Document:

exv10w4

Exhibit 10.4

LEGACY BANCORP, INC.

AND

LEGACY BANKS

TWO-YEAR CHANGE IN CONTROL AGREEMENT FORM

     This Change in Control Agreement (the “Agreement”) is made effective as of the 26th day of
October, 2008 (the “Effective Date”), by and between Legacy Bancorp, Inc., a Delaware corporation
(the “Company”), Legacy Banks (the “Bank”), a Massachusetts-chartered savings bank (the “Bank”)
with its principal administrative office at Pittsfield, Massachusetts, and [ ] (“Executive”). The
Bank is a wholly-owned subsidiary of the Company.

     WHEREAS, the Company and the Bank recognize the substantial contributions the Executive has
made to the Company and the Bank and wishes to protect Executive’s position with the Bank for the
period provided in this Agreement.

     NOW, THEREFORE, in consideration of the contributions of Executive and upon the other terms
and conditions hereinafter provided, the parties hereto agree as follows:

1. TERM OF AGREEMENT

     The term of this Agreement shall be the earlier of twelve (12) full calendar months from the
effective date of this Agreement set forth above (the “Initial Term”), or until the employment
relationship is terminated. Upon the expiration of the Initial Term and so long as this Agreement
remains in effect, upon the expiration of each successive twelve-month period (each a “Renewal
Term”), this Agreement will be renewed automatically for a successive twelve-month period, unless
the Board of Directors of each of the Bank and the Company (each a “Board,” provided that any
reference to “Board” herein shall refer to the Bank’s Board unless specifically noted otherwise) or
the Executive elects not to extend the term of this Agreement at the conclusion of the Initial Term
or any subsequent Renewal Term by giving written notice to the other party prior to the last day
of the Initial Term or any such Renewal Term as the case may be (a “Non-Renewal Notice”).
Notwithstanding anything to the contrary in this Section 1, this Agreement shall remain in effect
upon the public announcement of an event that, if consummated, would result in a Change in Control,
as defined in Section 2 hereof, and for a period of twelve (12) months after the closing or
completion of the Change in Control.

2. CHANGE IN CONTROL DEFINED

     For purposes of this Agreement, a “Change in Control” means any of the following events:

     (a) Merger: The Company merges into, or consolidates with, another corporation, or
merges another corporation into the Company, and as a result less than a majority of the combined
voting power of the resulting corporation immediately after the merger or

 

 

consolidation is held by persons who were stockholders of the Company immediately before the merger
or consolidation.

     (b) Acquisition of Significant Share Ownership: There is filed, or required to be
filed, a report on Schedule 13D or 13G or another form or schedule required under Sections 13(d),
13(g) or 14(d) of the Securities Exchange Act of 1934, which schedule discloses that the filing
person or persons acting in concert has, or have become, the beneficial owner of 25% or more of a
class of the Company’s voting securities.

     (c) Change in Board Composition: During any period of two consecutive years,
individuals who constitute the Company’s Board at the beginning of the two-year period cease for
any reason to constitute at least a majority of the Company’s Board; provided, however, that for
purposes of this clause, each director who is first elected by the board (or first nominated by the
board for election by the stockholders) by a vote of at least two-thirds (2/3) of the directors who
were directors at the beginning of the two-year period shall be deemed to have also been a director
at the beginning of such period; or

     (d) Sale of Assets: The Company sells to a third party all, or substantially all, of
its assets.

3. TERMINATION FOR GOOD REASON UPON A CHANGE IN CONTROL

     Upon the occurrence of a Change in Control, Executive shall have the right during the
remaining term of this Agreement to voluntarily terminate his employment upon the occurrence of any
of the following events, each of which shall constitute “Good Reason,” unless such event has been
consented to by Executive: (a) a material change in Executive’s position to become one of lesser
responsibility, importance or scope from the position Executive held immediately prior to the
Change in Control; (b) a material reduction in Executive’s base salary or benefits; (c) a
relocation of Executive’s principal place of employment by more than thirty (30) miles from its
location immediately prior to the Change in Control; or (d) any other action or inaction that
constitutes a material breach of this Agreement by the Company or the Bank.

     Notwithstanding the foregoing, termination for Good Reason shall not be effective under this
Section 3 unless Executive gives the Company and/or the Bank prior written notice of the events
giving rise to Executive’s right to elect to terminate for Good Reason. Such prior written notice
shall be given no later than ninety (90) days after the date of the event giving rise to the right
to terminate for Good Reason, and the Company and/or the Bank shall have thirty (30) days to remedy
such condition before Executive terminates employment, provided, however, that the Bank can waive
said 30 day period.

4. TERMINATION FOR CAUSE

     Executive shall not have the right to receive termination benefits pursuant to Section 5
hereof upon termination for Cause. As used herein, “Cause shall mean termination because of
Executive’s: (1) material act of dishonesty in performing Executive’s duties on behalf of the
Company and the Bank or a material breach of the Bank’s Code of Conduct or Sexual and Other

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Non-Harassment Policy; (2) willful misconduct that in the judgment of the Board or the Bank
Chief Executive Officer will likely cause economic damage to the Company and the Bank or injury to
the business reputation of the Company and the Bank; (3) incompetence, (4) breach of fiduciary duty
involving personal profit; (5) intentional failure to perform stated duties after written notice
thereof from the Board; or (6) willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) that reflect adversely on the reputation of the Company and the
Bank, any felony conviction, any violation of law involving moral turpitude, or any violation of a
final cease-and-desist order.

     Notwithstanding the foregoing, prior to a Change in Control, Executive’s termination for Cause
will not become effective unless the Chief Executive Officer of the Bank has delivered to Executive
a copy of a Notice of Termination, in accordance with Section 6 hereof. Following a Change in
Control, Executive shall not be deemed to have been Terminated for Cause unless and until there
shall have been delivered to him a Notice of Termination which shall include a copy of a resolution
duly adopted by the affirmative vote of not less than a majority of the members of the Board at a
meeting of the Board called and held for that purpose (after reasonable notice to Executive and an
opportunity for him, together with counsel, to be heard before the Board), finding that in the good
faith opinion of the Board, Executive was guilty of conduct justifying Termination for Cause and
specifying the particulars thereof in detail.

