that encompasses the covered person’s condition or disease
(PBOR, WAC 284-43-620(4)).

 

9.1.4.7              Documentation of timelines
for appeals in accord with Sections 10.3.9.1 and 10.3.9.2.

 

9.1.5                Annually
evaluate and update the UM program.

 

9.1.6                The
Contractor shall not structure compensation to individuals or entities that
conduct utilization management activities so as to provide incentives for the
individual or entity to deny, limit, or discontinue medically necessary
services to any enrollee.

 

9.1.7                The
Contractor shall not penalize or threaten a provider or facility with a
reduction in future payment or termination of participating provider or
participating facility status because the provider or facility disputes the
Contractor’s determination with respect to coverage or payment for health care
service (PBOR, WAC 284-43-210(6)).

 

9.2           Authorization of Services: The Contractor shall have in
place policies and procedures for the authorization of services that comply
with 42 CFR 438.210, WAC 388-538 and the provisions of this Contract and
require subcontractors with delegated authority for authorization to comply
with such policies and procedures.

 

9.2.1                The
Contractor shall have in
effect mechanisms to ensure consistent application of review criteria for
authorization decisions.

 

9.2.2                The
Contractor shall consult with the requesting provider when appropriate.

 

9.2.3                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.

 

9.2.4                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 the following requirements, except that the notice to the provider need
not be in writing (42 CFR 438.404):

 

52

 

9.2.4.1              The notice to the enrollee shall be
in writing and shall meet the requirements of Section 3.2, Information
Requirements for Enrollees and Potential Enrollees, of this Contract to ensure
ease of understanding.

 

9.2.4.2              The notice shall explain the following:

 

9.2.4.2.1              The action the Contractor has taken
or intends to take.

 

9.2.4.2.2              The reasons for the action, in easily
understood language.

 

9.2.4.2.3              The enrollee’s right to file an appeal.

 

9.2.4.2.4              The procedures for exercising the enrollee’s
rights.

 

9.2.4.2.5              The circumstances under which expedited resolution
is available and how to request it.

 

9.2.4.2.6              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.

 

9.2.5                The Contractor shall provide for
the following timeframes for authorization decisions and notices:

 

9.2.5.1              For denial of payment that may result in payment liability for the
enrollee, at the time of any action affecting the claim.

 

9.2.5.2              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.

 

9.2.5.2.1              For standard authorization,
determinations are to be made within two (2) business days of the receipt of
necessary information, but may not exceed fourteen (14) calendar days following
receipt of the request for services.

 

9.2.5.2.2              Beyond the fourteen (14) calendar
day period, a possible extension of up to fourteen (14) additional calendar
days (equal to a total of twenty-eight (28) calendar days) is allowed under the
following circumstances (42 CFR 438.210):

 

9.2.5.2.2.1                  The enrollee, or the provider, requests extension;
or

 

53

 

9.2.5.2.2.2                  The Contractor justifies and
documents a need for additional information and how the extension is in the
enrollee’s interest.

 

9.2.5.2.2.3                  If the Contractor extends that timeframe, it shall:

 

9.2.5.2.2.3.1                    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

 

9.2.5.2.2.3.2                    Issue and carry out its determination
as expeditiously as the enrollee’s health condition requires and no later than
the date the extension expires.

 

9.2.5.2.3              For standard authorization
decisions, notification of the decision shall be made to the attending
physician, ordering provider, facility and enrollee within two (2) calendar
days (PBOR, WAC 284-43-410).

 

9.2.5.3              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 fourteen (14) calendar days
under the following circumstances:

 

9.2.5.3.1                  The enrollee requests the extension; or

 

9.2.5.3.2                  The Contractor justifies and documents a need for
additional information and how the extension is in the enrollee’s interest.

 

10.       GRIEVANCE SYSTEM

 

10.1         General Requirements: The Contractor shall have a grievance
system which complies with the requirements of 42 CFR 438 Subpart F and WACs
388-538 and 284-43, insofar as it is not in conflict with 42 CFR 438 Subpart F.
The grievance system shall include a grievance process, an appeal process, and
access to the hearing process. NOTE: Provider claim disputes initiated by the
provider are not subject to this Section.

 

10.1.1              The
Contractor shall have
policies and procedures addressing the grievance system, which comply with the
requirements of this Contract. DSHS must approve, in writing, all grievance
system policies and

 

54

 

procedures and related notices to enrollees regarding the grievance
system. DSHS must also approve in writing any changes to policies and
procedures.

 

10.1.2              The
Contractor shall give enrollees
any assistance necessary in completing forms and other procedural steps for
grievances and appeals (WAC 284-43-615(2)(e)).

 

10.1.3              The
Contractor shall acknowledge
receipt of each grievance, either orally or in writing, and appeal, in writing,
within five (5) working days.

 

10.1.4              The
Contractor shall ensure
that decision makers on grievances and appeals were not involved in previous
levels of review or decision-making.

 

10.1.5              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:

 

10.1.5.1            If
the enrollee is
appealing an action concerning medical necessity.

 

10.1.5.2            If
an enrollee grievance
concerns a denial of expedited resolution of an appeal.

 

10.1.5.3            If
the grievance or appeal involves any clinical issues.

 

10.2         Grievance Process: The following requirements are specific
to the grievance process:

 

10.2.1              Only
an enrollee may file a grievance with the Contractor; a provider may not file a
grievance on behalf of an enrollee.

 

10.2.2              The
Contractor shall accept grievances forwarded by HCA or DSHS.

 

10.2.3              The
Contractor shall cooperate with any representative authorized in writing by the
covered enrollee (WAC 284-43-615).

 

10.2.4              The
Contractor shall consider all information submitted by the covered person or
representative (WAC 284-43-615).

 

10.2.5              The
Contractor shall investigate and resolve all grievances (WAC 284-43-615).

 

10.2.6              The
Contractor shall complete the disposition of a grievance and notice to the
affected parties as expeditiously as the enrollees health condition requires,
but no later than ninety (90) calendar days from receipt of the grievance.

 

55

 

10.2.7              The
Contractor may notify enrollees of the disposition of grievances. The
notification may be made orally or in writing for grievances not involving
clinical issues. Notices of disposition for clinical issues must be in writing.

 

10.2.8              Enrollees
do not have the right to a hearing in regard to the disposition of a grievance.

 

10.3         Appeal Process: The following requirements are specific to
the appeal process:

 

10.3.1              An
enrollee, or a provider acting on behalf of the enrollee and with the enrollee’s
written consent, may appeal a Contractor action.

 

10.3.2              If
HCA receives a request to appeal an action of the Contractor, HCA will cooperate
with DSHS to forward relevant information to the Contractor and the Contractor
will contact the enrollee.

 

10.3.3              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.

 

10.3.4              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 resolution apply (42 CFR 438.408).

 

10.3.5              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.

 

10.3.6              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.

 

10.3.7              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.

 

10.3.8              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.

 

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10.3.9              The
Contractor shall resolve each appeal and provide notice, as expeditiously as
the enrollee’s health condition requires, within the following timeframes:

 

10.3.9.1            For
standard resolution of appeals and for appeals for termination, suspension, or
reduction of previously authorized services a decision must be made within
fourteen (14) days after receipt of the appeal, unless the Contractor notifies
the enrollee that an extension is necessary to complete the appeal; however,
the extension cannot delay the decision beyond thirty (30) days of the request
for appeal, without the informed written consent of the enrollee. In all
circumstances the appeal determination must not be extended beyond forty-five
(45) calendar days from the day the Contractor receives the appeal request.

 

10.3.9.2            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.

 

10.3.10            The
notice of the resolution of the appeal shall:

 

10.3.10.1            Be
in writing. For notice of an expedited resolution, the Contractor shall also
make reasonable efforts to provide oral notice.

 

10.3.10.2            Include
the reasons for the determination in easily understood language and the date
completed.

 

10.3.10.3            A
written statement of the clinical rationale for the decision, including how the
requesting provider or enrollee may obtain the Utilization Management clinical
review or decision-making criteria.

 

10.3.10.4            For
appeals not resolved wholly in favor of the enrollee:

 

10.3.10.4.1              Include
information on the enrollee’s right to request a hearing and how to do so.

 

10.3.10.4.2              Include
information on the enrollee’s right to receive services while the hearing is
pending and how to make the request.

 

10.3.10.4.3              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.

 

10.4         Expedited Appeal Process:

 

10.4.1              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

 

57

 

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.

 

10.4.2              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.

 

10.4.3              The
Contractor shall ensure that punitive action is not taken against a provider
who requests an expedited resolution or supports an enrollee’s appeal.

 

10.4.4              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.

 

10.4.5              The
enrollee has a right to file a grievance regarding the Contractors denial of a
request for expedited resolution. The Contractor must inform the enrollee of
their right to file a grievance in the notice of denial.

 

10.5         Hearings:

 

10.5.1              A
provider may not request a hearing on behalf of an enrollee.

 

10.5.2              If
an enrollee does not agree with the Contractor’s resolution of the appeal, the
enrollee may file a request for a hearing within the following time frames (see
WAC 388-538-112 for the hearing process for enrollees):

 

10.5.2.1            For
hearings 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.

 

10.5.2.2            For
hearings 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 services is not timely, the
Contractor is not obligated to continue services and the timeframes for a hearing
regarding a standard service apply.

 

10.5.3              If
the enrollee requests a 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

 

58

 

transcript(s), records, or written decision(s) from participating
providers or delegated entities.

 

10.5.4              The
Contractor is an independent party and is responsible for its own
representation in any hearing, independent review, Board of Appeals and
subsequent judicial proceedings.

 

10.5.5              The
Contractor’s medical director or designee shall review all cases where a
hearing is requested and any related appeals, when medical necessity is an
issue.

 

10.5.6              The
enrollee must exhaust all levels of resolution and appeal within the Contractor’s
grievance system prior to filing a request for a hearing with DSHS.

 

10.5.7              DSHS
will notify the Contractor of hearing determinations. The Contractor will be
bound by the hearing determination, whether or not the hearing determination
upholds the Contractor’s decision. Implementation of such a hearing decision
shall not be the basis for disenrollment of the enrollee by the Contractor.

 

10.5.8              If
the hearing decision is not within the purview of this Contract, then DSHS will
be responsible for the implementation of the hearing decision.

 

10.6         Independent Review: After exhausting both the Contractor’s
appeal process and the hearing process an enrollee has a right to independent
review in accord with RCW 48.43.535 and WAC 284-43-630.

 

10.7         Board of Appeals: 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 ###-##-#### through ###-##-####. Notice of this
right will be included in the written determination from the Contractor or
Independent Review Organization.

 

10.8         Continuation of Services:

 

10.8.1              The
Contractor shall continue the enrollee’s services if all of the following
apply:

 

10.8.1.1            An
appeal, hearing or independent review is requested on or before the later of
the following:

 

10.8.1.1.1                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.

