Document:

EXHIBIT 10.69

EXHIBIT 10.69

ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM ADMINISTRATION

DIVISION OF BUSINESS AND FINANCE

CONTRACT AMENDMENT

	

 1. AMENDMENT NUMBER:

     19

		
2.  CONTRACT NO.:

      YH04-0001-06

		
3.  EFFECTIVE DATE OF MODIFICATION:

      June 1, 2008

		
4.  PROGRAM:

      DHCM-ACUTE

	

 5. CONTRACTOR/PROVIDER NAME AND ADDRESS:

Phoenix Health Plan, LLC

 7878 North 16th Street, Suite 105

 Phoenix, Arizona  85020

	

 6. PURPOSE:  To amend Sections B Capitation Rates; Section D, Program Requirements.

	
7.

	
 

	
The contract referenced above is amended as follows:

	
 

	
 

	
 

	
 

		
A.

	
 

	
ADD to Section B, CAPITATION RATES after first subparagraph add the following language:

	
 

		
 

	
 

	
 

	
 

		
 

	
 

	
“The Contractor will be paid the attached Contractor specific capitation rates retroactively, per member per month, for the period of October 1, 2007 through December 31, 2007. Only the impacted rates are included on the
attachment. All other rates remain unchanged. The Administration requires that the Contractor then make one-time payments to each rural hospital as prescribed on the attached schedule, pursuant to ARS §36-2905.02, to increase inpatient reimbursement to these
small rural hospitals

	
 

		
 

	
 

	
 

	
 

		
 

	
 

	
The retroactive capitation rate payment will be paid in June 2008. The Contractor shall make the prescribed payments to the rural hospitals by June 30, 2008 and submit proof of payment to the rural hospitals to the Assistant
Director for the Finance Unit of the Division of Health Care Management by July 18, 2008.

	
 

		
 

	
 

	
 

	
 

		
 

	
 

	
The capitation rates for the period January 1, 2008, through September 30, 2008, are not impacted by this amendment.”

	
 

		
 

	
 

	
 

	
 

		
B.

	
 

	
AMENDSection D. ¶3, ENROLLMENT AND DISENROLLMENT, last two sentences of first subparagraph under the heading Health Plan Choice should now read as follows:

	
 

		
 

	
 

	
 

	
 

		
 

	
 

	
“Once assigned, AHCCCS send a choice notice to the member and gives them 30 days to choose a different contractor from the auto-assigned contractor. See Section D, Paragraph 6, Auto-Assignment Algorithm, for further
explanation.”

	
 

		
 

	
 

	
 

	
 

		
C.

	
 

	
AMENDSection D. ¶3, ENROLLMENT AND DISENROLLMENT, last sentence of fifth subparagraph under the heading Health Plan Choice should read as follows:

	
 

		
 

	
 

	
 

	
 

		
 

	
 

	
“The member may then change plans no later than 30 days from the date the choice notice is sent.”

	
 

		
 

	
 

	
 

	
 

		
D.

	
 

	
AMENDSection D. ¶6, AUTO-ASSIGNMENT ALGORITHM, first sentence of first subparagraph should now read as follows:

	
 

		
 

	
 

	
  

	
 

		
 

	
 

	
“Once auto-assigned, AHCCCS sends a choice notice to member and gives them 30 days to choose a different contractor from the auto-assigned contractor.”

-1-

NOTE:  Please sign, date and return one original to:

Philip Baldwin

AHCCCS Contracts and Purchasing

701 E Jefferson Street, MD 5700

Phoenix, AZ  85034

	

 8. EXCEPT AS PROVIDED FOR HEREIN, ALL TERMS AND CONDITIONS OF THE ORIGINAL CONTRACT NOT HERETOFORE CHANGED AND/OR AMENDED REMAIN UNCHANGED AND IN FULL EFFECT.

 IN WITNESS WHEREOF THE PARTIES HERETO SIGN THEIR NAMES IN AGREEMENT.

	

 9. NAME OF CONTRACTOR:

     Phoenix Health Plan, LLC

	
 

	

 10. ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM

	

 SIGNATURE OF AUTHORIZED INDIVIDUAL:

 /s/ Nancy Novick                                   

 NANCY NOVICK

 CHIEF EXECUTIVE OFFICER

	
       

	

 SIGNATURE:

 /s/ Michael Veit                                       

 MICHAEL VEIT

 CONTRACTS & PURCHASING ADMINISTRATOR

	

 DATE:  5/5/08

	
    

	
DATE:

-2-EXHIBIT 10.70

EXHIBIT 10.70

	

 [AHCCCS

 LOGO]

	

  Notice of Request for Proposal

   SOLICITATION NO.: YH09-0001

PAGE 

 1 

 OF 

 175 

	

 (AHCCCS)

   Arizona Health Care Cost

 Containment System

   701 East Jefferson, MD 5700

   Phoenix, Arizona 85034

SECTION A: SOLICITATION, OFFER AND AWARD

Solicitation Contact Person:

Michael
Veit                                                                         
Telephone: (602) 417-4762

Contracts and Purchasing Section                                    Telefax: (602)
417-5957

701 E. Jefferson,
MD5700                                                  
E-Mail: Michael.Veit@azahcccs.gov

Phoenix, Arizona
85034                                                      
Issue Date: February 1, 2008

LOCATION:        ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM ADMINISTRATION

(AHCCCS)

                                Contracts and Purchasing Section (First
Floor)

                                701 E. Jefferson, MD5700

                                Phoenix, Arizona 85034

DESCRIPTION:                                   
ACUTE CARE SERVICES

PROPOSAL DUE DATE:                    March 28, 2008 AT 3:00 P.M. MST

Offeror’s Conference:

A Prospective Offeror’s Conference and Technical Assistance Session has been scheduled on February 11, 2008 from 8:30 AM to 12:00 PM, and a Information Technology (IT) PMMIS Technical Interface Meeting from 1:00 PM to 5:00 PM. in the Gold Room, at AHCCCS, 701
E. Jefferson, Phoenix, AZ 85034.

Persons with a disability may request a reasonable accommodation, such as a sign language interpreter, by contacting the person named above. Requests should be made as early as possible to allow time to arrange the
accommodation.

QUESTIONS CONCERNING THIS SOLICITATION SHALL BE SUBMITTED IN THE FORMAT DESCRIBED IN SECTION I, INSTRUCTIONS TO OFFERORS, TO THE SOLICITATION CONTACT PERSON NAMED ABOVE, IN WRITING VIA E-MAIL ONLY BY 5:00 PM ON FEBRUARY 15,
2008.

Competitive sealed proposals will be received at the above specified location, until the time and date cited. Proposals received by the correct time and date will be opened and the name of each offeror will be publicly
read.

Proposals must be in the actual possession of AHCCCS on or prior to the time and date and at the location indicated above. Late proposals shall not be considered.

Proposals must be submitted in a sealed envelope or package with the Solicitation Number and the offeror’s name and address clearly indicated on the envelope or package. All proposals must be typewritten. Additional
instructions for preparing a proposal are included in this solicitation document.

OFFERORS ARE STRONGLY ENCOURAGED TO CAREFULLY READ THE ENTIRE SOLICITATION.

OFFER

The undersigned Offeror hereby agrees to provide all services in accordance with the terms and requirements stated herein, including all exhibits, amendments, and final proposal revisions (if any). Signature also acknowledges
receipt of all pages indicated in the Table of Contents.

Arizona Transaction (Sales) Privilege Tax License No.:                N/A

Federal Employer Identification
No.:                                               
62-1831567

E-Mail Address:
Fax:                                                                          
nnovick@abrazohealth.com

VHS Phoenix Health Plan, LLC

7878 North 16th Street, Suite 105

Phoenix, AZ  85020

For clarification of this offer,
contact:                                             
Nancy Novick

                                                                                                               
Phone: 602-824-3810

                                                                                                               
Fax: 602-824-3857

                                                                                                               
/s/ Nancy
Novick                                                

                                                                                                               
Signature of Person Authorized to Sign Offer

                                                                                                               
Nancy Novick, CEO

CERTIFICATION

By signature in the Offer section above, the bidder certifies:

1.    The submission of the offer did not involve collusion or other anti-competitive practices.

2.    The bidder shall not discriminate against any employee or applicant for employment in violation of Federal Executive

       Order 11246, State Executive Order 99-4 or A.R.S. §§ 41-1461 through 1465.

3.    The bidder has not given, offered to give, nor intends to give at any time hereafter any economic opportunity, future

       employment, gift, loan, gratuity, special discount, trip, favor, or service to a public servant in connection with the

        submitted offer. Failure to provide a valid signature affirming the stipulations required by this clause shall result in

        rejection of the offer. Signing the offer with a false statement shall void the offer, any resulting contract and may be

        subject to legal remedies provided by law.

4.    The bidder certifies that the above referenced organization ___ is/ X  is not a small business with less than 100

       employees or has gross revenues of $4 million or less.

ACCEPTANCE OF OFFER (to be completed by AHCCCS)

Your offer, including all exhibits, amendments and final proposal revisions (if any), contained herein, is accepted.

The Contractor is now bound to provide all services listed by the attached contract and based upon the solicitation, including all terms, conditions, specifications, amendments, etc., and the Contractor’s Offer as
accepted by AHCCCS.

This contract shall henceforth be referred to as Contract No.YH09 - 0001

Awarded this 1st day of May 2008

/s/ Michael
Veit                                                   

 Michael Veit, as AHCCCS Contracting Officer and not personally

TABLE OF CONTENTS

	
SECTION B: CAPITATION RATES...........................................................................................................................

 SECTION C: DEFINITIONS.........................................................................................................................................

 SECTION D: PROGRAM REQUIREMENTS.............................................................................................................

 

INTRODUCTION...........................................................................................................................................................

         1.  TERM OF CONTRACT AND OPTION TO RENEW..................................................................................

         2.  ELIGIBILITY CATEGORIES............................................................................................................................

         3.  ENROLLMENT AND DISENROLLMENT....................................................................................................

         4.  ANNUAL ENROLLMENT CHOICE..............................................................................................................

         5.  ENROLLMENT AFTER CONTRACT AWARD..........................................................................................

         6.  AUTO-ASSIGNMENT ALGORITHM...........................................................................................................

         7.  AHCCCS MEMBER IDENTIFICATION CARDS........................................................................................

         8.  MAINSTREAMING OF AHCCCS MEMBERS............................................................................................

         9.  TRANSITION OF MEMBERS........................................................................................................................

         10. SCOPE OF SERVICES.....................................................................................................................................

         11. SPECIAL HEALTH CARE NEEDS................................................................................................................

         12. BEHAVIORAL HEALTH SERVICES............................................................................................................

         13. AHCCCS GUIDELINES, POLICIES AND MANUALS..............................................................................

         14. MEDICAID SCHOOL BASED CLAIMING PROGRAM (MSBC)............................................................

         15. PEDIATRIC IMMUNIZATIONS AND THE VACCINES FOR CHILDREN  PROGRAM.....................

         16. STAFF REQUIREMENTS AND SUPPORT SERVICES.............................................................................

         17. WRITTEN POLICIES, PROCEDURES AND JOB DESCRIPTIONS.........................................................

         18. MEMBER INFORMATION...........................................................................................................................

         19. SURVEYS..........................................................................................................................................................

         20. CULTURAL COMPETENCY.........................................................................................................................

         21. MEDICAL RECORDS.....................................................................................................................................

         22. ADVANCE DIRECTIVES...............................................................................................................................

         23. QUALITY MANAGEMENT (QM)...............................................................................................................

         24. MEDICAL MANAGEMENT (MM)..............................................................................................................

         25. ADMINISTRATIVE PERFORMANCE STANDARDS..............................................................................

         26. GRIEVANCE SYSTEM....................................................................................................................................

         27. NETWORK DEVELOPMENT........................................................................................................................

         28. PROVIDER AFFILIATION TRANSMISSION............................................................................................

         29. NETWORK MANAGEMENT.......................................................................................................................

         30. PRIMARY CARE PROVIDER  STANDARDS............................................................................................

         31. MATERNITY CARE PROVIDER STANDARDS........................................................................................

         32. REFERRAL MANAGEMENT PROCEDURES AND STANDARDS.......................................................

         33. APPOINTMENT STANDARDS...................................................................................................................

         34. FEDERALLY QUALIFIED HEALTH CENTERS AND RURAL HEALTH CLINICS.............................

         34. FEDERALLY QUALIFIED HEALTH CENTERS AND RURAL HEALTH CLINICS.............................

         35. PROVIDER MANUAL....................................................................................................................................

         36. PROVIDER REGISTRATION.........................................................................................................................

         37. SUBCONTRACTS...........................................................................................................................................

         38. CLAIMS PAYMENT/HEALTH INFORMATION SYSTEM ....................................................................

         39. SPECIALTY CONTRACTS............................................................................................................................

         40. HOSPITAL SUBCONTRACTING AND REIMBURSEMENT..................................................................

         41. RESPONSIBILITY FOR NURSING FACILITY REIMBURSEMENT........................................................

         42. PHYSICIAN INCENTIVES/PAY FOR PERFORMANCE ..........................................................................

         43. MANAGEMENT SERVICES AGREEMENT AND COST ALLOCATION PLAN.................................

         44. RESERVED........................................................................................................................................................

         45. RESERVED........................................................................................................................................................

         46. PERFORMANCE BOND OR BOND SUBSTITUTE...................................................................................

         47. AMOUNT OF PERFORMANCE BOND......................................................................................................

         48. ACCUMULATED FUND DEFICIT ..............................................................................................................

         49. ADVANCES, DISTRIBUTIONS, LOANS AND INVESTMENTS............................................................

         50. FINANCIAL VIABILITY STANDARDS ....................................................................................................

         51. SEPARATE INCORPORATION....................................................................................................................

         52. MERGER, REORGANIZATION AND CHANGE OF OWNERSHIP .......................................................

         53. COMPENSATION...........................................................................................................................................

         54. PAYMENTS TO CONTRACTORS...............................................................................................................

         55. CAPITATION ADJUSTMENTS ..................................................................................................................

         56. RESERVED........................................................................................................................................................

         57. REINSURANCE...............................................................................................................................................

         58. COORDINATION OF BENEFITS..................................................................................................................

         59. COPAYMENTS ...............................................................................................................................................

         60. MEDICARE SERVICES AND COST SHARING ........................................................................................

         61. MARKETING ..................................................................................................................................................

         62. CORPORATE COMPLIANCE.......................................................................................................................

         63. RECORDS RETENTION.................................................................................................................................

         64. DATA EXCHANGE REQUIREMENTS .......................................................................................................

         65. ENCOUNTER DATA REPORTING .............................................................................................................

         66. ENROLLMENT AND CAPITATION TRANSACTION UPDATES........................................................

         67. PERIODIC REPORT REQUIREMENTS........................................................................................................

         68. REQUESTS FOR INFORMATION................................................................................................................

         69. DISSEMINATION OF INFORMATION......................................................................................................

         70. OPERATIONAL AND FINANCIAL READINESS REVIEWS..................................................................

         71. OPERATIONAL AND FINANCIAL REVIEWS..........................................................................................

         72. SANCTIONS....................................................................................................................................................

         73. BUSINESS CONTINUITY AND RECOVERY PLAN..................................................................................

         74. TECHNOLOGICAL ADVANCEMENT .......................................................................................................

         75. PENDING LEGISLATIVE / OTHER ISSUES................................................................................................

         76. SUPPORT OF ARIZONA BASED TRANSLATIONAL AND CLINICAL RESEARCH ......................

         77. RESERVED........................................................................................................................................................

         78. RESERVED........................................................................................................................................................

 SECTION E: CONTRACT CLAUSES.........................................................................................................................

         1) APPLICABLE LAW..........................................................................................................................................

         2) AUTHORITY.....................................................................................................................................................

         3) ORDER OF PRECEDENCE...............................................................................................................................

         4) CONTRACT INTERPRETATION AND AMENDMENT ...........................................................................

         5) SEVERABILITY.................................................................................................................................................

         6) RELATIONSHIP OF PARTIES .......................................................................................................................

         7) ASSIGNMENT AND DELEGATION.............................................................................................................

         8) INDEMNIFICATION........................................................................................................................................

         9) INDEMNIFICATION -- PATENT AND COPYRIGHT ................................................................................

         10) COMPLIANCE WITH APPLICABLE LAWS, RULES AND REGULATIONS .....................................

         11) ADVERTISING AND PROMOTION OF CONTRACT..............................................................................

         12) PROPERTY OF THE STATE ........................................................................................................................

         13) THIRD PARTY ANTITRUST VIOLATIONS..............................................................................................

         14) RIGHT TO ASSURANCE...............................................................................................................................

         15) TERMINATION FOR CONFLICT OF INTEREST......................................................................................

         16) GRATUITIES...................................................................................................................................................

         17) SUSPENSION OR DEBARMENT ................................................................................................................

         18) TERMINATION FOR CONVENIENCE .......................................................................................................

         19) TEMPORARY MANAGEMENT/OPERATION OF A CONTRACTOR AND TERMINATION.........

         20) TERMINATION - AVAILABILITY OF FUNDS.........................................................................................

         21) RIGHT OF OFFSET ........................................................................................................................................

         22) NON-EXCLUSIVE REMEDIES......................................................................................................................

         23) NON-DISCRIMINATION .............................................................................................................................

         24) EFFECTIVE DATE..........................................................................................................................................

         25) INSURANCE....................................................................................................................................................

         26) DISPUTES........................................................................................................................................................

         27) RIGHT TO INSPECT PLANT OR PLACE OF BUSINESS.........................................................................

         28) INCORPORATION BY REFERENCE............................................................................................................

         29) COVENANT AGAINST CONTINGENT FEES............................................................................................

         30) CHANGES........................................................................................................................................................

         31) TYPE OF CONTRACT ...................................................................................................................................

         32) AMERICANS WITH DISABILITIES ACT.................................................................................................

         33) WARRANTY OF SERVICES.........................................................................................................................

         34) NO GUARANTEED QUANTITIES .............................................................................................................

         35) CONFLICT OF INTEREST ............................................................................................................................

         36) CONFIDENTIALITY AND DISCLOSURE OF CONFIDENTIAL INFORMATION..............................

         37) COOPERATION WITH OTHER CONTRACTORS ...................................................................................

         38) ASSIGNMENT OF CONTRACT AND BANKRUPTCY...........................................................................

         39) OWNERSHIP OF INFORMATION AND DATA ......................................................................................

         40) AUDITS AND INSPECTIONS .....................................................................................................................

         41) LOBBYING.......................................................................................................................................................

         42) CHOICE OF FORUM......................................................................................................................................

         43) DATA CERTIFICATION ..............................................................................................................................

         44) OFF SHORE PERFORMANCE OF WORK PROHIBITED........................................................................

         45) FEDERAL IMMIGRATION AND NATIONALITY ACT.........................................................................

         46) IRS W-9 FORM................................................................................................................................................

         47) CONTINUATION OF PERFORMANCE THROUGH TERMINATION..................................................

 SECTION F: RESERVED...............................................................................................................................................

 SECTION G: REPRESENTATIONS AND CERTIFICATIONS OF OFFEROR......................................................

 SECTION H: EVALUATION FACTORS AND SELECTION PROCESS................................................................

 SECTION I: INSTRUCTIONS TO OFFERORS..........................................................................................................

 SECTION J: LIST OF ATTACHMENTS....................................................................................................................

 ATTACHMENT A: MINIMUM SUBCONTRACT PROVISIONS.........................................................................

         1. ASSIGNMENT AND DELEGATION OF RIGHTS AND RESPONSIBILITIES ........................................

         2. AWARDS OF OTHER SUBCONTRACTS....................................................................................................

         3. CERTIFICATION OF COMPLIANCE – ANTI-KICKBACK AND LABORATORY TESTING.............

         4. CERTIFICATION OF TRUTHFULNESS OF REPRESENTATION............................................................

         5. CLINICAL LABORATORY IMPROVEMENT AMENDMENTS OF 1988................................................

         6. COMPLIANCE WITH AHCCCS RULES RELATING TO AUDIT AND INSPECTION..........................

         7. COMPLIANCE WITH LAWS AND OTHER REQUIREMENTS ...............................................................

         8. CONFIDENTIALITY REQUIREMENT ..........................................................................................................

         9. CONFLICT IN INTERPRETATION OF PROVISIONS ................................................................................

         10. CONTRACT CLAIMS AND DISPUTES .....................................................................................................

         11. ENCOUNTER DATA REQUIREMENT .......................................................................................................

         12. EVALUATION OF QUALITY, APPROPRIATENESS, OR TIMELINESS OF SERVICES ...................

         13. FRAUD AND ABUSE.....................................................................................................................................

         14. GENERAL INDEMNIFICATION ..................................................................................................................

         15. INSURANCE....................................................................................................................................................

         16. LIMITATIONS ON BILLING AND COLLECTION PRACTICES ............................................................

         17. MAINTENANCE OF REQUIREMENTS TO DO BUSINESS AND PROVIDE SERVICES....................

         18. NON-DISCRIMINATION REQUIREMENTS..............................................................................................

         19. PRIOR AUTHORIZATION AND UTILIZATION MANAGEMENT .....................................................

         20. RECORDS RETENTION.................................................................................................................................

         21. SEVERABILITY...............................................................................................................................................

         22. SUBJECTION OF SUBCONTRACT.............................................................................................................

         23. TERMINATION OF SUBCONTRACT.........................................................................................................

         24. VOIDABILITY OF SUBCONTRACT............................................................................................................

         25. WARRANTY OF SERVICES.........................................................................................................................

         26. OFF-SHORE PERFORMANCE OF WORK PROHIBITED .......................................................................

         27. FEDERAL IMMIGRATION AND NATIONALITY ACT..........................................................................

 ATTACHMENT B: MINIMUM NETWORK STANDARDS (BY GEOGRAPHIC SERVICE AREA)..............

 ATTACHMENT C: RESERVED .................................................................................................................................

 ATTACHMENT D: SAMPLE LETTER OF INTENT ..............................................................................................

 ATTACHMENT E: INSTRUCTIONS FOR PREPARING CAPITATION PROPOSAL.......................................

 ATTACHMENT F: PERIODIC REPORT REQUIREMENTS...................................................................................

 ATTACHMENT G: AUTO-ASSIGNMENT ALGORITHM....................................................................................

 ATTACHMENT H(1): ENROLLEE GRIEVANCE SYSTEM STANDARDS AND POLICY................................

 ATTACHMENT H(2): PROVIDER CLAIM DISPUTE STANDARDS AND POLICY.........................................

 ATTACHMENT I: RESERVED....................................................................................................................................

 ATTACHMENT J: OFFEROR’S CHECKLIST..........................................................................................................

 ATTACHMENT K: COST SHARING COPAYMENTS.............................................................................................

	
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SECTION B: CAPITATION RATES

The Contractor shall provide services as described in this contract. In consideration for these services, the Contractor

 will be paid Contractor-specific rates per member per month for the term October 1, 2008 through September 30,

 2009. See Attachment E, Instructions for Preparing Capitation Proposal, for more information.

SECTION C:        DEFINITIONS

638 TRIBAL FACILITY

A facility that is operated by an Indian tribe and that is authorized to provide

services pursuant to Public Law (P.L.) 93-638, as amended.

1931 (also referred to as TANF related)

Eligible individuals and families under Section 1931 of the Social Security Act,

with household income levels at or below 100% of the federal poverty level

(FPL).

ACOM

AHCCCS Contractor Operations Manual, available on the AHCCCS website at

www.azahcccs.gov.

ADHS

Arizona Department of Health Services, the state agency mandated to serve the

public health needs of all Arizona citizens.

ADHS BEHAVIORAL HEALTH RECIPIENT

A Title XIX or Title XXI acute care member who is eligible for and is receiving

behavioral health services through ADHS and its subcontractors.

ADJUDICATED CLAIMS

Claims that have been received and processed by the Contractor, and which

resulted in a payment or denial of payment

AGENT

Any person who has been delegated the authority to obligate or act on behalf of

another person or entity on who has been delegated the authority to obligate or

act on behalf of another person or entity.

AHCCCS

Arizona Health Care Cost Containment System, which is composed of the

Administration, Contractors, and other arrangements through which health care

services are provided to an eligible person, as defined by A.R.S. § 36-2902, et

seq.

AHCCCS BENEFITS

See “COVERED SERVICES”.

AHCCCS CARE

Eligible individuals and childless adults whose income is less than 100% of the

FPL, and who are not categorically linked to another Title XIX program. Also

known as “NON MEDICAL EXPENSE DEDUCTION MEMBER (NONMED)”

AHCCCS MEMBER

See “MEMBER”.

ALTCS

The Arizona Long Term Care System, a program under AHCCCS that delivers

long-term, acute, behavioral health and case management services to members, as

authorized by A.R.S. § 36-2932.

AMBULATORY CARE

Preventive, diagnostic and treatment services provided on an outpatient basis by

physicians, nurse practitioners, physician assistants and other health care

providers.

AMERICAN INDIAN HEALTH PROGRAM (AIHP)

The program that delivers health care to the eligible Native American population

living on reservations through the Indian Health Service (IHS). Formerly known

as AHCCCS IHS FFS Program.

AMPM

AHCCCS Medical Policy Manual, available on the AHCCCS website at

www.azahcccs.gov.

ANNUAL ENROLLMENT CHOICE (AEC)

The opportunity, given each member annually, to change to another Contractor in

their GSA.

APPEAL RESOLUTION

The written determination by the Contractor concerning an appeal.

ARIZONA ADMINISTRATIVE CODE (A.A.C.)

State regulations established pursuant to relevant statutes. For purposes of this

solicitation, the relevant sections of the A.A.C. are referred to throughout this

document as “AHCCCS Rules”.

A.R.S.

Arizona Revised Statutes.

BBA

The Balanced Budget Act of 1997.

BIDDER’S LIBRARY

A repository of manuals, statutes, rules and other reference material located on

the AHCCCS website at www.azahcccs.gov.

BOARD CERTIFIED

An individual who has successfully completed all prerequisites of the respective

specialty board and successfully passed the required examination for

certification.

BORDER COMMUNITIES

Cities, towns or municipalities located in Arizona and within a designated

geographic service area whose residents typically receive primary or emergency

care in adjacent Geographic Service Areas (GSA) or neighboring states,

excluding neighboring countries, due to service availability or distance. (R9-22-

201.F, R9-22-201.G, R9-22-101.B)

BREAST AND CERVICAL CANCER TREATMENT PROGRAM (BCCTP)

Eligible individuals under the Title XIX expansion program for women with

income up to 250% of the FPL, who are diagnosed with and need treatment for

breast and/or cervical cancer or cervical lesions and are not eligible for other

Title XIX programs providing full Title XIX services. Qualifying individuals

cannot have other creditable health insurance coverage, including Medicare.

CAPITATION

Payment to a Contractor by AHCCCS of a fixed monthly payment per person in

advance, for which the Contractor provides a full range of covered services as

authorized under A.R.S. § 36-2904 and § 36-2907.

CATEGORICALLY LINKED TITLE XIX MEMBER

Member eligible for Medicaid under Title XIX of the Social Security Act

including those eligible under 1931 provisions of the Social Security Act, Sixth

Omnibus Budget Reconciliation Act (SOBRA), Supplemental Security Income

(SSI), and SSI-related groups. To be categorically linked, the member must be

aged 65 or over, blind, disabled, a child under age 19, a parent of a dependent

child, or pregnant.

CLAIM DISPUTE

A dispute, filed by a provider or Contractor, whichever is applicable, involving a

payment of a claim, denial of a claim, imposition of a sanction or reinsurance.

CLEAN CLAIM

A claim that may be processed without obtaining additional information from the

provider of service or from a third party, but does not include a claim under

investigation for fraud or abuse or under review for medical necessity.

CMS

Centers for Medicare and Medicaid Services, an organization within the U.S.

Department of Health and Human Services, which administers the Medicare and

Medicaid programs and the State Children’s Health Insurance Program.

COMPETITIVE BID PROCESS

A state procurement system used to select Contractors to provide covered

services on a geographic basis.

CONTINUING OFFEROR (INCUMBENT)

An AHCCCS Contractor during CYE ‘08 that submits a proposal pursuant to this

solicitation.

CONTRACT SERVICES

See “COVERED SERVICES”.

CONTRACT YEAR (CY)

Corresponds to the federal fiscal year (October 1 through September 30).

CONTRACTOR

An organization or entity agreeing through a direct contracting relationship with

AHCCCS to provide the goods and services specified by this contract in

conformance with the stated contract requirements, AHCCCS statute and rules,

and federal law and regulations.

CONVICTED

A judgment of conviction has been entered by a federal, state or local court,

regardless of whether an appeal from that judgment is pending.

COPAYMENT

A monetary amount specified by the Director that the member pays directly to a

Contractor or provider at the time covered services are rendered, as defined in

R9-22-701.

COVERED SERVICES

Health care services to be delivered by a Contractor, which are designated in

Section D of this contract; AHCCCS Rules R9-22, Article 2, and R9-31, Article

2, and the AMPM [42 CFR 438.210(a)(4)].

CRS

The Children's Rehabilitative Services administered by ADHS, as defined in R9-

22-1401.

CRS-ELIGIBLE

An individual who has completed the CRS application process, as delineated in

the CRS Policy and Procedure Manual, and has met all applicable criteria to be

eligible to receive CRS-related services.

CY

See “CONTRACT YEAR”.

CYE

Contract Year Ending; same as “CONTRACT YEAR”.

DAYS

Calendar days, unless otherwise specified as defined in the text, as defined in

R9-22-101.

DELEGATED AGREEMENT

A type of subcontract with a qualified organization or person to perform one or

more functions required to be provided by the Contractor pursuant to this

contract.

DIRECTOR

The Director of AHCCCS.

DISENROLLMENT

The discontinuance of a member’s ability to receive covered services through a

Contractor.

DME

Durable medical equipment, which is an item or appliance that can withstand

repeated use, is designated to serve a medical purpose, and is not generally useful

to a person in the absence of a medical condition, illness or injury as defined in

R9-22-101.

DUAL ELIGIBLE

A member who is eligible for both Medicare and Medicaid.

ELIGIBILITY DETERMINATION

A process of determining, through a written application and required

documentation, whether an applicant meets the qualifications for Title XIX or

Title XXI.

EMERGENCY MEDICAL CONDITION

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 patient’s health (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)].

EMERGENCY MEDICAL SERVICE

Covered inpatient and outpatient services provided after the sudden onset of an

emergency medical condition as defined above. These services must be furnished

by a qualified provider, and must be necessary to evaluate or stabilize the

emergency medical condition [42 CFR 438.114(a)].

ENCOUNTER

A record of a health care-related service rendered by a provider or providers

registered with AHCCCS to a member who is enrolled with a Contractor on the

date of service.

ENROLLEE

An eligible person who is enrolled in AHCCCS, as defined in A.R.S. § 36-2901,

A.R.S. § 36-2981, A.R.S. § 36-2901.01, and 42 CFR 438.10(a).