5. SEVERANCE BENEFITS UPON TERMINATION AFTER CHANGE IN CONTROL

     (a) Upon the occurrence of a Change in Control, followed by (i) Executive’s voluntary
termination for Good Reason or (ii) involuntary termination of Executive’s employment other than
for Cause, the Bank shall pay Executive, or in the event of Executive’s subsequent death,
Executive’s beneficiary or beneficiaries or estate, as the case may be, as severance pay, a cash
lump sum payment equal to two (2) times the sum of (i) his Base Salary and (ii) the highest rate of
bonus paid to Executive during the two (2) years prior to termination, subject to applicable
withholding taxes. In addition, the Bank will continue to provide Executive with life insurance
coverage, non-taxable medical and dental coverage substantially comparable (and on substantially
the same terms and conditions) to the coverage maintained by the Bank for Executive prior to
Executive’s severance. Such coverage shall cease upon expiration of 24 months. The period for
group health care continuation coverage rights under the Consolidated Omnibus Budget Reconciliation
Act of 1985 (COBRA) shall not begin until the expiration of such 24 month period.

     (b) Upon the occurrence of a Change in Control, Executive will have such rights as specified
in any other employee benefit plan with respect to options and such other rights as may have been
granted to Executive under such plans.

     (c) Any cash severance payments shall be made in a lump sum with the next regularly scheduled
payroll following Executive’s termination of employment. Such payments shall not be reduced in the
event Executive obtains other employment following termination of employment with the Bank.

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     (d) Notwithstanding anything in this Agreement to the contrary, in no event shall the
aggregate payments or benefits to be made or afforded to Executive under this Section 5 constitute
an “excess parachute payment” under Code Section 280G or any successor thereto, and in order to
avoid such a result, Executive’s benefits hereunder shall be reduced, if necessary, to an amount,
the value of which is one dollar ($1.00) less than an amount equal to three (3) times Executive’s
“base amount,” as determined in accordance with Code Section 280G. The allocation of the reduction
required hereby shall be determined by Executive, provided, however, that if it is determined that
such election by Executive shall be in violation of Code Section 409A, the allocation of the
required reduction shall be pro-rata.

6. NOTICE OF TERMINATION

     Any purported termination by the Bank or Company or by Executive in connection with or
following a Change in Control shall be communicated by Notice of Termination to the other party
hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a written notice which
shall indicate the Date of Termination and, in the event of termination by Executive, the specific
termination provision in this Agreement relied upon. “Date of Termination” shall mean the date
specified in the Notice of Termination (which, in the case of a termination for Cause, shall be
immediate). In no event shall the Date of Termination exceed thirty (30) days from the date Notice
of Termination is given.

     If within thirty (30) days after any Notice of Termination is given, the party receiving such
Notice of Termination notifies the other party that a dispute exists concerning the termination,
the Date of Termination shall be the date on which the dispute is finally determined, either by
mutual written agreement of the parties, by a binding arbitration award, or by a final judgment,
order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired
and no appeal having been perfected) and provided further that the Date of Termination shall be
extended by a notice of dispute only if such notice is given in good faith and the party giving
such notice pursues the resolution of such dispute with reasonable diligence. Notwithstanding the
pendency of any such dispute in connection with a Change in Control, in the event the Executive is
terminated for reasons other than termination for Cause, the Bank will continue to pay Executive
his full compensation in effect when the notice giving rise to the dispute was given (including but
not limited to his annual salary) and continue him as a participant in all compensation, benefit
and insurance plans in which he was participating when the notice of dispute was given, until the
earlier to occur of : (i) the expiration of the remaining term of this Agreement as determined as
of the Date of Termination and (ii) final resolution of the dispute in accordance with this
Agreement. Amounts paid under this Section are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under this Agreement,
except in the event that Employer prevails in the dispute, in which case all amounts paid hereunder
shall be offset against any other amount due under this Agreement.

7. SOURCE OF PAYMENTS

     All payments provided in this Agreement shall be timely paid in cash or check from the general
funds of the Bank. The Company, however, guarantees payment and provision of all amounts and
benefits due hereunder to Executive and, if such amounts and benefits due from the

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Bank are not timely paid or provided by the Bank, such amounts and benefits shall be paid or
provided by the Company.

8. REQUIRED REGULATORY PROVISIONS

     (a) Notwithstanding anything herein contained to the contrary, any payments to Executive by
the Bank, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon
their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section
1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359.

     (b) Notwithstanding anything else in this Agreement, Executive’s employment shall not be
deemed to have been terminated unless and until the Executive has a Separation from Service within
the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). For
purposes of this Agreement, a “Separation from Service” shall have occurred if the Bank and
Executive reasonably anticipate that either no further services will be performed by the Executive
after the date of the termination (whether as an employee or as an independent contractor) or the
level of further services performed will not exceed 49% of the average level of bona fide services
in the thirty-six (36) months immediately preceding the termination. For all purposes hereunder,
the definition of Separation from Service shall be interpreted consistent with Treasury Regulation
Section 1.409A-1(h)(ii).

9. NO ATTACHMENT

     Except as required by law, no right to receive payments under this Agreement shall be subject
to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void, and
of no effect.

10. ENTIRE AGREEMENT; MODIFICATION AND WAIVER

     (a) This Agreement contains the entire understanding between the parties hereto and supersedes
any prior agreement between the Bank and Executive or the Company and Executive, except that this
Agreement shall not affect or operate to reduce any benefit or compensation inuring to Executive of
a kind elsewhere provided. No provision of this Agreement shall be interpreted to mean that
Executive is subject to receiving fewer benefits than those available to him without reference to
this Agreement. This Agreement is not a contract of employment between Executive and the Bank or
the Company.

     (b) This Agreement may not be modified or amended except by an instrument in writing signed by
the parties hereto.

     (c) No term or condition of this Agreement shall be deemed to have been waived, nor shall
there be any estoppel against the enforcement of any provision of this Agreement, except by written
instrument of the party charged with such waiver or estoppel. No such written waiver shall be
deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate
only as to the specific term or condition waived and shall not constitute a waiver of such term or
condition for the future or as to any act other than that specifically waived.

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11. SEVERABILITY

     If, for any reason, any provision of this Agreement, or any part of any provision, is held
invalid, such invalidity shall not affect any other provision of this Agreement or any part of such
provision not held so invalid, and each such other provision and part thereof shall to the full
extent consistent with law continue in full force and effect.

12. HEADINGS FOR REFERENCE ONLY

     The headings of sections and paragraphs herein are included solely for convenience of
reference and shall not control the meaning or interpretation of any of the provisions of this
Agreement.

13. GOVERNING LAW

     This Agreement shall be governed by the laws of the State of Delaware but only to the extent
not superseded by federal law.