 

10.8.1.1.2                The
intended effective date of the Contractor’s proposed action.

 

59

 

10.8.1.2            The
appeal involves the termination, suspension, or reduction of a previously
authorized course of treatment.

 

10.8.1.3            The
services were ordered by an authorized provider.

 

10.8.1.4            The
original period covered by the original authorization has not expired.

 

10.8.1.5            The
enrollee requests an extension of services.

 

10.8.2              If,
at the enrollee’s request, the Contractor continues or reinstates the enrollee’s
services while the appeal, hearing, independent review or DSHS Board of Appeals
is pending, the services shall be continued until one of the following occurs:

 

10.8.2.1            The
enrollee withdraws the appeal, hearing or independent review request.

 

10.8.2.2            Ten
(10) calendar days pass after the Contractor mails the notice of the resolution
of the appeal and the enrollee has not requested a hearing (with continuation
of services until the hearing decision is reached) within the ten (10) calendar
days.

 

10.8.2.3            Ten
(10) calendar days pass after DSHS mails the notice of resolution of the
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.

 

10.8.2.4            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 (10) calendar days.

 

10.8.2.5            The
time period or service limits of a previously authorized service has been met.

 

10.8.3              If
the final resolution of the appeal upholds the Contractor’s action, the
Contractor may recover from the enrollee 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.

 

10.9         Effect of Reversed Resolutions of Appeals and Hearings:

 

10.9.1              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

 

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appeal was pending, the Contractor shall authorize or provide the
disputed services promptly, and as expeditiously as the enrollee’s health
condition requires.

 

10.9.2              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.

 

10.10         Actions, Grievances, Appeals and Independent Reviews: The
Contractor shall maintain records of all actions, grievances, appeals and
independent reviews of adverse appeal decisions by an independent review
organization.

 

10.10.1            The
records shall include actions, grievances and appeals handled by delegated
entities.

 

10.10.2            The
Contractor shall provide a report of complete actions, grievances, appeals and
independent reviews to DSHS biannually for the prior six months.

 

10.10.2.1              The
report for the six months ending March 31 is due no later than June 1.

 

10.10.2.2              The
report for the six months ending September 30 is due no later than November 1.

 

10.10.3            The
Contractor is responsible for maintenance of records for and reporting of any
grievance, actions and appeals handled by delegated entities.

 

10.10.4            Delegated
actions, grievances and appeals are to be integrated into the Contractor’s
report.

 

10.10.5            Data
shall be reported in the DSHS and Contractor agreed upon format.

 

10.10.6            The
report medium shall be specified by DSHS.

 

10.10.7            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 unless the enrollee may be liable for payment.

 

10.10.8            The
Contractor shall provide information to HCA or DSHS regarding denial of payment
to providers upon request.

 

10.10.9            Reporting
of grievances shall include all expressions of enrollee dissatisfaction not
related to an action.

 

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10.10.10          The
records shall include, at a minimum:

 

10.10.10.1               Plan
Name

 

10.10.10.2               Name
of the delegated entity, if any

 

10.10.10.3               Quarter
of occurrence

 

10.10.10.4               Name
of Program: BH

 

10.10.10.5               Enrollee
Identifier - Patient Identification Code (PIC)

 

10.10.10.5.1                Enrollee
Last Name

 

10.10.10.5.2                Enrollee
First Name

 

10.10.10.5.3                Enrollee
Middle Initial

 

10.10.10.5.4                Enrollee
Birthday

 

10.10.10.6               Provider
Last Name

 

10.10.10.7               Provider
First Name

 

10.10.10.8               Provider
Middle Initial

 

10.10.10.9               Provider
Category (Optional)

 

10.10.10.10             Provider
Category Code (Optional)

 

10.10.10.11             Type/Level:

 

10.10.10.11.1                   Type
1 Grievance

 

10.10.10.11.2                   Type
3 Action

 

10.10.10.11.3                   Type
4 Appeal - First Level

 

10.10.10.11.4                   Type
5 Appeal - Second Level

 

10.10.10.11.5                   Type
6 IRO

 

10.10.10.12             Expedited:
Yes or No

 

10.10.10.13             Grievance,
Appeal or Requested Service Denied Category

 

10.10.10.14             Grievance
or Requested Service Denied Category Code

 

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10.10.10.15             Grievance
or Action Reason Type

 

10.10.10.16             Grievance
or Action Reason Type Code

 

10.10.10.17             Resolution
of Grievance, Appeal or IRO

 

10.10.10.18             Date
Received

 

10.10.10.19             Date
of Resolution

 

10.10.10.20             Resolution
Code

 

10.10.10.21             Date
written notification of Action or Grievance, Appeal or IRO outcome sent to
enrollee and provider

 

11.       BENEFITS

 

11.1         Scope of Services:

 

11.1.1              The
Contractor is responsible for covering medically necessary services relating
to:

 

11.1.1.1                   The
prevention, diagnosis, and treatment of health impairments.

 

11.1.1.2                   The
achievement of age-appropriate growth and development.

 

11.1.1.3                   The
attainment, maintenance, or regaining of functional capacity.

 

11.1.2              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 (see Attachment
A for website link), the Contractor shall cover the service subject to the
specific exclusions and limitations as described in this Contract.

 

11.1.3              Except
as otherwise specifically provided in this Contract, the Contractor shall
provide covered services in the amount, duration and scope described in the
Medicaid State Plan.

 

11.1.4              The
amount and duration of covered services that are medically necessary depends on
the enrollee’s condition.

 

11.1.5              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.

 

11.1.6              Except
as specifically provided in Section 9.2, Authorization of Services, the
requirements of this Section 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

 

63

 

utilization control measures do not deny medically necessary covered
services to enrollees. The Contractor’s utilization control measures are not
required to be the same as those in the Medicaid fee-for-service program.

 

11.1.7              For
specific covered services, the requirements of this Section shall also 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.

 

11.1.8              Nothing
in this Contract shall be construed to require or prevent the Contractor from
covering services outside of the scope of services covered under this Contract.

 

11.1.9              The
Contractor may limit coverage of services to participating providers except as
specifically provided in Section 5, Access; Section 11, Benefits, for emergency
services; as necessary to provide medically necessary services as described in
Section 11.1.11 Outside the Service Areas; and as necessary to coordinate
benefits under the requirements of Section 11.15.1, Coordination of Benefits, when
an enrollee has other medical coverage.

 

11.1.10            Within
the Service Areas: Within the Contractor’s service areas, as defined in Section
2.1, Service Areas, the Contractor shall cover enrollees for all medically
necessary services included in the scope of services covered by this Contract.

 

11.1.11            Outside
the Service Areas: For the enrollees still enrolled with the Contractor who are
temporarily outside of the service areas or who have moved to a service area
not served by the Contractor, the Contractor shall cover the following
services:

 

11.1.11.1                 Emergency
and post-stabilization services.

 

11.1.11.2                 Urgent
care services 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 5.6, Appointment Standards, are not exceeded.

 

11.1.11.3                 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 require pre-authorization for such services as
long as the wait times specified in Section 5.6, Appointment Standards, are not
exceeded.

 

64

 

11.1.11.4                 The
Contractor’s obligation for services outside the service area is limited to
ninety (90) calendar days beginning with the first of the month following the
month in which the enrollee leaves the service area or changes residence.

 

11.1.11.5                 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.

 

11.2         Medical Necessity Determination: The Contractor shall
determine which services are medically necessary, according to utilization
management requirements and the definition of Medically Necessary Services in
this Contract. The Contractor’s determination of medical necessity in specific
instances shall be final except as specifically provided in this Contract
regarding appeals, hearings and independent review.

 

11.3         Enrollee Self-Referral:

 

11.3.1              Enrollees
have the right to self-refer for certain services to local health departments
and family planning clinics paid through separate arrangements with the State
of Washington.

 

11.3.2              The
Contractor is not responsible for the coverage of the services provided through
such separate arrangements.

 

11.3.3              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 or family planning facility
for services provided to enrollees up to the limits described herein.

 

11.3.4              If
the Contractor subcontracts with local health departments or family planning
clinics as participating providers or refers enrollees to them to receive
services, the Contractor shall pay the local health department or family
planning facility for services provided to enrollees up to the limits described
herein.

 

11.3.5              The
services to which an enrollee may self-refer are:

 

11.3.5.1                   Family
planning services and sexually-transmitted disease screening and treatment
services provided at family planning facilities, such as Planned Parenthood.

 

11.3.5.2                   Immunizations,
sexually-transmitted disease screening and follow-up, immunodeficiency virus
(HIV) screening, tuberculosis screening

 

65

 

and follow-up, and family planning services through the local health
department.

 

11.4         Women’s Health Care Services: The Contractor must provide female enrollees with direct access to a
women’s health specialist within the Contractors network for covered care
necessary to provide women’s routine and preventive health care services in
accord with the provisions of WAC 284-43-250 and 42 CFR 438.206(b)(2).

 

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

 

11.6         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 (42 CFR 438.208).

 

11.6.1              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 5.13.2.

 

11.6.2              If
possible and reasonable, the Contractor shall preserve enrollee provider
relationships through transitions.

 

11.6.3              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.

 

11.6.4              The
Contractor shall allow new enrollees with the Contractor to fill prescriptions
written prior to enrollment until the first of the following occurs:

 

11.6.4.1                   The
thirtieth (30th) calendar day after enrollment with the Contractor.

 

11.6.4.2                   The
enrollee’s prescription expires.

 

11.6.4.3                   A
participating provider examines the enrollee to evaluate the continued need for
the prescription. If the enrollee refuses an evaluation by a participating
provider the Contractor may refuse to fill the prescription.

 

11.7         Coordination of Care: The Contractor shall ensure that
health care services are coordinated for enrollees as follows (42 CFR 438.208):

 

11.7.1              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.

 

66

 

11.7.2              The
Contractor shall also provide or shall ensure PCPs provide ongoing coordination
of community-based services required by enrollees, including but not limited
to:

 

11.7.2.1                   First
Steps Maternity Services and Maternity Case Management;

 

11.7.2.2                   Transportation
services;

 

11.7.2.3                   Regional
Support Networks for mental health services;

 

11.7.2.4                   Developmental
Disability services, including the Infant Toddler Early Intervention Program
(ITEIP);

 

11.7.2.5                   Health
Department services, including Title V services for children with special
health care needs;

 

11.7.2.6                   Home
and Community Services for older and physically disabled individuals; and

 

11.7.2.7                   Alcohol
and Substance Abuse services.

 

11.7.3              The
Contractor shall provide support services to assist PCPs in providing
coordination if it is not provided directly by the Contractor.

 

11.7.4              The
Contractor shall ensure that enrollee health information is shared between
providers in a manner that facilitates coordination of care while protecting
confidentiality and enrollee rights.

 

11.7.5              The
Contractor shall identify or shall ensure that providers 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 contact or health care visit
initiated by the enrollee and any information available to the Contractor
regarding an enrollee’s special health care needs.

 

11.7.6              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.

 

11.7.6.1                   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.