ENROLLMENT

The process by which an eligible person becomes a member of a Contractor’s

plan.

EPSDT

Early and Periodic Screening, Diagnosis and Treatment; services for persons

under 21 years of age, as described in AHCCCS Rules R9-22, Article 2.

FAMILY PLANNING SERVICES EXTENSION PROGRAM

A program that provides only family planning services for a maximum of two

consecutive 12-month periods to a SOBRA woman whose pregnancy has ended

and who is not otherwise eligible for full Title XIX services.

FEDERALLY QUALIFIED HEALTH CENTER (FQHC)

An entity that meets the requirements and receives a grant and funding pursuant

to Section 330 of the Public Health Service Act. An FQHC includes an

outpatient health program or facility operated by a tribe or tribal organization

under the Indian Self-Determination and Education Assistance Act (P.L. 93-638)

or an urban Indian organization receiving funds under Title V of the Indian

Health Care Improvement Act (P.L. 94-437).

FEE-FOR-SERVICE (FFS)

A method of payment to registered providers on an amount per-service basis.

FES

Federal Emergency Services program covered under R9-22-217, to treat an

emergency medical condition for a member who is determined eligible under

A.R.S. § 36-2903.03 (D).

FFP

Federal financial participation (FFP) refers to the contribution that the federal

government makes to the Title XIX and Title XXI program portions of

AHCCCS, as defined in 42 CFR 400.203.

FISCAL YEAR (FY)

The budget year - federal fiscal year: October 1 through September 30; State

fiscal year: July 1 through June 30.

FREEDOM OF CHOICE (FC)

The opportunity given to each member who does not specify a Contractor

preference at the time of enrollment to choose between the Contractors available

within the Geographic Service Area in which the member is enrolled.

FREEDOM TO WORK (TICKET TO WORK)

Eligible individuals under the Title XIX expansion program that extends

eligibility to individuals 16 through 64 years old who meet SSI disability criteria;

whose earned income, after allowable deduction, is at or below 250% of the FPL

and who are not eligible for any other Medicaid program.

GEOGRAPHIC SERVICE AREA (GSA)

A specific county or defined grouping of counties designated by AHCCCS

within which a Contractor provides, directly or through subcontract, covered

health care to members enrolled with that Contractor.

GRIEVANCE SYSTEM

A system that includes a process for enrollee grievances, enrollee appeals,

provider claim disputes, and access to the state fair hearing system.

HEALTHCARE GROUP OF ARIZONA (HCG)

A prepaid medical coverage plan marketed to small, uninsured businesses and

political subdivisions within the state.

HEALTH PLAN

See “CONTRACTOR”.

HIFA

The CMS Health Insurance Flexibility and Accountability Demonstration

Initiative , which targets State Children's Health Insurance Program (Title XXI)

funding for populations with incomes at or below 200 % of the FPL.

HIFA PARENTS

Parents of Medicaid-(SOBRA) and KidsCare-eligible children who are not

otherwise eligible for Medicaid. All eligible parents except Native Americans

must pay an enrollment fee and a monthly premium based on household income.

HIPAA

The Health Insurance Portability and Accountability Act (P.L. 104-191); also

known as the Kennedy-Kassebaum Act, signed August 21, 1996.

IBNR

Incurred but not reported: liability for services rendered for which claims have

not been received.

HIS

Indian Health Service authorized as a federal agency pursuant to 25 U.S.C. 1661.

KIDSCARE

A program for individuals under the age of 19 years, who are eligible under the

SCHIP program, in households with income at or below 200% FPL. All

members, except Native American members, are required to pay a premium

amount based on the number of children in the family and the gross family

income. Also referred to as “Title XXI”.

LIABLE PARTY

A person or entity that is or may be, by agreement, circumstance or otherwise,

liable to pay all or part of the medical expenses incurred by an AHCCCS

applicant or member.

LIEN

A legal claim, filed with the County Recorder’s office in the county in which a

member resides and/or in the county an injury was sustained, for the purpose of

ensuring that AHCCCS receives reimbursement for medical services paid. The

lien is attached to any settlement the member may receive as a result of an injury.

MANAGED CARE

Systems that integrate the financing and delivery of health care services to

covered individuals by means of arrangements with selected providers to furnish

comprehensive services to members; establish explicit criteria for the selection of

health care providers; have financial incentives for members to use providers and

procedures associated with the plan; and have formal programs for quality,

utilization management and the coordination of care.

MANAGEMENT SERVICES AGREEMENT

A type of subcontract with an entity in which the owner of the Contractor

delegates some or all of the comprehensive management and administrative

services necessary for the operation of the Contractor.

MANAGEMENT SERVICES SUBCONTRACTOR

An entity to which the Contractor delegates the comprehensive management and

administrative services necessary for the operation of the Contractor

MANAGING EMPLOYEE

A general manager, business manager, administrator, director, or other individual

who exercises operational or managerial control over or who directly or

indirectly conducts the day-to-day operation of an institution, organization or

agency.

MATERIAL OMISSION

Facts, data or other information excluded from a report, contract, etc.; the

absence of which could lead to erroneous conclusions following reasonable

review of such report, contract, etc.

MAJOR UPGRADE

Any upgrade or changes that may result in a disruption to the following: loading

of contracts, providers or members, issuing prior authorizations or the

adjudication of claims.

MEDICAID

A federal/state program authorized by Title XIX of the Social Security Act, as

amended.

MEDICAL EXPENSE DEDUCTION (MED)

Title XIX waiver member whose family income exceeds the limits of all other

Title XIX categories (except ALTCS) and has family medical expenses that

reduce income to or below 40% of the FPL. MED members may or may not

have a categorical link to Title XIX.

MEDICAL MANAGEMENT

An integrated process or system that is designed to assure appropriate utilization

of health care resources, in the amount and duration necessary to achieve desired

health outcomes, across the continuum of care (from prevention to end of life

care).

MEDICARE

A federal program authorized by Title XVIII of the Social Security Act, as

amended.

MEDICARE MANAGED CARE PLAN

A managed care entity that has a Medicare contract with CMS to provide services

to Medicare beneficiaries, including Medicare Advantage Plan (MAP), Medicare

Advantage Prescription Drug Plan (MAPDP), MAPDP Special Needs Plan, or

Medicare Prescription Drug Plan

MEDICARE PART DEXCLUDED DRUGS

Medicare Part D is the prescription drug coverage option available to Medicare

beneficiaries, including those also eligible for Medicaid. Medications that are

available under this benefit are not covered by AHCCCS. Certain drugs that are

excluded from coverage by Medicare continue to be covered by AHCCCS.

Those medications are barbiturates, benzodiazepines, and over-the-counter

medication as defined in the AMPM. Prescription medications that are covered

under Medicare, but are not on a Part D health plan’s formulary are not

considered excluded drugs, and are not covered by AHCCCS.

MEMBER

See “ENROLLEE”.

NON-CONTRACTING PROVIDER

A person or entity that provides services as prescribed in A.R.S. § 36-2901, but

does not have a subcontract with an AHCCCS Contractor.

NON-MEDICAL EXPENSE DEDUCTION (NON MED) MEMBER

See “AHCCCS CARE”.

NPI

National Provider Identifier assigned by the CMS contracted national

enumerator.

OFFEROR

An organization or other entity that submits a proposal to the Administration in

response to this RFP, as defined in R9-22-101.

PERFORMANCE STANDARDS

A set of standardized measures designed to assist AHCCCS in evaluating,

comparing and improving the performance of its Contractors.

PMMIS

AHCCCS’s Prepaid Medical Management Information System.

POST STABILIZATION SERVICES

Medically necessary services, related to an emergency medical condition,

provided after the member’s condition is sufficiently stabilized in order to

maintain, improve or resolve the member’s condition so that the member could

be safely discharged or transferred to another location [42 CFR 438-114(a)].

POTENTIAL ENROLLEE

A Medicaid-eligible recipient who is not yet enrolled with a Contractor [42 CFR

438.10(a)].

PRIMARY CARE PROVIDER (PCP)

An individual who meets the requirements of A.R.S. § 36-2901, and who is

responsible for the management of a member’s health care. A PCP may be a

physician defined as a person licensed as an allopathic or osteopathic physician

according to A.R.S. Title 32, Chapter 13 or Chapter 17, or a practitioner defined

as a physician assistant licensed under A.R.S. Title 32, Chapter 25, or a certified

nurse practitioner licensed under A.R.S. Title 32, Chapter 15.

PRIOR PERIOD

The period of time, prior to a member’s enrollment, during which the member is

eligible for covered services. The time frame is from the effective date of

eligibility to the day a member is enrolled with a Contractor.

PROVIDER

Any person or entity that contracts with AHCCCS or a Contractor for the

provision of covered services to members according to the provisions A.R.S. §

36-2901 or any subcontractor of a provider delivering services pursuant to A.R.S.

§ 36-2901.

QUALIFIED MEDICARE BENEFICIARY DUAL ELIGIBLE (QMB DUAL)

A person, eligible under A.R.S. § 36-2971(6), who is entitled to Medicare Part A

insurance and meets certain income and residency requirements of the Qualified

Medicare Beneficiary program. A QMB who is also eligible for Medicaid, is

commonly referred to as a QMB dual eligible.

RATE CODE

Eligibility classification for capitation payment purposes.

REGIONAL BEHAVIORAL HEALTH AUTHORITY (RBHA)

An organization under contract with ADHS, that administers covered behavioral

health services in a geographically specific area of the state. Tribal governments,

through an agreement with ADHS, may operate a tribal regional behavioral

health authority (TRBHA) for the provision of behavioral health services to

Native American members living on-reservation.

REINSURANCE

A risk-sharing program provided by AHCCCS to Contractors for the

reimbursement of certain contract service costs incurred for a member beyond a

predetermined monetary threshold.

RELATED PARTY

A party that has, or may have, the ability to control or significantly influence a

Contractor, or a party that is, or may be, controlled or significantly influenced by

a Contractor. "Related parties" include, but are not limited to, agents, managing

employees, persons with an ownership or controlling interest in the Offeror and

their immediate families, subcontractors, wholly-owned subsidiaries or suppliers,

parent companies, sister companies, holding companies, and other entities

controlled or managed by any such entities or persons.

RISK GROUP

Grouping of rate codes that are paid at the same capitation rate.

RFP

Request For Proposal is a document prepared by AHCCCS, which describes the

services required and instructs prospective Offerors about how to prepare a

response (proposal), as defined in R9-22-101.

RURAL HEALTH CLINIC (RHC)

A clinic located in an area designated by the Bureau of Census as rural, and by

the Secretary of the DHHS as medically underserved or having an insufficient

number of physicians, which meets the requirements under 42 CFR 491.

SCHIP

State Children’s Health Insurance Program under Title XXI of the Social

Security Act. The Arizona version of SCHIP is referred to as “KidsCare”. See

“KIDSCARE”.

SCOPE OF SERVICES See “COVERED SERVICES”.

SERVICE LEVEL AGREEMENT

A type of subcontract with a corporate owner or any of its divisions or subsidiaries

that requires specific levels of service for administrative functions or services for

the Contractor, specifically related to fulfilling the Contractor’s obligations to

AHCCCS under the terms of this contract.

SOBRA

Eligible pregnant women under Section 9401 of the Sixth Omnibus Budget and

Reconciliation Act of 1986, amended by the Medicare Catastrophic Coverage

Act of 1988, 42 U.S.C. 1396a(a)(10)(A)(ii)(IX), November 5, 1990, with

individually budgeted incomes at or below 150% of the FPL, and children in

families with individually budgeted incomes ranging from below 100% to 140%

of the FPL, depending on the age of the child.

SOBRA FAMILY PLANNING

Female members eligible for family planning services only, for a maximum of

two consecutive 12-month periods following the loss of SOBRA eligibility.

SPECIAL HEALTH CARE NEEDS

Members with special health care needs are those members who have serious and

chronic physical, developmental or behavioral conditions, and who also require

medically necessary health and related services of a type or amount beyond that

generally required by members.

STATE

The State of Arizona.

STATE ONLY TRANSPLANT MEMBERS

Individuals who are eligible under one of the Title XIX eligibility categories and

found eligible for a transplant, but subsequently lose Title XIX eligibility due to

excess income become eligible for one of two extended eligibility options as

specified in A.R.S. 36-2907.10 and A.R.S. 36-2907.11.

STATE PLAN

The written agreements between the State and CMS, which describe how the

AHCCCS program meets CMS requirements for participation in the Medicaid

program and the State Children’s Health Insurance Program.

SUBCONTRACT

An agreement entered into by the Contractor with a provider of health care

services, who agrees to furnish covered services to members, or with any other

organization or person who agrees to perform any administrative function or

service for the Contractor specifically related to fulfilling the Contractor's

obligations to AHCCCS under the terms of this contract, as defined in R9-22-

101.

SUBCONTRACTOR

(1) A provider of health care who agrees to furnish covered services to members.

(2) A person, agency or organization with which the Contractor has contracted or

delegated some of its management/administrative functions or responsibilities.

(3) A person, agency or organization with which a fiscal agent has entered into a

contract, agreement, purchase order or lease (or leases of real property) to obtain

space, supplies, equipment or services provided under the AHCCCS agreement.

SUPPLEMENTAL SECURITY INCOME (SSI) AND SSI RELATED GROUPS

Eligible individuals receiving income through federal cash assistance programs

under Title XVI of the Social Security Act who are aged, blind or disabled and

have household income levels at or below 100% of the FPL.

SUPPLEMENTAL SECURITY DISABILITY INSURANCE TEMPORARY

 MEDICAL COVERAGE (SSDITMC)

Eligible individuals who have been enrolled in AHCCCS at any time within the

most recent 24 months and became ineligible for AHCCCS coverage due to

excess income; and who are not covered by creditable health insurance, including

Medicare.

TEMPORARY ASSISTANCE TO NEEDY FAMILIES (TANF)

A federal cash assistance program under Title IV of the Social Security Act

established by the Personal Responsibility and Work Opportunity Reconciliation

Act of 1996 (P.L. 104-193). It replaced Aid To Families With Dependent

Children (AFDC).

THIRD PARTY LIABILITY (TPL)

See “LIABLE PARTY”.

TITLE XIX MEMBER

A member eligible for federally funded Medicaid programs under Title XIX of

the Social Security Act including those eligible under 1931 provisions of the

Social Security Act, Sixth Omnibus Budget Reconciliation Act (SOBRA),

Supplemental Security Income (SSI), SSI-related groups, Title XIX Waiver

groups, Medicare Cost Sharing groups, Breast and Cervical Cancer Treatment

program and Freedom to Work program.

TITLE XIX WAIVER GROUP (TWG)MEMBER

All AHCCCS Care (Non-MED) and MED members who do not meet the

requirements of a categorically linked Medicaid program.

TITLE XXI MEMBER

A member eligible for acute care services under Title XXI of the Social Security

Act, referred to in Federal legislation as the “State Children’s Health Insurance

Program” (SCHIP and HIFA). The Arizona version of SCHIP is referred to as

“KidsCare.”

WWHP

Well Woman Health-Check Program, administered by the Arizona Department

of Health Services and funded by the Centers for Disease Control and Prevention.

(See AMPM Chapter 400)

YEAR

See “CONTRACT YEAR”.

YOUNG ADULT TRANSITIONAL INSURANCE (YATI)

Eligible individuals, between 18 and 21 years of age who were formerly enrolled

through the foster care program.

[END OF DEFINITIONS]

SECTION D: PROGRAM REQUIREMENTS

INTRODUCTION

The Arizona Health Care Cost Containment System (AHCCCS) Administration is the single state agency for the

 Medicaid and SCHIP programs. AHCCCS has operated under an 1115 Research and Demonstration Waiver since

 1982 when it became the first statewide Medicaid managed care system in the nation. The program is a model

public-private collaboration that includes the state and its counties, the federal government, and managed care

 contractors and providers from both the public and private sectors. AHCCCS has remained a leader in Medicaid

 Managed Care through the diligent pursuit of excellence and cost effectiveness by Managed Care Contractors

 (MCOs) in collaboration with the AHCCCS Administration.

In order to continue this collaboration, Contractors must continue to add value to the program. A Contractor adds

 value when it:

            • Recognizes that Medicaid members are entitled to care and assistance navigating the service delivery

                   system and demonstrates special effort to assure members receive necessary services, including

                   prevention and screening services.

                • Recognizes that Medicaid members with special health care needs or chronic health conditions require

                   care coordination, and provides that coordination. This is particularly true if a member must receive

                   services from other AHCCCS Contractors in addition to the Contractor.

                • Recognizes that Medicaid members have the right to contact their elected officials in an effort to

                  secure necessary services and assist members in order to reduce their need to contact elected officials.

                  The Contractor provides information to elected officials to help them respond to the member.

                • Recognizes that health care providers are an essential partner in the delivery of health care services,

                  and operates in a manner that is efficient and effective for health care providers as well as the

                  Contractor.

                • Avoids administrative practices that place unnecessary burdens on providers with little or no impact

                  on quality of care or cost containment.

                • Recognizes that performance improvement is both clinical and operational in nature and self monitors

                  and self corrects as necessary to improve contract compliance or operational excellence.

                • Recognizes that the program is publicly funded, and as such is subject to public scrutiny and behaves

                  in a manner that is supported by the general public.

                • Recognizes that the program is subject to significant regulation and operates in compliance with those

                  regulations.

AHCCCS encourages Contractor innovation and application of best practices. The AHCCCS administration is

always looking for ways to reduce administrative costs and improve program efficiency. Over the term of the

contract, AHCCCS will work collaboratively with contractors to evaluate ways to reduce program complexity,

improve chronic disease management, reduce administrative burdens, leverage joint purchasing power, and

reduce unnecessary Medicaid/SCHIP administrative and medical costs.

1. TERM OF CONTRACT AND OPTION TO RENEW

The initial term of this contract shall be 10/1/08 through 9/30/11, with two additional one-year options to renew.

All contract renewals shall be through contract amendment. AHCCCS shall issue amendments prior to the end

date of the contract when there is an adjustment to capitation rates and/or changes to the scope of services

contained herein. Changes to the scope of services include, but are not limited, to changes in the enrolled

population, changes in covered services and changes in GSAs.

If the Contractor has been awarded a contract in more than one GSA, each such contract will be considered

separately renewable. AHCCCS may renew the Contractor’s contract in one GSA, but not in another. In

capping of the Contractor’s enrollment in all GSAs. Further, AHCCCS may require the Contractor to renew all

currently awarded GSAs, or may terminate the contract if the Contractor does not agree to renew all currently

awarded GSAs.

When AHCCCS issues an amendment to the contract, the provisions of such renewal will be deemed to have

been accepted 60 days after the date of mailing by AHCCCS, even if the amendment has not been signed by the

Contractor, unless within that time the Contractor notifies AHCCCS in writing that it refuses to sign the renewal

amendment. If the Contractor provides such notification, AHCCCS will initiate contract termination

proceedings.

Contractor’s Notice of Intent Not To Renew: If the Contractor chooses not to renew this contract, the

Contractor may be liable for certain costs associated with the transition of its members to a different Contractor.

If the Contractor provides AHCCCS written notice of its intent not to renew this contract at least 180 days before

its expiration, this liability for transition costs may be waived by AHCCCS.

Contract Termination: In the event that the contract or any portion thereof is terminated for any reason, or

expires, the Contractor shall assist AHCCCS in the transition of its members to other Contractors, and shall

abide by standards and protocols set forth in Paragraph 9, Transition of Members. In addition, AHCCCS

reserves the right to extend the term of the contract on a month-to-month basis to assist in any transition of

members. The Contractor shall make provision for continuing all management and administrative services

until the transition of all members is completed and all other requirements of this contract are satisfied. The

Contractor shall be responsible for providing all reports set forth in this contract and necessary for the

transition process, and shall be responsible for the following:

a. Notification of subcontractors and members.

b. Payment of all outstanding obligations for medical care rendered to members. Until AHCCCS is satisfied

    that the Contractor has paid all such obligations, the Contractor shall provide the following reports to

    AHCCCS on a monthly basis (due the 15th day of the month, for the preceding month):

                (1) A monthly claims aging report by provider/creditor including IBNR amounts;

                (2) A monthly summary of cash disbursements and provider/creditor settlements;

                (3) A monthly accounting of Member Grievances and Provider Claim Disputes and their disposition;

                (4) Additional reporting as requested in the termination letter issued by AHCCCS.

c. Quarterly and Audited Financial Statements up to the date of contract termination. The financial statement

    requirement will not be absolved without an official release from AHCCCS.

d. Encounter reporting until all services rendered prior to contract termination have reached adjudicated status

    and data validation of the information has been completed, as communicated by a letter of release from

    AHCCCS.

e. Cooperation with reinsurance audit activities on prior contract years until release has been granted by

    AHCCCS.

f. Cooperation with any open reconciliation activities including, but not limited to, PPC or SSDI-TMC until

    release has been granted by AHCCCS.

g. Quarterly Quality Management and Medical Management reports will be submitted as required by Section

    D, Paragraphs 23, Quality Management, and 24, Medical Management, as appropriate to provide AHCCCS

    with information on services rendered up to the date of Contract termination. This will include quality of care

    (QOC) concern reporting based on the date of service, as opposed to the date of reporting, for a period of 3

    months after contract termination.

h. Performance Bond will be required until remaining AHCCCS liabilities are less than $50,000.

i. In the event of termination or suspension of the contract by AHCCCS, such termination or suspension shall

    not affect the obligation of the Contractor to indemnify AHCCCS for any claim by any third party against the

    State or AHCCCS arising from the Contractor's performance of this contract and for which the Contractor

    would otherwise be liable under this contract.

j. Any dispute by the Contractor, with respect to termination or suspension of this contract by AHCCCS, shall

   be exclusively governed by the provisions of Section E, Paragraph 26, Disputes.

k. Any funds advanced to the Contractor for coverage of members for periods after the date of termination shall

   be returned to AHCCCS within 30 days of termination of the contract.

l. Record retention requirements, as described in Section D Paragraph 63; Section E, Paragraph 40 and

   Attachment A, Paragraph 20, will apply.

2. ELIGIBILITY CATEGORIES

AHCCCS is Arizona’s Title XIX Medicaid program operating under an 1115 Waiver and Title XXI program

operating under Title XXI State Plan authority. Arizona has the authority to require mandatory enrollment in

managed care. All Acute Care Program members eligible for AHCCCS benefits, with exceptions as identified

below, are enrolled with Acute Care Contractors that are paid on a capitated basis. AHCCCS pays for health

care expenses on a fee-for-service (FFS) basis for Title XIX- and Title XXI- eligible members who receive

services through the Indian Health Service; for Title XIX eligible members who are entitled to emergency

services under the Federal Emergency Services (FES) program; and for Medicare cost sharing beneficiaries

under QMB programs.

The following describes the eligibility groups enrolled in the managed care program and covered under this

contract [42 CFR 434.6(a)(2)].

Title XIX

1931 (Also referred to as TANF-related): Eligible individuals and families under the 1931 provision of

the Social Security Act, with household income levels at or below 100% of the FPL.

SSI and SSI Related Groups: Eligible individuals receiving income through federal cash assistance

programs under Title XVI of the Social Security Act who are aged, blind or disabled and have

household income levels at or below 100% of the FPL.

Freedom to Work (Ticket to Work): Eligible individuals under the Title XIX expansion program that

extends eligibility to individuals 16 through 64 years old who meet SSI disability criteria, and whose

earned income after allowable deductions is at or below 250% of the FPL, and who are not eligible for

any other Medicaid program. These members must pay a premium to AHCCCS, depending on income.

SOBRA: Under the Sixth Omnibus Budget Reconciliation Act of 1986, eligible pregnant women, with

individually budgeted income at or below 150% of the FPL, and children in families with individually

budgeted incomes ranging from below 100% to 140% of the FPL, depending on the age of the child.

SOBRA Family Planning: Family planning extension program that covers the costs for family

planning services only, for a maximum of two consecutive 12-month periods following the loss of

SOBRA eligibility.

Breast and Cervical Cancer Treatment Program (BCCTP): Eligible individuals under the Title XIX

expansion program for women with incomes up to 250% of the FPL, who are diagnosed with and need

treatment for breast and/or cervical cancer or cervical lesions and are not eligible for other Title XIX

programs. Eligible members cannot have other creditable health insurance coverage, including

Medicare.

Young Adult Transitional Insurance (YATI): Former foster care children between 18 and 21 years of

age.

Title XIX Waiver Group

AHCCCS Care (Non-MED): Eligible individuals and couples whose income is at or below 100% of the

FPL, and who are not categorically linked to another Title XIX program. Also known as Non-MED

members.

MED: Title XIX waiver member whose family income exceeds the limits of all other Title XIX

categories (except ALTCS) and has family medical expenses that reduce income to at or below 40% of

the FPL. MED members may or may not have a categorical link to Title XIX.

Title XXI

KidsCare: Individuals under the age of 19 years, eligible under the SCHIP program, who are in

households with incomes at or below 200% FPL. All members except Native American members are

required to pay a premium amount based on the number of children in the family and the gross family

income. Also referred to as Title XXI.

HIFA Parents: Non-Title XIX-eligible parents of KidsCare children or parents of Title XIX SOBRAeligible

children who are eligible under the HIFA demonstration initiative waiver. HIFA parents (except

Native American members) are required to pay a one-time enrollment fee and a monthly premium to

AHCCCS, based on household income. Due to funding considerations, this program has an enrollment

cap.

State-Only

Social Security Disability Insurance Temporary Medical Coverage (SSDI-TMC): Laws 2006, Chapter

373 established a Temporary Medical Coverage Program. SSDI-TMC provides health care coverage to

persons who:

1. Are citizens or qualified immigrants and residents who have been enrolled in AHCCCS at any time

   within the last 24 months; and

2. Become ineligible for AHCCCS coverage due to excess income making them over income for

   Medicaid; and

3. Are not yet eligible for Medicare; and

4. Are not covered by creditable health insurance.

In order to participate in SSDI-TMC, eligible persons must pay a premium. Participants become

ineligible for SSDI-TMC once they become eligible for Medicare. SSDI-TMC is funded entirely by the

State. Contractors will be capitated for these members under unique rate codes. SSDI-TMC members

are not eligible for prior period coverage, any supplemental payments or reinsurance. Members are

entitled to all AHCCCS Acute Care covered services. This program is subject to the availability of funds

and enrollment may be capped and/or frozen.

State-Only Transplants: Title XIX individuals, for whom medical necessity for a transplant has been

established and who subsequently lose Title XIX eligibility may become eligible for and select one of

two extended eligibility options as specified in A.R.S. 36-2907.10 and A.R.S. 36-2907.11. The extended

eligibility is authorized only for those individuals who have met all of the following conditions:

                1. The individual has been determined ineligible for Title XIX due to excess income;

                2. The individual has been placed on a donor waiting list before eligibility expired;

                3. The individual has entered into a contractual arrangement with the transplant facility to pay the

                   amount of income which is in excess of the eligibility income standards (referred to as

                   transplant share of cost).

The following options for extended eligibility are available to these members:

Option 1: Extended eligibility is for one 12-month period immediately following the loss of AHCCCS

eligibility. The member is eligible for all AHCCCS covered services as long as they continue to be

medically eligible for a transplant. If determined medically ineligible for a transplant at any time during

the period, eligibility will terminate at the end of the calendar month in which the determination is

made.

Option 2: As long as medical eligibility for a transplant (status on a transplant waiting list) is

maintained, at the time that the transplant is scheduled to be performed the transplant candidate will be

re-enrolled with his/her previous Contractor to receive all covered transplant services. Option 2-eligible

individuals are not eligible for any non-transplant related health care services from AHCCCS.

3. ENROLLMENT AND DISENROLLMENT

AHCCCS has the exclusive authority to enroll and disenroll members. The Contractor shall not disenroll any

member for any reason unless directed to do so by AHCCCS. The Contractor may request AHCCCS to

change the member’s enrollment in accordance with the ACOM Enrollment Choice and Change of Contractor

Policy. The Contractor may not request disenrollment because of an adverse change in the member’s health

status or because of the member’s utilization of medical services, diminished mental capacity, or

uncooperative or disruptive behavior resulting from his or her special needs. An AHCCCS member may

request disenrollment from the Contractor for cause at any time. Requests due to situations defined in Section

A (1) of the ACOM Change of Plan Policy should be referred to AHCCCS Member Services via mail or at

(602) 417-4000 or (800) 962-6690. For medical continuity requests, the Contractor shall follow the

procedures outlined in the ACOM Change of Plan Policy, before notifying AHCCCS. AHCCCS will disenroll

the member through the ACOM Change of Plan Policy when the member:

                1. Becomes ineligible for the AHCCCS program;

                2. Moves out of the Contractor’s service areas;

                3. Changes contractors during the member’s open enrollment/annual enrollment choice period;

                4. The Contractor does not, because of moral or religious objections, cover the service the member seeks; or

                5. When approved for a Contractor change [42 CFR 438.56].

Members may submit plan change requests to the Contractor or the AHCCCS Administration. A denial of any

plan change request must include a description of the member’s right to appeal the denial.

Eligibility for the various AHCCCS coverage groups is determined by one of the following agencies:

Social Security Administration (SSA)

SSA determines eligibility for the Supplemental Security Income

(SSI) cash program. SSI cash recipients are automatically

eligible for AHCCCS coverage.

Department of Economic Security (DES)

DES determines eligibility for families with children under

section 1931 of the Social Security Act, pregnant women and

children under SOBRA, the Adoption Subsidy Program, Title IVE

foster care children, Young Adult Transitional Insurance

Program, the Federal Emergency Services program (FES), HIFA

parents of SOBRA-eligible children and Title XIX Waiver

Members.

AHCCCS

AHCCCS determines eligibility for the SSI/Medical Assistance

Only groups, including the FES program for this population

(aged, disabled, blind), the Arizona Long Term Care System

(ALTCS), the Qualified Medicare Beneficiary program and other

Medicare cost sharing programs, BCCTP, the Freedom to Work

program, the Title XXI KidsCare program, HIFA parents of

KidsCare children, the SSDI-TMC program, and the State-Only

Transplant program.

AHCCCS Acute Care members are enrolled with Contractors in accordance with the rules set forth in A.A.C

R9-22, Article 17, A.A.C. R9-31, Articles 3 and 17.

Member Choice of Contractor

All AHCCCS members eligible for services covered under this contract have a choice of available Contractors.

Information about these Contractors will be given to each applicant during the application process for

AHCCCS benefits. If there is only one Contractor available for the applicant’s Geographic Service Area, no

choice is offered as long as the Contractor offers the member a choice of PCPs. Members who do not choose a

Contractor prior to AHCCCS being notified of their eligibility are automatically assigned to a Contractor based

on family continuity or the auto-assignment algorithm. Once assigned, AHCCCS sends a Freedom of Choice

notice to the member and gives them 30 days to choose a different Contractor from the auto-assigned

Contractor. See Section D, Paragraph 6, Auto-Assignment Algorithm, for further explanation.