14. ARBITRATION

     Any dispute or controversy arising under or in connection with this Agreement shall be settled
exclusively by binding arbitration, as an alternative to civil litigation and without any trial by
jury to resolve such claims, conducted by a single arbitrator who is certified by the American
Arbitration Association and is mutually acceptable to the Bank and Executive sitting in a location
selected by the Bank within fifty (50) miles from the main office of the Bank, in accordance with
the rules of the American Arbitration Association’s National Rules for the Resolution of Employment
Disputes then in effect. Judgment may be entered on the arbitrator’s award in any court having
jurisdiction.

15. PAYMENT OF LEGAL FEES

     To the extent that such payment(s) may be made without triggering penalty under Code Section
409A, all reasonable legal fees paid or incurred by Executive pursuant to any dispute or question
of interpretation relating to this Agreement shall be paid or reimbursed by the Bank or Company,
provided (i) that the dispute or interpretation has been settled by Executive and the Bank and
Company or resolved in Executive’s favor, (ii) Executive has provided prior written notice to the
Bank of his intention to retain counsel and the name of such counsel, and (iii) such reimbursement
shall occur no later than sixty (60) days after the end of the year in which the dispute is settled
or resolved in Executive’s favor.

16. OBLIGATIONS OF BANK

     The termination of Executive’s employment, other than following a Change in Control, shall not
result in any obligation of the Bank or the Company under this Agreement.

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17. SUCCESSORS AND ASSIGNS

     The Bank and the Company shall require any successor or assignee, whether direct or indirect,
by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets
of the Bank and/or the Company, expressly and unconditionally to assume and agree to perform the
Bank’s or Company’s obligations under this Agreement, in the same manner and to the same extent
that the Bank or Company would be required to perform if no such succession or assignment had taken
place.

[Signature Page Follows]

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SIGNATURES

     IN WITNESS WHEREOF, the Company and the Bank have each caused this Agreement to be executed by
its duly authorized officer, and Executive has signed this Agreement, on the dates set forth below.

	 	 	 	 	 	 	 
	 	 	LEGACY BANKS	 	 
	 
	 	 	 	 	 	 
	 

Date

	 	 By:	 	 	 	 
	 

	 	 	 	 

J. Williar Dunlaevy, Chairman
	 	 
	 

	 	 	 	For the Entire Board of Directors	 	 
	 
	 	 	 	 	 	 
	 	 	LEGACY BANCORP, INC.	 	 
	 
	 	 	 	 	 	 
	 

Date

	 	 By:	 	 	 	 
	 

	 	 	 	 

J. Williar Dunlaevy, Chairman
	 	 
	 

	 	 	 	For the Entire Board of Directors	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

Date

	 	 	 	 

[       ]
	 	 

8EX-10.1

Exhibit 10.1

2008-000065E

PHYSICAL HEALTH INSURANCE

CONTRACT

AGREEMENT BETWEEN

Puerto Rico Health Insurance Administration (PRHIA) a public instrumentality of the Commonwealth of
Puerto Rico organized pursuant to Act 72, of September 7, 1993, as amended, hereinafter referred to
as the “ADMINISTRATION”, and represented by its Executive Director, Minerva Rivera González

And

TRIPLE S, INC., a private corporation duly organized and authorized to do business under the laws
of the Commonwealth of Puerto Rico, with Employer Social Security Number ###-##-####, hereinafter
referred to as “INSURER”, and represented by its Chief Executive Officer, Ms. Socorro Rivas;

Contractor Name

For the Provision of Health Insurance coverage to eligible population under the Government
Health Insurance Plan 

 

 

WITNESSETH

In consideration of the mutual covenants and agreements hereinafter set forth, the parties, their
personal representative and successors, agree as follows:

WHEREAS: The parties entered into contract number 08-065 to provide health insurance coverage for
the North and Southwest Area medically indigent population; enrolled in the Government Health
Insurance Plan (GHIP) for the period November 2006 to June 2008. While negotiating premium rates
the parties agree to extend that contract until August 30, 2008; contract #08-065C.

WHEREAS: The Administration and TRIPLE S, INC, conclude the negotiation process for the period of
July 1, 2008 thru June 30, 2009 and the Board of Directors approved the premiums rates finally
agreed.

WHEREAS: The parties sign a contract that was not approved by CMS, thus it was necessary to amend
the contract with the language suggested by CMS.

HENCEFORTH: The appearing Parties agree to amend and extend the contract #08-065 as follows:

Article I: To amend in Article I “Definitions”; the definitions of Action and Grievance and
incorporate the definitions of EQR, EQRO, External Quality Review, External Quality Review
Organizations and Quality, to read as follows.

ACTION: Shall mean...

(1).....

(2).....

(5) The failure of the MCO to act within the timeframes of 42CFR 438.408(b).

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EQR: Stands for external quality review.

EQRO: Stands for external quality review organization.

EXTERNAL QUALITY REVIEW: Means the analysis and evaluation by an EQRO, of
aggregated information on quality, timeliness, and access to the health care
services that an MCO or their contractors furnish to Medicaid recipients.

EXTERNAL QUALITY REVIEW ORGANIZATION: Means an organization that meets
the competence and independence requirements set forth in §438.354, and performs
external quality review, other EQR-related activities as set forth in §438.358,
or both.

GRIEVANCE: Formal complaint, either orally or in writing made on the
basis of something that somebody feels is unfair. Shall mean the expression of
dissatisfaction about any matter, other than an action. Possible subject for
grievances include, but are not limited to, the quality of care or services
provided, and aspects of interpersonal relationship such as rudeness of a
provider or employee, or failure to respect enrollee’s rights.

QUALITY: As it pertains to external quality review, means the degree to
which an MCO and PHIP 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.

Article II: To amend Article IX “Contracts with HCO’s and All Participating Providers”; and
incorporate in provision six (6) new paragraphs identified by the letters (n) and (o) and a new
provision 18 to read as follows:

	 	m.	 	...
	 
	 	n.	 	The financial responsibility for services included in the Basic
Coverage, as established in Appendix A of this contract (Government Health
Insurance Plan Coverage), will be the sole obligation of the IPA/ HCO,
except when the IPA/ HCO have negotiated other risks with the INSURER and
other financial agreements are in place. In this case, the INSURER shall
notify the ADMINISTRATION

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	 	 	 	of this arrangement. These financial responsibilities include all
laboratories tests for the diagnostic of health conditions under the
Special Coverage. The INSURER is responsible to incorporate in contract
in contracts with HCO’s/IPA’s or any other providers, all the provisions,
as applicable, under Medicaid Managed Care Rules or any other federal
regulations, in order to receive payments from federal funds.
	 
	 	o.	 	The financial responsibility for services included in the Special
Coverage, established under Appendix A of this contract (Government Health
Insurance Plan Coverage), will be the sole obligation of the INSURER, except
in the cases that IPA/HCO have negotiated other risks with the INSURER and
other financial agreements are in place. In this case, the INSURER shall
notify the ADMINISTRATION of this arrangement. These financial
responsibilities include all laboratories test for beneficiaries included
and registered in the Special Coverage. The INSURER is responsible to
incorporate in contracts with HCO’s/IPA’s or any other providers, all the
provisions, as applicable, under Medicaid Manage Care Rules or any other
federal regulations, in order to receive payments from federal funds.