 

67

 

11.7.6.2                   If
the Contractor requires approval of the treatment plan, approval must be
provided in a timely manner appropriate to the enrollee’s health condition.

 

11.7.7              The
Contractor must implement procedure to share with other MCOs and RSNs serving
the enrollee the results of its identification and assessment of any children
with special health care needs and enrollee with special health care needs so
that those activities are not duplicated while protecting confidentiality and
enrollee rights (42 CFR 438.208 (b)(3)).

 

11.8         Second Opinions:

 

11.8.1              The
Contractor must authorize a second opinion regarding the enrollee’s health care
from a qualified health care professional within the Contractor’s network, or
authorize for the enrollee to obtain a second opinion outside the Contractor’s
network, if the Contractor’s network is unable to provide for a qualified
health care professional, at no cost to the enrollee.

 

11.8.2              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 (42 CFR
438.206(b)(3)).

 

11.9         Sterilizations and Hysterectomies: The Contractor shall
assure that all sterilizations and hysterectomies performed under this Contract
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.

 

11.10       Experimental and Investigational Services:

 

11.10.1            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 HCA or DSHS upon request (WACs 284-44-043, 284-46-507 and
284-96-015).

 

11.10.2            In
making the determination, whether a service is experimental and investigational
and, therefore, not a covered service, the Contractor shall consider the
following:

 

11.10.2.1                 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

 

68

 

the benefits of the service or treatment are outweighed by the risks of
death or serious complications.

 

11.10.2.2                 Whether
evidence indicates the service or treatment is likely to be as beneficial as
existing conventional treatment alternatives.

 

11.10.2.3                 Any
relevant, specific aspects of the condition.

 

11.10.2.4                 Whether
the service or treatment is generally used for the condition in the State of
Washington.

 

11.10.2.5                 Whether
the service or treatment is under continuing scientific testing and research.

 

11.10.2.6                 Whether
the service or treatment shows a demonstrable benefit for the condition.

 

11.10.2.7                 Whether
the service or treatment is safe and efficacious.

 

11.10.2.8                 Whether
the service or treatment will result in greater benefits for the condition than
another generally available service.

 

11.10.2.9                 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.

 

11.10.3            Criteria
to determine whether a service is experimental or investigational shall be no
more stringent for Medicaid enrollees than that applied to any other members.

 

11.10.4            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.

 

11.10.5            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.

 

11.10.6            An
adverse determination made by the Contractor shall be subject to appeal through
the Contractor’s appeal process, including independent review, through the
hearing process and independent review.

 

11.11       Enrollee Hospitalized at Enrollment:

 

11.11.1            If
an enrollee is enrolled in BH on the day the enrollee was admitted to an acute
care hospital, then the plan the enrollee is enrolled with on the date

 

69

 

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.

 

11.11.2            Except
as provided in Section 11.11.4, 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.

 

11.11.3            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 11.11.1 or 11.11.2 shall apply for services
provided to and associated with the mother.

 

11.11.4            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 4.2.

 

11.12       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.

 

11.13       General Description of Covered Services: This Section is a
general description of services covered under this Contract and is not intended
to be exhaustive.

 

11.13.1            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.

 

11.13.2            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 DSHS’ 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.

 

11.13.3            Outpatient
Hospital Services: Provided by acute care hospitals (licensed under RCW 70.41).

 

11.13.4            Emergency
Services and Post-stabilization Services:

 

11.13.4.1                 Emergency
Services: Emergency services are defined herein.

 

70

 

11.13.4.1.1              The
Contractor will provide all inpatient and outpatient emergency services in
accord with the requirements of 42 CFR 438.114.

 

11.13.4.1.2              The
Contractor shall cover all emergency services provided by a licensed provider, acting
with in their scope of practice, without regard to whether the provider is a
participating or non-participating provider (42 CFR 438.11 (c)(1)(i)).

 

11.13.4.1.3              Emergency
services shall be provided without requiring prior authorization.

 

11.13.4.1.4              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)).

 

11.13.4.1.5              The Contractor shall cover treatment obtained
under the following circumstances:

 

11.13.4.1.5.1               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.

 

11.13.4.1.5.2               A participating provider or other
Contractor representative instructs the enrollee to seek emergency services.

 

11.13.4.1.6              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.

 

11.13.4.2                 Post-stabilization
Services: Post-stabilization services are defined herein.

 

11.13.4.2.1              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).

 

11.13.4.2.2              The
Contractor shall cover all post-stabilization services provided by a licensed
provider, acting with in their scope of practice, without regard to whether the
provider is a participating or non-participating provider.

 

11.13.4.2.3              The
Contractor shall cover post-stabilization services under the following
circumstances:

 

71

 

11.13.4.2.3.1               The
services are pre-approved by a participating provider or other Contractor representative.

 

11.13.4.2.3.2               The
services are not
pre-approved by a participating 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.

 

11.13.4.2.3.3               The
services are not
pre-approved by a participating provider or other Contractor representative,
but are administered to maintain, improve, or resolve the enrollee’s stabilized
condition and:

 

11.13.4.2.3.3.1                The
Contractor does not respond to a request for pre-approval within thirty (30)
minutes (RCW 48.43.093(d));

 

11.13.4.2.3.3.2                The
Contractor cannot be contacted; or

 

11.13.4.2.3.3.3                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 11.13.4.2.4 is met.

 

11.13.4.2.4              The
Contractor’s responsibility for post-stabilization services it has not
pre-approved ends when:

 

11.13.4.2.4.1               A
participating provider with privileges at the treating hospital assumes
responsibility for the enrollee’s care;

 

11.13.4.2.4.2               A
participating provider assumes responsibility for the enrollee’s care through
transfer;

 

11.13.4.2.4.3               A
Contractor representative and the treating physician reach an agreement
concerning the enrollee’s care; or

 

11.13.4.2.4.4               The
enrollee is discharged.

 

11.13.5            Ambulatory
Surgery Center: Services provided at ambulatory surgery centers.

 

11.13.6            Provider
Services: Services provided in an inpatient or outpatient (e.g., office,
clinic, emergency room or home) setting by licensed professionals

 

72

 

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:

 

11.13.6.1                 Medical
examinations, including wellness exams for adults and EPSDT for children

 

11.13.6.2                 Immunizations

 

11.13.6.3                 Maternity
care

 

11.13.6.4                 Family
planning services provided or referred by a participating provider or
practitioner

 

11.13.6.5                 Performing
and/or reading diagnostic tests

 

11.13.6.6                 Private
duty nursing

 

11.13.6.7                 Surgical
services

 

11.13.6.8                 Services
to correct defects from birth, illness, or trauma, or for mastectomy reconstruction

 

11.13.6.9                 Anesthesia

 

11.13.6.10               Administering
pharmaceutical products

 

11.13.6.11               Fitting
prosthetic and orthotic devices

 

11.13.6.12               Rehabilitation
services

 

11.13.6.13               Enrollee
health education

 

11.13.6.14               Nutritional
counseling for specific conditions such as diabetes, high blood pressure, and
anemia

 

11.13.7            Tissue
and Organ Transplants: Heart, kidney, liver, bone marrow, lung, heart-lung,
pancreas, kidney-pancreas, cornea, and peripheral blood stem cell.

 

11.13.8            Laboratory,
Radiology, and Other Medical Imaging Services: Screening and diagnostic
services and radiation therapy.

 

11.13.9            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

 

73

 

restrict non-emergent care to participating providers.  Enrollees may self-refer to participating
providers for these services.

 

11.13.10          Outpatient
Mental Health:

 

11.13.10.1               Psychiatric
and psychological testing, evaluation and diagnosis:

 

11.13.10.1.1                Once
every twelve (12) months for adults twenty-one (21) and over.

 

11.13.10.1.2                Unlimited
for children under age twenty-one (21) when identified in an EPSDT visit.

 

11.13.10.2               Unlimited
medication management:

 

11.13.10.2.1                Provided
by the PCP or by PCP referral.

 

11.13.10.2.2                Provided
in conjunction with mental health treatment covered by the Contractor.

 

11.13.10.3               Twelve
hours per calendar year for treatment for enrollees who do not meet the RSNs
access standards for receiving treatment.

 

11.13.10.4               Transition
to the RSN, as appropriate to the enrollee’s condition to assure continuity of
care.

 

11.13.10.5               The
Contractor may subcontract with RSNs to provide the outpatient mental health
services that are the responsibility of the Contractor.  Such contracts 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.

 

11.13.10.6               The
DSHS Mental Health Division (MHD) and the Division of Program Support (DPS)
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 DPS,
MHD, Healthy Options contractors, and RSNs. 
The Contractor shall cooperate with the activities of the MHCCs.

 

11.13.11          Neurodevelopmental
Services, 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 when
provided by a facility that is not a DSHS recognized neurodevelopmental center.

 

74

 

The Contractor may refer children to a DSHS recognized
neurodevelopmental center for the services as long as appointment wait time
standards and access to care standards of this Contract are met (see Attachment
A for website link).

 

11.13.12          Pharmaceutical
Products:  Prescription drug products
according to a DSHS 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 enrollees’ medically necessary health care 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 have policies and procedures for the administration of the
pharmacy benefit including formulary exceptions.  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:

 

11.13.12.1               Oral,
enteral and parenteral nutritional supplements and supplies, including
prescribed infant formulas;

 

11.13.12.2               All
Food and Drug Administration (FDA) approved contraceptive drugs, devices, and
supplies; including but not limited to Depo-Provera, Norplant, and OTC products;

 

11.13.12.3               Antigens
and allergens; and

 

11.13.12.4               Therapeutic
vitamins and iron prescribed for prenatal and postnatal care.

 

11.13.13          Home
Health Services:  Home health services
through state-licensed agencies.

 

11.13.14          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.

 

11.13.15          Oxygen
and Respiratory Services:  Oxygen, and
respiratory therapy equipment and supplies.

 

11.13.16          Hospice
Services:  When the enrollee elects
hospice care. Includes facility services.

 

11.13.17          Blood,
Blood Components and Human Blood Products:  Administration of whole blood and blood
components as well as human blood products. 
In

 

75

 

areas where there is a charge for blood and/or blood products, the
Contractor shall cover the cost of the blood or blood products.

 

11.13.18          Treatment
for Renal Failure:  Hemodialysis, or
other appropriate procedures to treat renal failure, including equipment needed
in the course of treatment.

 

11.13.19          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:

 

11.13.19.1               When
it is necessary to transport an enrollee between facilities to receive a
covered services; and,

 

11.13.19.2               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.

 

11.13.20          Smoking
Cessation Services:  For pregnant women
through sixty (60) calendar days post pregnancy.

 

11.13.21          Newborn
Screenings:  The Contractor shall cover
all newborn screenings required by the Department of Health as of November 1,
2005.  A list of the required newborn
screenings can be viewed at the Department of Health website (see Attachment A
for website link).

 

11.13.22          EPSDT:

 

11.13.22.1               The
Contractor shall meet all requirements under the DSHS EPSDT program policy and
billing instructions (see Attachment A for website link).