The Contractor will share with AHCCCS the cost of providing information about the Acute Care Contractors

to potential members and to those eligible for annual enrollment choice.

Exceptions to the above enrollment policies for Title XIX members include previously enrolled members who

have been disenrolled for less than 90 days. These members will be automatically enrolled with the same

Contractor, if still available. Women who become eligible for the Family Planning Services Extension

Program, will remain assigned to their current Contractor.

The effective date of enrollment for a new Title XIX member with the Contractor is the day AHCCCS takes

the enrollment action. The Contractor is responsible for payment of medically necessary covered services

retroactive to the member’s beginning date of eligibility, as reflected in PMMIS.

SSDI-Temporary Medical Coverage and KidsCare Title XXI members must select a Contractor prior to being

determined eligible, and therefore will not be auto-assigned. HIFA parents who do not choose a Contractor

will be enrolled with their child’s Contractor following the enrollment rules set forth in R9-31-1719.

When a member is transferred from Title XIX to Title XXI and has not made a Contractor choice for Title

XXI, the member will remain with his/her current Contractor and a Freedom of Choice notice will be sent to

the member. The member may then change plans no later than 30 days from the date the Freedom of Choice

notice is sent.

The effective date of enrollment for a Title XXI member (including HIFA parents) and SSDI-Temporary

Medical Coverage members will be the first day of the month following notification to the Contractor. In the

event that eligibility is determined on or after the 25th day of the month, eligibility will begin on the 1st day of

the second month following the determination.

Prior Period Coverage: AHCCCS provides prior period coverage for the period of time prior to the Title XIX

member’s enrollment during which the member is eligible for covered services. The time frame is from the

effective date of eligibility to the day the member is enrolled with the Contractor. The Contractor receives

notification from the Administration of the member’s enrollment. The Contractor is responsible for payment of

all claims for medically necessary covered services, including all behavioral health services, provided to

members during prior period coverage. This may include services provided prior to the contract year (See

Section D, Paragraph 53, Compensation, for a description of the Contractor’s reimbursement from AHCCCS

for this eligibility time period).

For behavioral health services, the 72-hour maximum liability period specified in A.A.C. R9-22-210.01 does

NOT apply to services provided during prior period coverage. Additionally, behavioral health services

provided during the PPC period are not considered in the calculation of the maximum of 72 hours of inpatient

emergency behavioral health services as described in the rule. Pursuant to A.R.S. 36-545 et seq., court-ordered

behavioral health screening and evaluation services are the responsibility of the county. Refer also to Section

D, Paragraph 12, Behavioral Health Services.

Newborns: Newborns born to AHCCCS eligible mothers enrolled at the time of the child's birth will be

enrolled with the mother's Contractor, when newborn notification is received by AHCCCS. The Contractor is

responsible for notifying AHCCCS of a child’s birth to an enrolled member. Capitation for the newborn will

begin on the date notification is received by AHCCCS. The effective date of AHCCCS eligibility will be the

newborn’s date of birth, and the Contractor is responsible for all covered services to the newborn, whether or

not AHCCCS has received notification of the child’s birth. AHCCCS is currently available to receive

notification 24 hours a day, 7 days a week via phone or the AHCCCS website. Each eligible mother of a

newborn is sent a letter advising her of her right to choose a different Contractor for her child; the date of the

change will be the date of processing the request from the mother. If the mother does not request a change, the

child will remain with the mother's Contractor.

Newborns of FES mothers are auto-assigned to a Contractor and mothers of these newborns sent letters

advising them of their right to choose a different Contractor for their children. In the event the FES mother

chooses a different Contractor, AHCCCS will recoup all capitation paid to the originally assigned Contractor

and the baby will be enrolled retroactive to the date of birth with the second Contractor. The second

Contractor will receive prior period capitation from the date of birth to the day before assignment and

prospective capitation from the date of assignment forward. The second Contractor will be responsible for all

covered services to the newborn from date of birth.

Enrollment Guarantees: Upon initial capitated enrollment as a Title XIX-eligible member, the member is

guaranteed a minimum of five full months of continuous enrollment. Upon initial capitated enrollment as a

Title XXI-eligible member, the member is guaranteed a minimum of 12 full months of continuous enrollment.

Enrollment guarantees do not apply to HIFA parents and SSDI-Temporary Medical Coverage members. The

enrollment guarantee is a one-time benefit. If a member changes from one Contractor to another within the

enrollment guarantee period, the remainder of the guarantee period applies to the new Contractor. The

enrollment guarantee may not be granted or may be terminated if the member is incarcerated, or if a minor

child is adopted. AHCCCS Rules R9-22, Article 17, and R9-31, Article 3, describes other reasons for which

the enrollment guarantee may not apply.

Native Americans: Native Americans, on- or off-reservation, may choose to receive services from Indian

Health Service (IHS), a P.L. 93-638 tribal facility or any available Contractor. If a choice is not made within

the specified time limit, Native American Title XIX members living on-reservation will be assigned to the

AHCCCS American Indian Health Program (AIHP) as FFS members. The designation of a zip code as a

‘reservation zip code’, not the physical location of the residence, is the factor that determines whether a

member is considered on or off-reservation for these purposes. Further, if the member resides in a zip code that

contains land on both sides of a reservation boundary and the zip code is assigned as off-reservation, the

physical location of the residence does not change the off-reservation designation for the member. Native

American Title XIX members living off-reservation who do not make a Contractor choice will be assigned to

an available Contractor using the AHCCCS protocol for family continuity and the auto-assignment algorithm.

Native American Title XXI members must make a choice prior to being determined eligible. Title XXI HIFA

parent members’ enrollment will follow the Title XIX enrollment rules. Native Americans may change from

AHCCCS AIHP FFS to a Contractor or from a Contractor to AHCCCS AIHP FFS at any time.

4. ANNUAL ENROLLMENT CHOICE

AHCCCS conducts an Annual Enrollment Choice (AEC) for members on their annual anniversary date [42

CFR 438.56(c)(2)(ii)]. AHCCCS may hold an open enrollment in any GSA or combination of GSAs, as

deemed necessary. During AEC, members may change Contractors subject to the availability of other

Contractors within their Geographic Service Area. A members is mailed a printed enrollment form and other

information required by the Balanced Budget Act of 1997 (BBA) 60 days prior to his/her AEC date and may

choose a new Contractor by contacting AHCCCS to complete the enrollment process. If the member does not

participate in the AEC, no change of Contractor will be made (except for approved changes under the ACOM

Change of Plan Policy) during the new anniversary year. This holds true if a Contractor’s contract is renewed

and the member continues to live in a Contractor’s service area. The Contractor shall comply with the ACOM

Member Transition for Annual Enrollment Choice Policy, Open Enrollment and Other Plan Changes Policy,

and the AMPM.

5. ENROLLMENT AFTER CONTRACT AWARD

In the event that AHCCCS does not award a CYE ’09 contract to an incumbent contractor, AHCCCS will

direct enrollment effective October 1, 2008, for those members enrolled with an exiting Contractor. Members

will be auto assigned to all or select Contractors utilizing the auto assignment algorithm found in the

Conversion Group Assignment section of Attachment G, Auto-Assignment Algorithm. The members in the

Conversion Group will have the opportunity to choose an alternate Contractor, according to the details in

Attachment G, Auto-Assignment Algorithm.

AHCCCS will also use an enhanced auto-assignment algorithm in certain GSAs for new Contractors or those

incumbent Contractors defined as small Contractors. This enhanced algorithm may be in effect beginning

October 1, 2008, for a period of no less than three months and no more than six months. Those Contractors not

defined as new or small Contractors in a GSA may not receive auto-assigned members during the enhanced

algorithm period. See Attachment G, Auto-Assignment Algorithm, for details.

In addition to auto-assignment, AHCCCS will make changes to both annual enrollment choice materials and

new enrollee materials prior to October 1, 2008, to reflect the change in available contractors. The auto

assignment algorithm will be adjusted to exclude auto assignment of new enrollees to exiting Contractor(s)

effective August 1, 2008.

6. AUTO-ASSIGNMENT ALGORITHM

Members who do not exercise their right to choose and do not have family continuity are assigned to a Contractor

through an auto-assignment algorithm. Once auto-assigned, AHCCCS sends a Freedom of Choice notice to the

member and gives him/her 30 days to choose a different Contractor from the auto-assigned Contractor. The

algorithm is a mathematical formula used to distribute members to the various Contractors in a manner that is

predictable and consistent with AHCCCS goals. The algorithm favors those Contractors with lower capitation

rates and higher Program scores in this procurement and as described below. For further details on the AHCCCS

Auto-Assignment Algorithm, refer to Attachment G. AHCCCS may change the algorithm at any time during the

term of the contract in response to Contractor-specific issues (e.g. imposition of an enrollment cap).

In future contract years, AHCCCS may adjust the auto-assignment algorithm in consideration of Contractors’

clinical performance measure results when calculating target percentages. Ranking in the algorithm may be

weighted, based on the number of Performance Measures for which a Contractor is meeting the current AHCCCS

Minimum Performance Standard (MPS) as a percentage of the total number of measures utilized in the

calculation. AHCCCS will determine and communicate the Performance Measures to be used to evaluate

Contractor performance prior to the beginning of the contract year to be measured.

7. AHCCCS MEMBER IDENTIFICATION CARDS

The Contractor is responsible for paying the costs of producing AHCCCS member identification cards. The

Contractor will receive an invoice the month following the issue date of the identification card.

8. MAINSTREAMING OF AHCCCS MEMBERS

To ensure mainstreaming of AHCCCS members, the Contractor shall take affirmative action so that members

are provided covered services without regard to payer source, race, color, creed, gender, religion, age, national

origin (to include those with limited English proficiency), ancestry, marital status, sexual preference, genetic

information, or physical or mental handicap, except where medically indicated. The Contractor must take into

account a member’s literacy and culture when addressing members and their concerns, and must take

reasonable steps to encourage subcontractors to do the same. The Contractor must make interpreters, including

assistance for the vision- or hearing- impaired, available free of charge for all members to ensure appropriate

delivery of covered services. The Contractor must provide members with information instructing them how to

access these services.

Prohibited practices include, but are not limited to, the following, in accordance with Title VI of the US Civil

Rights Act of 1964, 42 USC, Section 2001, Executive Order 13166, and rules and regulation promulgated

according to, or as otherwise provided by law:

a. Denying or not providing a member any covered service or access to an available facility.

b. Providing to a member any covered service which is different, or is provided in a different manner or at a

   different time from that provided to other members, other public or private patients or the public at large,

   except where medically necessary.

c. Subjecting a member to segregation or separate treatment in any manner related to the receipt of any

   covered service; restricting a member in any way in his or her enjoyment of any advantage or privilege

   enjoyed by others receiving any covered service.

d. The assignment of times or places for the provision of services on the basis of the race, color, creed,

   religion, age, sex, national origin, ancestry, marital status, sexual preference, income status, AHCCCS

   membership, or physical or mental handicap of the participants to be served.

If the Contractor knowingly executes a subcontract with a provider with the intent of allowing or permitting

the subcontractor to implement barriers to care (i.e., the terms of the subcontract act to discourage the full

utilization of services by some members); the Contractor will be in default of its contract.

If the Contractor identifies a problem involving discrimination by one of its providers, it shall promptly

intervene and implement a corrective action plan. Failure to take prompt corrective measures may place the

Contractor in default of its contract.

9. TRANSITION OF MEMBERS

The Contractor shall comply with the AMPM and the ACOM Member Transition for Annual Enrollment

Choice, Open Enrollment and Other Plan Changes Policy standards for member transitions between

Contractors or GSAs, participation in or discharge from CRS or CMDP, to or from an ALTCS Contractor, and

upon termination or expiration of a contract. AHCCCS may discontinue enrollment of members with the

Contractor three months prior to the contract termination date. The Contractor shall develop and implement

policies and procedures which comply with these policies to address transition of:

a. Members with significant medical conditions such as a high-risk pregnancy or pregnancy within the last

   30 days, the need for organ or tissue transplantation, chronic illness resulting in hospitalization or nursing

   facility placement, etc.;

b. Members who are receiving ongoing services such as dialysis, home health, chemotherapy and/or radiation

   therapy, or who are hospitalized at the time of transition;

c. Members who have conditions requiring ongoing monitoring or screening such as elevated blood lead

   levels and members who were in the NICU after birth.

d. Members who frequently contact AHCCCS, state and local officials, the Governor’s Office and/or the media.

e. Members who have received prior authorization for services such as scheduled surgeries, out-of-area

   specialty services, or nursing home admission;

f. Prescriptions, DME and medically necessary transportation ordered for the transitioning member by the

   relinquishing Contractor; and

g. Medical records of the transitioning member (the cost, if any, of reproducing and forwarding medical

   records shall be the responsibility of the relinquishing AHCCCS Contractor).

h. Any members transitioning to CMDP.

When relinquishing members, the Contractor is responsible for timely notification to the receiving Contractor

regarding pertinent information related to any special needs of transitioning members. The Contractor, when

receiving a transitioning member with special needs, is responsible for coordinating care with the relinquishing

Contractor in order that services are not interrupted, and for providing the new member with Contractor and

service information, emergency numbers and instructions about how to obtain services.

10. SCOPE OF SERVICES

The Contractor shall provide covered services to AHCCCS members in accordance with all applicable federal

and state laws regulations and policies, including those listed by reference in attachments and this contract.

The services are described in detail in AHCCCS Rules R9-22, Article 2, the AHCCCS Medical Policy Manual

(AMPM) and the AHCCCS Contractor Operations Manual (ACOM), all of which are incorporated herein by

reference, except for provisions specific to the Fee-for-Service program, and may be found on the AHCCCS

website (http://www.azahcccs.gov/) [42 CFR 438.210(a)(1)]. To be covered, services must be medically

necessary and cost effective. The covered services are briefly described below. Except for annual well woman

exams, behavioral health and children’s dental services, covered services must be provided by or coordinated

with a primary care provider.

The Contractor shall coordinate all services it provides to a member with any services the member receives

from other entities, including behavioral health services the member receives through an ADHS/RBHA

provider and Children’s Rehabilitative Services (CRS) provided through ADHS/CRSA. The Contractor shall

ensure that, in the process of coordinating care, each member’s privacy is protected in accordance with the

privacy requirements in 45 CFR Parts 160 and 164, Subparts A and E, to the extent that they are applicable [42

CFR 438.208(b)(4) and 438.224].

Services must be rendered by providers that are appropriately licensed or certified, operating within their scope

of practice, and registered as an AHCCCS provider. The Contractor shall provide the same standard of care

for all members, regardless of the member's eligibility category. The Contractor shall ensure that the services

are sufficient in amount, duration and scope to reasonably be expected to achieve the purpose for which the

services are furnished. The Contractor shall not arbitrarily deny or reduce the amount, duration, or scope of a

required service solely because of diagnosis, type of illness, or condition of the member. The Contractor may

place appropriate limits on a service on the basis of criteria such as medical necessity; or for utilization control,

provided the services furnished can reasonably be expected to achieve their purpose [42 CFR 438.210(a)(3)].

If the Contractor does not, because of a moral or religious objection, cover one or more of the services listed in

this contract, it must notify AHCCCS of the objection. The Contractor must arrange for those services to be

provided by another entity. Any alternative arrangement must be approved in advance by AHCCCS. Requests

for approval must be submitted to the Division of Health Care Management, Acute Care Operations Unit, 90

days prior to implementation.

Authorization of Services: For the processing of requests for initial and continuing authorizations of services,

the Contractor shall have in place and follow written policies and procedures. The Contractor shall have

mechanisms in place to ensure consistent application of review criteria for authorization decisions. Any

decision to deny a service authorization request or to authorize a service in an amount, duration or scope that is

less than requested, shall be made by a health care professional who has appropriate clinical expertise in

treating the member’s condition or disease [42 CFR 438.210(b)].

Notice of Action: The Contractor shall notify the requesting provider and give the member written notice of

any decision by the Contractor to deny, reduce, suspend or terminate 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

requirements of 42 CFR 438.404, AHCCCS Rules and ACOM Notice of Action Policy. The notice to the

provider must also be in writing as specified in Attachment H(1) of this contract.

The Contractor shall ensure that its providers are not restricted or inhibited in any way from communicating

freely with members regarding their health care, medical needs and treatment options, even if needed services

are not covered by the Contractor.

Ambulatory Surgery: The Contractor shall provide surgical services for either emergency or scheduled

surgeries when provided in an ambulatory or outpatient setting, such as a freestanding surgical center or a

hospital-based outpatient surgical setting.

American Indian Health Program (AIHP): AHCCCS will reimburse claims on a FFS basis for acute care

services that are medically necessary, eligible for 100% Federal reimbursement, and are provided to Title XIX

members enrolled with the Contractor in an IHS or a 638 tribal facility. Encounters for Title XIX services in

IHS or tribal facilities will not be accepted by AHCCCS or considered in capitation rate development.

The Contractor is responsible for reimbursement to IHS or tribal facilities for services provided to Title XXI

Native American members enrolled with the Contractor. The Contractor may choose to subcontract with an

IHS or 638 tribal facility as part of its provider network for the delivery of Title XXI covered services.

Expenses incurred by the Contractor for Title XXI services delivered in an IHS or 638 tribal facility shall be

encountered and considered in capitation rate development.

Anti-hemophilic Agents and Related Services: The Contractor shall provide services for the treatment of

hemophilia and Von Willebrand’s disease (See Section D, Paragraph 57, Reinsurance, Catastrophic

Reinsurance).

Audiology: The Contractor shall provide audiology services to members under the age of 21 years, including

the identification and evaluation of hearing loss and rehabilitation of the hearing loss through medical or

surgical means. i.e., Only the identification and evaluation of hearing loss are covered for members 21 years of

age and older unless the hearing loss is due to an accident or injury-related emergent condition. Pursuant to

A.A.C. R9-22-212, hearing aids are not covered for members 21 and older.

Behavioral Health: The Contractor shall provide behavioral health services as described in Section D,

Paragraph 12, Behavioral Health Services. Also refer to Prior Period Coverage in Section D, Paragraph 3,

Enrollment and Disenrollment.

Children's Rehabilitative Services (CRS): The program for children with CRS-covered conditions is

administered by the Arizona Department of Health Services (ADHS) for children who meet CRS eligibility

criteria. The Contractor shall refer children to the CRS program who are potentially eligible for services

related to CRS-covered conditions, as specified in R9-22, Article 2, and A.R.S. Title 36, Chapter 2, Article 3.

The Contractor is responsible for care of members until Children’s Rehabilitative Services Administration

(CRSA) determines those members eligible. In addition, the Contractor is responsible for covered services for

CRS-eligible members unless and until the Contractor has received written confirmation from CRSA that

CRSA will provide the requested service. The Contractor shall require the member’s Primary Care Provider

(PCP) to coordinate the member’s care with the CRS Program. For more detailed information regarding

eligibility criteria, referral practices, and Contractor-CRS coordination issues, refer to the CRS Policy and

Procedures Manual located on the Arizona Department of Health Services website at http://www.azdhs.gov/

and the related ACOM policy.

The Contractor shall respond to requests for services potentially covered by CRSA in accordance with the

related ACOM policy. The Contractor is responsible for addressing prior authorization requests if CRSA fails

to comply with the timeframes specified in the related ACOM policy. The Contractor remains ultimately

responsible for the provision of all covered services to its members, including emergency services not related

to a CRS condition, emergency services related to a CRS condition rendered outside the CRS network, and

AHCCCS-covered services denied by CRSA for the reason that it is not a service related to a CRS condition.

Referral to CRSA does not relieve the Contractor of the responsibility for providing timely medically

necessary AHCCCS services not covered by CRSA. In the event that CRSA denies a medically necessary

AHCCCS service for the reason that it is not related to a CRS condition, the Contractor must promptly respond

to the service authorization request and authorize the provision of medically necessary services. CRSA cannot

contest the Contractor prior authorization determination if CRSA fails to timely respond to a service

authorization request. The Contractor, through its Medical Director, may request review from the CRS

Regional Medical Director when it denies a service for the reason that it is not covered by the CRS Program.

The Contractor may also request a hearing with the Administration if it is dissatisfied with the CRSA

determination. If the AHCCCS Hearing Decision determines that the service should have been provided by

CRSA, CRSA shall be financially responsible for the costs incurred by the Contractor in providing the service.

A member with private insurance is not required to utilize CRSA. This includes members with Medicare

whether they are enrolled in Medicare FFS or a Medicare Managed Care plan. If a member uses the private

insurance network or Medicare for a CRS-covered condition, the Contractor is responsible for all applicable

deductibles and copayments. If the member is on Medicare, the ACOM Medicare Cost Sharing for Members

in Traditional Fee for Service Medicare Policy and Medicare Cost Sharing for Members in Medicare

Managed Care Plans Policy shall apply. When the private insurance or Medicare is exhausted, or certain

annual or lifetime limits are reached with respect to CRS-covered conditions, the Contractor shall refer the

member to CRSA for determination of eligibility for CRS services. If the member with private insurance or

Medicare chooses to enroll with CRS, CRS becomes the secondary payer responsible for all applicable

deductibles and copayments. The Contractor is not responsible to provide services in instances when the

 CRS-eligible member who has no primary insurance or Medicare refuses to receive CRS-covered services through

the CRS program. If the Contractor becomes aware that a member with a CRS-covered condition refuses to

participate in the CRS application process or refuses to receive services through the CRS Program, the member

may be billed by the provider in accordance with AHCCCS regulations regarding billing for unauthorized

services.

Chiropractic Services: The Contractor shall provide chiropractic services to members under age 21 when

prescribed by the member’s PCP and approved by the Contractor in order to ameliorate the member’s medical

condition. Medicare approved chiropractic services for any member shall also be covered, subject to

limitations specified in 42 CFR 410.22, for Qualified Medicare Beneficiaries if prescribed by the member’s

PCP and approved by the Contractor.

Dialysis: The Contractor shall provide medically necessary dialysis, supplies, diagnostic testing and

medication for all members when provided by Medicare-certified hospitals or Medicare-certified end stage

renal disease (ESRD) providers. Services may be provided on an outpatient basis or on an inpatient basis if the

hospital admission is not solely to provide chronic dialysis services.

Early and Periodic Screening, Diagnosis and Treatment (EPSDT): The Contractor shall provide

comprehensive health care services through primary prevention, early intervention, diagnosis and medically

necessary treatment to correct or ameliorate defects and physical or mental illness discovered by the screenings

for members under age 21. The Contractor shall ensure that these members receive required health screenings,

including those for developmental/behavioral health, in compliance with the AHCCCS periodicity schedule.

The Contractor shall submit all EPSDT reports to the AHCCCS Division of Health Care Management, as

required by the AMPM. The Contractor is required to meet specific participation/utilization rates for members

as described in Section D, Paragraph 23, Quality Management.

The Contractor shall ensure the initiation and coordination of a referral to the ADHS/RBHA system for

members in need of behavioral health services. The Contractor shall follow up with the RBHA to monitor

whether members have received these health services.

The Contractor is encouraged to assign EPSDT-aged members to providers that are trained on and who use

AHCCCS-approved developmental screening tools.

Early Detection Health Risk Assessment, Screening, Treatment and Primary Prevention: The Contractor

shall provide primary prevention education to adult members. The Contractor shall provide health care services

through screening, diagnosis and medically necessary treatment for members 21 years of age and older. These

services include, but are not limited to, screening and treatment for hypertension; elevated cholesterol; colon

cancer; sexually transmitted diseases; tuberculosis; HIV/AIDS; breast and cervical cancer; and prostate cancer.

Nutritional assessment and treatment are covered when medically necessary to meet the nutritional needs of

members who may have a chronic debilitating disease. Physical examinations, diagnostic work-ups and

medically necessary immunizations are also covered as found in Arizona Administrative Code Section R9-22-

205. Required assessment and screening services for members under age 21 are specified in the AHCCCS

EPSDT periodicity schedule.

Emergency Services: The Contractor shall have and/or provide the following as a minimum:

a. Emergency services facilities adequately staffed by qualified medical professionals to provide prehospital,

    emergency care on a 24-hour-a-day, 7-day-a-week basis, for the sudden onset of a medically

    emergent condition. Emergency medical services are covered without prior authorization. The

    Contractor is encouraged to contract with emergency service facilities for the provision of emergency

    services. The Contractor shall be responsible for educating members and providers regarding

    appropriate utilization of emergency room services including behavioral health emergencies. The

    Contractor shall monitor emergency service utilization (by both provider and member) and shall have

    guidelines for implementing corrective action for inappropriate utilization;

b. All medical services necessary to rule out an emergency condition; and

c. Emergency transportation.

Per the Balanced Budget Act of 1997, 42 CFR 438.114, the following conditions apply with respect to

coverage and payment of emergency services:

The Contractor must cover and pay for emergency services regardless of whether the provider that furnishes

the service has a contract with the Contractor.

The Contractor may not deny payment for treatment obtained under either of the following circumstances:

1. A member had an emergency medical condition, including cases in which the absence of medical

   attention would not have resulted in the outcomes identified in the definition of emergency medical

   condition under 42 CFR 438.114.

2. A representative of the Contractor (an employee or subcontracting provider) instructs the member to

   seek emergency medical services.

Additionally, the Contractor may not:

1. Limit what constitutes an emergency medical condition as defined in 42 CFR 438.114, on the basis of

   lists of diagnoses or symptoms.

2. Refuse to cover emergency services based on the failure of the emergency room provider, hospital, or

   fiscal agent to notify the Contractor of the member’s screening and treatment within 10 calendar days

   of presentation for emergency services. Claims submission by the hospital within 10 calendar days of

   presentation for the emergency services constitutes notice to the Contractor. This notification

   stipulation is only related to the provision of emergency services.

3. Require notification of Emergency Department treat and release visits as a condition of payment

   unless the plan has prior approval of the AHCCCS Administration.

A member who has an emergency medical condition may not be held liable for payment of subsequent

screening and treatment needed to diagnose the specific condition or stabilize the patient.

The attending emergency physician, or the provider actually treating the member, is responsible for

determining when the member is sufficiently stabilized for transfer or discharge, and such determination is

binding on the Contractor responsible for coverage and payment. The Contractor shall comply with BBA

guidelines regarding the coordination of post-stabilization care.

For additional information and requirements regarding emergency services, refer to AHCCCS Rules R9-22-201

et seq. and 42 CFR 438.114.

Family Planning: The Contractor shall provide family planning services in accordance with the AMPM, for

all members who choose to delay or prevent pregnancy. These include medical, surgical, pharmacological and

laboratory services, as well as contraceptive devices. Information and counseling, which allow members to

make informed decisions regarding family planning methods, shall also be included. If the Contractor does not

provide family planning services, it must contract for these services through another health care delivery

system.

The Contractor shall provide services to members enrolled in the Family Planning Services Extension

Program, a program that provides family planning services only, for a maximum of two consecutive 12-month

periods, to women whose SOBRA eligibility has terminated. The Contractor is also responsible for notifying

AHCCCS when a SOBRA woman is sterilized to prevent inappropriate enrollment in the SOBRA Family

Planning Services Extension Program. Notification should be made at the time the newborn is reported or

after the sterilization procedure is completed.

Home and Community Based Services (HCBS): Assisted living facility, alternative residential setting, or

home and community based services (HCBS) as defined in R9-22, Article 2, and R9-28, Article 2 that meet the

provider standards described in R9-28, Article 5, and subject to the limitations set forth in the AMPM. These

services are covered in lieu of a nursing facility.

Home Health: This service shall be provided under the direction of a physician to prevent hospitalization or

institutionalization and may include nursing, therapies, supplies and home health aide services. It shall be

provided on a part-time or intermittent basis.

Hospice: These services are covered for members who are certified by a physician as being terminally ill and

having six months or less to live. See the AMPM for details on covered hospice services.

Hospital: Inpatient services include semi-private accommodations for routine care, intensive and coronary

care, surgical care, obstetrics and newborn nurseries, and behavioral health emergency/crisis services. If the

member’s medical condition requires isolation, private inpatient accommodations are covered. Nursing

services, dietary services and ancillary services such as laboratory, radiology, pharmaceuticals, medical

supplies, blood and blood derivatives, etc. are also covered. Outpatient hospital services include any of the

above, which may be appropriately provided on an outpatient or ambulatory basis (i.e., laboratory, radiology,

therapies, ambulatory surgery, etc.). Observation services may be provided on an outpatient basis, if

determined reasonable and necessary, when deciding whether the member should be admitted for inpatient

care. Observation services include the use of a bed and periodic monitoring by hospital nursing staff and/or

other staff to evaluate, stabilize or treat medical conditions of a significant degree of instability and/or

disability.

Immunizations: The Contractor shall provide immunizations for adults (21 years of age and older) to include

but not limited to: diphtheria-tetanus, influenza, pneumococcus, rubella, measles and hepatitis-B and others as

medically indicated. For all members under the age of 21, immunization requirements include but are not

limited to: diphtheria, tetanus, pertussis vaccine (DTaP), inactivated polio vaccine (IPV), measles, mumps,

rubella (MMR) vaccine, H. influenza, type B (HIB) vaccine, hepatitis B (Hep B) vaccine, varicella zoster virus

(VZV) vaccine and pneumococcal conjugate vaccine (PCV) (see Section D, Paragraph 15, Pediatric

Immunizations and the Vaccines for Children Program). The Contractor is required to meet specific

immunization rates for members under the age of 21, which are described in Section D, Paragraph 23, Quality

Management. (Please refer to the AMPM for current immunization requirements.)

Incontinence Supplies: The Contractor shall cover incontinence supplies as specified in AHCCCS Rule

A.A.C. R9-22-212 and the AMPM.

Laboratory: Laboratory services for diagnostic, screening and monitoring purposes are covered when

provided by a CLIA (Clinical Laboratory Improvement Act) approved free-standing laboratory, hospital,

clinic, physician office or other health care facility laboratory.

Upon written request, the Contractor may obtain laboratory test data on members from a freestanding

laboratory or hospital- based laboratory subject to the requirements specified in A.R.S. § 36-2903(Q) and (R).

The data shall be used exclusively for quality improvement activities and health care outcome studies required

and/or approved by the Administration.

Maternity: The Contractor shall provide pre-conception counseling, pregnancy identification, prenatal care,

treatment of pregnancy related conditions, labor and delivery services, and postpartum care for members.

Services may be provided by physicians, physician assistants, nurse practitioners, or certified nurse midwives.

Members may select or be assigned to a PCP specializing in obstetrics. All members, anticipated to have a

low-risk delivery, may elect to receive labor and delivery services in their home, if this setting is included in

the allowable settings of the Contractor and the Contractor has providers in its network that offer home labor

and delivery services. All members anticipated to have a low-risk prenatal course and delivery may elect to

receive prenatal care, labor and delivery and postpartum care provided by certified nurse midwives, if these

providers are in the Contractor’s network. Members receiving maternity services from a certified nurse

midwife must also be assigned to a PCP for other health care and medical services. The Contractor shall allow

women and their newborns to receive up to 48 hours of inpatient hospital care after a routine vaginal delivery

and up to 96 hours of inpatient care after a cesarean delivery. The attending health care provider, in

consultation with the mother, may discharge the mother or newborn prior to the minimum length of stay. A

normal newborn may be granted an extended stay in the hospital of birth when the mother’s continued stay in

the hospital is beyond the 48 or 96 hour stay.