	17.	 	.....
	 
	18.	 	CONTRACTS WITH FQHC

	 	A.	 	Standards for Contractor FQHC Rates. The Insurer shall not pay FQHCs
less than the level and amount of payment that the contractor would make for a
similar set of services if the services were furnished by a non-FQHC. The Insurer
may pay the FQHCs on a capitated basis. The Insurer shall make payments for primary
care equal to, or greater than, the average amounts paid to other primary care
providers. Services provided by Specialist Physician may be included if mutually
agreeable between the contractor and FQHC.
	 
	 	B.	 	Department of Health Reimbursement to FQHCs. Under Title XIX, an FQHC
shall be paid under a Prospective Payment System (PPS) by Department of Health. At
the end each calendar quarter, the Insurer shall provide to the contracted FQHCs the
statistical data available and necessary for the FQHC to prepare the cost reports
that will enable Department of Health to determine PPS reimbursement and compare
that to what was actually paid by the Insurer to the FQHC. Department of Health
will reimburse FQHC the

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	 	 	 	difference between the PPS rate per encounter and payments to the FQHC made by the
Insurer if the payments by the Insurer to the FQHC are less than the PPS rate. In
the event of an overpayment, the FQHC shall reimburse Department of Health for
payments received from the Insurer that are in excess of the PPS rate. FQHC
providers must meet the Insurer’s credentialing and program requirements.
	 
	 	C.	 	Insurer Participation in Reconciliation Process. The Insurer shall
participate in the reconciliation processes if there is a dispute between what the
insurer reported and what the FQHC reported as valid encounters or payments.

Article III: To amend in Article XII “Grievance Procedure” provisions seven (7), eight (8) and
seventeen (17) to read as follows:

	 	6.	 	...
	 
	 	7.	 	INSURER represents that it has established an
effective procedure that assures the compliance with the basic
minimum requirements established under the Medicaid Regulations for
the handling and resolution of all grievances made by the
beneficiaries and the participating providers. INSURER grievance
forms shall be approved by the ADMINISTRATION. The approved
grievance form shall be made available to all beneficiaries, HCO’s,
HCO’s network of participating providers and the INSURER’s
participating providers. The parties shall make whatever adjustments
are necessary to reconcile their grievance procedure with provisions
of Law No. 94 of August 25, 2000 (known as the “Patient Bill of
Rights and Responsibilities”) and those contained in Law No. 11 of
April 11, 2001 (known as the “Organic Law of the Office of the
Patient Advocate”), to the extent that such provisions do not enter
in direct conflict with, or may be deemed an obstacle to, federal
regulations.
	 
	 	8.	 	INSURER shall be responsible for documenting in
writing all aspects and details of said grievance procedures.
	 
	 	9.	 	...

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	 	17.	 	The Grievance Procedures shall comply with the
minimum standards and timeframes for prompt resolution of
grievances and appeals set forth in this Contract and any applicable
laws and regulations of the Commonwealth, such as Law No. 94 August
25, 2000(known as the “Patient Bill Rights and Responsibilities”),
and Law No. 408, (the Mental Health Law) of August 25, 2000, to the
extent that provisions of said laws do not enter in direct conflict
with, or may be deemed an obstacle to, federal regulations.

Article IV: To amend in Article XV “Quality of Healthcare and Performance” “Section C Statistical
Reports Program”, to read as follows:

.....

	C.	 	Statistical Reports Program (SRP)

	 	1.	 	The INSURER agrees to provide to the ADMINISTRATION, on a regular basis as
needed, any and all data, information, reports, and documentation that will permit
Governmental Agencies, to compile statistical data to substantiate the need for, and
the appropriate use of federal funds for federally and state financed health programs.
	 
	 	2.	 	As an additional measure to guarantee quality and adequacy of the medical
health services, the INSURER will conduct periodical statistics analysis of the
medical services rendered to the beneficiaries and will compare them with the primary
physician practice profile of their regular health insurance plan. Quarterly reports
as to the analysis and comparison statistics will be submitted to the ADMINISTRATION,
upon request.
	 
	 	3.	 	The INSURER upon the ADMINISTRATION request, must provide a utilization
control analysis based on:

	 	a.	 	patient/family
	 
	 	b.	 	region, area/region town, (zip code)
	 
	 	c.	 	provider (provider’s identification number or social security
account numbers)
	 
	 	d.	 	diagnosis
	 
	 	e.	 	procedure or service

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	 	f.	 	date of service

	 	4.	 	The ADMINISTRATION will require the INSURER the following quarterly
statistical reports that include, but are not limited:

	 	a.	 	Claims Cost Distribution by Line of Service (SRP-001)
	 
	 	b.	 	PMPM Claim Cost Summary Budgeted & Actual (SRP-002)
	 
	 	c.	 	Premium Trend (SRP-003)
	 
	 	d.	 	Aggregate Stop Loss/Reinsurance (SRP-004)
	 
	 	e.	 	Early Periodic Screening Diagnostics Tests (EPSDT) (SRP-005)
	 
	 	f.	 	Providers Network Credentialing (SRP-006)
	 
	 	g.	 	Medical Record Review (SRP-007)
	 
	 	h.	 	Hospital Concurrent Review (SRP-008)
	 
	 	i.	 	Retrospective Medical Record Review (SRP-009)
	 
	 	j.	 	Fraud and Abuse (SRP-010)
	 
	 	k.	 	Pre-authorizations (SRP-011)
	 
	 	l.	 	Coordination of Benefits (SRP-012)
	 
	 	m.	 	Capitation Settlement Quarterly Report (SRP-013)
	 
	 	n.	 	Grievances and Appeals (SRP-014)
	 
	 	o.	 	 Financial Operation Quarterly Summary (SRP-015)
	 
	 	p.	 	Education Report (SRP-016)
	 
	 	q.	 	Preventive Services Report (SRP-16a-h)
	 
	 	r.	 	Insured Population by IPA and Primary Care Physician
(SRP-017)
	 
	 	s.	 	Eligible and Insured Population by Group of Age and Gender
(SRP-017a)

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	 	t.	 	Providers in and out of network (SRP-018)

	 	5.	 	The INSURER will be responsible to provide to the ADMINISTRATION all
quarterly reports detailing the services furnished under the Preventive Program.
	 