 

11.13.22.2               The
following services are cover when referred as a result of an EPSDT exam.

 

11.13.22.2.1                Chiropractic
services;

 

11.13.22.2.2                Nutritional
counseling; and

 

11.13.22.2.3                Unlimited
psychiatric and psychological testing evaluation and diagnosis.

 

11.14       Exclusions:  The following
services and supplies are excluded from coverage under this agreement.  Unless otherwise required by this agreement,
ancillary services resulting from excluded services are also excluded.  Complications

 

76

 

resulting from an excluded service are also excluded for a period of
one hundred and eighty (180) calendar days following the occurrence of the
excluded service not counting the date of service, except for complication
resulting from surgery for weight loss or reduction, which are excluded for a
period of three hundred and sixty-five (365) calendar days following the
occurrence of the excluded service not counting the date of service.  Thereafter, complications resulting from an
excluded service are a covered service when they would otherwise be a covered
service under the provisions of this Contract.

 

11.14.1            Services
Covered By DSHS Fee-For-Service Or Through Other Contracts:

 

11.14.1.1                 School
Medical Services for Special Students as described in the DSHS billing
instructions for School Medical Services.

 

11.14.1.2                 Eyeglass
Frames, Lenses, and Fabrication Services covered under DSHS’ selective contract
for these services, and associated fitting and dispensing services.

 

11.14.1.3                 Voluntary
Termination of Pregnancy.

 

11.14.1.4                 Transportation
Services other than Ambulance:  including
but not limited to Taxi, cabulance, voluntary transportation, public
transportation and common carriers.

 

11.14.1.5                 Dental
Care, Prostheses, Orthodontics and Oral Surgery, including physical exams
required prior to hospital admissions for oral surgery and anesthesia for
dental care.

 

11.14.1.6                 Hearing
Aid Devices, including fitting, follow-up care and repair.

 

11.14.1.7                 First
Steps Maternity Case Management and Maternity Support Services.

 

11.14.1.8                 Sterilizations
for enrollees under age 21, or those that do not meet other federal
requirements (42 CFR 441 Subpart F) (see Attachment A for website link).

 

11.14.1.9                 Health
care services provided by a neurodevelopmental center recognized by DSHS.

 

11.14.1.10               Services
provided by a health department or family planning clinic when a client
self-refers for care.

 

11.14.1.11               Inpatient
psychiatric professional services.

 

11.14.1.12               Emergency
mental health services.

 

11.14.1.13               Pharmaceutical
products prescribed by any provider related to services provided under a
separate Contract with DSHS.

 

77

 

11.14.1.14               Laboratory
services required for medication management of drugs prescribed by community
mental health providers whose services are purchased by the Mental Health
Division.

 

11.14.1.15               Protease
Inhibitors.

 

11.14.1.16               Services
ordered as a result of an EPSDT exam that are not otherwise covered services.

 

11.14.1.17               Surgical procedures for weight loss or
reduction, when approved by DSHS in accord with WAC 388-531-0200.  The Contractor has no obligation to cover surgical procedures for weight loss or
reduction.

 

11.14.1.18               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 only for pregnant women as
maternity care when medically necessary, see Section 11.13.6.3.

 

11.14.1.19               Gender dysphoria surgery and related
procedures, treatment, prosthetics, or supplies when approved by DSHS in accord
with WAC 388-531.

 

11.14.2            Services
Covered By Other Divisions In The Department Of Social And Health Services:

 

11.14.2.1                 Substance
abuse treatment services covered through the Division of Alcohol and Substance
Abuse (DASA).

 

11.14.2.2                 Community-based
services (e.g., COPES and Personal Care Services) covered through the Aging and
Disability Services Administration.

 

11.14.2.3                 Nursing
facilities covered through the Aging and Disability Services Administration.

 

11.14.2.4                 Mental
health services separately purchased for all Medicaid clients by the Mental
Health Division, including 24-hour crisis intervention, outpatient mental
health treatment services, Club House, respite care, Supported Employment and
inpatient psychiatric services.

 

11.14.2.5                 Health
care services covered through the Division of Developmental Disabilities for
institutionalized clients.

 

11.14.2.6                 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.

 

78

 

11.14.3            Services
Not Covered by Either DSHS or the Contractor:

 

11.14.3.1                 Medical
examinations for Social Security Disability.

 

11.14.3.2                 Services
for which plastic surgery or other services are indicated primarily for
cosmetic reasons.

 

11.14.3.3                 Physical
examinations required for obtaining continuing employment, insurance or
governmental licensing.

 

11.14.3.4                 Sports
physicals

 

11.14.3.5                 Experimental
and Investigational Treatment or Services, determined in accord with Section 11.10,
Experimental and Investigational Services, and services associated with
experimental or investigational treatment or services.

 

11.14.3.6                 Reversal
of voluntary induced sterilization.

 

11.14.3.7                 Personal
Comfort Items, including but not limited to guest trays, television and
telephone charges.

 

11.14.3.8                 Biofeedback
Therapy

 

11.14.3.9                 Massage
Therapy

 

11.14.3.10               Acupuncture

 

11.14.3.11               TMJ
for Adults

 

11.14.3.12               Diagnosis
and treatment of infertility, impotence, and sexual dysfunction.

 

11.14.3.13               Orthoptic
(eye training) care for eye conditions

 

11.14.3.14               Naturopathy

 

11.14.3.15               Tissue
or organ transplants that are not specifically listed as covered.

 

11.14.3.16               Immunizations
required for international travel purposes only.

 

11.14.3.17               Court-ordered
services

 

11.14.3.18               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.

 

79

 

11.14.3.19               Pharmaceutical
products prescribed by any provider related to non- covered services.

 

11.14.3.20               Any
service, product, or supply paid for by DSHS under its fee-for-service program
only on an exception to policy basis.

 

11.14.3.21               Any
other service, product, or supply not covered by DSHS under its fee-for-service
program.

 

11.15       Coordination of Benefits and Subrogation of Rights of Third Party
Liability:

 

11.15.1            Coordination
of Benefits:

 

11.15.1.1                 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 Contract shall be secondary to any other medical coverage.

 

11.15.1.2                 Nothing
in this Section negates any of the Contractor’s responsibilities under this
Contract including, but not limited to, the requirement of Section 8.6,
Prohibition on Enrollee Charges for Covered Services.  The Contractor shall:

 

11.15.1.2.1                  Not
refuse or reduce services provided under this Contract 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.

 

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

 

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

 

11.15.1.2.4                  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)).

 

11.15.1.2.5                  Communicate
the requirements of this Section to subcontractors that provide services under
the terms of this Contract, and assure compliance with them.

 

80

 

11.15.2            Subrogation
Rights of Third-Party Liability:

 

11.15.2.1                 Injured
person means an enrollee covered by this Contract who sustains bodily injury.

 

11.15.2.2                 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.

 

11.15.2.3                 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.

 

11.15.2.4                 HCA
and DSHS specifically assign to the Contractor the HCA’s and DSHS’ rights to
such third party payments for medical care provided to an enrollee on behalf of
HCA and DSHS, which the enrollee assigned to DSHS as provided in WAC
388-505-0540.

 

11.15.2.5                 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.

 

11.15.2.6                 The
Contractor may obtain a signed agreement from the enrollee in which the enrollee
agrees to fully cooperate in effecting collection from persons 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.

 

11.15.2.7                 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.

 

12.       GENERAL TERMS AND CONDITIONS

 

12.1         Amendment:  This
Contract, or any term or condition,
may be modified or extended by a written amendment signed by both parties.  Only personnel authorized to bind each of the
parties may sign an amendment.

 

12.2         Assignment of this Contract: 
The Contractor shall not assign this Contract, including the rights,
benefits and duties hereunder, without obtaining the express written consent of
HCA.  HCA shall not recognize any
assignment made without such prior written consent.  In the event that consent is given and this
Contract is

 

81

 

assigned, all terms and conditions of this Contract shall be binding
upon the Contractor’s successors and assignees.

 

12.3         Access to Facilities and Records:  The Contractor and its subcontractors shall
cooperate with audits performed by duly authorized representatives of HCA,
DSHS, the State of Washington, the federal Department of Health and Human
Services, auditors from the federal Government Accountability Office, federal
Office of the Inspector General and federal 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 records pertinent to this
Contract to monitor and evaluate performance under this Contract, including,
but not limited to, the quality, cost, use, health and safety and timeliness of
services, and assessment of the Contractor’s capacity to bear the potential
financial losses.  The Contractor and its
subcontractors shall provide immediate access to facilities and records
pertinent to this Contract for Medicaid fraud investigators (42 CFR 438.6).

 

12.4         Compliance with All Applicable Laws and Regulations:  In the provision of services under this
Contract, the Contractor and its subcontractors shall comply with all
applicable federal, state and local laws and regulations, and all amendments
thereto, that are in effect when the Contract is signed or that come into
effect during the term of this Contract (42 CFR 438.100(d)).  This includes, but is not limited to:

 

12.4.1              Title
XIX and Title XXI of the Social Security Act;

 

12.4.2              Title
VI of the Civil Rights Act of 1964;

 

12.4.3              Title
IX of the Education Amendments of 1972, regarding any education programs and
activities;

 

12.4.4              The
Age Discrimination Act of 1975;

 

12.4.5              The
Rehabilitation Act of 1973;

 

12.4.6              All
federal and state professional and facility licensing and accreditation
requirements/standards that apply to services performed under the terms of this
Contract, including but not limited to:

 

12.4.6.1               All
applicable standards, orders, or requirements issued under Section 306 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.

 

12.4.6.2               Any
applicable mandatory standards and policies relating to energy efficiency that
are contained in the State Energy Conservation Plan,

 

82

 

issued in compliance with the Federal Energy Policy and Conservation
Act.

 

12.4.6.3               Those
specified for laboratory services in the Clinical Laboratory Improvement
Amendments (CLIA).

 

12.4.6.4               Those
specified in Title 18 RCW for professional licensing.

 

12.4.6.5               Industrial
Insurance – Title 51 RCW.

 

12.4.6.6               Reporting
of abuse as required by RCW 26.44.030.

 

12.4.6.7               Federal
Drug and Alcohol Confidentiality Laws in 42 CFR Part 2.

 

12.4.6.8               EEO
Provisions.

 

12.4.6.9               Copeland
Anti-Kickback Act.

 

12.4.6.10             Davis-Bacon
Act.

 

12.4.6.11             Byrd
Anti-Lobbying Amendment.

 

12.4.6.12             All
federal and state nondiscrimination laws and regulations.

 

12.4.6.13             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.

 

12.4.6.14             Any
other requirements associated with the receipt of federal funds.

 

12.5         Complete Contract:  This
Contract incorporates exhibits to this Contract and the DSHS billing
instructions applicable to the Contractor. 
All terms and conditions of this Contract are stated in this Contract
and its incorporations.  No other
agreements, oral or written, are binding.