The Contractor shall inform all assigned AHCCCS pregnant women of voluntary prenatal HIV testing and the

availability of medical counseling if the test is positive. The Contractor shall provide information in the

member handbook and annually in the member newsletter, which encourages pregnant women to be tested and

provides instructions about where testing is available. Semi-annually, the Contractor shall report to AHCCCS

the number of pregnant women who have been identified as HIV/AIDS-positive. This report is due no later

than 30 days after the end of the second and fourth quarters of the contract year.

Medical Foods: Medical foods are covered within limitations defined in the AMPM for members diagnosed

with a metabolic condition included under the ADHS Newborn Screening Program and specified in the

AMPM. The medical foods, including metabolic formula and modified low protein foods, must be prescribed

or ordered under the supervision of a physician.

Medical Supplies, Durable Medical Equipment (DME), Orthotic and Prosthetic Devices: These services are

covered when prescribed by the member’s PCP, attending physician, practitioner, or by a dentist. Medical

equipment may be rented or purchased only if other sources, which provide the items at no cost, are not

available. The total cost of the rental must not exceed the purchase price of the item. Reasonable repairs or

adjustments of purchased equipment are covered to make the equipment serviceable and/or when the repair

cost is less than renting or purchasing another unit.

Nursing Facility: The Contractor shall provide services in nursing facilities, including religious non-medical

health care institutions, for members who require short-term convalescent care not to exceed 90 days per

contract year. In lieu of a nursing facility, the member may be placed in an assisted living facility, an

alternative residential setting, or receive home and community based services (HCBS) as defined in R9-22,

Article 2 and R9-28, Article 2 that meet the provider standards described in R9-28, Article 5, and subject to the

limitations set forth in the AMPM.

Nursing facility services must be provided in a dually-certified Medicare/Medicaid nursing facility, which

includes in the per-diem rate: nursing services; basic patient care equipment and sickroom supplies; dietary

services; administrative physician visits; non-customized DME; necessary maintenance and rehabilitation

therapies; over-the-counter medications; social, recreational and spiritual activities; and administrative,

operational medical direction services. See Section D, Paragraph 41, Responsibility for Nursing Facility

Reimbursement, for further details.

The Contractor shall notify the Assistant Director of the Division of Member Services, by Email, when a

member has been residing in a nursing facility for 75 days. This will allow AHCCCS time to follow-up on the

status of the ALTCS application and to consider potential fee-for-service coverage, if the stay goes beyond the

90-day per contract year maximum. The notice should be sent via e-mail to

HealthPlan75DayNotice@azahcccs.gov.

                Notifications must include:

                1. Member Name

                2. AHCCCS ID

                3. Date of Birth

                4. Name of Facility

                5. Admission Date to the Facility

                6. Date they reach the 75 days

                7. Name of Contractor of enrollment

Nutrition: Nutritional assessments may be conducted as a part of the EPSDT screenings for members under

age 21, and to assist members 21 years of age and older whose health status may improve with nutritional

intervention. Assessment of nutritional status on a periodic basis may be provided as determined necessary,

and as a part of the health risk assessment and screening services provided by the member’s PCP. AHCCCS

covers nutritional therapy on an enteral, parenteral or oral basis, when determined medically necessary to

provide either complete daily dietary requirements or to supplement a member’s daily nutritional and caloric

intake and when AHCCCS criteria specified in the AMPM are met.

Oral Health: The Contractor shall provide all members under the age of 21 years with all medically necessary

dental services including emergency dental services, dental screening and preventive services in accordance

with the AHCCCS periodicity schedule, as well as therapeutic dental services, dentures, and pretransplantation

dental services. The Contractor shall monitor compliance with the EPSDT periodicity schedule

for dental screening services. The Contractor is required to meet specific utilization rates for members as

described in Section D, Paragraph 23, Quality Management. The Contractor shall ensure that members are

notified when dental screenings are due if the member has not been scheduled for a visit. If a dental screening

is not received by the member, a second notice must be sent. Members under the age of 21 may request dental

services without referral and may choose a dental provider from the Contractor’s provider network. For

members who are 21 years of age and older, the Contractor shall provide emergency dental care, medically

necessary dentures and dental services for transplantation services as specified in the AMPM.

Physician: The Contractor shall provide physician services to include medical assessment, treatments and

surgical services provided by licensed allopathic or osteopathic physicians.

Podiatry: The Contractor shall provide podiatry services to include bunionectomies, casting for the purpose of

constructing or accommodating orthotics, medically necessary orthopedic shoes that are an integral part of a

brace, and medically necessary routine foot care for patients with a severe systemic disease that prohibits care

by a nonprofessional person.

Post-stabilization Care Services Coverage and Payment: Pursuant to AHCCCS Rule A.A.C. R9-22-210 and

42 CFR 438.114, 422.113(c) and 422.133, the following conditions apply with respect to coverage and

payment of emergency and of post-stabilization care services, except where otherwise noted in the contract:

The Contractor must cover and pay for post-stabilization care services without authorization, regardless of

whether the provider that furnishes the service has a contract with the Contractor, for the following situations:

1. Post-stabilization care services that were pre-approved by the Contractor; or

2. Post-stabilization care services were not pre-approved by the Contractor because the Contractor

   did not respond to the treating provider’s request for pre-approval within one hour after being

   requested to approve such care or could not be contacted for pre-approval.

3. The Contractor representative and the treating physician cannot reach agreement concerning the

   member’s care and a Contractor physician is not available for consultation. In this situation, the

   Contractor must give the treating physician the opportunity to consult with a Contractor physician

   and the treating physician may continue with care of the patient until a Contractor physician is

   reached or one of the criteria in 42 CFR 422.113(c)(3) is met.

Pursuant to 42 CFR 422.113(c)(3), the Contractor’s financial responsibility for post-stabilization care services

that have not been pre-approved ends when:

1. A Contractor physician with privileges at the treating hospital assumes responsibility for the

   member’s care;

2. A Contractor physician assumes responsibility for the member’s care through transfer;

3. A Contractor representative and the treating physician reach an agreement concerning the

   member’s care; or

4. The member is discharged.

Pregnancy Terminations: AHCCCS covers pregnancy termination if the pregnant member suffers from a

physical disorder, physical injury, or physical illness, including a life endangering physical condition caused

by or arising from the pregnancy itself, that would, as certified by a physician, place the member in danger of

death unless the pregnancy is terminated, or the pregnancy is a result of rape or incest.

The attending physician must acknowledge that a pregnancy termination has been determined medically

necessary by submitting the Certificate of Necessity for Pregnancy Termination. This certificate must be

submitted to the Contractor’s Medical Director. The Certificate must certify that, in the physician's

professional judgment, one or more of the previously mentioned criteria have been met.

Prescription Drugs: Medications ordered by a PCP, attending physician, dentist or other authorized prescriber

and dispensed under the direction of a licensed pharmacist are covered subject to limitations related to

prescription supply amounts, Contractor formularies and prior authorization requirements. The Contractor

may include over-the-counter medications in the formulary, as defined in the AMPM. An appropriate overthe-

counter medication may be prescribed, when it is determined to be a lower-cost alternative to prescription

drugs.

Medicare Part D: AHCCCS covers those drugs ordered by a PCP, attending physician, dentist or other

authorized prescriber and dispensed under the direction of a licensed pharmacist subject to limitations related

to prescription supply amounts, and the Contractor’s prior authorization requirements if they are excluded from

Medicare Part D coverage. Medications that are covered by Part D, but are not on a specific Part D Health

Plan’s formulary are not considered excluded drugs and will not be covered by AHCCCS.

Primary Care Provider (PCP): PCP services are covered when provided by a physician, physician assistant or

nurse practitioner selected by, or assigned to, the member. The PCP provides primary health care and serves

as a coordinator in referring the member for specialty medical services [42 CFR 438.208(b)]. The PCP is

responsible for maintaining the member’s primary medical record, which contains documentation of all health

risk assessments and health care services of which they are aware whether or not they were provided by the

PCP.

Radiology and Medical Imaging: These services are covered when ordered by the member’s PCP, attending

physician or dentist and are provided for diagnosis, prevention, treatment or assessment of a medical condition.

Services are generally provided in hospitals, clinics, physician offices and other health care facilities.

Rehabilitation Therapy: The Contractor shall provide occupational, physical and speech therapies. Therapies

must be prescribed by the member’s PCP or attending physician for an acute condition and the member must

have the potential for improvement due to the rehabilitation. Physical therapy for all members, and

occupational and speech therapies for members under the age of 21, are covered in both inpatient and

outpatient settings. For those members who are 21 and over, occupational and speech therapies are covered in

inpatient settings only.

Respiratory Therapy: This therapy is covered in inpatient and outpatient settings when prescribed by the

member’s PCP or attending physician, and is necessary to restore, maintain or improve respiratory functioning.

Transplantation of Organs and Tissue, and Related Immunosuppressant Drugs: These services are covered

within limitations defined in the AMPM for members diagnosed with specified medical conditions. Services

include pre-transplant inpatient or outpatient evaluation; donor search; organ/tissue harvesting or procurement;

preparation and transplantation services; and convalescent care. In addition, if a member receives, or has

received, a transplant covered by a source other than AHCCCS, medically necessary non-experimental

services are provided, within limitations, after the discharge from the acute care hospitalization for the

transplantation. AHCCCS has contracted with transplantation providers for the Contractor’s use or the

Contractor may select its own transplantation provider.

Transportation: These services include emergency and non-emergency medically necessary transportation.

Emergency transportation, including transportation initiated by an emergency response system such as 911,

may be provided by ground, air or water ambulance to manage an AHCCCS member’s emergency medical

condition at an emergency scene and transport the member to the nearest appropriate medical facility.

 Non-emergency transportation shall be provided for members who are unable to provide their own transportation

for medically necessary services. The Contractor shall ensure that members have coordinated, reliable,

medically necessary transportation to ensure members arrive on-time for regularly scheduled appointments and

are picked up upon completion of the entire scheduled treatment.

Triage/Screening and Evaluation: These are covered services when provided by acute care hospitals, IHS

facilities, a PL 93-638 tribal facility and after-hours settings to determine whether or not an emergency exists,

assess the severity of the member’s medical condition and determine what services are necessary to alleviate or

stabilize the emergent condition. Triage/screening services must be reasonable, cost effective and meet the

criteria for severity of illness and intensity of service.

Vision Services/Ophthalmology/Optometry: The Contractor shall provide all medically necessary emergency

eye care, vision examinations, prescriptive lenses, and treatments for conditions of the eye for all members

under the age of 21. For members who are 21 years of age and older, the Contractor shall provide emergency

care for eye conditions which meet the definition of an emergency medical condition. Also covered for this

population is cataract removal, and medically necessary vision examinations and prescriptive lenses, if

required, following cataract removal and other eye conditions as specified in the AMPM.

Members shall have full freedom to choose, within the Contractor’s network, a practitioner in the field of eye

care, acting within the scope of their practice, to provide the examination, care or treatment for which the

member is eligible. A “practitioner in the field of eye care” is defined to be either an ophthalmologist or an

optometrist.

11. SPECIAL HEALTH CARE NEEDS

The Contractor shall have in place a mechanism to identify all members with special health care needs [42

CFR 438.240(b)(4)]. The Contractor shall implement mechanisms to assess each member identified as having

special health care needs, in order to identify any ongoing special conditions of the member which require a

course of treatment or regular care monitoring. The assessment mechanisms shall use appropriate health care

professionals [42 CFR 438.208(c)(2)]. The Contractor shall share with other entities providing services to that

member the results of its identification and assessment of that member’s needs so that those activities need not

be duplicated [42 CFR 438.208(b)(3)].

For members with special health care needs determined to need a specialized course of treatment or regular

care monitoring, the Contractor must have procedures in place to allow members to directly access a specialist

(for example through a standing referral or an approved number of visits) as appropriate for the member’s

condition and identified needs [42 CFR 438.208(c)(4)].

The Contractor shall have a methodology to identify providers willing to provide medical home services and

make reasonable efforts to offer access to these providers.

The American Academy of Pediatrics (AAP) describes care from a medical home as:

                • Accessible

                • Continuous

                • Coordinated

                • Family-centered

                • Comprehensive

                • Compassionate

                • Culturally effective

The Contractor shall ensure that populations with ongoing medical needs, including but not limited to dialysis,

radiation and chemotherapy, have coordinated, reliable, medically necessary transportation to ensure members

arrive on-time for regularly scheduled appointments and are picked up upon completion of the entire scheduled

treatment.

12. BEHAVIORAL HEALTH SERVICES

AHCCCS members, except for SOBRA Family Planning members, are eligible for comprehensive behavioral

health services. For SOBRA Family Planning members, there is no behavioral health coverage. With the

exception of the Contractor’s providers’ medical management of certain behavioral health conditions as

described under “Medication Management Services”, the behavioral health benefit for these members is

provided through the ADHS - Regional Behavioral Health Authority (RBHA) system. The Contractor shall be

responsible for member education regarding these benefits; provision of limited emergency inpatient services;

and screening and referral to the RBHA system of members identified as requiring behavioral health services.

Member Education: The Contractor shall be responsible for educating members in the member handbook and

other printed documents about covered behavioral health services and where and how to access services.

Covered services include:

a. Behavior Management (behavioral health personal care, family support/home care training, self-help/peer

   support)

b. Behavioral Health Case Management Services (limited)

c. Behavioral Health Nursing Services

d. Emergency Behavioral Health Care

e. Emergency and Non-Emergency Transportation

f. Evaluation and Assessment

g. Individual, Group and Family Therapy and Counseling

h. Inpatient Hospital Services (the Contractor may provide services in alternative inpatient settings that are

    licensed by the Arizona Department of Health Services, Division of Assurance and Licensure, the Office

    of Behavioral Health Licensure, in lieu of services in an inpatient hospital. These alternative settings must be

    lower cost than traditional inpatient settings. The cost of the alternative settings will be considered in

    capitation rate development)

i.  Non-Hospital Inpatient Psychiatric Facilities Services (Level I residential treatment centers and sub-acute

    facilities)

j.  Laboratory and Radiology Services for Psychotropic Medication Regulation and Diagnosis

k. Opioid Agonist Treatment

l.  Partial Care (Supervised day program, therapeutic day program and medical day program)

m. Psychosocial Rehabilitation (living skills training; health promotion; supportive employment services)

n. Psychotropic Medication

o. Psychotropic Medication Adjustment and Monitoring

p. Respite Care (with limitations)

q. Rural Substance Abuse Transitional Agency Services

r. Screening

s. Behavioral Health Therapeutic Home Care Services

Referrals: As specified in Section D, Paragraph 10, Scope of Services, EPSDT, the Contractor must provide

developmental/behavioral health screenings for members up to 21 years of age in compliance with the

AHCCCS periodicity schedule. The Contractor shall ensure the initiation and coordination of behavioral

health referrals of these members to the RBHA when determined necessary through the screening process.

The Contractor is responsible for RBHA referral and follow-up collaboration, as necessary, for other members

identified as needing behavioral health evaluation and treatment. Members may also access the RBHA system

for evaluation by self-referral or be referred by schools, State agencies or other service providers. The

Contractor is responsible for providing transportation to a member’s first RBHA evaluation appointment if a

member is unable to provide his/her own transportation.

Emergency Services: Once a member is enrolled, the Contractor is responsible for providing up to 72 hours

inpatient emergency behavioral health services to members with psychiatric or substance abuse diagnoses who

are not behavioral health recipients in accordance with AHCCCS Rule R9-22-210.01. These emergency

inpatient behavioral health services are in addition to a Contractor’s responsibility to reimburse all medically

necessary behavioral health services received during prior period coverage. Reimbursement for court ordered

screening and evaluation services is not the responsibility of the Contractor and instead falls to the county

pursuant to A.R.S. 36-545. For additional information regarding behavioral health services refer to Title 9

Chapter 22 Articles 2 and 12. It is expected that the Contractor initiate a referral to the RBHA for evaluation

and behavioral health recipient eligibility as soon as possible after admission.

When members present in an emergency room setting, the Contractor is responsible for all emergency medical

services including triage, physician assessment and diagnostic tests. For members who are not ADHS

behavioral health recipients, the Contractor is responsible to provide medically necessary psychiatric

consultations or psychological consultations in emergency room settings to help stabilize the member or

determine the need for inpatient behavioral health services. ADHS is responsible for medically necessary

psychiatric consultations provided to ADHS behavioral health recipients in emergency room settings.

Comorbidities: The Contractor must ensure that members with diabetes who are being discharged from the

Arizona State Hospital (AzSH) are issued the same brand and model of both glucometer and supplies they were

trained to use while in the facility. Care must be coordinated with the AzSH prior to discharge to ensure that all

supplies are authorized and available to the member upon discharge.

In the event that a member’s mental health status renders them incapable or unwilling to manage their medical

condition and the member has a skilled medical need, the Contractor must arrange ongoing medically necessary

nursing services.

Coordination of Care: The Contractor is responsible for ensuring that a medical record is established by the

PCP when behavioral health information is received from the RBHA or provider about an assigned member even

if the PCP has not yet seen the assigned member. In lieu of actually establishing a medical record, such

information may be kept in an appropriately labeled file but must be associated with the member’s medical record

as soon as one is established. The Contractor shall require the PCP to respond to RBHA/provider information

requests pertaining to ADHS behavioral health recipient members within 10 business days of receiving the

request. The response should include all pertinent information, including, but not limited to, current diagnoses,

medications, laboratory results, last PCP visit, and recent hospitalizations. The Contractor shall require the PCP to

document or initial signifying review of member behavioral health information received from a RBHA

behavioral health provider who is also treating the member. For prior period coverage, the Contractor is

responsible for payment of all claims for medically necessary covered behavioral health services.

Medication Management Services: The Contractor shall allow PCPs to provide medication management

services (prescriptions, medication monitoring visits, laboratory and other diagnostic tests necessary for

diagnosis and treatment of behavioral disorders) to members with diagnoses of depression, anxiety and

attention deficit hyperactivity disorder. The Contractor shall make available, on the Contractor’s formulary,

medications for the treatment of these disorders. AHCCCS has established a work group to identify best

practices and evidence-based practice guidelines for the treatment of anxiety, depression and ADHD disorders.

The Contractor shall be required to participate in the AHCCCS work group meetings. Decisions from the work

group shall be implemented by the Contractor, and may include, but are not limited to, assuring that PCPs are

trained on and follow AHCCCS-approved evidence-based practice guidelines, implementation of monitoring

processes and reporting of guidelines.

The Contractor may implement step therapy for behavioral health medications used for treating anxiety,

depression and ADHD disorders. If the RBHA/behavioral health provider provides documentation to the

Contractor that step therapy has already been completed, or is medically contraindicated, the Contractor shall

continue to provide the medication at the dosage at which the member has been stabilized, unless there is

subsequently a change in medical condition of the member.

The Contractor shall ensure that training and education are available to PCPs regarding behavioral health

referral and consultation procedures. The Contractor shall establish policies and procedures for referral and

consultation and shall describe them in its provider manual. Policies for referral must include, at a minimum,

criteria, processes, responsible parties and minimum requirements no less stringent than those specified in this

contract for the forwarding of member medical information.

Transfer of Care: When a PCP has initiated medication management services for a member to treat a

behavioral health disorder, and it is subsequently determined by the PCP or Contractor that the member should

be transferred to a RBHA prescriber for evaluation and/or continued medication management services, the

Contractor will require and ensure that the PCP or Contractor coordinates the transfer of care. All affected

subcontracts shall include this provision. The Contractor shall establish policies and procedures for the

transition of members who are referred to the RBHA for ongoing treatment. The Contractor shall ensure that

PCPs maintain continuity of care for these members. The policies and procedures must address, at a

minimum, the following:

1. Guidelines for when a transition of the member to the RBHA for ongoing treatment is indicated.

2. Protocols for notifying the RBHA of the member’s transfer, including reason for transfer, diagnostic

    information, and medication history.

3. Protocols and guidelines for the transfer of medical records, including but not limited to which parts of

    the medical record are to be copied, timeline for making the medical record available to the RBHA,

    observance of confidentiality of the member’s medical record, and protocols for responding to RBHA

    requests for additional medical record information.

4. Protocols for transition of prescription services, including but not limited to notification to the RBHA

    of the member’s current medications and timeframes for dispensing and refilling medications during

    the transition period. This coordination must ensure at a minimum, that the member does not run out

    of prescribed medications prior to the first appointment with a RBHA prescriber and that all relevant

    member pertinent medical information as outlined above and including the reason for transfer is

    forwarded to the receiving RBHA prescriber prior to the member’s first scheduled appointment with

    the RBHA prescriber.

5. Contractor activities to monitor to ensure that members are appropriately transitioned to the RBHA for

    care.

The Contractor shall ensure that its quality management program incorporates monitoring of the PCP’s

management of behavioral health disorders and referral to, coordination of care with and transfer of care to

RBHA providers as required under this contract.

13. AHCCCS GUIDELINES, POLICIES AND MANUALS

All AHCCCS guidelines, policies and manuals are hereby incorporated by reference into this contract. All

guidelines, policies and manuals are available on the AHCCCS internet website, located at www.azahcccs.gov.

The Contractor is responsible for complying with the requirements set forth within. In addition, linkages to

AHCCCS Rules (Arizona Administrative Code), Statutes and other resources are also available to all

interested parties through the AHCCCS website. Upon adoption by AHCCCS, updates will be made available

to the Contractor. The Contractor shall be responsible for implementing these requirements and maintaining

current copies of updates.

14. MEDICAID SCHOOL BASED CLAIMING PROGRAM (MSBC)

Pursuant to an Intergovernmental Agreement with the Department of Education, and a contract with a Third

Party Administrator, AHCCCS reimburses participating school districts for specifically identified Medicaid

services when provided to Medicaid eligible children who are included under the Individuals with Disabilities

Education Act (IDEA). The Medicaid services must be identified in the member’s Individual Education Plan

(IEP) as medically necessary for the child to obtain a public school education.

MSBC services are provided in a school setting or other approved setting specifically to allow children to

receive a public school education. They do not replace medically necessary services provided outside the

school setting or other MSBC approved alternative setting. Currently, services include audiology, therapies

(OT, PT and speech/language); behavioral health evaluation and counseling; nursing and attendant care; and

specialized transportation. The Contractor’s evaluations and determinations of medical necessity shall be

made independent of the fact that the child is receiving MSBC services.

The Contractor and its providers must coordinate with schools and school districts that provide MSBC services

to the Contractor’s enrolled members. Services should not be duplicative. Contractor case managers, working

with special needs children, should coordinate with the appropriate school staff working with these members.

Transfer of member medical information and progress toward treatment goals between the Contractor and the

member’s school or school district is required as appropriate and should be used to enhance the services

provided to members.

15. PEDIATRIC IMMUNIZATIONS AND THE VACCINES FOR CHILDREN PROGRAM

Through the Vaccines for Children Program, the Federal and State governments purchase, and make available

to providers free of charge, vaccines for AHCCCS children under age 19. The Contractor shall not utilize

AHCCCS funding to purchase vaccines for members under the age of 19. If vaccines are not available through

the VFC Program, the Contractor shall contact the AHCCCS Division of Health Care Management, Clinical

Quality Management Unit. Any provider, licensed by the State to administer immunizations, may register with

ADHS as a "VFC provider" and receive free vaccines. The Contractor shall not reimburse providers for the

administration of the vaccines in excess of the maximum allowable as set by CMS, found in the AHCCCS fee

schedule. The Contractor shall comply with all VFC requirements and monitor its providers to ensure that, a

physician if acting as primary care physician (PCP) to AHCCCS members under the age of 19 is registered

with ADHS/VFC.

In some GSAs, providers may choose not to provide vaccinations due to low numbers of children in their

panels, etc. The Contractor must develop processes to ensure that vaccinations are available through a VFC

enrolled provider or through the county Health Department. In all instances, the antigens are to be provided

through the VFC program. The Contractor must develop processes to pay the administration fee to whoever

administers the vaccine regardless of their contract status with the Contractor.

Arizona State law requires the reporting of all immunizations given to children under the age of 19.

Immunizations must be reported at least monthly to the ADHS. Reported immunizations are held in a central

database known as ASIIS (Arizona State Immunization Information System), which can be accessed by

providers to obtain complete, accurate immunization records. Software is available from ADHS to assist

providers in meeting this reporting requirement. The Contractor must educate its provider network about these

reporting requirements and the use of this resource and monitor to ensure compliance.

16. STAFF REQUIREMENTS AND SUPPORT SERVICES

The Contractor shall have in place the organizational, operational, managerial and administrative systems

capable of fulfilling all contract requirements. For the purposes of this contract, the Contractor shall not

employ or contract with any individual who has been debarred, suspended or otherwise lawfully prohibited

from participating in any public procurement activity or from participating in non-procurement activities under

regulations issued under Executive Order No. 12549 or under guidelines implementing Executive Order 12549

[42 CFR 438.610 (a) & (b)].

The Contractor is responsible for maintaining a significant local (within the State of Arizona) presence. This

presence includes staff designated below with an asterisk (*). The Contractor must obtain approval from

AHCCCS prior to moving functions outside the State of Arizona. Such a request for approval must be

submitted to the Division of Health Care Management at least 60 days prior to the proposed change in

operations and must include a description of the processes in place that assure rapid responsiveness to effect

changes for contract compliance. The Contractor shall be responsible for any additional costs associated with

on-site audits or other oversight activities of required functions located outside of the State of Arizona. At the

beginning of each contract year the Contractor must provide, to the Division of Health Care Management, a

listing of all functions and their locations.

The Contractor must employ sufficient staffing and utilize appropriate resources to achieve contractual

compliance. The Contractor’s resource allocation must be adequate to achieve outcomes in all functional areas

within the organization. Adequacy will be evaluated based on outcomes and compliance with contractual and

AHCCCS policy requirements, including the requirement for providing culturally competent services. If the

Contractor does not achieve the desired outcomes or maintain compliance with contractual obligations,

additional monitoring and regulatory action may be employed by AHCCCS, up to and including actions

specified in Section D, Paragraph 72, Sanctions, of the Contract.

An individual staff member shall be limited to occupying a maximum of two of the Key Staff positions listed

below. The Contractor shall inform AHCCCS, Division of Health Care Management, in writing within seven

days, when an employee leaves one of the Key Staff positions listed below (this requirement does not apply to

Additional Required Staff, also listed below). The name of the interim contact person should be included with

the notification. The name and resume of the permanent employee should be submitted as soon as the new hire

has taken place. At a minimum, the following staff is required:

Key Staff

a. *Administrator/CEO/COO or designee must be available, full time, to fulfill the responsibilities of the

    position and to oversee the entire operation of the Contractor. The Administrator shall devote sufficient

    time to the Contractor’s operations to ensure adherence to program requirements and timely responses to

    AHCCCS Administration.

b. *Medical Director/CMO who shall be an Arizona-licensed physician. The Medical Director shall be

    actively involved in all-major clinical programs and QM and MM components of the Contractor. The

    Medical Director shall devote sufficient time to the Contractor to ensure timely medical decisions,

    including after-hours consultation as needed.

c. Chief Financial Officer/CFO who is available, full time, to fulfill the responsibilities of the position and

    to oversee the budget and accounting systems implemented by the Contractor.

d. Pharmacy Director/Coordinator who is an Arizona licensed pharmacist or physician who oversees and

    administers the prescription drug and pharmacy benefits. The Pharmacy Coordinator/Director may be an

    employee or Contractor of the Plan.

e. Dental Director/Coordinator who is responsible for coordinating dental activities of the health plan and

    providing required communication between the plan and AHCCCS. The Dental Director/Coordinator may

    be an employee or Contractor of the plan and must be licensed in Arizona if they are required to review or

    deny dental services.

f. *Compliance Officer who will implement and oversee the Contractor’s compliance program. The

    compliance officer shall be an on-site management official, available to all employees, with designated

    and recognized authority to access records and make independent referrals to the AHCCCS Office of

    Program Integrity. See Section D, Paragraph 62, Corporate Compliance

g. *Grievance Manager who will manage and adjudicate member and provider disputes arising under the

    Grievance System including member grievances, appeals, and requests for hearing and provider claim

    disputes.

h. Business Continuity Planning Coordinator as noted in the ACOM Business Continuity and Recovery

    Plan Policy

i. *Contract Compliance Officer who will serve as the primary point-of-contact for all Contractor

    operational issues.

    The primary functions of the Contract Compliance Officer are:

     –Coordinate the tracking and submission of all contract deliverables

     –Field and coordinate responses to AHCCCS inquiries

     –Coordinate the preparation and execution of contract requirements such as OFRS, random and

    periodic audits and ad hoc visits

j. *Quality Management Coordinator who is an Arizona-licensed registered nurse, physician or physician's

    assistant or a Certified Professional in Healthcare Quality (CPHQ). The QM Coordinator must have

    experience in quality management and quality improvement.

    The primary functions of the Quality Management Coordinator position are:

     –Ensure individual and systemic quality of care

     –Integrate quality throughout the organization

     –Implement process improvement

     –Resolve, track and trend quality of care grievances

     –Ensure a credentialed provider network

k. Performance/Quality Improvement Coordinator The Performance/Quality Improvement Coordinator will

    have a minimum qualification as a Certified Professional in Healthcare Quality (CPHQ) or comparable

    education and experience in data and outcomes measurement.

    The primary functions of the Performance/Quality Improvement Coordinator are:

     –Focus organizational efforts on improving clinical quality performance measures

     –Develop and implement performance improvement projects

     –Utilize data to develop intervention strategies to improve outcomes

     –Report quality improvement/performance outcomes

l. *Maternal Health/EPSDT (child health) Coordinator who shall be an Arizona licensed nurse, physician

    or physician's assistant; or have a Master's degree in health services, public health, health care

    administration or other related field, and/or a Certified Professional in Health Care Quality (CPHQ).

    Staffing under this position should be sufficient to meet quality and performance measure goals.

    The primary functions of the MCH/EPSDT Coordinator are:

     –Ensuring receipt of EPSDT services

     –Ensuring receipt of maternal and postpartum care

     –Promoting family planning services

     –Promoting preventive health strategies

     –Identification and coordination assistance for identified member needs

     –Interface with community partners

m. *Medical Management Coordinator who is an Arizona licensed registered nurse, physician or physician’s

    assistant if required to make medical necessity determinations; or have a Master’s degree in health

    services, health care administration, or business administration if not required to make medical necessity

    determination.

    The primary functions of the Medical Management Coordinator are:

     –Ensure adoption and consistent application of appropriate inpatient and outpatient medical necessity

    criteria.