	 	6.	 	The INSURER will deliver all the quarterly reports by the twenty-fifth day
(25) of the next month following the reporting quarter. The reports will be delivered
on an electronic media (i.e., CD Rom disc) accompanied with a letter of submission to
the ADMINISTRATION Planning and Clinical Affairs Office Director. Concurrently, such
letter must be copy to the ADMNISTRATION Compliance Office Director.
	 
	 	7.	 	The INSURER must provide and deliver the last quarterly reports for the
corresponding fiscal period by the 25th day of July and the 25th
day of January, following the next fiscal period. All quarterly reports will be based
on utilization and completion lag of twelve (12) months of incurred services and
eighteen (18) months of paid services.
	 
	 	8.	 	The ADMINISTRATION and the INSURER will agree on the required format in order
to comply with the reporting requirements in this Section, and, for which will be
accomplish through electronic or magnetic media.

Article V: To amend Article XVIII “Information Systems and Reporting Requirements", to read as
follows:

ARTICLE XVIII

INFORMATION SYSTEMS REQUIREMENTS

	1.	 	The INSURER shall be responsible for the data collection of all services provided including,
but not limited, to encounter and real cost of each one, claims services and any other
pertinent data from all HCO’s, participating providers or any other entity which provides
services to beneficiaries under the program, said data to be classified by provider, by
beneficiary, by diagnosis, by procedure and by the date the service is rendered. INSURER
shall also provide information on utilization grievances and appeals, and disenrollment for
other than loss of Medicaid eligibility. The data collected

8

 

	 	 	must then be forwarded to the ADMINISTRATION on a monthly basis in an electronic or on
machine readable media format. The data fields and specific data elements required to be
transmitted are contained in the document titled, “Carrier to ASES Data Submissions, New File
Layouts”. The ADMINISTRATION reserves the right to modify, expand or delete the requirements
contained therein or issue new requirements, subject to consultation with the INSURER and
cost negotiation, if necessary.
	 
	 	 	Accordingly the INSURER must submit to the ADMINISTRATION a detailed Systems Requirements
Inventory Report which details the following:

	 	a)	 	Plan’s compliance with each information system requirement;
	 
	 	b)	 	Action plan of INSURER’s response to the requirements;
	 
	 	c)	 	Actual date that each system requirement will be completely operational, not
to exceed the effective date of coverage under this contract.

	2.	 	The INSURER agrees to submit to the ADMINISTRATION the System Inventory Report for final
approval not later than the date of the signing of this contract.
	 
	3.	 	All Management Information Systems Requirements shall be fully operational as of the first
day of coverage under this Contract and shall remain as such for the duration of the Contract.
If INSURER is not in compliance with this requirement will be subject to the cancellation of
this contract.
	 
	4.	 	The INSURER agrees that all required data and information needs to be collected and reported
through electronic or machine readable media commencing with the effective date of coverage
of this contract to the ADMINISTRATION, and upon request to CMS. The MCO ensures that data
received from providers is screened for completeness, logic, and consistency.

	 	4.1	 	Data that must be certified by INSURER. The data that must be certified include and is
not limited to, documents specified by the ADMINISTRATION, enrollment information,
encounter data and other information required in this contract and RFP. Any payment by the
ADMINISTRATION that is based on data submitted by the INSURER, must comply with the
certification as provided on 42 CFR 438.606. The certification must attest, based on the
best knowledge, information and belief as to the accuracy, completeness and truthfulness of
the document and data. The certification must be submitted concurrently with the certified
data and documents.

9

 

	 	4.2	 	The data and documents submitted by INSURER to the ADMNISTRATION must be certified by
one of the following:

	 	•	 	INSURER’S Chief Executive Officer
	 
	 	•	 	INSURER’S Chief Financial Officer
	 
	 	•	 	An individual who has delegated authority to sign for, and who reports directly to
INSURER’S Chief executive Officer or Chief Financial Officer.

	5.	 	The information system of all HCO’s shall be compatible with the systems in use by the
INSURER.
	 
	6.	 	The INSURER shall supply to the HCO’s and, upon request, to all participating providers with
eligibility information on a daily basis. Said information shall be secured through on-line
access with the INSURER.

Exchange of data, reports and other information related to the ADMINISTRATION’s Information Systems
Office

The ADMINISTRATION will make available a secure FTP server, accessible via the Internet, for
receipt of electronic files and reports from the INSURER and to transmit files and reports
deliverable by the ADMINISTRATION to the INSURER. When this system is not operational, the
ADMINISTRATION and the INSURER will mutually agree on alternate methods for the exchange of
files.

INSURER agrees to submit to the ADMINISTRATION in such form and detail as indicated in the
“Carrier to ASES Data Submissions, New File Layouts” document and any other formats the
ADMINISTRATION require, the following information in the timeframes specified herein:

	 	a)	 	On a Daily basis

	 	•	 	Enrollment data

	 	b)	 	Within five (5) calendar days of the end of each month

	 	•	 	Data pertaining to health insurance services provided to beneficiaries in the
form of files for Services, Claims, Providers, IPAs/HCOs, Capitation Payments and
Administrative Expenses. Such files will be submitted according to the latest
version of the “Carrier to ASES Data Submissions, New File Layouts” document in
effect at the time of the submission.

10

 

	 	c)	 	As required by the ADMINISTRATION Information Systems Office:

	 	•	 	Any other reports or data that it may require after consultation and
negotiation with INSURER.

The ADMINISTRATION will deliver data to the INSURER, according to the layouts defined by the
ADMINISTARTION for the following information in the timeframes specified herein:

	 	d)	 	On a Daily basis

	 	•	 	Enrollment rejects and errors

	 	e)	 	On Daily and Monthly Basis

	 	•	 	Eligibility data (including the incorporation of enrollment information).

	 	f)	 	On a Monthly basis:

	 	•	 	Payment of Premiums/Administrative Fees
	 
	 	•	 	Error Return files and Processing Summary reports for monthly files submitted
by INSURER under b) above.