 

12.6         Confidentiality:  The
Contractor may use Personal Information and other information gained by reason
of this Contract only for the purpose of this Contract.  The Contractor shall not disclose, transfer
or sell any such information to any party, including but not limited to medical
records, except as provided by law or, in the case of Personal Information,
with the prior written consent of the person to whom the Personal Information
pertains or their legal guardian.  The
Contractor shall maintain and protect the confidentiality of all Personal
Information and other information gained by reason of this Contract.  Upon written request by DSHS and HCA, the
Contractor shall either return or destroy and certify destruction of all
Personal Information.

 

83

 

12.6.1              The
Contractor, HCA and DSHS agree to share Personal Information regarding
enrollees in a manner that complies with applicable state and federal law
protecting confidentiality of such information (including but not limited to
the Health Insurance Portability and Accountability Act (HIPAA) of 1996,
codified at 42 USC 1320(d) et.seq. and 45 CFR parts 160, 162, and 164., the
HIPAA regulations, 42 CFR 431 Subpart F, RCW 5.60.060(4), and RCW 70.02). The
Contractor and the Contractor’s subcontractors shall fully cooperate with HCA
and DSHS efforts to implement HIPAA requirements.

 

12.6.2              The
Contractor shall have policies and procedures in place to address the protection
and destruction of retained enrollee Personal Information data shared by HCA
and DSHS with the Contractor.

 

12.6.2.1               The
Contractor’s policies and procedures related to the protection and destruction
of retained enrollee Personal Information data shall include the following:

 

12.6.2.1.1                    Written
policies, procedures, and standards of conduct that articulates the Contractor’s
compliance with applicable state and federal law protecting confidentiality of
such information (including but not limited to the Health Insurance Portability
and Accountability Act (HIPAA) of 1996, codified at 42 USC 1320(d) et.seq. and
45 CFR parts 160, 162, and 164., the HIPAA regulations, 42 CFR 431 Subpart F,
RCW 5.60.060(4), and RCW 70.02).

 

12.6.2.1.2                    Identification
of who will have access to and the extent of security measures implemented to
protect retained enrollee Personal Information data.

 

12.6.2.1.3                    Identification
of the methods the Contractor will use to destroy retained enrollee Personal
Information data shared by HCA and DSHS with the Contractor.

 

12.6.2.1.4                    Provision
for internal and external monitoring and auditing of compliance with the
Contractors policies and procedures to protect retained enrollee Personal
Information data.

 

12.6.2.1.5                    Provision
for prompt response to detected security offenses and for the development of
corrective action related to the protection and destruction of retained
enrollee Personal Information data.

 

12.6.2.2               The
policies and procedures to protect retained enrollee Personal Information data will
be submitted to DSHS for approval, according to Section 12.26, Notices, by January
31st each year of this Contract. 
DSHS shall respond with approval or denial with required modifications
within thirty (30) calendar days of receipt. 
The

 

84

 

Contractor shall have thirty (30) calendar days to resubmit the
policies and procedures.  If the policies
and procedures to protect retained enrollee Personal Information data have been
approved by DSHS for the previous year and they are unchanged, the Contractor
shall not be required to resubmit them but instead shall certify in writing to
DSHS that they are unchanged, in accord with Section 12.26, Notices.

 

12.6.3              Retained
enrollee Personal Information data will be maintained throughout the life cycle
of the data, to include any record retention cycle, as described in Section
12.30.2, or archival period, in a manner that will retain its confidential
nature regardless of the age or media format of the data.

 

12.7         Contractor Certification Regarding Ethics:  The Contractor certifies that the Contractor
is now, and shall remain, in compliance with Chapter 42.52 RCW, Ethics in
Public Services, throughout the term of this Contract.

 

12.8         Covenant Against Contingent Fees:  The Contractor certifies that no person or
agency has been employed or retained on a contingent fee for the purpose of
seeking or obtaining this Contract.  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, HCA may, at its discretion: 
a) annul the Contract without any liability; or b) deduct from the
Contract price or consideration or otherwise recover the full amount of any such
contingent fee.

 

12.9         Data Certification Requirements:  Any information and/or data required by this
Contract and submitted to DSHS after April 1, 2005 shall be certified by the
Contractor as follows (42 CFR 438.600 through 42 CFR 438.606):

 

12.9.1              Source
of certification:  The information and/or
data shall be certified by one of the following:

 

12.9.1.1               The
Contractor’s Chief Executive Officer.

 

12.9.1.2               The
Contractor’s Chief Financial Officer.

 

12.9.1.3               An
individual who has delegated authority to sign for, and who reports directly
to, the Contractor’s Chief Executive Officer or Chief Financial Officer.

 

12.9.2              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.

 

12.9.3              Timing
of certification:  The Contractor shall
submit the certification concurrently with the certified information and/or
data.

 

12.9.4              Data
that must be certified include documents specified by DSHS.

 

85

 

12.10         Disputes:  When a
dispute arises over an issue that pertains in any way to this Contract, the
parties agree to the following process to address the dispute:

 

12.10.1            The
Contractor, HCA and DSHS shall attempt to resolve the dispute through informal
means between the Contractor, the HCA contract manager, and the Office Chief of
the DSHS, Division of Program Support, Office of Managed Care.

 

12.10.2            If
the Contractor is not satisfied with the outcome of the informal resolution ,
the Contractor may submit the disputed issue, in writing, for review, within
ten (10) working days of the outcome, to:

 

Barney Speight, Deputy Administrator

Health Care Authority

P.O. Box 427000

Olympia, WA 98504-2700

 

and

 

MaryAnne Lindeblad, Director (or her successor)

Department of Social and Health Services

Division of Program Support

P.O. Box 45530

Olympia, WA 98504-5530

 

The Deputy Administrator
and Director may request additional information from the HCA contract manager, DSHS
Office Chief and/or the Contractor.  The Deputy
Administrator and 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 12.26, Notices.

 

12.10.3            When
the Contractor disagrees with the review decision of the Deputy Administrator
and Director, the Contractor may request independent mediation of the
dispute.  The request for mediation must
be submitted to the Deputy Administrator and Director, in writing, within ten
(10) working days of the contractor’s receipt of the Deputy Administrator’s and
Director’s review decision.  The
Contractor, HCA 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.

 

12.10.4            All
parties agree to make their best efforts to resolve disputes arising from this
Contract 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
Contract.

 

86

 

12.11       HCA and DSHS Not Guarantor: 
The Contractor acknowledges and certifies that neither HCA or DSHS nor
the State of Washington are guarantors of any obligations or debts of the
Contractor.

 

12.12       Exclusions and Debarment:

 

12.12.1            The
Contractor certifies that the Contractor has not been debarred, suspended or
otherwise excluded by any federal agency. 
The Contractor certifies that it does not knowingly have a director,
officer, partner, or person with a beneficial ownership of more than five
percent (5%) of the Contractor’s equity, or have an employee, consultant or subcontractor
who is significant or material to the provision of services under this
Contract, 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 debarred, suspended or otherwise excluded parties is available on the
following Internet website: www.arnet.gov/epls.

 

12.12.2            By
entering into this Contract, 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 five percent (5%) of its
equity.

 

12.12.3            The
Contractor is not required to consult the excluded parties list, but may
instead rely on certification from directors, officers, partners, employees,
contractors, or persons with beneficial ownership of more than five percent (5%)
of the Contractor’s equity, that they are not debarred or excluded from a
federal program.

 

12.12.4            The
Contractor is required to notify HCA and DSHS, in accord with Section 12.26,
Notices, when circumstances change that affect such certifications referenced
in Sections 12.1.2, 12.1.2 and 12.1.3.

 

12.13       Five Percent Equity:  The
Contractor shall provide to DSHS, according to Section 12.26, Notices, a list
of persons with a beneficial ownership of more than five percent (5%) of the
Contractor’s equity no later than February 28 of each year of this Contract.

 

12.14       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, alternative and, to the extent practicable, comparable
performance.  Nothing in this Section
shall be construed to prevent HCA from terminating this Contract for reasons
other

 

87

 

than for default during the period of events set forth above, or for
default, if such default occurred prior to such event.

 

12.15       Fraud and Abuse Requirements – Policies and Procedures:

 

12.15.1            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)).

 

12.15.2            The
Contractor’s arrangements or procedures shall include the following (42 CFR
438.608(b)(1)):

 

12.15.2.1             Written
policies, procedures, and standards of conduct that articulates the Contractor’s
commitment to comply with all applicable federal and state standards.

 

12.15.2.2             The
designation of a compliance officer and a compliance committee that is
accountable to senior management.

 

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

 

12.15.2.4             Effective
lines of communication between the compliance officer and the Contractor’s
staff.

 

12.15.2.5             Enforcement
of standards through well-publicized disciplinary guidelines.

 

12.15.2.6             Provision
for internal monitoring and auditing.

 

12.15.2.7             Provision
for prompt response to detected offenses, and for development of corrective
action initiatives.

 

12.15.3            The
Contractor shall submit a written copy of its administrative and management
arrangement or procedures and mandatory compliance plan regarding fraud and
abuse to DSHS for approval, according to Section 12.26, Notices, by March 31
each year of this Contract.  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.  If the administrative and
management arrangements or procedures and mandatory compliance plan regarding
fraud and abuse have been approved by DSHS for the previous year and they are
unchanged, the Contractor shall not be required to resubmit them but instead
shall certify in writing to DSHS that they are unchanged, in accord with
Section 12.26, Notices.

 

12.15.4            The
Contractor may request a copy of the guidelines that DSHS will use in
evaluating the Contractor’s written administrative and management

 

88

 

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, Office of
Managed Care e-mail box at healthyoptions@dshs.wa.gov.

 

12.16       Fraud and Abuse Reporting: 
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 HCA and DSHS according to
Section 12.26, Notices.  The report shall
include the following information:

 

12.16.1            Subject(s)
of complaint by name and either provider/subcontractor type or employee
position.

 

12.16.2            Source
of complaint by name and provider/subcontractor type or employee position, if
applicable.

 

12.16.3            Nature
of complaint.

 

12.16.4            Estimate
of the amount of funds involved.

 

12.16.5            Legal
and administrative disposition of case.

 

12.17       Governing Law and Venue: 
This Contract shall be governed by the laws of the State of Washington.  In the event of any legal action brought
hereunder, venue shall be proper only in Thurston County, Washington.  By execution of this Contract, the Contractor
acknowledges the jurisdiction of the courts of the State of Washington
regarding this matter.

 

12.18       Headings not Controlling: 
The headings and the index used herein are for reference and convenience
only, and shall not enter into the interpretation of this Contract, or describe
the scope or intent of any provisions or sections thereof.

 

12.19       Health and Safety: 
The Contractor shall perform any and all of its obligations under this
Contract in a manner that does not compromise the health and safety of any HCA enrollee
or DSHS client with whom the Contractor has contact.