     –Ensure appropriate concurrent review and discharge planning of inpatient stays is conducted.

     –Develop, implement and monitor the provision of care coordination, disease management and case

    management functions.

     –Monitor, analyze and implement appropriate interventioins based on utilization data, including

    identifying and correcting over or under utilization of services.

n. *Behavioral Health Coordinator who shall be a behavioral health professional as described in Health

    Services Rule R9-20. The Behavioral Health Coordinator shall devote sufficient time to ensure that the

    Contractor’s behavioral health referral and coordination activities are implemented per AHCCCS

    requirements.

    The primary functions of the Behavioral Health Coordinator are:

     –Coordinate member behavioral care needs with the RBHA system

     –Develop processes to coordinate behavioral health care between PCPs and RBHAs

     –Participate in the identification of best practices for behavioral health in a primary care setting

     –Coordinate behavioral care with medically necessary services

o. Member Services Manager who shall coordinate communications with members; serve in the role of

    member advocate; coordinate issues with appropriate areas within the organization; resolve member

    inquiries/problems and meet standards for resolution, telephone abandonment rates and telephone hold

    times.

p. *Provider Services Manager who shall coordinate communications between the Contractor, its

    subcontractors, IHS and tribally-operated health programs under P.L. 93-638 (Indian Self-Determination

    and Education Assistance Act); provide assistance to providers in resolving problems; respond to provider

    inquiries; educate providers about participation in the AHCCCS program and maintain a sufficient

    provider network.

q. Claims Administrator

    The primary functions of the Claims Administrator are:

     –Develop and implement claims processing systems capable of paying claims in accordance with state

    and federal requirements

     –Develop processes for cost avoidance

     –Ensure minimization of claims recoupments

     –Meet claims processing timelines

     –Meet AHCCCS encounter reporting requirements

r. *Provider Claims Educator (full-time equivalent employee for a Contractor with over 100,000 members)

    The position is fully integrated with the Contractor’s grievance, claims processing, and provider relations

    systems and facilitates the exchange of information between these systems and providers.

    The primary functions of the Provider Claims Educator are:

     –Educate contracted and non-contracted providers (i.e.: professional and institutional) regarding

    appropriate claims submission requirements, coding updates, electronic claims transactions and

    electronic fund transfer, and available Contractor resources such as provider manuals, website, fee

    schedules, etc.

     –Interfaces with the Contractor’s call center to compile, analyze, and disseminate information from

    provider calls

     –identifies trends and guides the development and implementation of strategies to improve provider

    satisfaction

     –Frequently communicates (i.e.: telephonic and on-site) with providers to assure the effective exchange

    of information and gain feedback regarding the extent to which providers are informed about

    appropriate claims submission practices

Additional Required Staff

s. Prior Authorization staff to authorize health care 24 hours per day, 7 days per week. This staff shall

    include an Arizona-licensed nurse, physician or physician's assistant. The staff will work under the

    direction of an Arizona-licensed registered nurse, physician, or physician’s assistant.

t. *Concurrent Review staff to conduct inpatient concurrent review. This staff shall consist of an Arizona-licensed

    nurse, physician, or physician's assistant. The staff will work under the direction of an Arizona-licensed

    nurse.

u. *Clerical and Support staff to ensure appropriate functioning of the Contractor's operation.

v. Member Services staff There shall be sufficient Member Service staff to enable members to receive

    prompt resolution of their inquiries/problems.

w. *Provider Services staff There shall be sufficient Provider Services staff to enable providers to receive

    prompt responses and assistance (See Section D, Paragraph 29, Network Management, for more

    information).

x. Claims Processing staff There shall be sufficient, appropriately trained, Claim Processing staff to ensure

    the timely and accurate processing of original claims, resubmissions and overall adjudication of claims.

y. Encounter Processing staff There shall be sufficient, appropriately trained, Encounter Processing staff to

    ensure the timely and accurate processing and submission to AHCCCS of encounter data and reports.

Staff Training and Meeting Attendance

The Contractor shall ensure that all staff members have appropriate training, education, experience and

orientation to fulfill the requirements of the position. AHCCCS may require additional staffing for a

Contractor that has substantially failed to maintain compliance with any provision of this contract and/or

AHCCCS policies.

The Contractor must provide initial and ongoing staff training that includes an overview of AHCCCS;

AHCCCS Policy and Procedure Manuals; Contract requirements and State and Federal requirements specific

to individual job functions. The Contractor shall ensure that all staff members having contact with members or

providers receive initial and ongoing training with regard to the appropriate identification and handling of

quality of care/service concerns.

New and existing transportation, prior authorization and member services representatives must be trained in

the geography of any/all GSA(s) in which the Contractor holds a contract and have access to mapping search

engines (e.g. MapQuest, Yahoo Maps, Google Maps, etc) for the purposes of authorizing services in;

recommending providers in; and transporting members to, the most geographically appropriate location.

The Contractor shall provide the appropriate staff representation for attendance and participation in meetings

and/or events scheduled by AHCCCS. All meetings shall be considered mandatory unless otherwise indicated.

17. WRITTEN POLICIES, PROCEDURES AND JOB DESCRIPTIONS

The Contractor shall develop and maintain written policies, procedures and job descriptions for each functional

area of its plan, consistent in format and style. The Contractor shall maintain written guidelines for

developing, reviewing and approving all policies, procedures and job descriptions. All policies and procedures

shall be reviewed at least annually to ensure that the Contractor's written policies reflect current practices.

Reviewed policies shall be dated and signed by the Contractor's appropriate manager, coordinator, director or

administrator. Minutes reflecting the review and approval of the policies by an appropriate committee are also

acceptable documentation. All medical and quality management policies must be approved and signed by the

Contractor's Medical Director. Job descriptions shall be reviewed at least annually to ensure that current duties

performed by the employee reflect written requirements.

Based on provider or member feedback, if AHCCCS deems a Contractor policy or process to be inefficient

and/or place unnecessary burden on the members or providers, the Contractor will be required to work with

AHCCCS to change the policy or procedure within a time period specified by AHCCCS.

18. MEMBER INFORMATION

The Contractor shall be accessible by phone for general member information during normal business hours.

All enrolled members will have access to a toll free phone number. All informational materials, prepared by

the Contractor, shall be approved by AHCCCS prior to distribution to members. The reading level and name of

the evaluation methodology used should be included. The Contractor should refer to the ACOM Member

Information Policy for further information and requirements.

All materials shall be translated when the Contractor is aware that a language is spoken by 3,000 or 10%,

whichever is less, of the Contractor’s members, who also have limited English proficiency (LEP).

All vital materials shall be translated when the Contractor is aware that a language is spoken by 1,000 or 5%,

whichever is less, of the Contractor’s members, who also have LEP. Vital materials must include, at a

minimum, Notices of Action, vital information from the member handbooks and consent forms.

All written notices informing members of their right to interpretation and translation services in a language

shall be translated when the Contractor is aware that 1,000 or 5%, whichever is less, of the Contractor’s

members speak that language and have LEP [42 CFR 438.10(c)(3)].

Oral interpretation services must be available and free of charge to all members regardless of the prevalence of

the language. The Contractor must notify all members of their right to access oral interpretation services and

how to access them. Refer to the ACOM Member Information Policy [42 CFR 438.10(c)(4) and (5)].

The Contractor shall make every effort to ensure that all information prepared for distribution to members is

written using an easily understood language and format and as further described in the AHCCCS Member

Information Policy. Regardless of the format chosen by the Contractor, the member information must be

printed in a type, style and size, which can easily be read by members with varying degrees of visual

impairment. The Contractor must notify its members that alternative formats are available and how to access

them [42 CFR 438.10(d)].

When there are program changes, notification shall be provided to the affected members at least 30 days before

implementation.

The Contractor shall produce and provide the following printed information to each member or family within

10 days of receipt of notification of the enrollment date [42 CFR 438.10(f)(3)]:

I. A member handbook which, at a minimum, shall include the items listed in the ACOM Member

   Information Policy.

   The Contractor shall review and update the Member Handbook at least once a year. The handbook must be

   submitted to AHCCCS, Division of Health Care Management for approval by August 15th of each

   contract year, or within four weeks of receiving the annual renewal amendment, whichever is later.

II. A description of the Contractor’s provider network, which at a minimum, includes those items listed in the

   ACOM Member Information Policy.

The Contractor must give written notice about termination of a contracted provider, within 15 days after

receipt or issuance of the termination notice, to each member who received their primary care from, or is seen

on a regular basis by, the terminated provider. Affected members must be informed of any other changes in

the network 30 days prior to the implementation date of the change [42 CFR 438.10(f)(4) and (5)]. The

Contractor shall have information available for potential enrollees as described in the ACOM Member

Information Policy.

The Contractor must develop and distribute, at a minimum, quarterly newsletters during the contract year. The

following types of information are to be contained in the newsletter:

            • Educational information on chronic illnesses and ways to self-manage care

                • Reminders of flu shots and other prevention measures at appropriate times

                • Medicare Part D issues

                • Cultural Competency

                • Contractor specific issues

                • Tobacco cessation information

                • HIV/AIDS testing for pregnant women

                • Other information as required by the Administration

The Contractor will, on an annual basis, inform all members of their right to request the following information

[42 CFR 438.10(f)(6) and 42 CFR 438.100(a)(1) and (2)]:

                a. An updated member handbook at no cost to the member

                b. The network description as described in the ACOM Member Information Policy

This information may be sent in a separate written communication or included with other written information

such as in a member newsletter.

19. SURVEYS

The Contractor may be required to perform its own annual general or focused member survey. All such

Contractor surveys, along with a timeline for the project, shall be approved in advance by AHCCCS DHCM.

The results and the analysis of the results shall be submitted to the Acute Care Operations Unit within 45 days

of the completion of the project. AHCCCS may require inclusion of certain questions.

AHCCCS may periodically conduct surveys of a representative sample of the Contractor's membership and

providers. AHCCCS will consider suggestions from the Contractor for questions to be included in each

survey. The results of these surveys, conducted by AHCCCS, will become public information and available to

all interested parties upon request. The draft reports from the surveys will be shared with the Contractor prior

to finalization. The Contractor will be responsible for the cost of these surveys based on its share of AHCCCS

enrollment.

20. CULTURAL COMPETENCY

The Contractor shall have a Cultural Competency Plan that meets the requirements of the ACOM Cultural

Competency Policy. An annual assessment of the effectiveness of the plan, along with any modifications to the

plan, must be submitted to the Division of Health Care Management, no later than 45 days after the start of

each contract year. This plan should address all services and settings [42 CFR 438.206(c)(2)].

21. MEDICAL RECORDS

The member's medical record is the property of the provider who generates the record. Each member is entitled

to one copy of his or her medical record free of charge. The Contractor shall have written policies and

procedures to maintain the confidentiality of all medical records.

The Contractor is responsible for ensuring that a medical record is established when information is received about

a member. If the PCP has not yet seen the member, such information may be kept temporarily in an

appropriately labeled file, in lieu of establishing a medical record, but must be associated with the member’s

medical record as soon as one is established.

The Contractor shall have written policies and procedures for the maintenance of medical records so that those

records are documented accurately and in a timely manner, are readily accessible, and permit prompt and

systematic retrieval of information.

The Contractor shall have written standards for documentation on the medical record for legibility, accuracy and

plan of care, which comply with the AMPM.

The Contractor shall have written plans for providing training and evaluating providers' compliance with the

Contractor's medical records standards. Medical records shall be maintained in a detailed and comprehensive

manner, which conforms to good professional medical practice, permits effective professional medical review

and medical audit processes, and which facilitates an adequate system for follow-up treatment. Medical records

must be legible, signed and dated.

When a member changes PCPs, his or her medical records or copies of medical records must be forwarded to the

new PCP within 10 business days from receipt of the request for transfer of the medical records.

AHCCCS is not required to obtain written approval from a member, before requesting the member's medical

record from the PCP or any other agency. The Contractor may obtain a copy of a member's medical records

without written approval of the member, if the reason for such request is directly related to the administration of

the AHCCCS program. AHCCCS shall be afforded access to all members' medical records whether electronic or

paper within 20 business days of receipt of request.

Information related to fraud and abuse may be released so long as protected HIV-related information is not

disclosed (A.R.S. §36-664(I)).

22. ADVANCE DIRECTIVES

In accordance with 42 CFR 422.128, the Contractor shall maintain policies and procedures addressing

advanced directives for adult members that specify:

1. Each contract or agreement with a hospital, nursing facility, home health agency, hospice or organization

   responsible for providing personal care, must comply with Federal and State law regarding advance

   directives for adult members [42 CFR 438.6(i)(1)]. Requirements include:

a) Maintaining written policies that address the rights of adult members to make decisions about medical

   care, including the right to accept or refuse medical care, and the right to execute an advance directive.

   If the agency/organization has a conscientious objection to carrying out an advance directive, it must

   be explained in policies. (A health care provider is not prohibited from making such objection when

   made pursuant to A.R.S. § 36-3205.C.1.)

b) Provide written information to adult members regarding each individual’s rights under State law to

   make decisions regarding medical care, and the health care provider's written policies concerning

   advance directives (including any conscientious objections) [42 CFR 438.6(i)(3)]

c) Documenting in the member’s medical record whether or not the adult member has been provided the

   information and whether an advance directive has been executed.

d) Not discriminating against a member because of his or her decision to execute or not execute an

   advance directive, and not making it a condition for the provision of care.

e) Providing education to staff on issues concerning advance directives including notification of direct

   care providers of services, such as home health care and personal care, of any advanced directives

   executed by members to whom they are assigned to provide services.

2. The Contractor shall require subcontracted PCPs, which have agreements with the entities described in

   paragraph 1 above, to comply with the requirements of subparagraphs 1 (a) through (e) above. The

   Contractor shall also encourage health care providers specified in subparagraph a. to provide a copy of the

   member’s executed advanced directive, or documentation of refusal, to the member’s PCP for inclusion in

   the member’s medical record.

3. The Contractor shall provide written information to adult members that describe the following:

a) A member’s rights under State law, including a description of the applicable State law.

b) The organization’s policies respecting the implementation of those rights, including a statement of any

   limitation regarding the implementation of advance directives as a matter of conscience.

c) The member’s right to file complaints directly with AHCCCS.

d) Changes to State law as soon as possible, but no later than 90 days after the effective date of the

change [42 CFR 438.6(i)(4)].

23. QUALITY MANAGEMENT (QM)

The Contractor shall provide quality medical care and services to members, regardless of payer source or

eligibility category. The Contractor shall promote improvement in the quality of care provided to enrolled

members through established quality management and performance improvement processes. The Contractor

shall execute processes to assess, plan, implement and evaluate quality management and performance

improvement activities, as specified in the AMPM [42 CFR 438.240(a)(1) and (e)(2)].

The Contractor quality assessment and performance improvement programs, at a minimum, shall comply with

the requirements outlined in the AMPM and this Paragraph.

A. Quality Management Program:

The Conractor shall have an ongoing quality management program for the services it furnishes to members

that includes the requirements listed in AMPM Capter 900 and the following:

1. A written Quality Assessment and Performance Improvement (QA/PI) plan, an evaluation of the

   previous year’s QA/PI program, and Quarterly QA/PI reports that address its strategies for

   performance improvement and conducting the quality management activites.

2. QM/PI Program monitoring and evaluation activites that includes Peer Review and Quality

   Management Committees chaired by the Contractor’s Chief Medical Officer.

3. Protection of medical records and any other personal health and enrollment information that identifies

   a particular member or subset of members in accordance with Federal and State privacy requirements.

4. Member rights and responsibilities.

5. Uniform provisional credentialing, initial credentialing, re-credentialing and organizational credential

   verification [42 CFR 438.206(b)(6)]. The Contractor shall demonstrate that its providers are

   credentialed and reviewed through the Contractor’s Credentialing Committee that is chaired by the

   Contractor’s Medical Director [42 CFR 438.214]. The Contractor should refer to Section D, Paragraph

25, Administrative Performance Standards, and Attachement F, Periodic Report Requirements, for

   reporting requirements. The process:

                a. Shall follow a documented process for provisional credentialing, initial credentialing, recredentialing

                   and organizational credential verification of providers who have signed

                   contracts or participation agreements with the Contractor;

                b. Shall not discriminate against particular providers that serve high-risk populations or

                   specialize in conditions that require costly treatment;

                c. Shall not employ or contract with providers excluded from participation in Federal health care

                   programs.

6. Tracking and trending of member and provider issues, which includes investigation and analysis of

   quality of care issues, abuse, neglect and unexpected deaths. The resolution process must include:

                a. Acknowledgement letter to the originator of the concern;

                b. Documentation of all steps utilized during the investigation and resolution process;

                c. Follow-up with the member to assist in ensuring immediate health care needs are met;

                d. Closure/resolution letter that provides sufficient detail to ensure that the member has an

                   understanding of the resolution of their issue, any responsibilities they have in ensuring all

                   covered, medically necessary care needs are met, and a Contractor contact name/telephone

                   number to call for assistance or to express any unresolved concerns;

                e. Documentation of implemented corrective action plan(s) or action(s) taken to resolve the

                   concern;

                f. Analysis of the effectiveness of the interventions taken.

7. Mechanisms to assess the quality and appropriateness of care furnished to members with special

   health care needs.

8. Participation in community initiatives including applicable activities of the Medicare Quality

   Improvement Organization (QIO).

9. Performance improvement programs including performance measures and performance improvement

   projects.

B. Performance Improvement:

The Contractor’s quality management program shall be designed to achieve, through ongoing measurements

and intervention, significant improvement, sustained over time, in the areas of clinical care and non-clinical

care that are expected to have a favorable effect on health outcomes and member satisfaction. The Contractor

must [42 CFR 438.240(b)(2) and (c)]:

                1. Measure and report to the State its performance, using standard measures required by the State, or as

                   required by CMS;

                2. Submit to the State data specified by the State, that enables the State to measure the Contractor’s

                   performance; or

                3. Perform a combination of the activities.

I. Performance Measures:

The Contractor shall comply with AHCCCS quality management requirements to improve performance for all

AHCCCS established performance measures. Complete descriptions of the AHCCCS clinical quality

Performance Measure can be found in the most recently published reports of acute-care performance measures

located on the AHCCCS website. AHCCCS uses Healthcare Effectiveness Data and Information Set (also

known as the Health Plan Employer Data and Information Set, or HEDIS) technical specifications from the

National Committee for Quality Assurance (NCQA) for all clinical quality performance Measures. The only

exception to AHCCCS’ use of the HEDIS methodology is in the performance measure titled “EPSDT

Participation”. AHCCCS bases the measurement of EPSDT Participation on the methodology established in

CMS “Form 416” which can be found on the CMS website (www.cms.hhs.gov).

Contractors must comply with national performance measures and levels that may be identified and developed

by the Centers for Medicare and Medicaid Services in consultation with AHCCCS and/or other relevant

stakeholders. CMS has been working in partnership with states in developing core performance measures for

Medicaid and SCHIP programs. The current AHCCCS-established performance measures may be subject to

change when these core measures are finalized and implemented.

AHCCCS intends to implement a hybrid methodology for collecting and reporting Performance Measure rates,

as allowed by NCQA, for selected HEDIS measures. Contractors shall collect data from medical records and

provide these data with supporting documentation, as instructed by AHCCCS, for each hybrid measure as

requested. The number of records that each Contractor will be required to collect will be based on HEDIS

sampling guidelines and may be affected by the Contractor’s previous rate for the measure being collected.

AHCCCS may begin implementation of the hybrid methodology with the following measures: Adolescent

Immunizations, Cervical Cancer Screening and Timeliness of Prenatal Care. AHCCCS may implement hybrid

methodology for collecting and reporting additional measures in this, or future, contract years.

In addition, the Contractor must have in place a process for internal monitoring of Performance Measure rates,

using a standard methodology established or adopted by AHCCCS, for each required Performance Measure.

The Contractor’s Quality Assessment/Performance Improvement Program will report its performance on an

ongoing basis to its Administration. It also will report this Performance Measure data to AHCCCS in

conjunction with its Quarterly EPSDT and Adult Quarterly Monitoring Report.

The Contractor must meet AHCCCS stated Minimum Performance Standards for each population/eligibility

category for which AHCCCS reports results. However, it is equally important that the Contractor continually

improve performance measure outcomes from year to year. The Contractor shall strive to meet the goal

established by AHCCCS.

                Minimum Performance Standard – A Minimum Performance Standard (MPS) is the minimal

                expected level of performance by the Contractor. If a Contractor does not achieve this standard, the

                Contractor will be required to submit a corrective action plan and may be subject to a sanction of up to

                $100,000 dollars for each deficient measure.

                Goal – If the Contractor has already met or exceeded the AHCCCS Minimum Performance
Standard

                for any measure, the Contractor must strive to meet the established Goal for the measure(s).

A Contractor must show demonstrable and sustained improvement toward meeting AHCCCS Performance

Standards. AHCCCS may impose sanctions on Contractors that do not show statistically significant

improvement in a measure rate and require the Contractor to demonstrate that they are allocating increased

administrative resources to improving rates for a particular measure or service area. AHCCCS also may

require a corrective action plan and may sanction any Contractor that shows a statistically significant decrease

in its rate, even if it meets or exceeds the Minimum Performance Standard.

An evidence-based corrective action plan must be received by AHCCCS within 30 days of receipt of

notification of the deficiency from AHCCCS. This plan must be approved by AHCCCS prior to

implementation. AHCCCS may conduct one or more follow-up on-site reviews to verify compliance with a

corrective action plan.

All Performance Measures apply to all member populations [42 CFR 438.240(a)(2), (b)(2) and (c)]. AHCCCS

may analyze and report results by line of business, by GSA or county, and/or applicable demographic factors.

AHCCCS has established standards for the measures listed below.

The following table identifies the Minimum Performance Standards (MPS) and Goals for each measure:

                                Acute-care Contractor
Performance Standards

Performance Measure                      
Minimum Performance Standard    Goal (Health People Goals)

Immunization of Two-year-olds

4:3:1:3:3:1
Series                                                  
82%                                                       
80%

4:3:1:3:3:1:4
Series                                               
43%                                                       
80%

DTaP - 4
doses                                                    
85%                                                       
90%

Polio - 3 doses
(*)                                               
90%                                                       
90%

MMR - 1 dose
(*)                                               
90%                                                       
90%

Hib - 3 doses
(*)                                                  
86%                                                       
90%

HBV - 3 doses
(*)                                                
90%                                                       
90%

Varicella - 1 dose
(*)                                           
86%                                                       
90%

PCV – 4 doses
(*)                                               
47%                                                       
90%

Adolescent Immunizations(1)                           
TBD                       
                                90%

Children’s Dental Visits 2 to 21

Years                                                                     
55%                                                       
57%

Well-child Visits 15 Months                             
65%                                                       
90%

Well-child Visits 3 - 6 Years                              
64%                                                       
80%

Adolescent Well-care Visits                             
41%                                                       
50%

EPSDT
Participation                                           
68%                                                       
80%

Children's Access to PCPs 24 Months             93%                       
                                97%

Children's Access to PCPs 25

 months-6
Years                                                   
83%                                                       
97%

Children’s Access to PCPs 7-11

Years                                                                     
83%                                                       
97%

Children's Access to PCPs 12-19 Years           
81%                                                       
97%

Cervical Cancer Screening                                 
65%                                                       
90%

Breast Cancer Screening                                    
54%                                                       
70%

Adult Preventive/Ambulatory

Care 20-44
Years                                                  
78%                                                       
96%

Adult Preventive/Ambulatory

Care 45-64
Years                                                  
85%                                                       
96%

Timeliness of Prenatal Care                               
80%                                                       
90%

Chlamydia
Screening                                          
51%                                                       
62%

Appropriate Medications for Asthma             
86%                                                       
93%

Diabetes Care: Hb A1c Testing                        
77%                                                       
89%

Diabetes Care: Eye Exam                                    
49%                                                       
68%

Diabetes Care: LDL-C Screening                      
81%                                                       
91%

Notes:

Contractor Performance is evaluated annually on the AHCCCS-reported rate for each measure. Rates

for measures that include only members under 21 years of age are reported and evaluated separately

for Title XIX and Title XXI eligibility groups.

The MPS is based on the national HEDIS Medicaid mean for 2006 as reported by NCQA or, if the

most recent AHCCCS statewide average is greater than the national Medicaid mean, the MPS is based

on the AHCCCS statewide average for Medicaid members.

Goals are based on Healthy People 2010 Objectives; if there was no comparable objective set for a

particular measure, the most recent HEDIS 90th percentile rate for Medicaid plans nationally was used

as the benchmark.

(*) AHCCCS will continue to measure and report results of these individual antigens; however, a

Contractor may not be held accountable for specific Performance Standards unless AHCCCS

determines that completion of a specific antigen or antigens is affecting overall completion of the

childhood immunization series.

(1) NCQA is in the process of making revisions to the measure, and current AHCCCS data is not yet

available.

The Contractor shall participate in immunization audits, at intervals specified by AHCCCS, based on random

sampling to verify the immunization status of members at 24 months of age. If records are missing for more

than 5 percent of the Contractor’s final sample, the Contractor is subject to sanctions by AHCCCS. An

External Quality Review Organization (EQRO) may conduct a study to validate the Contractor’s reported

rates.

In addition, AHCCCS shall measure and report the Contractor’s EPSDT Participation Rate, utilizing the CMS

416 methodology. The Contractor must take affirmative steps to increase member participation in the EPSDT

program. The EPSDT participation rate is the number of children younger than 21 years receiving at least one

medical screen during the contract year, compared to the number of children expected to receive at least one

medical screen. The number of children expected to receive at least one medical screen is based on the

AHCCCS EPSDT periodicity schedule and the average period of eligibility.

The Contractor must monitor rates for postpartum visits and low/very low birth weight deliveries and

implement interventions as necessary to improve or sustain these rates. These activities will be monitored by

AHCCCS during the Operational and Financial Review.

II. Performance Improvement Program:

The Contractor shall have an ongoing program of performance improvement projects that focus on clinical and

non-clinical areas as specified in the AMPM, and that involve the following [42 CFR 438.240(b)(1) and

(d)(1)]:

1. Measurement of performance using objective quality indicators.

2. Implementation of system interventions to achieve improvement in quality

3. Evaluation of the effectiveness of the interventions.

4. Planning and initiation of activities for increasing or sustaining improvement.

The Contractor shall report the status and results of each project to AHCCCCS as requested. Each

performance improvement project must be completed in a reasonable time period so as to generally allow

information on the success of performance improvement projects in the aggregate to produce new information

on quality of care every year [42 CFR 438.240(d)(2)].

III. Data Collection Procedures:

When requested, the Contractor must submit data for standardized Performance Measures and/or Performance

Improvement Projects as required by AHCCCS within specified timelines and according to AHCCCS

procedures for collecting and reporting the data. Contractor is responsible for collecting valid and reliable data

and using qualified staff and personnel to collect the data. Data collected for Performance Measures and/or

Performance Improvement Projects must be returned by the Contractor in the format and according to

instructions from AHCCCS, by the due date specified. Any extension for additional time to collect and report

data must be made in writing in advance of the initial due date. Failure to follow the data collection and

reporting instructions that accompany the data request may result in sanctions imposed on the Contractor.

24. MEDICAL MANAGEMENT (MM)

The Contractor shall execute processes to assess, plan, implement and evaluate medical management activities,

as specified in the AMPM Chapter 1000, Utilization Management, that include at least the following:

1. Pharmacy Management; including the evaluation, reporting, analysis and interventions based on the data

and reported through the MM Committee.

2. Prior authorization and Referral Management;

For the processing of requests for initial and continuing authorizations of services the Contractor shall:

                a) Have in effect mechanisms to ensure consistent application of review criteria for

                   authorization decisions;

                b) Consult with the requesting provider when appropriate [42 CFR 438.210(b)(2)];

                c) Monitor and ensure that all enrollees with special health care needs have direct access to care.

3. Development and/or Adoption of Practice Guidelines [42 CFR 438.236(b)], that

                a) Are based on valid and reliable clinical evidence or a consensus of health care professionals

                   in the particular field;

                b) Consider the needs of the Contractor’s members;

                c) Are adopted in consultation with contracting health care professionals;

                d) Are reviewed and updated periodically as appropriate;

                e) Are disseminated by the Contractor to all affected providers and, upon request, to enrollees

                   and potential enrollees [42 CFR 438.236(c)];

                f) Provide a basis for consistent decisions for utilization management, member education,

                   coverage of services, and other areas to which the guidelines apply [42 CFR 438.236(d)].

4. Concurrent review:

                a) Consistent application of review criteria; Provide a basis for consistent decisions for

                   utilization management, coverage of services, and other areas to which the guidelines apply;

                b) Discharge planning.

5. Continuity and coordination of care;

6. Monitoring and evaluation of over and/or under utilization of services [42 CFR 438-240(b)(3)];

7. Evaluation of new medical technologies, and new uses of existing technologies;

8. Disease Management or Chronic Care Program that reports results and provides for analysis of the program

   through the MM Committee; and

9. Quarterly Utilization Management Report (details in the AMPM)

10. Within the first two years of the contract term, the Contractor must review all prior authorization

   requirements for services, items or medications and submit a report to AHCCCS providing the rationale for the

   requirements. AHCCCS shall determine and provide a format for the report.

The Contractor shall have a process to report MM data and management activities through a MM Committee.

The Contractor’s MM committee will analyze the data, make recommendations for action, monitor the

effectiveness of actions and report these findings to the committee. The Contractor shall have in effect

mechanisms to assess the quality and appropriateness of care furnished to members with special health care

needs [42 CFR 438.240(b)(4)].

The Contractor will assess, monitor and report quarterly through the MM Committee medical decisions to

assure compliance with Notice of Action timeliness, language and content, and that the decisions comply with

all Contractor coverage criteria. This includes quarterly evaluation of all Notice of Action decisions that are

made by a subcontracted entity.

The Contractor shall maintain a written MM plan that addresses its plan for monitoring MM activities

described in this section. The plan must be submitted for review by AHCCCS Division of Health Care

Management within timelines specified in Attachment F.

In addition to care coordination as specified in this contract, the Contractor must proactively provide care

coordination for members who have multiple complaints regarding services or the AHCCCS Program. This

includes, but is not limited to, members who do not meet the Contractor's criteria for case management as well

as members who contact governmental entities for assistance, including AHCCCS.

25. ADMINISTRATIVE PERFORMANCE STANDARDS

This paragraph contains requirements for the Contractor’s Member Services, Provider Services and Claims

Services telephonic performance; as well as the measurement of credentialing timeliness. All reported data is

subject to validation through periodic audit and/or Operational and Financial Review.

Telephone Standards

The maximum allowable speed of answer (SOA) is 45 seconds. The SOA is defined as the on line wait time in

seconds that the member/provider waits from the moment the call is connected in the Contractor’s phone

switch until the call is picked up by a Contractor representative or Interactive Voice Recognition System

(IVR). If the Contractor has IVR capabilities, callers must be given the choice of completing their call by IVR

or by Contractor representative.