	 	 	The INSURER will update its system with eligibility data delivered to the INSURER within one
(1) business day of receipt.
	 
	 	 	Files which record the enrollment or changes in enrollment of a member in the INSURER must be
delivered to the ADMINISTRATION by the first business day following the enrollment of the
member or change of enrollment status of the member.
	 
	 	 	Claims and Encounters: All files which report Claims, Services, Providers, IPAs/HCOs,
Capitation and Administrative expenses according to the “Carrier to ASES Data Submissions,
New File Layouts” document must be submitted to the ADMINISTRATION by the fifth
(5th) day of the month following the month being reported, or as required by the
ADMINISTRATION. Files delivered by the INSURER will be rejected if the ADMINSTRATION can not
process them for validation. Files will be validated and, to be accepted, must not exceed 1%
(one percent) of records in error. Files which are rejected for failing the error threshold
must be corrected and re-submitted in their entirety. Files for any month’s deliverables
will not be accepted by the ADMINISTRATION if a rejected file

11

 

	 	 	from a prior month remains outstanding. On accepted files, the ADMINISTRATION will report
records with errors to the INSURER and such records must be corrected and such corrected
records must be included in the next month’s file.
	 
	 	 	Failure to deliver files on a timely basis, the rejection of delivered files by the
ADMINISTRATION as described above, failure by the INSURER to correct and resubmit rejected
files or failure by the INSURER to correct records reported in error, will constitute
failures to comply with this Agreement and will be sufficient cause for the imposition
against the INSURER of the penalties provided for in Article XXXVIII.
	 
	7.	 	The INSURER agrees to report to the ADMINISTRATION on a daily basis all information
pertaining to enrollment, disenrollment, and other subscriber or beneficiary transactions as
required by the ADMINISTRATION. All records shall be transmitted: 1) through approved
ADMINISTRATION systems contractor; or 2) over data transmission lines directly to the
ADMINISTRATION; or 3) on machine readable media. All machine readable media or electronic
transmissions shall be consistent with the relevant ADMINISTRATION’s record layouts and
specifications.
	 
	8.	 	The INSURER will submit to the ADMINISTRATION on a quarterly basis data generated
electronically that allows the ADMINISTRATION:

	 	a.	 	Evaluation of the effectiveness of the delivery of services by providers and
the adequacy of these services.
	 
	 	b.	 	Monitoring and evaluation of the efficiency and propriety of the services
that are being received by the beneficiaries and their dependents.
	 
	 	c.	 	Comparison of experience with that of other providers.
	 
	 	d.	 	Comparison of the utilization of health care and the cost tendencies within
the community and the group that renders service.
	 
	 	e.	 	Demonstration of how the quality of care is being improved for the insured
and their dependents.
	 
	 	f.	 	Comparison of the administrative measures taken by the INSURER with industry
benchmarks to be able to evaluate the progress towards constant improvement.
	 
	 	g.	 	Compliance with the information requirements and reports of the Federal
Programs such as: Title II of the Health Insurance Portability and Accountability
Act;Title IV-B Part 1 and 2, Title IV-E,

12

 

	 	 	 	Title V, Title XIX, and Title XXI of the Social Security Act; the applicable state
laws as ( the Child Abuse Act, “Ley de Maltrato de Menores” Public Law 75 of May
28,1980; the Protection and Assistance to Victims and Witness Act, “Ley de
Protección y Asistencia a Víctimas de Delitos y Testigos”,Public Law 77 of July
9,1986), and any other information requirements which in the future are mandated by
federal and state programs.
	 
	 	h.	 	Evaluation of each service provided with separate identification by
beneficiary, by provider, by diagnosis, by diagnostic code, by procedure code and by
date and place of service. The provider must be identified by his/her provider’s
identification number or his/her social security account number.

	10.	 	The INSURER will provide the ADMINISTRATION with a uniform system for data collection.
	 
	11.	 	The INSURER’S Information Systems must provide a continuous flow of information to measure
the quality of services rendered to the beneficiaries and their dependents. The purpose of
these systems must be to help the ADMINISTRATION and the INSURER in the process of achieving
continuous improvement in the quality of services rendered to beneficiaries and their
dependents within a cost effective system.
	 
	12.	 	The INSURER will prepare the necessary reports requested herein for the administration of the
health insurance contract. Daily reports are due by the end of the following business day.
Weekly reports are due on the first business day of the following week. Monthly reports are
due twenty-five (25) days after the end of each month. Quarterly reports are due twenty five
(25) days after the end of each quarter.
	 
	13.	 	The INSURER must inform the Administration on a monthly basis all cancellation and
disenrollment of providers.
	 
	14.	 	The INSURER will coordinate the enrollment of beneficiaries.
	 
	15.	 	The INSURER will assure adequate and efficient functioning for the term of the contract that
includes an insurance against economic loss due to system failure or data loss.
	 
	16.	 	In order to insure that all enrollee’s encounters are registered and recorded, the INSURER
will conduct audits using statistical samples and unannounced personal audits of the HCO’s and
participating provider’s facilities to assure that the medical records reconcile with the
encounter reported, and corrective measures will be taken in case of any violation of the
INSURER’s regulations regarding the registry and report of encounters.

13

 

	 	 	The INSURER will provide quarterly reports to the ADMINISTRATION’s Compliance Office with a
copy to the Information Systems Office, covering all the findings and corrective measures
taken regarding any violation of said regulations, if any.
	 
	17.	 	The INSURER, as a minimum must guarantee the following:

	 	a.	 	The security and integrity of the information and communication systems
through:

	 	1.	 	Regular Backups on a daily basis
	 
	 	2.	 	Controlled Access to the physical plant
	 
	 	3.	 	Control logical access to information systems
	 
	 	4.	 	Verification of the accuracy of the data and information

	 	b.	 	The continuity of services through:

	 	1.	 	Regular maintenance of the systems, programs and equipment
	 
	 	2.	 	A staff of duly trained personnel
	 
	 	3.	 	An established and proven system of Disaster Recovery
	 
	 	4.	 	Cost Effective systems.

	 	c.	 	Identification of the beneficiary via the use of plastic cards.
	 
	 	d.	 	Automated system of communication with statistics of the management of calls
(Occurrence of busy lines, etc.)
	 
	 	e.	 	A comprehensive health insurance claim processing system to handle receiving,
processing and payment of claims and encounters.
	 
	 	f.	 	Financial and Actuarial reports
	 
	 	g.	 	System of Control for claims payment that includes payment history.
	 