 

12.20       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 Contract.  The
Contractor shall have in place mechanisms to verify the health information
received from subcontractors.  The health
information system must:

 

89

 

12.20.1            Collect,
analyze, integrate, and report 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.

 

12.20.2            Ensure
data received from providers is accurate and complete by:

 

12.20.2.1             Verifying
the accuracy and timeliness of reported data;

 

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

 

12.20.2.3             Collecting
service information on standardized formats to the extent feasible and
appropriate.

 

12.20.3            The
Contractor shall make all collected data available to HCA, DSHS and the Center
for Medicare and Medicaid Services (CMS) upon request.

 

12.21       Independent Contractor: 
The Contractor acknowledges that the Contractor is an independent
Contractor, and certifies that none of its directors, officers, partners,
employees, or agents are officers, employees, or agents of HCA, DSHS or the State
of Washington.  Neither the Contractor
nor any of its directors, officers, partners, employees, or agents shall hold
themselves out as, or claim to be, an officer, employee, or agent of HCA, DSHS
or the State of Washington by reason of this Contract.  Neither the Contractor nor any of its
directors, officers, partners, employees, or agents shall claim any rights,
privileges, or benefits that would accrue to a civil service employee under RCW
41.06.

 

12.21.1            Contractor
shall be responsible for the payment of its internal administrative costs,
including but not limited to federal, state and social security tax
payments.  The Contractor shall indemnify and hold HCA and DSHS harmless
from all obligations to pay or withhold federal or state taxes or contributions
on behalf of the Contractor or the Contractor’s employees.

 

12.22       Insolvency:

 

12.22.1            If
the Contractor becomes insolvent during the term of this Contract:

 

12.22.1.1             The
State of Washington and enrollees shall not be in any manner liable for the
debts and obligations of the Contractor;

 

12.22.1.2             In
accord with Section 8.6, 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 Contract, charge enrollees for covered
services.

 

12.22.1.3             The
Contractor shall, in accord with RCW 48.44.055, or RCW 48.46.245, provide for
the continuity of care for enrollees.

 

90

 

12.23       Insurance:  The
Contractor shall at all times comply with the following insurance requirements:

 

12.23.1            Commercial
General Liability Insurance (CGL):  The
Contractor shall maintain CGL 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.  HCA, DSHS, the State of Washington, 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.

 

12.23.2            Professional
Liability Insurance (PL):  The Contractor
shall maintain Professional Liability Insurance, including coverage for losses
caused by errors and omissions, with the following minimum limits:  Each Occurrence - $1,000,000; General
Aggregate - $2,000,000.

 

12.23.3            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, HCA and DSHS shall not be held
responsible as an employer for claims filed by the Contractor or its employees
under such laws and regulations.

 

12.23.4            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.

 

12.23.5            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 HCA or DSHS
if requested.

 

12.23.6            Separation
of Insureds:  All insurance Commercial General Liability policies shall
contain a “separation of insureds” provision.

 

12.23.7            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.

 

12.23.8            Evidence
of Coverage:  The Contractor shall submit Certificates of Insurance in
accord with the Notices Section of this Contract, Section 12.26, for each
coverage required under this Contract upon execution of this Contract.  Each Certificate of Insurance shall be
executed by a duly authorized representative of each insurer.

 

91

 

12.23.9            Material
Changes:  The Contractor shall give HCA and DSHS, in accord with the
Notices Section of this Contract, Section 12.26, 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 HCA and DSHS ten (10) days’ advance notice of
cancellation.

 

12.23.10          General: 
By requiring insurance, the State of Washington, HCA and DSHS do not represent
that the coverage and limits specified will be adequate to protect the
Contractor.  Such coverage and limits shall not 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, HCA 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.

 

Contractor may waive the
requirements contained in Sections 12.23.1, 12.23.2, 12.23.7 and 12.23.8 if
self-insured.  In the event the Contractor is self insured, the Contractor
must send to HCA and DSHS by January 15, 2006, a signed written document, which
certifies that the contractor is self insured, carries coverage adequate to
meet the requirements of Section 12.23, will treat HCA and DSHS as additional
insureds, expressly for, and limited to, the Contractor’s services provided
under this Contract, and provides a point of contact for HCA and DSHS.

 

12.24       Mutual Indemnification and Hold Harmless:  Each party shall be responsible for, and
shall indemnify and hold the other party harmless from, all claims and/or
damages to persons and/or property resulting from its own all negligent acts
and omissions.  The Contractor shall
indemnify and hold harmless HCA and DSHS from any claims by non-participating
providers related to the provision to enrollees of covered services under this
Contract.  The Contractor waives its
immunity under Title 51 RCW to the extent it is required to indemnify, defend,
and hold harmless the State and its agencies, officials, agents, or employees

 

12.25       No Federal or State Endorsement:  Award of this Contract does not indicate
endorsement of the Contractor by CMS, the federal or state government or any
similar entity.  No federal funds have
been used for lobbying purposes in connection with this Contract or managed
care program.

 

12.26       Notices:

 

12.26.1            Whenever
one party is required to give notice to the other under this Contract, it shall
be deemed given if mailed by United States Postal Services, registered or
certified mail, return receipt requested, postage prepaid and addressed as follows:

 

92

 

12.26.2            In
the case of notice to the Contractor, notice will be sent to the Contractor
Contact at the address for the Contractor on the first page of this Contract.

 

In the case of notice to HCA:

 

Anton Cooper, BH Procurement Manager (or successor)

676 Woodland Square Loop SE

P.O. Box 42710

Olympia, WA 98504-2710

 

In the case of notice to DSHS:

 

Peggy Wilson, Office Chief (or successor)

Department of Social and Health Services

Division of Program Support 

Office of Managed Care

P.O. Box 45530

Olympia, WA 98504-5530

 

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 a notice in accord with
this Section, stating the change and setting forth the new address, which shall
be effective on the tenth (10th) day following the effective date of
such notice unless a later date is specified.

 

12.27       Order of Precedence: 
In the interpretation of this Contract 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:

 

12.27.1            Title
XIX of the federal Social Security Act of 1935, as amended, and its
implementing regulations, as well as federal statutes and regulations
concerning the operation of Managed Care Organizations.

 

12.27.2            State
of Washington statues and regulations concerning the operation of the HCA
programs participating in this Contract including but not limited to WAC
chapter 182-25 (Washington Basic Health Plan).

 

12.27.3            State
of Washington statues and regulations concerning the operation of the DSHS
programs participating in this Contract, including but not limited to WAC chapters
388-538 (Managed Care), 388-865 (Mental Health) and 388-805 (DASA) WAC.

 

12.27.4            State
of Washington statutes and regulations concerning the operation of Health
Maintenance Organizations, Health Care Service Contractors, and Life and
Disability Insurance Carriers.

 

93

 

12.27.5            General
Terms and Conditions of this Contract.

 

12.27.6            Any
other term and condition of this Contract and exhibits if any, as indicated on
page one of this Contract.

 

12.27.7            DSHS
solicitation documents associated with this Contract.

 

12.27.8            Any
other material incorporated herein by reference.

 

12.28       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 (see Attachment A
for website link).

 

12.29       Proprietary Rights:  HCA
recognizes that nothing in this Contract shall give HCA ownership rights to the
systems developed or acquired by the Contractor during the performance of this
Contract.  The Contractor recognizes that
nothing in this Contract shall give the Contractor ownership rights to the
systems developed or acquired by HCA or DSHS during the performance of this
Contract.

 

12.30       Records Maintenance and Retention:

 

12.30.1            Maintenance:  The Contractor and its subcontractors shall
maintain financial, medical and other records pertinent to this Contract.  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 Contract.

 

12.30.2            Retention:  All records and reports relating to this
Contract shall be retained by the Contractor and its subcontractors for a
minimum of six (6) years after final payment is made under this Contract.  However, when an audit, litigation, or other
action involving records is initiated prior to the end of said period, records
shall be maintained for a minimum of six (6) years following resolution of such
action.

 

12.31       Sanctions:

 

12.31.1            If
the Contractor fails to meet one or more of its obligations under the terms of
this Contract, DSHS may impose sanctions by withholding up to five percent of
its scheduled payments to the Contractor rather than terminating the Contract.

 

94

 

HCA or 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.

 

12.31.2            HCA
or DSHS will notify the Contractor in writing of the basis and nature of 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 12.10, Disputes, if the Contractor
disagrees with HCA’s or DSHS’ position.

 

12.31.3            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:

 

12.31.3.1             Failing
to provide medically necessary services that the Contractor is required to
provide, under law or under this Contract, to an enrollee covered under this
Contract.

 

12.31.3.2             Imposing
on enrollees premiums or charges that are in excess of the premiums or charges
permitted under law or under this Contract.

 

12.31.3.3             Acting
to discriminate against enrollees on the basis of their health status or need
for health care services.  This includes
termination of enrollment or refusal to reenroll an enrollee, except as permitted
under law or under this Contract, or any practice that would reasonably be
expected to discourage enrollment by enrollees whose medical condition or
history indicates probable need for substantial future medical services.

 

12.31.3.4             Misrepresenting
or falsifying information that it furnishes to CMS, DSHS, an enrollee,
potential enrollee or any of its subcontractors.

 

12.31.3.5             Failing
to comply with the requirements for physician incentive plans.

 

12.31.3.6             Distributing
directly or indirectly through any agent or independent contractor, marketing
materials that have not been approved by DSHS or that contain false or
materially misleading information.

 

12.31.3.7             Violating
any of the other requirements of Sections 1903(m) or 1932 of the Social Security
Act, and any implementing regulations.

 

12.31.3.8             Intermediate
sanctions may include:

 

12.31.3.8.1                  Civil
monetary penalties in the following amounts:

 

12.31.3.8.1.1               A
maximum of $25,000 for each determination of failure to provide services;
misrepresentation or false statements to

 

95

 

enrollees, potential enrollees or healthcare providers; failure to
comply with physician incentive plan requirements; or marketing violations;

 

12.31.3.8.1.2               A
maximum of $100,000 for each determination of discrimination; or
misrepresentation or false statements to CMS or DSHS;

 

12.31.3.8.1.3               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; and

 

12.31.3.8.1.4               A
maximum of $25,000 or double the amount of the charges, whichever is greater,
for charges to enrollees that are not allowed under managed care.  DSHS will deduct from the penalty the amount
charged and return it to the enrollee.

 

12.31.3.8.2                  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.  Temporary management will be imposed in accord
with RCW 48.44.033.

 

12.31.3.8.3                  Suspension
of all new enrollments, including default enrollment, after the effective date
of the sanction.  DSHS shall notify current
enrollees of the sanctions and that they may terminate enrollment at any time.

 

12.31.3.8.4                  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.

 

12.32       Severability:  The
terms and conditions of this Contract are severable.  If any term or condition of this Contract is
held invalid by any court, such invalidity shall not affect the validity of the
other terms or conditions of this Contract.

 

12.33       Solvency:

 

12.33.1            The
Contractor shall have a Certificate of Registration as a Health Maintenance
Organization (HMO), Health Care Service Contractor (HCSC) or Life and
Disability Insurance Carrier, from the Washington State Office of the Insurance
Commissioner (OIC).  The Contractor shall
comply with the solvency provisions of chapter 48.44 or 48.46 RCW, as amended.