The Contractor shall meet the following standards for its member services and centralized provider telephone

line statistics. All calls to the line shall be included in the measure.

                a. The Monthly Average Abandonment Rate shall be 5% or less;

                b. First Contact Call Resolution shall be 70% or better; and

                c. The Monthly Average Service Level shall be 75% or better.

The Monthly Average Abandonment Rate (AR) is:

Number of calls abandoned in a 24-hour period

Total number of calls received in a 24-hour period

The ARs are then summed and divided by the number of days in the reporting period.

First Contact Call Resolution Rate (FCCR) is:

                Number of calls received in 24-hour period for which no follow up communication or internal

                phone transfer is needed, divided by Total number of calls received in 24-hour period

The daily FCCRs are then summed and divided by the number of days in the reporting period.

The Monthly Average Service Level (MASL) is:

Calls answered within 45 seconds for the month reported

Total of month’s answered calls + month’s abandoned calls + (if available) month’s calls receiving a busy signal

Note: Do not use average daily service levels divided by the days in the reporting period.

On a monthly basis the measures are to be reported for both the Member Services and Provider telephone lines.

For each of the Administrative Measures a. through c., the Contractor shall also report the number of days in

the reporting period that the standard was not met. The Contractor shall include in the report the instances of

down time for the centralized telephone lines, the dates of occurrence and the length of time they were out of

service. The reports should be sent to the Contractor's assigned Operations and Compliance Officer in the

Acute Care Operations Unit of the Division of Health Care Management. The deadline for submission of the

reports is the 15th day of the month following the reporting period (or the first business day following the

15th). Back up documentation for the report, to the level of measured segments in the 24-hour period, shall be

retained for a rolling 12-month period. AHCCCS will review the performance measure calculation procedures

and source data for this report.

Credentialing Timeliness

The Contractor is required to process credentialing applications in a timely manner. To assess the timeliness of

provisional and initial credentialing a Contractor will divide the number of complete applications processed

(approved/denied) during the time period by the number of complete applications that were received during the

time period, as follows:

Complete applications processed

Complete applications received

The standards for processing are listed by category below:

Type of Credentialing         14 days                  90
days                  120
days                                180 days

Provisional                            100%

Initial                                                                     
90%                       
95%                                        100%

The Contractor will also report the following information with regard to all credentialing applications on a

quarterly basis, as specified in Attachment F, Periodic Report Requirements:

                1. Number of applications received

                2. Number of completed applications received (separated by type: provisional, initial)

                3. Number of completed provisional credentialing applications approved

                4. Number of completed provisional credentialing applications denied

                5. Number of initial credentialing applications approved

                6. Number of initial credentialing applications denied

                7. Number of initial (include provisional in this number) applications processed within 90, 120, 180 days

26. GRIEVANCE SYSTEM

The Contractor shall have in place a written grievance system process for subcontractors, enrollees and non-

ontracted providers, which defines their rights regarding disputed matters with the Contractor. The

Contractor’s grievance system for enrollees includes a grievance process (the procedures for addressing

enrollee grievances), an appeals process and access to the state’s fair hearing process. The Contractor shall

provide the appropriate personnel to establish implement and maintain the necessary functions related to the

grievance systems process. Refer to Attachments H(1) and H(2) for Enrollee Grievance System and Provider

Grievance System Standards and Policy, respectively.

The Contractor may delegate the grievance system process to subcontractors, however, the Contractor must

ensure that the delegated entity complies with applicable Federal and State laws, regulations and policies,

including, but not limited to 42 CFR Part 438 Subpart F. The Contractor shall remain responsible for

compliance with all requirements. The Contractor shall also ensure that it timely provides written information

to both enrollees and providers, which clearly explains the grievance system requirements. This information

must include a description of: the right to a state fair hearing, the method for obtaining a state fair hearing, the

rules that govern representation at the hearing, the right to file grievances, appeals and claim disputes, the

requirements and timeframes for filing grievances, appeals and claim disputes, the availability of assistance in

the filing process, the toll-free numbers that the enrollee can use to file a grievance or appeal by phone, that

benefits will continue when requested by the enrollee in an appeal or state fair hearing request concerning

certain actions which are timely filed, that the enrollee may be required to pay the cost of services furnished

during the appeal/hearing process if the final decision is adverse to the enrollee, and that a provider may file an

appeal on behalf of an enrollee with the enrollee’s written consent. Information to enrollees must meet cultural

competency and limited English proficiency requirements as specified in Section D, Paragraph 18, Member

Information, and Section D, Paragraph 20, Cultural Competency.

The Contractor shall be responsible to provide the necessary professional, paraprofessional and clerical

services for the representation of the Contractor in all issues relating to the grievance system and any other

matters arising under this contract which rise to the level of administrative hearing or a judicial proceeding.

Unless there is an agreement with the State in advance, the Contractor shall be responsible for all attorney fees

and costs awarded to the claimant in a judicial proceeding.

The Contractor will provide reports on the Grievance System as required in the Grievance System Reporting

Guide available on the AHCCCS website.

27. NETWORK DEVELOPMENT

The Contractor shall develop and maintain a provider network that is designed to support a medical home for

members and sufficient to provide all covered services to AHCCCS members [42 CFR 438.206(b)(1)]. It shall

ensure covered services are provided promptly and are reasonably accessible in terms of location and hours of

operation [42 CFR 438.206(c)(1)(i) and (ii)]. There shall be sufficient personnel for the provision of covered

services, including emergency medical care on a 24-hour-a-day, 7-days-a-week basis [42 CFR 438.206(c)(1)(iii)].

The network shall be sufficient to provide covered services within designated time and distance limits. For

Maricopa and Pima Counties only, this includes a network such that 95% of its members residing within the

boundary area of metropolitan Phoenix and Tucson do not have to travel more than 5 miles to visit a PCP, dentist

or pharmacy. Additionally, a Contractor in Maricopa and/or Pima counties must have at least one contracted

hospital in each of the service districts specified in Attachment B. In rural counties the contractor must have a

sufficient network of physicians to provide adequate inpatient and outpatient services to the Contractor’s

members.. For inpatient services Hospitalists may satisfy this requirement. See Attachment B for GSA

specific requirements.

The Contractor is expected to design a network that provides a geographically convenient flow of patients

among network providers. The provider network shall be designed to reflect the needs and service

requirements of AHCCCS’s culturally and linguistically diverse member population. The Contractor shall

design their provider networks to maximize the availability of community based primary care and specialty

care access and that reduces utilization of emergency services, one day hospital admissions, hospital based

outpatient surgeries when lower cost surgery centers are available, and hospitalization for preventable medical

problems. The Contractor must provide a comprehensive provider network that ensures its membership has

access at least equal to community norms. Services shall be as accessible to AHCCCS members in terms of

timeliness, amount, duration and scope as those services are available to non-AHCCCS persons within the same

service area [42 CFR 438.210(a)(2)]. The Contractor is expected to consider the full spectrum of care when

developing its network. The Contractor is encouraged to have available non-emergent after-hours physician or

primary care services within its network. The Contractor must also consider communities whose residents

typically receive care in neighboring states/border communities. If the Contractor is unable to provide any

services locally, it must notify AHCCCS and shall provide reasonable alternatives for members to access care.

These alternatives must be approved by AHCCCS. If the Contractor’s network is unable to provide medically

necessary services required under contract, the Contractor must adequately and timely cover these services

through an out of network provider until a network provider is contracted. The Contractor and out of network

provider must coordinate with respect to authorization and payment issues in these circumstances [42 CFR

438.206(b)(4) and (5)].

The Contractor must pay all AHCCCS registered Arizona Early Intervention Program (AzEIP) providers,

regardless of their contract status with the Contractor, when Individual Family Service Plans identify and meet

the requirement for medically necessary EPSDT covered services.

The Contractor is also encouraged to develop non-financial incentive programs to increase participation in its

provider network.

AHCCCS is committed to workforce development and support of the medical residency and dental student

training programs in the state of Arizona. AHCCCS expects the Contractor to support these efforts. AHCCCS

encourages plans to contract with or otherwise support the many Graduate Medical Education (GME)

Residency Training Programs currently operating in the state and to investigate opportunities for resident

participation in Contractor medical management and committee activities. In the event of a contract

termination between the Contractor and a Graduate Medical Education Residency Training Program or training

site, the Contractor may not remove members from that program in such a manner as to harm the stability of

the program. AHCCCS reserves the right to determine what constitutes risk to the program. If a Residency

Training Program is in need of patients in order to maintain accreditation, AHCCCS may require a Contractor

within the program’s GSA to make members available to the program. Further, the Contractor must attempt to

contract with graduating residents and providers that are opening new practices in, or relocating to, Arizona,

especially in rural or underserved areas.

The Contractor shall not discriminate with respect to participation in the AHCCCS program, reimbursement or

indemnification against any provider based solely on the provider’s type of licensure or certification [42 CFR

438.12(a)(1)]. In addition, the Contractor must not discriminate against particular providers that service high-risk

populations or specialize in conditions that require costly treatment [42 CFR 438.214(c)]. This provision,

however, does not prohibit the Contractor from limiting provider participation to the extent necessary to meet the

needs of the Contractor’s members. This provision also does not interfere with measures established by the

Contractor to control costs consistent with its responsibilities under this contract [42 CFR 438.12(b)(1)]. If a

Contractor declines to include individual or groups of providers in its network, it must give the affected providers

timely written notice of the reason for its decision [42 CFR 438.12(a)(1)]. The Contractor may not include

providers excluded from participation in Federal health care programs, under either section 1128 or section

1128A of the Social Security Act [42 CFR 438.214(d)].

See Attachment B, Minimum Network Requirements, for details on network requirements by Geographic Service

Area.

Provider Network Development and Management Plan: The Contractor shall develop and maintain a provider

network development and management plan, which ensures that the provision of covered services will occur as

stated above. The requirements for the Network Development and Management Plan are found in the ACOM

Provider Network Development and Management Plan Policy [42 CFR 438.207(b)]. This plan shall be updated

annually and submitted to AHCCCS, Division of Health Care Management, 45 days from the start of each

contract year.

28. PROVIDER AFFILIATION TRANSMISSION

The Contractor shall submit information quarterly regarding its provider network. This information shall be

submitted in the format described in the Provider Affiliation Transmission User Manual on October 15, January

15, April 15, and July 15 of each contract year. The manual may be found on the AHCCCS website. If the

provider affiliation transmission is not timely, accurate and complete, the Contractor may be required to submit a

corrective action plan and may be subject to sanction.

29. NETWORK MANAGEMENT

The Contractor shall have policies on how the Contractor will [42 CFR 438.214(a)]:

a. Communicate with the network regarding contractual and/or program changes and requirements;

b. Monitor network compliance with policies and rules of AHCCCS and the Contractor, including compliance

   with all policies and procedures related to the grievance process and ensuring the member’s care is not

   compromised during the grievance process;

c. Evaluate the quality of services delivered by the network;

d. Provide or arrange for medically necessary covered services should the network become temporarily

   insufficient within the contracted service area;

e. Monitor the adequacy, accessibility and availability of its provider network to meet the needs of its members,

   including the provision of care to members with limited proficiency in English;

f. Process expedited and temporary credentials;

g. Recruit, select, credential, re-credential and contract with providers in a manner that incorporate quality

   management, utilization, office audits and provider profiling;

h. Provide training for its providers and maintain records of such training;

i. Track and trend provider inquiries/complaints/requests for information and take systemic action as necessary

   and appropriate;

j. Ensure that provider calls are acknowledged within 3 business days of receipt; resolved and the result

   communicated to the provider within 30 business days of receipt.

Contractor policies shall be subject to approval by AHCCCS, Division of Health Care Management, and shall

be monitored through operational audits.

The Contractor is required to obtain prior approval from AHCCCS, DHCM regarding material changes to

operations. A material change to operations is defined as any change in overall business operations (i.e.,

policy, process, protocol, etc.) that could have an impact on or reasonably be foreseen to have an impact on

more than 5% of the members and/or providers. The Contractor must submit the request for approval of

material change, including draft notification to affected members and providers, 60 days prior to the expected

implementation of the change. The request should contain, at a minimum, information regarding the nature of

the change; the reason for the change; methods of communication to be used; and the anticipated effective

date. If AHCCCS does not respond to the Contractor within 30 days; the request and the notices are deemed

approved. A material change in Contractor operations requires 30 days advance written notice to affected

providers and members. The requirements regarding material changes do not extend to contract negotiations

between the Contractor and a provider.

The Contractor may be required to conduct meetings with providers to address issues (or to provide general

information, technical assistance, etc.) related to federal and state requirements, changes in policy,

reimbursement matters, prior authorization and other matters as identified or requested by the Administration.

The Contractor shall give hospitals and provider groups 90 days notice prior to a contract termination without

cause. Contracts between the Contractor and single practitioners are exempt from this requirement.

All material changes in the Contractor's provider network must be approved in advance by AHCCCS, Division of

Health Care Management [42 CFR 438.207(c)]. A material change to the network is defined as one which

affects, or can reasonably be foreseen to affect, the Contractor's ability to meet the performance and network

standards as described in this contract. It also includes any change that would cause more than 5% of members in

the GSA to change the location where services are received or rendered. The Contractor must submit the request

for approval of material change, including draft notification to affected members, 60 days prior to the expected

implementation of the change. The request must include a description of any short-term gaps identified as a

result of the change and the alternatives that will be used to fill them. If AHCCCS does not respond within 30

days the request and the notice are deemed approved. A material change in Contractor network requires 30

days advance written notice to affected members. For emergency situations, AHCCCS will expedite the

approval process.

The Contractor shall notify AHCCCS, Division of Health Care Management, within one business day of any

unexpected changes that would impair its provider network. This notification shall include (1) information about

how the change will affect the delivery of covered services, and (2) the Contractor's plans for maintaining the

quality of member care, if the provider network change is likely to affect the delivery of covered services.

Homeless Clinics:

A Contractor in Maricopa and Pima County must contract with homeless clinics at the AHCCCS Fee-for-Service

rate for Primary Care services. Contracts must stipulate that:

                1. Only those members that request a homeless clinic as a PCP may be assigned to them; and

                2. Members assigned to a homeless clinic may be referred out-of-network for needed specialty services

The Contractor must make resources available to assist homeless clinics with administrative issues such as

obtaining Prior Authorization, and resolving claims issues.

AHCCCS will convene meetings, as necessary, with the Contractor and the homeless clinics to resolve

administrative issues and perceived barriers to the homeless members receiving care. Representatives from the

Contractor must attend these meetings.

E-Prescribing:

The Contractor must work in collaboration with the Administration to implement E-Prescribing.

30. PRIMARY CARE PROVIDER STANDARDS

The Contractor shall include in its provider network a sufficient number of PCPs to meet the requirements of

this contract. Health care providers designated by the Contractor as PCPs shall be licensed in Arizona as

allopathic or osteopathic physicians who generally specialize in family practice, internal medicine, obstetrics,

gynecology, or pediatrics; certified nurse practitioners or certified nurse midwives; or physician’s assistants

[42 CFR 438.206(b)(2)].

The Contractor shall assess the PCP’s ability to meet AHCCCS appointment availability and other standards

when determining the appropriate number of its members to be assigned to a PCP. The Contractor should also

consider the PCP’s total panel size (i.e., AHCCCS and non-AHCCCS patients) when making this

determination. AHCCCS members shall not comprise the majority of a PCP’s panel of patients. AHCCCS

shall inform the Contractor when a PCP has a panel of more than 1,800 AHCCCS members (assigned by a

single Contractor or multiple Contractors), to assist in the assessment of the size of their panel. This

information will be provided on a quarterly basis. The Contractor will adjust the size of a PCP’s panel, as

needed, for the PCP to meet AHCCCS appointment and clinical performance standards.

The Contractor shall have a system in place to monitor and ensure that each member is assigned to an

individual PCP and that the Contractor’s data regarding PCP assignments is current. The Contractor is

encouraged to assign members with complex medical conditions, who are age 12 and younger, to board

certified pediatricians. PCP’s, with assigned members diagnosed with AIDS or as HIV positive, shall meet

criteria and standards set forth in the AMPM.

The Contractor shall ensure that providers serving EPSDT-aged members utilize AHCCCS-approved standard

developmental screening tools and are trained in the use of the tools. The Contractor is encouraged to assign

EPSDT-aged members to providers that are trained in the use of, and have expressed willingness to use,

AHCCCS-approved developmental screening tools.

To the extent required by this contract, the Contractor shall offer members freedom of choice within its

network in selecting a PCP [42 CFR 438.6(m) and 438.52(d)]. The Contractor may restrict this choice when a

member has shown an inability to form a relationship with a PCP, as evidenced by frequent changes, or when

there is a medically necessary reason. When a new member has been assigned to the Contractor, the

Contractor shall inform the member in writing of his enrollment and of his PCP assignment within 10 days of

the Contractor's receipt of notification of assignment by AHCCCS. The Contractor shall include with the

enrollment notification a list of all the Contractor's available PCPs, the process for changing the PCP

assignment, should the member desire to do so, as well as the information required in the ACOM Member

Information Policy. The Contractor shall confirm any PCP change in writing to the member. Members may

make both their initial PCP selection and any subsequent PCP changes either verbally or in writing.

At a minimum, the Contractor shall hold the PCP responsible for the following activities [42 CFR

438.208(b)(1)]:

a. Supervision, coordination and provision of care to each assigned member;

b. Initiation of referrals for medically necessary specialty care;

c. Maintaining continuity of care for each assigned member;

d. Maintaining the member’s medical record, including documentation of all services provided to the

   member by the PCP, as well as any specialty or referral services. Services potentially requiring medical

   follow up are the only dental services whose documentation must be included in the medical record.

The Contractor shall establish and implement policies and procedures to monitor PCP activities and to ensure

that PCPs are adequately notified of, and receive documentation regarding, specialty and referral services

provided to assigned members by specialty physicians, and other health care professionals. Contractor policies

and procedures shall be subject to approval by AHCCCS, Division of Health Care Management, and shall be

monitored through operational audits.

The Contractor will work with AHCCCS to develop a methodology to reimburse school based clinics.

AHCCCS and the Contractor will identify coordination of care processes and reimbursement mechanisms.

The Contractor will be responsible for payment of these services directly to the clinics.

31. MATERNITY CARE PROVIDER STANDARDS

The Contractor shall ensure that a maternity care provider is designated for each pregnant member for the

duration of her pregnancy and postpartum care and that those maternity services are provided in accordance

with the AMPM. The Contractor may include in its provider network the following maternity care providers:

a. Arizona licensed allopathic and/or osteopathic physicians who are Obstetricians or general

   practitice/family practice providers who provide maternity care services.

b. Physician Assistants

c. Nurse Practitioners

d. Certified Nurse Midwives

Pregnant members may choose, or be assigned, a PCP who provides obstetrical care. Such assignment shall be

consistent with the freedom of choice requirements for selecting health care professionals while ensuring that

the continuity of care is not compromised. Members who choose to receive maternity services from a certified

nurse midwife shall also be assigned to a PCP for medical care, as primary care is not within the scope of

practice for certified nurse midwives.

All physicians and certified nurse midwives who perform deliveries shall have OB hospital privileges or a

documented hospital coverage agreement for those practitioners performing deliveries in alternate settings.

Certified midwives perform deliveries only in the member’s home. Labor and delivery services may also be

provided in the member’s home by physicians, certified nurse practitioners and certified nurse midwives who

include such services within their practice.

32. REFERRAL MANAGEMENT PROCEDURES AND STANDARDS

The Contractor shall have adequate written procedures regarding referrals to specialists, to include, at a

minimum, the following:

a. Use of referral forms clearly identifying the Contractor.

b. PCP referral shall be required for specialty physician services, except that women shall have direct access

   to in-network GYN providers, including physicians, physician assistants and nurse practitioners within the

   scope of their practice, without a referral for preventive and routine services [42 CFR 438.206(b)(2)]. In

   addition, for members with special health care needs determined to need a specialized course of treatment

   or regular care monitoring, the Contractor must have a mechanism in place to allow such members to

   directly access a specialist (for example through a standing referral or an approved number of visits) as

   appropriate for the member’s condition and identified needs. Any waiver of this requirement by the

   Contractor must be approved in advance by AHCCCS.

c. Specialty physicians shall not begin a course of treatment for a medical condition other than that for which

   the member was referred, unless approved by the member’s PCP.

d. A process in place that ensures the member's PCP receives all specialist and consulting reports and a

   process to ensure PCP follow-up of all referrals including EPSDT referrals for behavioral health services.

e. A referral plan for any member who is about to lose eligibility and who requests information on low-cost

   or no-cost health care services.

f. Referral to Medicare Managed Care Plan.

g. Allow for a second opinion from a qualified health care professional within the network, or if one is not

   available in network, arrange for the member to obtain one outside the network, at no cost to the member

    [42 CFR 438.206(b)(3)].

The Contractor shall comply with all applicable physician referral requirements and conditions defined in

Sections 1903(s) and 1877 of the Social Security Act and their implementing regulations which include, but

are not limited to, 42 CFR Part 411, Part 424, Part 435 and Part 455. Sections 1903(s) and 1877 of the Act

prohibits physicians from making referrals for designated health services to health care entities with which the

physician or a member of the physician’s family has a financial relationship. Designated health services

include:

                a. Clinical laboratory services

                b. Physical therapy services

                c. Occupational therapy services

                d. Radiology services

                e. Radiation therapy services and supplies

                f. Durable medical equipment and supplies

                g. Parenteral and enteral nutrients, equipment and supplies

                h. Prosthetics, orthotics and prosthetic devices and supplies

                i. Home health services

                j. Outpatient prescription drugs

                k. Inpatient and outpatient hospital services

33. APPOINTMENT STANDARDS

The Contractor shall monitor appointment availability utilizing the methodology found in the ACOM

Appointment Availability Monitoring and Reporting Policy to ensure that the following standards are met:

Wait time for Appointment:

For Primary Care Appointments, the Contractor shall be able to provide:

a. Emergency PCP appointments - same day of request

b. Urgent care PCP appointments - within 2 days of request

c. Routine care PCP appointments - within 21 days of request

For specialty referrals, the Contractor shall be able to provide:

a. Emergency appointments - within 24 hours of referral

b. Urgent care appointments - within 3 days of referral

c. Routine care appointments - within 45 days of referral

For dental appointments, the Contractor shall be able to provide:

a. Emergency appointments - within 24 hours of request

b. Urgent care appointments - within 3 days of request

c. Routine care appointments - within 45 days of request

For maternity care, the Contractor shall be able to provide initial prenatal care appointments for enrolled

pregnant members as follows:

a. First trimester - within 14 days of request

b. Second trimester - within 7 days of request

c. Third trimester - within 3 days of request

d. High risk pregnancies - within 3 days of identification of high risk by the Contractor or maternity

   care provider, or immediately if an emergency exists

For purposes of the sections above, “urgent” is defined as an acute, but not necessarily life-threatening

condition which, if not attended to, could endanger the patient’s health.

Wait time in Office:

The Contractor shall actively monitor and ensure that a member's waiting time for a scheduled appointment at

the PCP’s or specialist’s office is no more than 45 minutes, except when the provider is unavailable due to an

emergency.

Wait time for Transportation:

If a member needs non-emergent medically necessary transportation, the Contractor shall require its

transportation provider to schedule the transportation so that the member arrives on time for the appointment,

but no sooner than one hour before the appointment; does not have to wait more than one hour after calling for

transportation after the conclusion of the appointment to be picked up; nor have to wait for more than one hour

after conclusion of the treatment for transportation home; nor be picked up prior to the completion of

treatment. The Contractor must develop and implement a quarterly performance auditing protocol to evaluate

compliance with the standards above for all subcontracted transportation vendors/brokers and require

corrective action if standards are not met.

The Contractor must use the results of appointment availability monitoring to assure adequate appointment

availability in order to reduce unnecessary emergency department utilization. The Contractor is also encouraged

to contract with or employ the services of non-emergency facilities to address member non-emergency care issues

occurring after regular office hours or on weekends.

The Contractor shall establish processes to monitor and reduce the appointment “no-show” rate by provider

and service type. As best practices are identified, AHCCCS may require implementation by the Contractor.

The Contractor shall have written policies and procedures about educating its provider network regarding

appointment time requirements. The Contractor must assign a specific staff member or unit within its

organization to monitor compliance with appointment standards. The Contractor must develop a corrective

action plan when appointment standards are not met; if appropriate, the corrective action plan should be

developed in conjunction with the provider [42 CFR 438.206(c)(1)(iv), (v) and (vi)]. Appointment standards

shall be included in the Provider Manual. The Contractor is encouraged to include the standards in the provider

subcontract.

34. FEDERALLY QUALIFIED HEALTH CENTERS AND RURAL HEALTH CLINICS

The Contractor is encouraged to use FQHCs/RHCs in Arizona to provide covered services. AHCCCS requires

the Contractor to negotiate rates of payment with FQHCs/RHCs for non-pharmacy services that are comparable

to the rates paid to providers that provide similar services. AHCCCS reserves the right to review a Contractor’s

negotiated rates with an FQHC/RHC for reasonableness and to require adjustments when negotiated rates are

found to be substantially less than those being paid to other, non-FQHC/RHC providers for comparable services.

The Contractor is required to submit member information for Title XIX members for each FQHC/RHC on a

quarterly basis to the AHCCCS Division of Health Care Management. AHCCCS will perform periodic audits of

the member information submitted. The Contractor should refer to the AHCCCS Reporting Guide for Acute

Care Contractors with the Arizona Health Care Cost Containment System for further guidance. The

FQHCs/RHCs registered with AHCCCS are listed on the AHCCCS website (http://www.azahcccs.gov).

35. PROVIDER MANUAL

The Contractor shall develop, distribute and maintain a provider manual as described in the ACOM Provider

Information Policy.

36. PROVIDER REGISTRATION

The Contractor shall ensure that all of its subcontractors register with AHCCCS as an approved service provider.

A Provider Participation Agreement must be signed by each provider who is not already an AHCCCS registered

provider. The original shall be forwarded to AHCCCS. The provider registration process must be completed in

order for the Contractor to report services a provider renders to enrolled members and for the Contractor to be

paid reinsurance. The National Provider Identifier (NPI) is required on all claim submissions and subsequent

encounters (from providers who are eligible for a NPI). The Contractor shall work with providers to obtain their

NPI.

Except as otherwise required by law or as otherwise specified in a contract between a Contractor and a provider,

the AHCCCS Administration fee-for-service provisions referenced in the AHCCCS Provider Participation

Agreement located on the AHCCCS website (e.g. billing requirements, coding standards, payment rates) are in

force between the provider and Contractor.

37. SUBCONTRACTS

The Contractor shall be legally responsible for contract performance whether or not subcontracts are used [42

CFR 438.230(a) and 434.6(c)]. No subcontract shall operate to terminate the legal responsibility of the

Contractor to assure that all activities carried out by the subcontractor conform to the provisions of this contract.

Subject to such conditions, any function required to be provided by the Contractor pursuant to this contract may

be subcontracted to a qualified person or organization. All such subcontracts must be in writing [42 CFR

438.6(L)]. See the ACOM Contractor Claims Processing by Health Plan Subcontracted Providers Policy.

All subcontracts entered into by the Contractor are subject to prior review and written approval by AHCCCS,

Division of Health Care Management, and shall incorporate by reference the terms and conditions of this

contract. The following types of Administrative Services subcontracts shall be submitted to AHCCCS, Division

of Health Care Management for prior approval at least 30 days prior to the beginning date of the subcontract.

Administrative Services Subcontracts:

                1. Delegated agreements that subcontract:

                                a) Any function related to the management of the contract with AHCCCS. Examples
include

                                   member services, provider relations, quality management,
medical management (e.g., prior

                                   authorization, concurrent review, medical claims review)

                                b) Claims processing, including pharmacy claims.

                                c) Credentialing including those for only primary source verification

                2. All Management Service Agreements

                3. All Service Level Agreements with any Division or Subsidiary of a corporate parent owner

AHCCCS may, at its discretion, communicate directly with the governing body or Parent Corporation of the

Contractor regarding the performance of a subcontractor or Contractor respectively.

The Contractor shall maintain a fully executed original of all subcontracts, which shall be accessible to AHCCCS

within two business days of request by AHCCCS. All requested subcontracts must have full disclosure of all

terms and conditions and must fully disclose all financial or other requested information. Information may be

designated as confidential but may not be withheld from AHCCCS as proprietary. Information designated as

confidential may not be disclosed by AHCCCS without the prior written consent of the Contractor except as

required by law. All subcontracts shall comply with the applicable provisions of Federal and State laws,

regulations and policies.

Before entering into a subcontract which delegates Contractor duties or responsibilities to a subcontractor, the

Contractor must evaluate the prospective subcontractor’s ability to perform the activities to be delegated. If the

Contractor delegates duties or responsibilities such as utilization management or claims processing to a

subcontractor, then the Contractor shall establish a written agreement that specifies the activities and reporting

responsibilities delegated to the subcontractor. The written agreement shall also provide for revoking delegation

or imposing other sanctions if the subcontractor’s performance is inadequate. In order to determine adequate

performance, the Contractor shall monitor the subcontractor’s performance on an ongoing basis and subject it to

formal review according to a periodic schedule. The schedule for review shall be submitted to AHCCCS,

Division of Health Care Management for prior approval. As a result of the performance review, any deficiencies

must be communicated to the subcontractor in order to establish a corrective action plan. The results of the

performance review and the correction plan shall be communicated to AHCCCS upon completion [42 CFR

438.230(b)].

A merger, reorganization or change in ownership of an Administrative Services subcontractor of the Contractor

shall require a contract amendment and prior approval of AHCCCS.

Contractor must submit the Annual Subcontractor Assignment and Evaluation Report (within 90 days from

the start of the contract year) detailing any Contractor duties or responsibilities that have been subcontracted as

described under administrative subcontracts previously in this section. If the Contractor does not assign any

duties under the subcontract types listed in the paragraph above, a statement to this effect must be submitted in

lieu of the Annual Subcontractor Assignment and Evaluation Report. The Annual Subcontractor Assignment

and Evaluation Report will include the following:

            • Subcontractor’s name

                • Delegated duties and responsibilities

                • Most recent review date of the duties, responsibilities and financial position of the subcontractor

                • A comprehensive evaluation of the performance (operational and financial) of the subcontractor

                • Identified areas of deficiency

                • Corrective action plans as necessary

                • Next scheduled review date

The Contractor shall promptly inform AHCCCS, Division of Health Care Management, in writing if a

subcontractor is in significant non-compliance that would affect their abilities to perform the duties and

responsibilities of the subcontract.

The Contractor shall not include covenant-not-to-compete requirements in its provider agreements. Specifically,

the Contractor shall not contract with a provider and require that the provider not provide services for any other

AHCCCS Contractor. In addition, except for cost sharing requirements, the Contractor shall not enter into

subcontracts that contain compensation terms that discourage providers from serving any specific eligibility

category.