	 	h.	 	Computerized pharmacy system that permits its integration to the payment
procedures to the providers.
	 
	 	i.	 	Outcome Analysis

14

 

	 	j.	 	Electronic creation of data files related to mortality, morbidity, and vital
statistics.
	 
	 	k.	 	Integration to central systems

	 	1.	 	Procedures and communications protocol compatibility;
	 
	 	2.	 	Ability to transmit reports, and or files via electronic means.

	 	l.	 	Electronic Handling of:

	 	1.	 	The process of Admission to hospitals and ambulatory services
	 
	 	2.	 	Verification of eligibility and subscription to the plan.
	 
	 	3.	 	Verification of benefits
	 
	 	5.	 	Verification of Financial information (Deductibles,
Co-payments, etc.)
	 
	 	6.	 	Verification of individual demographic data
	 
	 	7.	 	Coordination of Benefits.

	 	m.	 	Computerized applications for general accounting.
	 
	 	n.	 	As to HCO’s and all Participating Providers the information system shall
provide for:

	 	1.	 	Online access to service history for each beneficiary.
	 
	 	2.	 	Register of diagnosis and procedures for each service
rendered.
	 
	 	3.	 	Complete demography on line, including the aspect of coverage
and financial responsibility of the patient.
	 
	 	4.	 	Individual and family transactions.
	 
	 	5.	 	Annotations on line (General notes such as allergies,
reminders or other clinical aspects (free form)
	 
	 	6.	 	Analysis of activity by:

	 	a.	 	department

15

 

	 	b.	 	provider
	 
	 	c.	 	diagnosis
	 
	 	d.	 	procedures
	 
	 	e.	 	age
	 
	 	f.	 	sex
	 
	 	g.	 	origin
	 
	 	h.	 	others, as mutually agreed upon.

	 	7.	 	Diagnosis history by patient with multiple codes per service.
	 
	 	8.	 	AD Hoc Reports
	 
	 	9.	 	Referrals Control
	 
	 	10.	 	Electronic Billing
	 
	 	11.	 	Pharmacy system
	 
	 	12.	 	Dental system
	 
	 	13.	 	Ability to handle requirements of the Medicare programs such
as RBRVS (Relative Base Relative Value System)
	 
	 	14.	 	Ability to collect data as to the quarter in which the
pregnant female beneficiary commences her ob-gyn treatment. The format for
the collection of this data shall be approved by the ADMINISTRATION prior to
its implementation.

	 	 	Failure to comply with the requirements contained herein will be sufficient cause for the
imposition against the INSURER of the penalty provided for in this contract.
	 
	18.	 	The INSURER agrees to report all procedure and diagnostic information using the current
versions of Current Procedural Terminology, International Classification of Diseases, Clinical
Modification, Diagnostic Statistic Manual and American Dental Association’s Current Dental
Terminology, respectively. This does not prevent the adoption by INSURER of the ANSI X-12
electronic transactions for standards set forth in the HIPAA regulations; which shall be
implemented on or before October 2002, unless modified by DHHS.
	 
	19.	 	Non compliance with the Information Systems; requirements related to the electronic standards
transactions to be implemented within the schedule set forth by the HIPAA regulations, or with
other requirements contained herein,

16

 

	 	 	shall be subject to the provisions of this contract and Law 72 of September 7, 1993, which
provides the right of the ADMINISTRATION to enforce compliance through the Court of Appeals of
Puerto Rico, Part of San Juan.
	 
	20.	 	The INSURER shall provide the ADMINISTRATION the ability for the ADMINISTRATION’s authorized
personnel access to the INSURER’s on-line computer applications. Such access will allow the
ADMINISTRATION use of the same systems and access to the same information as used by the
INSURER and enable the inquiry on beneficiaries, providers, and statistics files related to
this contract. The preferred access method will be via a secure Internet connection and the
INSURER will supply the ADMINISTRATION’s designated personnel with the required user-ids,
passwords and instructions to be able to access the systems. In the event that secure
Internet access is not possible, the INSURER and the ADMINISTRATION will mutually agree on
alternate access methods.
	 
	21.	 	INSURER shall provide to each HCO’s, HCOs network of participating providers and INSURER’s
participating providers in the Health Area/Region, as well as to those outside of the
area/region who provide services to beneficiaries from within the area/region, the necessary
hardware and software to maintain on-line communication with the INSURER’s Information System
to document all encounters and services rendered to beneficiaries. Said hardware and software
will be provided at a reasonable cost for the implementation and servicing.
	 
	22.	 	The INSURER agrees to submit to the ADMINISTRATION reports as to the data and information
gathered through the use of the Health Plan Employer Data and Information Set (HEDIS) and the
work plan required by the ADMINISTRATION.
	 
	23.	 	INSURER TELEPHONE ACCESS REQUIREMENTS
	 
	 	 	INSURER must have adequately-staffed telephone lines available. Telephone personnel must
receive customer service telephone training. INSURER must ensure that telephone staffing is
adequate to fulfill the standards of promptness and quality listed below:

	 	1.	 	80% of all telephone calls must be answered within an average of 30 seconds;
	 
	 	2.	 	The lost (abandonment) rate must not exceed 5%;
	 
	 	3.	 	INSURER cannot impose maximum call duration limits but must allow calls to be
of sufficient length to ensure adequate information is provided to the Beneficiaries
or Provider.

17

 

	24.	 	The INSURER shall abide with the present Information Systems established in this agreement
and shall cooperate with the ADMINISTRATION in the development and implementation of any
future systems.

Article VI: To amend Article XXXVIII “Penalties and Sanctions Clauses”; to incorporate a new
provision numbered 5 to read as follows:

	 	5.	 	The ADMINISTRATION advices that during the course of this contract
will issue a normative letter that will address the economic penalties and
sanctions related to violations of dispositions of this contract in a
specific and detailed manner, including, but not limited to, levels of
penalties, frequency of violations as well as specifications between minor
and severe violations.

Article VII: To amend in Article XIX “Financial Requirements” to incorporate a new provision
numbered as nine (9) to read as follows:

	 	1.	 	.....
	 
	 	2.	 	.....
	 