 

96

 

12.33.2            The
Contractor agrees that HCA and DSHS may at any time access any information
related to the Contractor’s financial condition, or compliance with OIC
requirements, from OIC and consult with OIC concerning such information.

 

12.34       State Conflict of Interest Safeguards:  The Contractor shall have conflict of
interest safeguards that, at a minimum, are equivalent to conflict of interest
safeguards imposed by federal law on parties involved in public contracting (41
USC 423).

 

12.35       Survivability:

 

12.35.1            The
terms and conditions contained in this Contract that shall survive the
expiration or termination of this Contract include but are not limited to:  Confidentiality, Indemnification and Hold
Harmless, Access to Facilities and Records, and Maintenance of Records.

 

12.35.2            After
termination of this Contract, the Contractor remains obligated to:

 

12.35.2.1             Cover
hospitalized enrollees until discharge consistent with Section 11.11, Enrollees
Hospitalized at Disenrollment.

 

12.35.2.2             Submit
reports required in this Contract.

 

12.35.2.3             Provide
access to records required in Section 12.3, Access to Facilities and Records.

 

12.35.2.4             Provide
the administrative services associated with covered services (e.g. claims
processing, enrollee appeals) provide to enrollees under the terms of this
Contract.

 

12.36       Termination by the Contractor for Default:  The Contractor may terminate this Contract
whenever HCA defaults in performance of the Contract and fails to cure the
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. 
For purposes of this Section, default means failure of HCA to meet one
or more material obligations of this Contract. 
In the event it is determined that HCA was not in default, HCA may claim
damages for wrongful termination through the dispute resolution provisions of
this Contract or by a court of competent jurisdiction.

 

12.37       Termination by HCA for Default:  The Contract Administrator may terminate this
Contract whenever the Contractor defaults in performance of this Contract and
fails to cure the default within a period of one hundred twenty (120) calendar
days (or such longer period as HCA may allow) after receipt from HCA or DSHS of
a written notice specifying the default. 
For purposes of this Section, default means failure of the Contractor to
meet one or more material obligations of this

 

97

 

Contract.  In the event it is
determined that the Contractor was not in default, the Contractor may claim
damages for wrongful termination through the dispute resolution provisions of
this Contract or by a court of competent jurisdiction.

 

12.38       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 Contract and prior to the termination
date, HCA may terminate this Contract under the “Termination for Convenience”
clause.

 

12.39       Termination - Information on Outstanding Claims:  In the event this agreement is terminated,
the Contractor shall provide HCA and 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 4,
Payment.

 

12.40       Terminations - Pre-termination Processes:

 

12.40.1            Either
party to the Contract shall give the other party to the Contract written notice
of the intent to terminate this Contract and the reason for termination.

 

12.40.2            If
either party disagrees with the other party’s decision to terminate this
Contract, other than for reduction in funding, that party will have the right
to a dispute resolution as described in Section 12.10, Disputes.

 

12.40.3            If
the Contractor disagrees with an HCA decision to terminate this Contract and the
dispute process is not successful, HCA shall provide the Contractor a
pre-termination hearing prior to termination of the Contract under 42 CFR
438.708.  DSHS shall:

 

12.40.3.1             Give
the Contractor written notice of the intent to terminate, the reason for
termination, and the time and place of the hearing;

 

12.40.3.2             Give
the Contractor (after the hearing) written notice of the decision affirming or
reversing the proposed termination of this Contract, and for an affirming
decision the effective date of termination; and

 

12.40.3.3             For
an affirming decision, give enrollees notice of the termination and information
consistent with 42 CFR 438.10 on their options for receiving Medicaid services
following the effective date of termination.

 

12.41       Washington Public Disclosure Act:  The Contractor acknowledges that HCA and DSHS
are subject to the Public Records Act (the Act, which is codified at RCW
42.17.250, et seq.). This Contract will be a ‘public record’ as defined in RCW
42.17.020.  Any documents submitted to HCA or DSHS by the Contractor may
also be construed as ‘public records’ and therefore subject to public
disclosure under the Act.  The Contractor may label documents submitted to

 

98

 

HCA and DSHS as ‘confidential’ or ‘proprietary’ if it so chooses;
however, the Contractor acknowledges that such labels are not determinative of
whether the documents are subject to disclosure under the Act.  If HCA or DSHS
receives a public disclosure request that would encompass any Contractor
document that has been labeled by the Contractor as ‘confidential’ or ‘proprietary,’
then HCA or DSHS will notify the Contractor pursuant to RCW 42.17.330. 
The Contractor then will have the option, under RCW 42.17.330, of seeking
judicial intervention to prevent the public disclosure of the affected
document(s).

 

12.42       Waiver:  Waiver of any
breach or default on any occasion shall not be deemed to be a waiver of any
subsequent breach or default.  Any waiver shall not be construed to be a
modification of the terms and conditions of this Contract as amended as set
forth in Section 12.1, Amendment. The failure of either party to enforce any
provision of this Contract 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 Contract.

 

99Exhibit 10.4

 

STATE OF CALIFORNIA

STANDARD
AGREEMENT AMENDMENT

STD 213 A (DHS Rev 7/04)

	
   

  	
   

  	
   

  	
  AGREEMENT NUMBER

  	
   

  	
  AMENDMENT NUMBER

  
	
  ý

  	
  CHECK HERE IF ADDITIONAL
  PAGES ARE ADDED 6 PAGES

  	
   

  	
  95-23637

  	
   

  	
  A-17

  
	
   

  	
   

  	
   

  	
  REGISTRATION NUMBER:

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  This Agreement is entered
  into between the State Agency and Contractor named below:

  
	
   

  	
  STATE AGENCY’S NAME

  	
  (Also
  referred to as CDHS, DHS, or the State)

  
	
   

  	
  California Department of
  Health Services

  
	
   

  	
  CONTRACTOR’S NAME

  	
  (Also
  referred to as Contractor)

  
	
   

  	
  Molina Healthcare of
  California Partner Plan, Inc.

  
	
   

  	
   

  
	
  2.

  	
  The term of this

  
	
   

  	
  Agreement is

  	
  4/02/96

  	
  through

  	
  3/31/07

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  The maximum amount

  	
  $ 1,212,332,870 One Billion, Two Hundred
  Twelve Million,

  
	
   

  	
  of this Agreement is:

  	
     Three
  Hundred Thirty-Two Thousand, Eight Hundred Seventy Dollars

  
	
   

  	
   

  	
   

  
	
  4.

  	
  The parties mutually agree
  to this amendment as follows. All actions noted below are by this reference
  made a part of the Agreement and incorporated herein:

  
											

 

I.           Amendment effective date: 
October 1, 2005

 

II.         Purpose of amendment:  The
purpose of this amendment is to implement Medicare Part D contract language
effective 1/1/06; to decrease the encumbered amount of the contract for FY
2005-2006 by $1,739,620, for FY 2006-2007 by $1,352,221, for a combined total
decrease of $3,091,841; to implement the annual rate redetermination for the

2005-2006 Rate Period (10/1/05 - 12/31/05); and to implement the Medicare Part
D rate adjustment for the period 01/01/06-9/30/06.

 

III.        Certain changes made in this amendment are shown as:  Text additions are displayed in bold and underline.
Text deletions are displayed as strike through text (i.e., Strike).

 

IV.        Paragraph 3 (maximum amount payable) on the face of the original STD
213 is decreased by $3,091,841 and is amended to read:  $1,215,424,711
(One Billion, Two Hundred Fifteen Million, Four Hundred Twenty-Four Thousand,
Seven Hundred Eleven Dollars.)$1,212,332,870
(One Billion, Two Hundred Twelve Million, Three Hundred Thirty-Two Thousand,
Eight Hundred Seventy Dollars).

 

(Continued
on next page)

 

All other terms and
conditions shall remain the same.

 

IN WITNESS
WHEREOF, this Agreement has been executed by the parties hereto.

 

	
  CONTRACTOR

  	
   

  	
  CALIFORNIA

  
	
   

  	
   

  	
  Department of General Services

  
	
  CONTRACTOR’S NAME (If
  other than an individual, state whether a corporation, partnership, etc.)

  	
   

  	
  Use Only

  
	
  Molina Healthcare of
  California Partner Plan, Inc.

  	
   

  	
   

  
	
  BY (Authorized
  Signature)

  	
  DATE SIGNED (Do
  not type)

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  
	
  PRINTED NAME AND TITLE OF
  PERSON SIGNING

  	
   

  	
   

  
	
  Joann Zarza-Garrido, CEO

  	
   

  	
   

  
	
  ADDRESS

  	
   

  	
   

  
	
  One Golden Shore Drive,
  Long Beach, CA 90802

  	
   

  	
   

  
	
  STATE OF CALIFORNIA

  	
   

  	
   

  
	
  AGENCY NAME

  	
   

  	
   

  
	
  California Department of
  Health Services

  	
   

  	
   

  
	
  BY (Authorized
  Signature)

  	
  DATE SIGNED (Do
  not type)

  	
   

  	
   

  
	
  

  	
   

  	
   

  
	
  PRINTED NAME AND TITLE OF
  PERSON SIGNING

  	
   

  	
  ý  Exempt per:W&I Code 14087.4

  
	
  Terri L. Anderson, Chief,
  Contracts and Purchasing Services Section

  	
   

  	
   

  
	
  ADDRESS

  	
   

  	
   

  
	
  1501 Capitol Avenue, Room
  71.2101, MS 1403, P.O. Box 997413

  	
   

  	
   

  
	
  Sacramento, CA 95899-7413

  	
   

  	
   

  

 

 

Molina Healthcare of California Partner Plan, Inc.

95-23637 A-17

 

V.            Exhibit A, Attachment
10, Scope of Services, Provision 1., Covered Services, is amended to read:

 

1.             Covered Services

 

Contractor shall provide or arrange for all
Medically Necessary Covered Services for Members. Covered Services are those
services set forth in Title 22, CCR, Chapter 3, Article 4, beginning with
Section 51301, and Title 17, CCR, Division 1, Chapter 4, Subchapter 13,
beginning with Section 6840, unless otherwise specifically excluded under the
terms of this Contract.

 

Except as set forth in Attachment 3.1.B.1
(effective 1/1/2006) of the California Medicaid State Plan or as otherwise
authorized by Welfare & Institutions Code Section 14133.23, effective
January 1, 2006, drug benefits for full-benefit dual eligible beneficiaries who
are eligible for drug benefits under Part D of Title XVIII of the Social
Security Act (42 USC Section 1395w-101 et seq) are not a Covered Service under
this Contract. Consequently, effective January 1, 2006, the capitation rates
shall not include reimbursement for such drug benefits and existing capitation
rates shall be adjusted accordingly, even if the adjustment results in a change
of less than one percent of cost to Contractor. Additionally, Contractor shall
comply with all applicable provisions of the Medicare Prescription Drug
Improvement and Modernization Act of 2003, 42 USC 1395(x) et seq.