The Contractor must enter into a written agreement with any provider (including out-of-state providers) the

Contractor reasonably anticipates will be providing services at the request of the Contractor more than 25 times

during the contract year [42 CFR 438.206(b)(1)]. Exceptions to this requirement include the following:

1. If a provider who provides services more than 25 times during the contract year refuses to enter into a written

   agreement with the Contractor, the Contractor shall submit documentation of such refusal to AHCCCS,

   Division of Health Care Management within seven days of its final attempt to gain such agreement.

2. If a provider performs emergency services such as an emergency room physician or an ambulance company,

   a written agreement is not required.

3. Individual providers as detailed in the AMPM.

4. Hospitals, as discussed in Section D, Paragraph 40, Hospital Subcontracting and Reimbursement.

5. If a provider primarily performs services in an inpatient setting.

6. If upon the Medical Director’s review, it is determined that the Contractor or members would not benefit by

   adding the provider to the contracted network.

Any other exceptions to this requirement must be approved by AHCCCS, Division of Health Care Management.

If AHCCCS does not respond within 30 days; the requested exception is deemed approved. The Contractor may

request an expedited review and approval.

All subcontracts must contain verbatim all the provisions of Attachment A, Minimum Subcontract Provisions. In

addition, each provider subcontract must contain the following [42 CFR 438.206(b)(1)]:

1. Full disclosure of the method and amount of compensation or other consideration to be received by the

   subcontractor.

2. Identification of the name and address of the subcontractor.

3. Identification of the population, to include patient capacity, to be covered by the subcontractor.

4. The amount, duration and scope of medical services to be provided, and for which compensation will be

   paid.

5. The term of the subcontract including beginning and ending dates, methods of extension, termination and

    re-negotiation.

6. The specific duties of the subcontractor relating to coordination of benefits and determination of third-party

   liability.

7. A provision that the subcontractor agrees to identify Medicare and other third-party liability coverage and to

   seek such Medicare or third party liability payment before submitting claims to the Contractor.

8. A description of the subcontractor's patient, medical, dental and cost record keeping system.

9. Specification that the subcontractor shall cooperate with quality management/quality improvement programs,

   and comply with the utilization management and review procedures specified in 42 CFR Part 456, as

   specified in the AMPM.

10. A provision stating that a merger, reorganization or change in ownership of an Administrative Services

   subcontractor of the Contractor shall require a contract amendment and prior approval of AHCCCS.

11. A provision that indicates that AHCCCS is responsible for enrollment, re-enrollment and dis-enrollment of

   the covered population.

12. A provision that the subcontractor shall be fully responsible for all tax obligations, Worker's Compensation

   Insurance, and all other applicable insurance coverage obligations which arise under this subcontract, for

   itself and its employees, and that AHCCCS shall have no responsibility or liability for any such taxes or

   insurance coverage.

13. A provision that the subcontractor must obtain any necessary authorization from the Contractor or AHCCCS

   for services provided to eligible and/or enrolled members.

14. A provision that the subcontractor must comply with encounter reporting and claims submission

   requirements as described in the subcontract.

15. Provision(s) that allow the Contractor to suspend, deny, refuse to renew or terminate any subcontractor in

   accordance with the terms of this contract and applicable law and regulation.

16. A provision that the subcontractor may provide the member with factual information, but is prohibited from

   recommending or steering a member in the member’s selection of a Contractor.

17. A provision that compensation to individuals or entities that conduct utilization management and concurrent

   review activities is not structured so as to provide incentives for the individual or entity to deny, limit or

   discontinue medically necessary services to any enrollee (42 CFR 438.210(e)).

38. CLAIMS PAYMENT/HEALTH INFORMATION SYSTEM

The Contractor shall develop and maintain a health information system that collects, analyzes, integrates, and

reports data. The system shall provide information on areas including, but not limited to, service utilization,

claim disputes and appeals [42 CFR 438.242(a)].

The Contractor will ensure that changing or making major upgrades to the information systems affecting

claims processing, or any other major business component, will be accompanied by a plan which includes a

timeline, milestones, and adequate testing before implementation. At least six months before the anticipated

implementation date, the Contractor shall provide the system change plan to AHCCCS for review and

comment.

The Contractor must have a health information system that integrates member demographic data, provider

information, service provision, claims submission and reimbursement. This system must be capable of

collecting, storing and producing information for the purposes of financial, medical and operational

management.

In support of this requirement, the Contractor will be required to have an independent audit of the Claims

Payment/Health Information System completed within two (2) calendar years of the initiation of the Contract; or

by September 30, 2010 (CYE10). The Contractor must submit a signed agreement on or before December 31st

2008, with a schedule for completion, entered into with an independent auditing firm of their selection to be

approved by the AHCCCS Division of Health Care Management. The Division of Health Care Management will

monitor the scope of this audit, to include no less than a verification of contract information management

(contract loading and auditing), claims processing and encounter submission processes. In addition to this

requirement, the Contractor may be required in future contract years to initiate additional independent Claim

System/Health Information System audit at the direction of the AHCCCS Administration. In the event of a

system change or upgrade, the Contractor will be required to initiate an independent Claim System/Health

Information System audit.

In addtition to the above required audit, the Contractor shall develop and implement an internal claims audit

function that will include the following:

                • Verification that provider contracts are loaded correctly

                • Accuracy of payments against provider contract terms

The Contractor shall develop and maintain a HIPAA compliant claims processing and payment system capable of

processing, cost avoiding and paying claims in accordance with A.R.S. §§ 36-2903 and 2904 and AHCCCS

Rules R9-22 Article 7. The system must be adaptable to updates in order to support future AHCCCS claims

related Policy requirements as needed.

The contractor must include nationally recognized methodologies to correctly pay claims including but not

limited to:

                • Correct Coding Initiative (CCI) for Professional and Outpatient services;

                • Multiple Surgical Reductions;

                • Global Day Bundling;

                • Multi Channel Lab Test Bundling

The Contractor claims payment system must be able to assess and/or apply the following data related edits:

                • Benefit Package Variations;

                • Timeliness Standards;

                • Data Accuracy;

                • Adherence to AHCCCS Policy;

                • Provider Qualifications;

                • Member Eligibility and Enrollment;

                • Over-Utilization Standards

This system must produce a remittance advice related to the Contractor’s payments and/or denials to providers

and must include at a minimum:

                • an adequate description of all denials and adjustments;

                • the reasons for such denials and adjustments;

                • the amount billed;

                • the amount paid;

                • application of COB;

                • provider rights for claim disputes.

The related remittance advice must be sent with the payment, unless the payment is made by electronic funds

transfer (EFT). The remittance advice sent related to an EFT must be mailed, or sent to the provider, no later than

the date of the EFT. If the remittance is made through EFT, a notice of the provider’s right for claim dispute must

be sent to the provider concurrently.

The Contractor’s claims payment system, as well as its prior authorization and concurrent review process, must

minimize the likelihood of having to recoup already-paid claims. Any individual recoupment in excess of

$50,000 per provider within a contract year must be approved in advance by AHCCCS, Division of Health Care

Management, Acute Care Operations Unit. If AHCCCS does not respond within 30 days the recoupment request

is deemed approved. AHCCCS must be notified of any cumulative recoupment greater than $50,000 per

provider Tax Identification Number per contract year. A Contractor shall not recoup monies from a provider

later than 12 months after the date of original payment on a clean claim, without prior approval from AHCCCS,

as further described in the ACOM Recoupment Request Policy.

The Contractor is required to reimburse providers for previously recouped monies if the provider was

subsequently denied payment by the primary insurer based on timely filing limits or lack of prior authorization

and the member failed to disclose additional insurance coverage other than AHCCCS.

The Contractor must void encounters for claims that are recouped in full. For recoupments that result in a

reduced claim value or adjustments that result in an increased claim value, replacement encounters must be

submitted. AHCCCS will validate the submission of applicable voids and replacement encounters upon

completion of any approved recoupment that meets the qualifications of this section. All replaced or voided

encounters must reach adjudicated status within 120 days of the approval of the recoupment. The Contractor

should refer to the ACOM Recoupment Request Policy and AHCCCS Encounter Reporting User Manual for

further guidance.

Unless a subcontract specifies otherwise, a Contractor with 50,000 or more members shall ensure that 95% of all

clean claims are adjudicated within 30 days of receipt of the clean claim and 99% are adjudicated within 60 days

of receipt of the clean claim. Unless a subcontract specifies otherwise, a Contractor with fewer than 50,000

members shall ensure that 90% of all clean claims are adjudicated within 30 days of receipt of the clean claim and

99% are adjudicated within 60 days of receipt of the clean claim. Additionally, unless a shorter time period is

specified in contract, the Contractor shall not pay a claim initially submitted more than 6 months after date of

service or pay a clean claim submitted more than 12 months after date of service. Claim payment requirements

pertain to both contracted and non-contracted providers. The receipt date of the claim is the date stamp on the

claim or the date electronically received. The receipt date is the day the claim is received at the Contractor’s

specified claim mailing address. The paid date of the claim is the date on the check or other form of payment [42

CFR 447.45(d)]. Claims submission deadlines shall be calculated from the claim end date or the effective date of

eligibility posting, whichever is later as stated in A.R.S. 36-2904.H.

Effective for all non-hospital clean claims, in the absence of a contract specifying other late payment terms, a

Contractor is required to pay interest on late payments. Late claims payments are those that are paid after 45 days

of receipt of the clean claim (as defined in this contract). In grievance situations, interest shall be paid back to the

date interest would have started to accrue beyond the applicable 45 day requirement. Interest shall be at the rate

of ten per cent per annum, unless a different rate is stated in a written contract. In the absence of interest payment

terms in a subcontract, interest shall accrue starting on the first day after a clean claim is contracted to be paid.

For hospital clean claims, a slow payment penalty shall be paid in accordance with A.R.S. 2903.01. When

interest is paid, the Contractor must report the interest as directed in the AHCCCS Encounter Reporting User

Manual.

AHCCCS will require the Contractor to participate in an AHCCCS workgroup to develop uniform guidelines for

standardizing hospital outpatient and outpatient provider claim requirements, including billing rules and

documentation requirements. The workgroup may be facilitated by an AHCCCS selected consultant. The

Contractor will be held responsible for the cost of this project based on its share of AHCCCS enrollment.

The Contractor is required to accept and generate HIPAA compliant electronic claims transactions from/to any

provider interested and capable of electronic submission or electronic remittance receipt; and must be able to

make claims payments via electronic funds transfer. In addition, the Contractor shall implement and meet the

following milestone in order to make claims processing and payment more efficient and timely:

            • Receive and pay 60% of all claims (based on volume of actual claims excluding claims processed by

                Pharmacy Benefit Managers (PBMs)) electronically by July 1, 2009

In accordance with the Deficit Reduction Act of 2005, Section 6085, Contractor is required to reimburse non-

ontracted emergency services providers at no more than the AHCCCS Fee-For-Service rate. This applies to

in state as well as out of state providers.

In accordance with Arizona Revised Statute 36-2903 and 36-2904, in the absence of a written negotiated rate,

Contractor is required to reimburse non-contracted non-emergent in state providers at the AHCCCS fee

schedule and methodology, or pursuant to 36-2905.01, at ninety-five percent of the AHCCCS Fee-For-Service

rates for urban hospital days. All payments are subject to other limitations that apply, such as provider

registration, prior authorization, medical necessity, and covered service.

The Contractor shall submit a monthly Claims Dashboard as specified in the AHCCCS Claims Dashboard

Reporting Guide. The Monthly report must be received by the AHCCCS Division of Healthcare Management,

no later than 15 days from the end of each month.

Within the first 6 months of the contract term, the Contractor must review claim requirements, including billing

rules and documentation requirements, and submit a report to AHCCCS that will include the rationale for the

requirements. AHCCCS shall determine and provide a format for the report.

39. SPECIALTY CONTRACTS

AHCCCS may at any time negotiate or contract on behalf of the Contractor and AHCCCS for specialized

hospital and medical services. AHCCCS will consider existing Contractor resources in the development and

execution of specialty contracts. AHCCCS may require the Contractor to modify its delivery network to

accommodate the provisions of specialty contracts. AHCCCS may consider waiving this requirement in

particular situations if such action is determined to be in the best interest of the State; however, in no case shall

reimbursement exceeding that payable under the relevant AHCCCS specialty contract be considered in capitation

rate development or risk sharing arrangements, including reinsurance.

During the term of specialty contracts, AHCCCS may act as an intermediary between the Contractor and

specialty Contractors to enhance the cost effectiveness of service delivery. Adjudication of claims related to

payments provided under specialty contracts shall remain the responsibility of the Contractor. AHCCCS may

provide technical assistance prior to the implementation of any specialty contracts.

Currently, AHCCCS only has specialty contracts for transplant services and anti-hemophilic agents and related

pharmaceutical services. AHCCCS shall provide at least 60 days advance written notice to the Contractor prior

to the implementation of any specialty contract. See Section D, Paragraph 57, Reinsurance, for further details.

40. HOSPITAL SUBCONTRACTING AND REIMBURSEMENT

Maricopa and Pima counties only: The Inpatient Hospital Reimbursement Program is defined in the Arizona

Revised Statutes (A.R.S.) 36-2905.01, and requires hospital subcontracts to be negotiated between the Contractor

and hospitals in Maricopa and Pima counties to establish reimbursement levels, terms and conditions.

Subcontracts shall be negotiated by the Contractor and hospitals to cover operational concerns, such as timeliness

of claims submission and payment, payment of discounts or penalties and legal resolution which may, as an

option, include establishing arbitration procedures. These negotiated subcontracts shall remain under close

scrutiny by AHCCCS to ensure availability of quality services within specific service districts, equity of related

party interests and reasonableness of rates. The general provisions of this program encompass acute care hospital

services and outpatient hospital services that result in an admission. The Contractor, upon request, shall make

available to AHCCCS, all hospital subcontracts and amendments. For non-emergency patient-days, the

Contractor shall ensure that at least 65% of its members use contracted hospitals. AHCCCS reserves the right to

subsequently adjust the 65% standard. Further, if in AHCCCS’s judgment the number of emergency days at a

particular non-contracted hospital becomes significant, AHCCCS may require a subcontract at that hospital. In

accordance with R9-22-718, unless otherwise negotiated by both parties, the reimbursement for inpatient

services, including outliers, provided at a non-contracted hospital shall be based on the rates as defined in A.R.S.

§ 36-2903.01, multiplied by 95%.

All counties EXCEPT Maricopa and Pima: The Contractor shall reimburse hospitals for member care in

accordance with AHCCCS Rule R9-22-705. The Contractor is encouraged to obtain subcontracts with hospitals

in all GSAs. The Contractor, upon request, shall make available to AHCCCS, all hospital subcontracts and

amendments.

Out-of-State Hospitals: The Contractor shall reimburse out-of-state hospitals in accordance with AHCCCS

Rule R9-22-705. A Contractor serving border communities (excluding Mexico) is strongly encouraged to

establish contractual agreements with those out-of-state hospitals that are identified by GSA in Attachment B.

Outpatient hospital services: In the absence of a contract, the default payment rate for outpatient hospital

services billed on a UB-92 will be based on the AHCCCS outpatient hospital fee schedule, rather than a

 hospital-specific cost-to-charge ratio (pursuant to ARS 36-2904).

Hospital Recoupments: The Contractor may conduct prepayment and post-payment medical reviews of all

hospital claims including outlier claims. Erroneously paid claims are subject to recoupment. If the Contractor

fails to identify lack of medical necessity through concurrent review and/or prepayment medical review, lack of

medical necessity identified during post-payment medical review shall not constitute a basis for recoupment by

the Contractor. This prohibition does not apply to recoupments that are a result of an AHCCCS reinsurance

audit. See also Section D, Paragraph 38, Claims Payment/Health Information System. For a more complete

description of the guidelines for hospital reimbursement, please consult the AHCCCS website for applicable

statutes and rules.

41. RESPONSIBILITY FOR NURSING FACILITY REIMBURSEMENT

The Contractor shall provide medically necessary nursing facility services as outlined in Section D, Paragraph 10,

Scope of Services. The Contractor shall also provide medically necessary nursing facility services for any

enrolled member who has a pending ALTCS application who is currently residing in a nursing facility and is

eligible for services provided under this contract. If the member becomes ALTCS eligible and is enrolled with an

ALTCS Contractor before the end of the maximum 90 days per contract year of nursing facility coverage, the

Contractor is only responsible for nursing facility reimbursement during the time the member is enrolled with the

Contractor as shown in the PMMIS. Nursing facility services covered by another liable party (including

Medicare) while the member is enrolled with the Contractor, shall be applied to the 90 day per contract year

limitation.

The Contractor shall not deny nursing facility services when the member’s eligibility, including prior period

coverage, had not been posted at the time of admission. In such situations the Contrator shall impose reasonable

authorization requirements. There is no ALTCS enrollment, including prior period coverage, that occurs

concurrently with AHCCCS acute enrollment.

The Contractor shall notify the Assitant Director of the Division of Member Services, when a member has been

residing in a nursing facility for 75 days as specified in Section D, Paragraph 10, Scope of Services, under the

heading Nursing Facility. This will allow AHCCCS time to follow-up on the status of the ALTCS application

and to consider potential fee-for-service coverage if the stay goes beyond the 90 day per contract year maximum.

42. PHYSICIAN INCENTIVES/PAY FOR PERFORMANCE

Physician Incentives

Reporting of Physician Incentive Plans has been suspended by CMS until further notice. No reporting is

required until suspension is lifted.

The Contractor must comply with all applicable physician incentive requirements and conditions defined in 42

CFR 417.479. These regulations prohibit physician incentive plans that directly or indirectly make payments

to a doctor or a group as an inducement to limit or refuse medically necessary services to a member. The

Contractor is required to disclose all physician incentive agreements to AHCCCS and to AHCCCS members

who request them.

The Contractor shall not enter into contractual arrangements that place providers at significant financial risk as

defined in 42 CFR 417.479 unless specifically approved in advance by the AHCCCS Division of Health Care

Management. In order to obtain approval, the following must be submitted to the AHCCCS Division of

Health Care Management 45 days prior to the implementation of the contract [42 CFR 438.6(g)]:

1. A complete copy of the contract

2. A plan for the member satisfaction survey

3. Details of the stop-loss protection provided

4. A summary of the compensation arrangement that meets the substantial financial risk definition.

The Contractor shall disclose to AHCCCS the information on physician incentive plans listed in 42 CFR

417.479(h)(1) through 417.479(I) upon contract renewal, prior to initiation of a new contract, or upon request

from AHCCCS or CMS.

The Contractor shall also provide for compliance with physician incentive plan requirements as set forth in 42

CFR 422.208, 422.210 and 438.6(h). These regulations apply to contract arrangements with subcontracted

entities that provide utilization management services.

Value Driven Healthcare/Pay for Performance

AHCCCS may explore opportunities to develop and implement system-wide Value Driven Healthcare

programs and pay for performance initiatives. The Contractor shall participate in the development and

implementation of such programs as requested by AHCCCS. Should the Contractor’s individual pay for

performance program conflict with AHCCCS programs, the Contractor may be required to close out the

individual program. AHCCCS may require the Contractor to provide PCP assignment information. The

Contractor shall provide this information in a format specified by AHCCCS upon request.

Transparency

AHCCCS programs will be in compliance with Federal and State transparency initiatives. AHCCCS may

publically report or make available any data, reports, analysis or outcomes related to Contractor activities,

operations and/or performance. Public reporting may include, but is not limited to, the following components:

                a) Use of evidence based guidlelines

                b) Identification and publication of top performing Contractors

                c) Identification and publication of top performing providers

                d) Program pay for performance payouts

                e) Mandated publication of guidelines

                f) Mandated publication of outcomes

                g) Identification of Centers of Excellence for specific conditions, procedures or member populations

                h) Establishment of Return on Investment goals

Any Contractor-selected and/or -developed pay for performance initiative that meets the requirements of 42

CFR 417.479 must be approved by AHCCCS Division of Health Care Management prior to implementation.

Public Reporting of Contractor Cost Management, Satisfaction and Quality Performance

AHCCCS is in the process of developing a cost management, satisfaction, and quality score card as part of the

AHCCCS value driven decision support initiative. The score card information will made available to

beneficiaries, legislators and the public. These reports will be posted on the AHCCCS website and made

available at enrollment and reenrollment or at any time that beneficiaries are choosing a Contractor.

Contractors are also encouraged to provide quality and cost information on network hospitals and providers to

help enrollees choose among high performing value driven providers and hospitals.

43. MANAGEMENT SERVICES AGREEMENT AND COST ALLOCATION PLAN

If a Contractor has subcontracted for management services, the management service agreement must be approved

in advance by AHCCCS, Division of Health Care Management. If there is a cost allocation plan as part of the

management services agreement, it is subject to review by AHCCCS upon request. AHCCCS reserves the right

to perform a thorough review of actual management fees charged and/or corporate allocations made.

If there is a change in ownership of the entity with which the Contractor has contracted for management services,

AHCCCS must review and provide prior approval of the assignment of the subcontract to the new owner.

AHCCCS may offer open enrollment to the members assigned to the Contractor should a change in ownership

occur. AHCCCS will not permit two Contractors to utilize the same management service company in the same

GSA.

The performance of management service subcontractors must be evaluated and included in the Annual

Subcontractor Assignment and Evaluation Report required by Section D, Paragraph 37, Subcontracts and

Attachment F: Periodic Report Requirements.

44. RESERVED

45. RESERVED

46. PERFORMANCE BOND OR BOND SUBSTITUTE

The Contractor shall be required to provide a performance bond of standard commercial scope issued by a surety

company authorized to do business in this State, an irrevocable letter of credit, or a cash deposit ("Performance

Bond") to AHCCCS for as long as the Contractor has AHCCCS-related liabilities of $50,000 or more

outstanding, or 15 months following the termination date of this contract, whichever is later, to guarantee: (1)

payment of the Contractor's obligations to providers, non-contracting providers, and non-providers; and (2)

performance by the Contractor of its obligations under this contract [42 CFR 438.116(a)(1) and (b)(1)]. The

Performance Bond shall be in a form acceptable to AHCCCS as described in the ACOM Performance Bond

Policy available on the AHCCCS website.

In the event of a default by the Contractor, AHCCCS shall, in addition to any other remedies it may have under

this contract, obtain payment under the Performance Bond or substitute security for the purposes of the following:

1. Paying any damages sustained by providers, non-contracting providers and non-providers by reason of a

   breach of the Contractor's obligations under this contract,

2. Reimbursing AHCCCS for any payments made by AHCCCS on behalf of the Contractor, and

3. Reimbursing AHCCCS for any extraordinary administrative expenses incurred by reason of a breach of the

   Contractor's obligations under this contract, including, but not limited to, expenses incurred after termination

   of this contract for reasons other than the convenience of the State by AHCCCS.

In the event AHCCCS agrees to accept substitute security in lieu of the Performance Bond, irrevocable letter of

credit or cash deposit, the Contractor agrees to execute any and all documents and perform any and all acts

necessary to secure and enforce AHCCCS's security interest in such substitute security including, but not limited

to, security agreements and necessary UCC filings pursuant to the Arizona Uniform Commercial Code. The

Contractor must request acceptance from AHCCCS when a substitute security in lieu of the performance bond,

irrevocable letter of credit or cash deposit is established. In the event such substitute security is agreed to and

accepted by AHCCCS, the Contractor acknowledges that it has granted AHCCCS a security interest in such

substitute security to secure performance of its obligations under this contract. The Contractor is solely

responsible for establishing the credit-worthiness of all forms of substitute security. AHCCCS may, after written

notice to the Contractor, withdraw its permission for substitute security, in which case the Contractor shall

provide AHCCCS with a form of security described above.

The Contractor may not change the amount, duration or scope of the performance bond without prior written

approval from AHCCCS, Division of Health Care Management. The Contractor shall not leverage the bond for

another loan or create other creditors using the bond as security.

47. AMOUNT OF PERFORMANCE BOND

The initial amount of the Performance Bond shall be equal to 80% of the total capitation payment expected to

be paid to the Contractor in the first month of the contract year, or as determined by AHCCCS. The total

capitation amount (including delivery supplement) excludes premium tax. This requirement must be satisfied

by the Contractor no later than 30 days after notification by AHCCCS of the amount required. Thereafter,

AHCCCS shall review the adequacy of the Performance Bond on a monthly basis to determine if the

Performance Bond must be increased. The Contractor shall have 30 days following notification by AHCCCS

to increase the amount of the Performance Bond. The Performance Bond amount that must be maintained

after the contract term shall be sufficient to cover all outstanding liabilities and will be determined by

AHCCCS. The Contractor may not change the amount of the performance bond without prior written

approval from AHCCCS, Division of Health Care Management. Refer to the ACOM Performance Bond and

Equity Per Member Requirements Policy for more details.

48. ACCUMULATED FUND DEFICIT

The Contractor and its owners must review for accumulated fund deficits on a quarterly basis. In the event the

Contractor has a fund deficit, the Contractor and its owners shall fund the deficit through capital contributions in

a form acceptable to AHCCCS within 30 days after the quarterly, draft or final annual financial statements in

which the deficit is reported are due to AHCCCS, or in a timeframe otherwise requested by AHCCCS. AHCCCS

may, at its option, impose enrollment caps in any or all GSA’s as a result of an accumulated deficit, even if

unaudited.

49. ADVANCES, DISTRIBUTIONS, LOANS AND INVESTMENTS

The Contractor shall not, without the prior approval of AHCCCS, make any advances, distributions, loans or loan

guarantees to related parties or affiliates including another fund or line of business within its organization. The

Contractor shall not, without prior approval of AHCCCS, make advances to providers in excess of $50,000. All

requests for prior approval are to be submitted to the AHCCCS Division of Health Care Management. Refer to

the ACOM Provider and Affiliate Advance Request Policy for further information.

50. FINANCIAL VIABILITY STANDARDS

The Contractor must comply with the AHCCCS-established financial viability standards. On a quarterly basis,

AHCCCS will review the following ratios with the purpose of monitoring the financial health of the Contractor:

Current Ratio; Equity per Member; Medical Expense Ratio; and the Administrative Cost Percentage.

Sanctions may be imposed if the Contractor does not meet these financial viability standards. AHCCCS will take

into account the Contractor’s unique programs for managing care and improving the heath status of members

when analyzing medical expense and administrative ratio results. However, if a critical combination of the

Financial Viability Standards are not met, or if the Contractor’s experience differs significantly from other

Contractors, additional monitoring, such as monthly reporting, may be required.

FINANCIAL VIABILITY STANDARDS

Current Ratio

Current assets divided by current liabilities. "Current assets" includes

any long-term investments that can be converted to cash within 24

hours without significant penalty (i.e., greater than 20%). A request to

include long-term investments that can be converted to cash within 24

hours in the current ratio calculation must be sent to AHCCCS, DHCM,

within 30 days of the contract start date and within 30 days of contract

renewal.

Standard: At least 1.00

If current assets include a receivable from a parent company, the parent

company must have liquid assets that support the amount of the intercompany

loan.

Equity per Member

 Unrestricted equity, less on-balance sheet performance bond, divided by

the number of non-SOBRA Family Planning Extension Services

members enrolled at the end of the period.

Standard: At least $150 for Contractors with enrollment < 100,000

$100 for Contractors with enrollment of 100,000+

Additional information regarding the Equity per Member requirement

may be found in the Performance Bond and Equity per Member

Requirements policy in the ACOM.

Medical Expense Ratio

 Total medical expenses divided by the sum of total capitation + Delivery

Supplement +TPL+ Reinsurance less premium tax

Standard: At least 84%

Administrative Cost Percentage

Total administrative expenses divided by the sum of total capitation +

Delivery Supplement + TPL + Reinsurance less premium tax

Standard: No greater than 10%

The Contractor shall comply with all financial reporting requirements contained in Attachment F, Periodic Report

Requirements and the Reporting Guide for Acute Health Care Contractors with the Arizona Health Care Cost

Containment System, a copy of which may be found on the AHCCCS website. The required reports are subject

to change during the contract term and are summarized in Attachment F, Periodic Report Requirements.

51. SEPARATE INCORPORATION

Within 60 days of contract award, a non-governmental Contractor shall have established a separate corporation

for the purposes of this contract, whose sole activity is the performance of the requirements of this contract.

52. MERGER, REORGANIZATION AND CHANGE OF OWNERSHIP

A proposed merger, reorganization or change in ownership of the Contractor shall require prior approval of

AHCCCS and may require a contract amendment. AHCCCS may terminate this contract pursuant to Section D,

Paragraph 1, Term of Contract and Option to Renew, if the Contractor does not obtain prior approval or

AHCCCS determines that the change in ownership is not in the best interest of the State. AHCCCS may offer

open enrollment to the members assigned to the Contractor should a change in ownership occur. AHCCCS will

not permit one organization to own or manage more than one contract in the same GSA.

The Contractor must submit a detailed merger, reorganization and/or transition plan to AHCCCS, Division of

Health Care Management, for review at least 60 days prior to the effective date of the proposed change. The

purpose of the plan review is to ensure uninterrupted services to members, evaluate the new entity's ability to

support the provider network, ensure that services to members are not diminished and that major components of

the organization and AHCCCS programs are not adversely affected by such merger, reorganization or change in

ownership.

53. COMPENSATION

The method of compensation under this contract will be Prior Period Coverage (PPC) capitation, prospective

capitation, delivery supplement, reinsurance and third party liability, as described and defined within this contract

and appropriate laws, regulations or policies.

Actuaries establish the capitation rates using practices established by the Actuarial Standards Board. AHCCCS

provides the following data to its actuaries for the purposes of rebasing the capitation rates.

                a. Utilization and unit cost data derived from adjudicated encounters

                b. Both audited and unaudited financial statements reported by the Contractor

                c. Market basket inflation trends

                d. AHCCCS fee-for-service schedule pricing adjustments

                e. Programmatic or Medicaid covered service changes that affect reimbursement

                f. Other changes to medical practices or administrative requirements that affect reimbursement

AHCCCS adjusts its rates to best match payment to risk. This further ensures the actuarial basis for the capitation

rates. The following are examples of risk factors that may be included:

                a. Reinsurance (as described in Section D, Paragraph 57)

                b. Age/Gender

                c. Medicare enrollment for SSI members

                d. Delivery supplemental payment

                e. Geographic Service Area adjustments

                f. Risk sharing arrangements for specific populations

                g. Member specific statistics, e.g. member acuity, member choice, member diagnosis, etc.

The above information is reviewed by AHCCCS’ actuaries in renewal years to determine if adjustments are

necessary. A Contractor may cover services that are not covered under the State Plan; however those services are

not included in the data provided to actuaries for setting capitation rates [42 CFR 438.6(e)].