	 	9.	 	The INSURER must disclose to the ADMINISTRATION the following information on
provider incentive plans in sufficient detail to determine whether their incentive
plan complies with the regulatory requirements set forth under the 42 CFR 438.6(h),
422.208 and 422.210

	 	a)	 	Whether services not furnished by the physician or physician group
are covered by the incentive plan. If physician incentive plan does not cover the
services furnished by the physician or physician group, disclosure of other
aspects of the plan need not be made.
	 
	 	b)	 	The type of incentive arrangement (i.e., withhold, bonus,
capitation).
	 
	 	c)	 	A determination on the percent of payment under the contract that is
based on the use of referral services. If the incentive plan involves a
withholding or bonus, the percent of the withholding of bonus. If the calculated
amount is 25% or less, disclosure of the

18

 

	 	 	 	remaining elements in this list is not required and there is no substantial risk.
	 
	 	d)	 	Proof that the physician or physician group has adequate stop-loss
protection, including the amount and type of stop-loss protection.
	 
	 	e)	 	The panel size and, if patients are pooled, the method used.
	 
	 	f)	 	In the case of those prepaid plans that are required to conduct
beneficiary surveys, the survey’s results.
	 
	 	g)	 	The entity must report percent of withhold or bonus, if applicable.
	 
	 	h)	 	If the physician/group is at substantial financial risk, the entity
must report proof the physician/group has adequate stop loss coverage, including
amount and type of stop-loss.

The information items (a) through (e) above, must be disclosed to the ADMINISTRATION: (1)
prior to approval of its initial contracts or agreements, upon the contract or agreements
anniversary or renewal effective date or upon request by the Administration or CMS. The
disclosure item (f) is due 3 months after the end of the contract year or upon request by
CMS.

If the contract with the INSURER is an initial Medicaid contract, but the INSURER has
operated previously in the commercial or Medicare markets, information on physician
incentive plans for the year preceding the initial contract period must be disclosed. If
the contract is an initial contract with INSURER, but the INSURER has not operated
previously in the commercial or Medicare markets, the INSURER should provide assurance that
the provider agreements that they sign will meet CMS and Commonwealth requirements (i.e.
there is no Physician Incentive Plan (PIP); there is a PIP but no Substantial Financial
Risk (SFR); there is a PIP and SFR so stop-loss and survey requirements will be met). For
contracts being renewed or extended, the INSURER must provide PIP disclosure information
for the prior contracting period’s contracts.

19

 

The INSURER must update PIP disclosures annually and must disclose to administration
whether PIP arrangements have changed from the previous year. Where arrangements have not
changed, a written assurance that there has not been a change is sufficient. This also
applies when INSURER analyzes the PIP arrangements in their direct and downstream contracts
to determine which disclosure items are due from their contractors. INSURER is expected to
maintain the current written assurances and the prior periods’ documentation so that the
materials are available during on-site reviews.

Article VIII: To amend provision 1 in Article XXIX “Effective Date and Term” to read as follows:

	 	1.	 	This contract shall be in effect from July 1, 2008 until June 30, 2009.
	 
	 	2.	 	.......
	 
	 	3.	 	.......

Article IX: To amend Article XXXIV Modification of Contract; to read as follows:

The ADMINISTRATION may modify any of the contract requirements, terms and conditions,
functions, part thereof or any other services to be performed by the INSURER; for any of
the reasons listed below:

	 	1.	 	Amendments to Law 72 of September 7, 1993
	 
	 	2.	 	Reductions in budget appropriations or unavailability of appropriated
or otherwise anticipated funds designated for premium payments.
	 
	 	3.	 	Changes in federal or local legislation that affect this contract

	 
	 	4.	 	Implementation of demonstrative or special projects
	 
	 	5.	 	Any other reason deemed by the ADMINISTRATION to be in the best
interest of the Government of Puerto Rico in carrying out the provisions of Law 72
of September 7, 1993.

The ADMINISTRATION shall provide the INSURER written notice that the modification will be
effective within sixty (60) days after date of notice and the opportunity to participate in
the planning process for adjustments.

Changes resulting from approval of new laws or program modification, that materially affect
the INSURER, will be evaluated by both parties to

20

 

determine if changes in the premium need to be agreed upon, subject to availability of
funds.

Notwithstanding the aforementioned, in the event funds are not available for premium
payments, the ADMINISTRATION reserves the right to terminate this contract, effective no
less than sixty (60) days after prior written notification.

Article X: To delete the last paragraph of Article XXXV.

Article XI: To amend Appendix C; to incorporate premium rates for this contract period.

All other terms and conditions of the contract number 08-065; and amendments 08-065A and 08-065B
remain unchanged. In witness whereof, the parties have duly execute this Amendment on this
2nd day of October, 2008 and affixes below their respective signature.

	 	 	 	 	 	 	 
	/s/ Minerva Rivera González

	 	 	 	10/2/08
	 	 
	 

	 	 	 	 	 	 
	MINERVA RIVERA GONZALEZ, Esq.

	 	 	 	          Date of Signature	 	 
	Acting Executive Director

	 	 	 	          (month/day/year)	 	 
	Puerto Rico Health Insurance Administration
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Socorro Rivas

	 	 	 	10/2/08	 	 
	 

	 	 	 	 	 	 
	SOCORRO RIVAS

	 	 	 	          Date of Signature	 	 
	Chief Executive Officer

	 	 	 	          (month/day/year)	 	 
	Triple S, Inc.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Luis A. Marini

	 	 	 	10/2/08	 	 
	 

	 	 	 	 	 	 
	LUIS A. MARINI, DMD

	 	 	 	          Date of Signature	 	 
	Chief Executive Officer

	 	 	 	          (month/day/year)	 	 

Cifra 5000-212

21

 

Appendix C

TRIPLE S / TRIPLE C, INC.

The monthly premiums for all beneficiaries, including all those who are sixty-five (65) years and
older who are Medicare beneficiaries Part A or Part A and B those who are sixty-five years and
older who are not Medicare recipients is establish below on a per member per month (pmpm) rate; for
the period of July 1st, 2008 to June 30, 2009.

Monthly Premiums Rates

SSS

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Fixed Administrative	 	 
	Region or Area	 	Premiums Rates	 	Cost	 	Profit
	North
	 	$	87.99	 	 	$	6.30	 	 	$	2.20	 
	Southwest
	 	$	87.71	 	 	$	6.30	 	 	$	2.19	 

The INSURER will be paid a fixed administrative cost fee and profit included in the total premium
rate paid by the Administration as detailed above. Further, the INSURER’s aggregated net earnings
(considering all INSURER’s Health Areas/Regions contracted with the ADMINISTRATION) in excess of
2.5 of the total aggregated earned premium in this contract year period will be shared with the
ADMINISTRATION. The ADMINISTRATION share apportionment of the earnings shall be 75% and the INSURER
share shall be 25%.

22

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