 

VI.           Exhibit
B, Budget Detail and Payment Provisions, Provision 2., Amounts Payable, is
amended to read:

 

2.             Amounts Payable

 

The amounts payable under this agreement
shall not exceed:

 

A.            $32,080,630 for the 1995-96 Fiscal Year
ending June 30, 1996.

B.            $194,472,680 for the
1996-97 Fiscal Year ending June 30, 1997.

C.            $6,500,000 for the
1997-98 Fiscal Year ending June 30, 1998.

D.            $80,000,000 for the
1998-99 Fiscal Year ending June 30, 1999.

E.             $107,000,000 for the
1999-00 Fiscal Year ending June 30, 2000.

F.             $107,000,000 for the
2000-01 Fiscal Year ending June 30, 2001.

G.            $107,000,000 for the
2001-02 Fiscal Year ending June 30, 2002.

H.            $108,041,631 for the
2002-03 Fiscal Year ending June 30, 2003.

I.              $114,083,000 for the 2003-04 Fiscal
Year ending June 30, 2004.

J.             $126,461,929 for the 2004-05 Fiscal Year
ending June 30, 2005.

K.            $130,965,620$129,226,000 for the 2005-06 Fiscal Year ending June 30, 2006.

L.             $101,819,221$100,467,000 for the 2006-07 Fiscal Year ending June 30, 2007.

 

2

 

The maximum amount payable for this Contract
shall not exceed $1,215,424,711  $1,212,332,870.

 

VII.         Exhibit B, Budget Detail and Payment
Provisions, Provision 4., Capitation Rates, is amended to add the Capitation
Rate Tables included below. Paragraph B remains unchanged. Paragraph C is
amended to read as indicted herein:

 

4.             Capitation
Rates

 

A.            DHS
shall remit to Contractor a capitation payment each month for each Medi-Cal
Member that appears on the approved list of Members supplied to Contractor by
DHS. The capitation rate shall be the amount specified below. The payment
period for health care services shall commence on the first day of operations, as
determined by DHS. Capitation payments shall be made in accordance with the
following schedule of capitation payment rates at the end of the month:

 

	
  For the period 10/01/05
  – 12/31/05

  	
   

  	
  Riverside

  

 

	
  Groups

  	
   

  	
  Aid Codes

  	
   

  	
  Rate

  	
   

  
	
  Family

  	
   

  	
  01, 0A,
  02, 03, 04, 08, 30, 32, 33, 34, 35, 38, 39, 40, 42, 45, 47, 54, 59, 72, 82,
  3A, 3C, 3E, 3G, 3H, 3L, 3M, 3N, 3P, 3R, 3U, 3W, 4A, 4C, 4F, 4G, 4K, 4M, 5K,
  5X, 7A, 7J, 7X, 8P, 8R

  	
   

  	
  $

  	
  92.71

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Disabled

  	
   

  	
  20, 24,
  26, 28, 36, 60, 64, 66, 68, 6A, 6C, 6E, 6H, 6J, 6N, 6P, 6V, 2E

  	
   

  	
  $

  	
  341.21

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aged

  	
   

  	
  10, 14,
  16, 18, 1E, 1H

  	
   

  	
  $

  	
  242.74

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Adult

  	
   

  	
  86

  	
   

  	
  $

  	
  504.39

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AIDS

  Beneficiary

  	
   

  	
   

  	
   

  	
  $

  	
  1,304.01

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Breast and

  Cervical

  Cancer

  Treatment

  Program

  	
   

  	
  0M, 0N,
  0P, 0R, 0T, 0U

  	
   

  	
  $

  	
  836.89

  	
   

  

 

3

 

	
  For the period 10/01/05 – 12/31/05

  	
   

  	
  San Bernardino

  

 

	
  Groups

  	
   

  	
  Aid Codes

  	
   

  	
  Rate

  	
   

  
	
  Family

  	
   

  	
  01, 0A,
  02, 03, 04, 08, 30, 32, 33, 34, 35, 38, 39, 40, 42, 45, 47, 54, 59, 72, 82,
  3A, 3C, 3E, 3G, 3H, 3L, 3M, 3N, 3P, 3R, 3U, 3W, 4A, 4C, 4F, 4G, 4K, 4M, 5K,
  5X, 7A, 7J, 7X, 8P, 8R

  	
   

  	
  $

  	
  95.17

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Disabled

  	
   

  	
  20, 24,
  26, 28, 36, 60, 64, 66, 68, 6A, 6C, 6E, 6H, 6J, 6N, 6P, 6R, 6V, 2E

  	
   

  	
  $

  	
  332.67

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aged

  	
   

  	
  10, 14,
  16, 18, 1E, 1H

  	
   

  	
  $

  	
  251.24

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Adult

  	
   

  	
  86

  	
   

  	
  $

  	
  516.98

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AIDS

  Beneficiary

  	
   

  	
   

  	
   

  	
  $

  	
  1,338.04

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Breast and

  Cervical

  Cancer

  Treatment

  Program

  	
   

  	
  0M, 0N,
  0P, 0R, 0T, 0U

  	
   

  	
  $

  	
  857.78

  	
   

  

 

4

 

MEDI-CAL ONLY

 

	
  For the period 01/01/06 – 09/30/06

  	
   

  	
  Riverside

  

 

	
  Groups

  	
   

  	
  Aid Codes

  	
   

  	
  Rate

  	
   

  
	
  Family

  	
   

  	
  01, 0A,
  02, 03, 04, 08, 30, 32, 33, 34, 35, 38, 39, 40, 42, 45, 47, 54, 59, 72, 82,
  3A, 3C, 3E, 3G, 3H, 3L, 3M, 3N, 3P, 3R, 3U, 3W, 4A, 4C, 4F, 4G, 4K, 4M, 5K,
  5X, 7A, 7J, 7X, 8P, 8R

  	
   

  	
  $

  	
  92.71

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Disabled

  	
   

  	
  20, 24,
  26, 28, 36, 60, 64, 66, 68, 6A, 6C, 6E, 6H, 6J, 6N, 6P, 6R, 6V, 2E

  	
   

  	
  $

  	
  369.30

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aged

  	
   

  	
  10, 14,
  16, 18, 1E, 1H

  	
   

  	
  $

  	
  351.20

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Adult

  	
   

  	
  86

  	
   

  	
  $

  	
  504.39

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AIDS

  Beneficiary

  	
   

  	
   

  	
   

  	
  $

  	
  1,503.90

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Breast and

  Cervical

  Cancer

  Treatment

  Program

  	
   

  	
  0M, 0N,
  0P, 0R, 0T, 0U

  	
   

  	
  $

  	
  836.89

  	
   

  

 

5

 

MEDI-CAL ONLY

 

	
  For the period 01/01/06 – 09/30/06

  	
   

  	
  San Bernardino

  

 

	
  Groups

  	
   

  	
  Aid Codes

  	
   

  	
  Rate

  	
   

  
	
  Family

  	
   

  	
  01, 0A,
  02, 03, 04, 08, 30, 32, 33, 34, 35, 38, 39, 40, 42, 45, 47, 54, 59, 72, 82,
  3A, 3C, 3E, 3G, 3H, 3L, 3M, 3N, 3P, 3R, 3U, 3W, 4A, 4C, 4F, 4G, 4K, 4M, 5K,
  5X, 7A, 7J, 7X, 8P, 8R

  	
   

  	
  $

  	
  95.17

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Disabled

  	
   

  	
  20, 24,
  26, 28, 36, 60, 64, 66, 68, 6A, 6C, 6E, 6H, 6J, 6N, 6P, 6R, 6V, 2E

  	
   

  	
  $

  	
  353.25

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aged

  	
   

  	
  10, 14,
  16, 18, 1E, 1H

  	
   

  	
  $

  	
  322.06

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Adult

  	
   

  	
  86

  	
   

  	
  $

  	
  516.98

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AIDS

  Beneficiary

  	
   

  	
   

  	
   

  	
  $

  	
  1,514.21

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Breast and

  Cervical

  Cancer

  Treatment

  Program

  	
   

  	
  0M, 0N,
  0P, 0R, 0T, 0U

  	
   

  	
  $

  	
  857.78

  	
   

  

 

DUAL ELIGIBLES – MEDI-CAL AND MEDICARE (Part D)

 

	
  For the period 01/01/06 – 09/30/06

  	
   

  	
  Riverside

  

 

	
  Groups

  	
   

  	
  Aid Codes

  	
   

  	
  Rate

  	
   

  
	
  Disabled

  Duals

  	
   

  	
  20, 24,
  26, 28, 36, 60, 64, 66, 68, 6A, 6C, 6E, 6H, 6J, 6N, 6P, 6R, 6V, 2E

  	
   

  	
  $

  	
  84.32

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aged

  Duals

  	
   

  	
  10, 14,
  16, 18, 1E, 1H

  	
   

  	
  $

  	
  104.43

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AIDS

  Beneficiary

  Duals

  	
   

  	
   

  	
   

  	
  $

  	
  304.96

  	
   

  

 

6

 

DUAL ELIGIBLES – MEDI-CAL AND MEDICARE (Part D)

 

	
  For the period 01/01/06 – 09/30/06

  	
   

  	
  San Bernardino

  

 

	
  Groups

  	
   

  	
  Aid Codes

  	
   

  	
  Rate

  	
   

  
	
  Disabled

  Duals

  	
   

  	
  20, 24,
  26, 28, 36, 60, 64, 66, 68, 6A, 6C, 6E, 6H, 6J, 6N, 6P, 6R, 6V, 2E

  	
   

  	
  $

  	
  81.53

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aged

  Duals

  	
   

  	
  10, 14,
  16, 18, 1E, 1H

  	
   

  	
  $

  	
  96.21

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AIDS

  Beneficiary

  Duals

  	
   

  	
   

  	
   

  	
  $

  	
  307.58

  	
   

  

 

B.            If DHS creates a new
aid code that is split or derived from an existing aid code covered under this
Contract, and the aid code has a neutral revenue effect for the Contractor,
then the split aid code will automatically be included in the same aid code
rate group as the original aid code covered under this Contract. Contractor
agrees to continue providing Covered Services to the Members at the monthly
capitation rate specified for the original aid code. DHS shall confirm all aid
code splits, and the rates of payment for such new aid codes, in writing to
Contractor as soon as practical after such aid code splits occur.

 

C.            Pursuant
to Title 42, Code of Federal Regulations, Section 438.6(c)(2)(ii), the
actuarial basis for the computation of the capitation payment rates shall be
set forth in DHS’ most recent version of the annually-published Rate Manual for
the rate period that is identified in the Capitation Rate Sheets attached
hereto in Exhibit B, Attachment 1 (consisting of 1230
pages). Said Rate Manual is hereby incorporated by reference as if fully set
forth herein.

 

VIII.        All other terms and
conditions shall remain the same.

 

7

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