AHCCCS anticipates utilizing an episodic/diagnostic risk adjustment methodology that will be applied to

Contractor specific capitation rates for rates effective no sooner than April 1, 2009, and annually thereafter

effective October 1. AHCCCS will use a national model, based on a Contractor's membership at a specified

date, and will share the methodology with the Contractor prior to implementation. For the episodic/diagnostic

risk adjustment in CYE 09, AHCCCS will apply no more than 50% of the capitation rate adjustment to the

remaining months of the contract year. Effective October 1, 2009, the full impact of the model will be

applied.The methodology may apply to any or all risk groups and GSAs.

Prospective Capitation: The Contractor will be paid capitation for all prospective member months, including

partial member months. This capitation includes the cost of providing medically necessary covered services to

members during the prospective period coverage.

Prior Period Coverage (PPC ) Capitation: Except for SOBRA Family Planning, SSDI-TMC, KidsCare, HIFA

Parents and State Only Transplants, the Contractor will be paid capitation for all PPC member months, including

partial member months. This capitation includes the cost of providing medically necessary covered services,

including behavioral health services, to members during prior period coverage. The PPC capitation rates will be

set by AHCCCS and will be paid to the Contractor along with the prospective capitation described above. The

Contractor will not receive PPC capitation for newborns of members who were enrolled at the time of delivery.

Reconciliation of PPC Costs to Reimbursement: AHCCCS will reconcile the Contractor’s PPC medical cost

expenses to PPC capitation paid to the Contractor during the year. This reconciliation will limit the Contractor’s

profits and losses to 2%. Any losses in excess of 2% will be reimbursed to the Contractor, and likewise, profits in

excess of 2% will be recouped. Adjudicated encounter data will be used to determine medical expenses. Refer to

the ACOM PPC Reconciliation Policy for further details.

Reconciliation of SSDI-TMC Costs to Reimbursement: AHCCCS will reconcile the Contractor’s SSDI-TMC

medical expenses to SSDI-TMC capitation paid to the Contractor during the year. This reconciliation will limit

the Contractor’s profits and losses to 2%. Any losses in excess of 2% will be reimbursed to the Contractor, and

likewise, profits in excess of 2% will be recouped. Adjudicated encounter data will be used to determine medical

expenses. Refer to the ACOM SSDI-Temporary Medical Coverage Reconciliation Policy for further details.

Delivery Supplement: When the Contractor has an enrolled woman who delivers during a prospective

enrollment period, the Contractor will be entitled to a supplemental payment. Supplemental payments will not

apply to women who deliver in a prior period coverage time period, SSDI-TMC members or State Only

Transplant members. AHCCCS reserves the right at any time during the term of this contract to adjust the

amount of this payment for women who deliver at home.

State Only Transplants Option 1 and Option 2: The Contractor will only be paid capitation for an

administrative component for those member months the member is enrolled with the Contractor. For Option 1

members the Contractor will be paid the administrative component up to a 12-month continuous period of

extended eligibility. For Option 2 members the administrative component will be paid for the period of time the

transplant is scheduled or performed. All medically necessary covered services will be reimbursed 100% with no

deductible through Reinsurance payments based on adjudicated encounters. Delivery supplement payments will

not apply to women who deliver during the 12 month continuous period of extended eligibility specified as

Option 1.

54. PAYMENTS TO CONTRACTORS

Subject to the availability of funds, AHCCCS shall make payments to the Contractor in accordance with the

terms of this contract provided that the Contractor’s performance is in compliance with the terms and conditions

of this contract. Payment must comply with requirements of A.R.S. Title 36. AHCCCS reserves the option to

make payments to the Contractor by wire or National Automated Clearing House Association (NACHA) transfer

and will provide the Contractor at least 30 days notice prior to the effective date of any such change.

Where payments are made by electronic funds transfer, AHCCCS shall not be liable for any error or delay in

transfer or indirect or consequential damages arising from the use of the electronic funds transfer process. Any

charges or expenses imposed by the bank for transfers or related actions shall be borne by the Contractor. Except

for adjustments made to correct errors in payment, and as otherwise specified in this section, any savings

remaining to the Contractor as a result of favorable claims experience and efficiencies in service delivery at the

end of the contract term may be kept by the Contractor.

All funds received by the Contractor pursuant to this contract shall be separately accounted for in accordance

with generally accepted accounting principles.

Except for funds received from the collection of permitted copayments and third-party liabilities, the only source

of payment to the Contractor for the services provided hereunder is the Arizona Health Care Cost Containment

System Fund. An error discovered by the State, with or without an audit, in the amount of fees paid to the

Contractor will be subject to adjustment or repayment by AHCCCS making a corresponding decrease in a current

Contractor’s payment or by making an additional payment to the Contractor. When the Contractor identifies an

overpayment, AHCCCS must be notified and reimbursed within 30 days of identification.

No payment due the Contractor by AHCCCS may be assigned or pledged by the Contractor. This section shall

not prohibit AHCCCS at its sole option from making payment to a fiscal agent hired by the Contractor.

55. CAPITATION ADJUSTMENTS

Except for changes made specifically in accordance with this contract, the rates set forth in Section B shall not

be subject to re-negotiation or modification during the contract period. AHCCCS may, at its option, review

the effect of a program change and determine if a capitation adjustment is needed. In these instances the

adjustment will be prospective with assumptions discussed with the Contractor prior to modifying capitation

rates. The Contractor may request a review of a program change if it believes the program change was not

equitable; AHCCCS will not unreasonably withhold such a review.

If the Contractor is in any manner in default in the performance of any obligation under this contract, AHCCCS

may, at its option and in addition to other available remedies, adjust the amount of payment until there is

satisfactory resolution of the default. The Contractor shall reimburse AHCCCS and/or AHCCCS may deduct

from future monthly capitation for any portion of a month during which the Contractor was not at risk due to, for

example:

a. death of a member

b. inmate of a public institution

c. duplicate capitation to the same Contractor

d. adjustment based on change in member’s contract type

e. voluntary withdrawal

Upon becoming aware that a member may be an inmate of a public institution, the Contractor must

contact AHCCCS for an eligibility determination.

If a member is enrolled twice with the same Contractor, recoupment will be made as soon as the double

capitation is identified. AHCCCS reserves the right to modify its policy on capitation recoupments at any time

during the term of this contract.

56. RESERVED

57. REINSURANCE

Reinsurance is a stop-loss program provided by AHCCCS to the Contractor for the partial reimbursement of

covered services, as described below, for a member with an acute medical condition beyond an annual

deductible level. AHCCCS self-insures the reinsurance program through a deduction to capitation rates. For

all reinsurance payments AHCCCS bases reimbursement on adjudicated and approved encounters. Refer to the

AHCCCS Reinsurance Processing Manual for further details on the Reinsurance Program.

Inpatient Reinsurance

Inpatient reinsurance covers partial reimbursement of covered inpatient facility medical services. See the table

below for applicable deductible levels and coinsurance percentages. The coinsurance percent is the rate at

which AHCCCS will reimburse the Contractor for covered inpatient costs incurred above the deductible. The

deductible is the responsibility of the Contractor. Per diem rates paid for nursing facility services provided

within 30 days of an acute hospital stay, including room and board, provided in lieu of hospitalization for up to

90 days in any contract year shall be eligible for reinsurance coverage. Same-day admit-and-discharge services

do not qualify for reinsurance.

The following table represents deductible and coinsurance levels effective October 1, 2008, through September

30, 2009:

                                                                               
Annual Deductible

Statewide Plan Enrollment                               Prospective
Reinsurance                   Coinsurance

0-34,999                                                                 
$20,000                                                  
75%

35,000-49,999                                                        
$35,000  
                                               
75%

50,000 and
over                                                   
$50,000                                                  
75%

Annual deductible levels apply to all members except for SSDI-TMC, State Only Transplant and SOBRA

Family Planning members. Beginning October 1, 2009, and annually thereafter, each of the deductible levels

above will increase by $5,000.

Prospective Reinsurance: This coverage applies to prospective enrollment periods. The deductible level is

based on the Contractor’s statewide AHCCCS acute care enrollment (not including SOBRA Family Planning

Extension services) as of October 1st each contract year, as shown in the table above. AHCCCS will adjust the

Contractor’s deductible level at the beginning of a contract year if the Contractor’s enrollment changes to the

next enrollment level. A Contractor at or above the 35,000 enrollment deductible level may elect a lower

deductible prior to the beginning of a new contract year. These deductible levels are subject to change by

AHCCCS during the term of this contract. Any change in deductible levels will have a corresponding impact

on capitation rates.

PPC inpatient expenses are not covered for any members under the reinsurance program unless they qualify

under catastrophic or transplant reinsurance.

Catastrophic Reinsurance

The Catastrophic Reinsurance program encompasses members receiving certain biotech drugs (listed below),

and those members diagnosed with hemophilia, Von Willebrand’s Disease or Gaucher’s Disease. For

additional detail and restrictions refer to the AHCCCS Reinsurance Processing Manual and the AMPM. There

are no deductibles for catastrophic reinsurance cases. For member’s receiving Biotech drugs outside of the

specific conditions mentioned in this paragraph, AHCCCS will reimburse at 85% of the cost of the drug only.

For those members diagnosed with hemophilia, Von Willebrand’s Disease and Gaucher’s Disease, all

medically necessary covered services provided during the contract year shall be eligible for reimbursement at

85% of the AHCCCS allowed amount or the Contractor’s paid amount, whichever is lower, depending on the

subcap code. Reinsurance coverage for anti-hemophilic blood factors will be limited to 85% of the AHCCCS

contracted amount or the Contractor’s paid amount, whichever is lower. All catastrophic claims are subject to

medical review by AHCCCS.

AHCCCS holds a single-source specialty contract for anti-hemophilic agents and related services for

hemophilia. Non-hemophilia related services are not covered under this specialty contract. Non-hemophiliarelated

care is defined as any care that is provided not related to the hemophilia services.

The Contractor may access anti-hemophilic agents and related pharmaceutical services for hemophilia or Von

Willebrand’s under the terms and conditions of the specialty contract for members enrolled in their plans. In

that instance, the Contractor is the authorizing payor. As such, the Contractor will provide prior authorization,

care coordination, and reimbursement for all components covered under the contract for their members. A

Contractor utilizing the contract will comply with the terms and conditions of the contract. A Contractor may

use the AHCCCS contract or contract with a provider of their choice.

The Contractor must notify AHCCCS, Division of Health Care Management, Medical Management Unit, of

cases identified for catastrophic reinsurance coverage, excluding coverage of Biotech drugs outside of those

condition mentioned in this paragraph, within 30 days of initial diagnosis and/orenrollment with the

Contractor, and annually 30 days prior to the beginning of each contract year. Catastrophic reinsurance will be

paid for a maximum 30-day retroactive period from the date of notification to AHCCCS. The determination of

whether a case or type of case is catastrophic shall be made by the Director or designee based on the following

criteria; 1) severity of medical condition, including prognosis; and 2) the average cost or average length of

hospitalization and medical care, or both, in Arizona, for the type of case under consideration.

HEMOPHILIA: Catastrophic reinsurance coverage is available for all members diagnosed with Hemophilia

(ICD9 codes 286.0, 286.1, 286.2).

VON WILLEBRAND’S DISEASE: Catastrophic reinsurance coverage is available for all members diagnosed

with von Willebrand’s Disease who are non-DDAVP responders and dependent on Plasma Factor VIII.

GAUCHER’S DISEASE: Catastrophic reinsurance is available for members diagnosed with Gaucher’s Disease

classified as Type I and are dependent on enzyme replacement therapy.

BIOTECH DRUGS: Catastrophic reinsurance is available to cover the cost of certain biotech drugs when

medically necessary. These drugs, collectively referred to as Biotech Drugs, are the responsibility of the

Contractor unless the members is CRS enrolled, the medications are related to the management of a CRS-covered

condition, and CRS is providing coverage. Catastrophic reinsurance will cover the drug cost only.

The drugs covered are Cerazyme, Aldurazyme, Fabryzyme, Myozyme, and Elaprase. The Biotech Drugs

covered under reinsurance will be reviewed by AHCCCS at the start of each contract year. AHCCCS reserves

the right to require the use of a generic equivalent where applicable. AHCCCS will reimburse at the lesser of

the Biotech Drug or its generic equivalent for reinsurance purposes.

Transplants

This program covers members who are eligible to receive covered major organ and tissue transplantation

including bone marrow, heart, heart/lung, lung, liver, kidney, and other organ transplantation. Bone grafts and

cornea transplantation services are not eligible for transplant reinsurance coverage but are eligible under the

regular inpatient reinsurance program. Refer to the AMPM for covered services for organ and tissue

transplants. Reinsurance coverage for transplants received at an AHCCCS contracted facility is paid at the

lesser of 85% of the AHCCCS contract amount for the transplantation services rendered or 85% of the

Contractor’s paid amount. Reinsurance coverage for transplants received at a non-AHCCCS contracted facility

is paid the lesser of 85% of the lowest AHCCCS contracted rate, for the same organ or tissue, or the Contractor

paid amount. The AHCCCS contracted transplantation rates may be found on the AHCCCS website. When a

member is referred to a transplant facility for an AHCCCS-covered organ transplant, the Contractor shall

notify AHCCCS, Division of Health Care Management, Medical Management Unit.

Option 1 and Option 2 Transplant Services: Reinsurance coverage for State Only Option 1 and Option 2

members (as described in Section D, Paragraph 2, Eligibility Categories) for transplants received at an

AHCCCS contracted facility is paid at the lesser of 100% of the AHCCCS contract amount for the

transplantation services rendered, or the Contractor paid amount, less the transplant share of cost. For

transplants received at a facility not contracted with AHCCCS, payment is made at the lesser of 100% of the

lowest AHCCCS contracted amount for the transplantation services rendered, or the Contractor paid amount,

less the transplant share of cost. The AHCCCS contracted transplantation rates may be found on the AHCCCS

website. When a member is referred to a transplant facility for an AHCCCS-covered organ transplant, the

Contractor shall notify AHCCCS, Division of Health Care Management, Medical Management Unit as

specified in the AMPM Chapter 300, Policy 310 Attachments A and B, Extended Eligibility Process/Procedure

for Covered Solid Organ and Tissue Transplants.

Option 1 Non-transplant Reinsurance

All medically necessary covered services provided to Option 1 members, unrelated to the transplant, shall be

eligible for reimbursement, with no deductible, at 100% of the Contractor’s paid amount based on adjudicated

encounters.

Other

For all reinsurance case types other than transplants, the Contractor will be reimbursed 100% for all medically

necessary covered expenses provided in a contract year, after the Contractor paid amount in the reinsurance

case reaches $650,000. It is the responsibility of the Contractor to notify AHCCCS, Division of Health Care

Management, Reinsurance Supervisor, once a reinsurance case reaches $650,000. The Contractor is required to

split encounters as necessary once the reinsurance case reaches $650,000. Failure to notify AHCCCS or failure

to split and adjudicate encounters appropriately within 15 months from the end date or service will disqualify

the related encounters for 100% reimbursement consideration.

Encounter Submission and Payments for Reinsurance

a) Encounter Submission: All reinsurance associated encounters must reach a clean claim status within

fifteen months from the end date of service, or date of eligibility posting, whichever is later. Encounters for

reinsurance claims that have passed the fifteen month deadline and are being adjusted due to a claim dispute or

hearing decision must be submitted and pass all encounter and reinsurance edits within 90 calendar days of the

date of the claim dispute decision or hearing decision, or Director’s decision, whichever is applicable. Failure

to submit the encounter within this timeframe will result in the loss of any related reinsurance dollars.

The Contractor must void encounters for any claims that are recouped in full. For recoupments that result in a

reduced claim value or any adjustments that result in an increased claim value, replacement encounters must be

submitted. For replacement encounters resulting in an increased claim value, the replacement encounter must

reach adjudicated status within 15 months of end date of service to receive additional reinsurance benefits.

The Contractor should refer to Section D, Paragraph 65, Encounter Data Reporting, for encounter reporting

requirements.

b) Payment of Inpatient and Catastrophic Reinsurance Cases: AHCCCS will reimburse a Contractor for

costs incurred in excess of the applicable deductible level, subject to coinsurance percentages and

Medicare/TPL payment, less any applicable quick pay discounts, slow payment penalties and interest.

Amounts in excess of the deductible level shall be paid based upon costs paid by the Contractor, minus the

coinsurance and Medicare/TPL payment, unless the costs are paid under a subcapitated arrangement. In

subcapitated arrangements, the Administration shall base reimbursement of reinsurance encounters on the

lower of the AHCCCS allowed amount or the reported health plan paid amount, minus the coinsurance and

Medicare/TPL payment and applicable quick pay discounts, slow payment penalties and interest.

When a member with an annual enrollment choice changes Contractors within a contract year, for reinsurance

purposes, all eligible inpatient costs, nursing facility costs and inpatient psychiatric costs incurred for that

member do not follow the member to the receiving Contractor. Encounters from the Contractor the member is

leaving (for dates of service within the current contract year) will not be applied toward the receiving

Contractor’s deductible level. For further details regarding this policy and other reinsurance policies refer to

the AHCCCS Reinsurance Processing Manual.

c) Payment of Transplant Reinsurance Cases: Reinsurance benefits are based upon the lower of the

AHCCCS contract amount or the Contractor’s paid amount, subject to coinsurance percentages. The

Contractor is required to submit all supporting encounters for transplant services. Reinsurance payments will

be linked to transplant encounter submissions. In order to receive reinsurance payment for transplant stages,

billed amounts and health plan paid amounts for adjudicated encounters must agree with related claims and/or

invoices. Timeliness for each stage payment will be calculated based on the latest adjudication date for the

complete set of encounters related to the stage. Please refer to the AHCCCS Reinsurance Processing Manual

for the appropriate billing of transplant services.

Reinsurance Audits

Pre-Audit: Any medical audits on reinsurance cases will be conducted on a statistically significant random

sample selected based on utilization trends. The Division of Health Care Management will select reinsurance

cases based on encounter data received during the contract year to assure timeliness of the audit process. The

Contractor will be notified of the documentation required for the medical audit. For closed contracts, a 100%

audit may be conducted.

Audit: AHCCCS will give the Contractor at least 45 days advance notice of any audit. The Contractor shall

have all requested medical records and financial documentation available to the nurse auditors. Any

documents not requested in advance by AHCCCS shall be made available upon request of the Audit Team

during the course of the audit. The Contractor representative shall be available to the Audit Team at all times

during AHCCCS audit activities. If an audit should be conducted on-site, the Contractor shall provide the

Audit Team with workspace, access to a telephone, electrical outlets and privacy for conferences.

Audits may be completed without an on-site visit. For these audits, the Contractor will be asked to send the

required documentation to AHCCCS. The documentation will then be reviewed by AHCCCS.

Audit Considerations: Reinsurance consideration will be given to inpatient facility contracts and hearing

decisions rendered by the Office of Legal Assistance. Pre-hearing and/or hearing penalties discoverable during

the review process will not be reimbursed under reinsurance.

Per diem rates may be paid for nursing facility and rehabilitation services provided the services are rendered

within 30 days of an acute hospital stay, including room and board, provided in lieu of hospitalization for up to

90 days in any contract year. The services rendered in these sub-acute settings must be of an acute nature and,

in the case of rehabilitative or restorative services, steady progress must be documented in the medical record.

Audit Determinations: The Contractor will be furnished a copy of the Reinsurance Post-Audit Results letter

approximately 45 days after the audit and given an opportunity to comment and provide additional medical or

financial documentation on any audit findings. AHCCCS may limit reinsurance reimbursement to a lower or

alternative level of care if the Director or designee determines that the less costly alternative could and should

have been used by the Contractor. A recoupment of reinsurance reimbursements made to the Contractor may

occur based on the results of the medical audit.

A Contractor whose reinsurance case is reduced or denied shall be notified in writing by AHCCCS and will be

informed of rationale for reduction or denial determination and the applicable grievance and appeal process

available.

58. COORDINATION OF BENEFITS

Pursuant to federal and state law, AHCCCS is the payer of last resort except under limited situations. This means

AHCCCS shall be used as a source of payment for covered services only after all other sources of payment have

been exhausted. The Contractor shall coordinate benefits in accordance with 42 CFR 433.135 et seq., ARS 36-

2903, and A.A.C. R9-22-1001 et seq. so that costs for services otherwise payable by the Contractor are cost

avoided or recovered from a liable party. The term “State” shall be interpreted to mean “Contractor” for purposes

of complying with the federal regulations referenced above. The Contractor may require subcontractors to be

responsible for coordination of benefits for services provided pursuant to this contract.

The two methods used in the coordination of benefits are cost avoidance and post payment recovery. The

Contractor shall use these methods as described in A.A.C. R9-22-1001 et seq. and federal and state law. See also

Section D, Paragraph 60, Medicare Services and Cost Sharing.

Cost Avoidance: The Contractor shall take reasonable measures to determine all legally liable parties. This

refers to any individual, entity or program that is or may be liable to pay all or part of the expenditures for

covered services. The Contractor shall cost-avoid a claim if it has established the probable existence of a liable

party at the time the claim is filed. Establishing liability takes place when the Contractor receives confirmation

that another party is, by statute, contract, or agreement, legally responsible for the payment of a claim for a

healthcare item or service delivered to a member. If the probable existence of a party’s liability cannot be

established the Contractor must adjudicate the claim. The Contractor must then utilize post payment recovery

which is described in further detail below. If the Administration determines that the Contractor is not actively

engaged in cost avoidance activities the Contractor shall be subject to sanctions in an amount not less than

three times the amount that could have been cost avoided.

The Contractor shall not deny a claim for untimeliness if the untimely claim submission results from a

provider’s efforts to determine the extent of liability.

If a third party insurer other than Medicare requires the member to pay any copayment, coinsurance or

deductible, the Contractor is responsible for making these payments, even if the services are provided outside

of the Contractor network. The Contractor is not responsible for paying coinsurance and deductibles that are

in excess of what the Contractor would have paid for the entire service per a written contract with the provider

performing the service, or the AHCCCS FFS payment equivalent when no contract exists. If the Contractor

refers the member for services to a third-party insurer, other than Medicare, and the insurer requires payment

in advance of all copaycopayments, coinsurance and deductibles, the Contractor must make such payments in

advance.

Members with CRS condition: A member with private insurance or Medicare coverage is not required to utilize

CRSA. This includes members with Medicare whether they are enrolled in Medicare FFS or a Medicare

Managed Care Plan. If the member uses the private insurance network for a CRS-covered condition, the

Contractor is responsible for all applicable deductibles and copayments. However, if the member has

Medicare coverage, the AHCCCS Policy 201- Medicare Cost Sharing for Members in Traditional Fee for

Service Medicare and Policy 202 - Medicare Cost Sharing for Members in Medicare Managed Care Plans

shall apply. When the private insurance or Medicare is exhausted, or certain annual or lifetime limits are

reached with respect to CRS-covered conditions, the Contractor shall refer the member to CRSA for

determination for CRS services. If the member with private insurance or Medicare chooses to enroll with CRS,

CRS becomes the secondary payer responsible for all applicable deductibles and copayments. The Contractor

is not responsible to provide services in instances when the CRS-eligible member, who has no primary

insurance or Medicare, refuses to receive CRS-covered services through the CRS Program. If the Contractor

becomes aware that a member with a CRS-covered condition refuses to participate in the CRS application

process or refuses to receive services through the CRS Program, the member may be billed by the provider in

accordance with AHCCCS regulations regarding billing for unauthorized services.

Post-payment Recoveries: Post-payment recovery is necessary in cases where the Contractor has not

established the probable existence of a liable party at the time services were rendered or paid for, or was

unable to cost-avoid.The following sections set forth requirements for Contractor recovery actions including

recoupment activities, other recoveries and total plan case requirements.

Recoupments: The Contractor must follow the protocols established in the ACOM Recoupment Request Policy.

The Contractor must void encounters for claims that are recouped in full. For recoupments that result in an

adjusted claim value, the Contractor must submit replacement encounters.

Other Recoveries: The Contractor shall identify the existence of potentially liable parties through the use of

trauma code edits, utilizing diagnostic codes 799.9 and 800 to 999.9 (excluding code 994.6), and other

procedures. The Contractor shall not pursue recovery in the following circumstances, unless the case has been

referred to the Contractor by AHCCCS or AHCCCS’s authorized representative:

Uninsured/underinsured motorist insurance                  Restitution Recovery

First-and third-party liability insurance                            Worker’s Compensation

Tortfeasors, including casualty                                        
Estate Recovery

Special Treatment Trust Recovery

Upon identification of any of the above situations, the Contractor shall promptly report cases to AHCCCS’s

authorized representative for determination of a “total plan” case. The Contractor is responsible for all

recovery actions for a “total plan” case. A total plan case is a case where payments for services rendered to the

member are exclusively the responsibility of the Contractor; no reinsurance or fee-for-service payments are

involved. By contrast, a “joint” case is one where fee-for-service payments and/or reinsurance payments are

involved. In joint cases, the Contractor shall notify AHCCCS’s authorized representative within 10 business

days of the identification of a liable party. Failure to report these cases may result in one of the remedies

specified in Section D, Paragraph 72, Sanctions. The Contractor shall cooperate with AHCCCS’s authorized

representative in all collection efforts.

Total Plan Case Requirements: In “total plan” cases, the Contractor is responsible for performing all research,

investigation, the mandatory filing of initial liens on cases that exceed $250, lien amendments, lien releases,

and payment of other related costs in accordance with A.R.S. 36-2915 and A.R.S. 36-2916. The Contractor

shall use the AHCCCS-approved casualty recovery correspondence when filing liens and when corresponding

to others in regard to casualty recovery. The Contractor may retain up to 100% of its recovery collections if all

of the following conditions exist:

                a. Total collections received do not exceed the total amount of the Contractor’s financial

                   liability for the member;

                b. There are no payments made by AHCCCS related to fee-for-service, reinsurance or

                   administrative costs (i.e., lien filing , etc.); and

                c. Such recovery is not prohibited by state or Federal law.

Prior to negotiating a settlement on a total plan case, the Contractor shall notify AHCCCS to ensure that there

is no reinsurance or fee-for-service payment that has been made by AHCCCS. Failure to report these cases

prior to negotiating a settlement amount may result in one of the remedies specified in Section D, Paragraph

72, Sanctions.

Total Plan Cases: the Contractor shall report settlement information to AHCCCS, utilizing the AHCCCS-approved

casualty recovery Notification of Settlement form, within 10 business days from the settlement date.

Failure to report these cases may result in one of the remedies specified in Section D, Paragraph 72, Sanctions.

Joint Cases: AHCCCS’s authorized representative is responsible for performing all research, investigation and

payment of lien-related costs, subsequent to the referral of any and all relevant case information to AHCCCS’s

authorized representative by the Contractor. In joint cases, AHCCCS’s authorized representative is also

responsible for negotiating and acting in the best interest of all parties to obtain a reasonable settlement in joint

cases and may compromise a settlement in order to maximize overall reimbursement, net of legal and other

costs. The Contractor will be responsible for their prorated share of the contingency fee. The Contractor’s

share of the contingency fee will be deducted from the settlement proceeds prior to AHCCCS remitting the

settlement to the Contractor.

Other Reporting Requirements: If a Contractor discovers the probable existence of a liable party that is not

known to AHCCCS, the Contractor must report the information to the AHCCCS contracted vendor not later

than 10 days from the date of discovery. In addition, the Contractor shall notify AHCCCS of any known

changes in coverage within deadlines and in a format prescribed by AHCCCS in the Technical Interface

Guidelines. Failure to report these cases may result in one of the remedies specified in Section D, Paragraph

72, Sanctions.

At AHCCCS’s request, the Contractor shall provide an electronic extract of the Casualty cases, including open

and closed cases. Data elements include, but are not limited to: the member’s first and last name; AHCCCS

ID; date of incident; claimed amount; paid/recovered amount; and case status. The AHCCCS TPL Section

shall provide the format and reporting schedule for this information to the Contractor. AHCCCS will provide

the Contractor with a file of all other coverage information, for the purpose of updating the Contractor’s files,

as decribed in the Technical Interface Guidelines.

Title XXI (KidsCare), HIFA Parents, BCCTP, SOBRA Family Planning and SSDI-TMC: Eligibility for

KidsCare, HIFA Parents, BCCTP, SOBRA Family Planning and SSDI-TMC benefits require that the

applicant/member not be enrolled with any other creditable health insurance plan. If the Contractor becomes

aware of any such coverage, the Contractor shall notify AHCCCS immediately. AHCCCS will determine if the

other insurance meets the creditable coverage definition in A.R.S. 36-2982(G).

Contract Termination: Upon termination of this contract, the Contractor will complete the existing third party

liability cases or make any necessary arrangements to transfer the cases to AHCCCS’s authorized TPL

representative.

59. COPAYMENTS

Most of the AHCCCS members remain exempt from copayments while others are subject to an optional

copayment. Those populations exempt or subject to optional copayments may not be denied services for the

inability to pay the copayment [42 CFR 438.108]. Any copayments collected shall belong to the Contractor or

its subcontractors. Attachment K, Copayments, provides detail of the populations and their related copayment

structure.

60. MEDICARE SERVICES AND COST SHARING

AHCCCS has members enrolled who are eligible for both Medicaid and Medicare. These members are

referred to as “dual eligibles”. Generally, the Contractor is responsible for payment of Medicare coinsurance

and/or deductibles for covered services provided to dual eligible members. However, there are different cost

sharing responsibilities that apply to dual eligible members based on a variety of factors. Unless prior

approval is obtained from AHCCCS, the Contractor must limit their cost sharing responsibility according to

the ACOM Medicare Cost Sharing Policy. The Contractor shall have no cost sharing obligation if the

Medicare payment exceeds what the Contractor would have paid for the same service of a non-Medicare

member. Please refer to Section D, Paragraph 10, Scope of Services, for information regarding prescription

medication for Medicare Part D.

When a person with Medicare who is also eligible for Medicaid (dual eligible) is in a medical institution that is

funded by Medicaid for a full calendar month, the dual eligible person is not required to pay copayments for

their Medicare covered prescription medications for the remainder of the calendar year. To ensure appropriate

information is communicated for these members to the Centers for Medicare and Medicaid Services (CMS),

the Contractor must, using the approved form, notify the AHCCCS Member Database Management

Administration (MDMA), via fax at (602) 253-4807 as soon as it determines that a dual eligible person is

expected to be in a medical institution that is funded by Medicaid for a full calendar month, regardless of the

status of the dual eligible person’s Medicare lifetime or annual benefits. This includes:

                a. Members who have Medicare part “B” only;

                b. Members who have used their Medicare part “A” life time inpatient benefit;

                c. Members who are in a continuous placement in a single medical institution or any

                   combination of continuous placements in a medical institution.

For purposes of the medical institution notification, medical institutions are defined as acute hospitals,

psychiatric hospital – Non IMD, psychiatric hospital – IMD, residential treatment center – Non IMD,

residential treatment center – IMD, skilled nursing facilities, and Intermediate Care Facilities for the Mentally

Retarded.

61. MARKETING

The Contractor shall submit all proposed marketing and outreach materials and events that will involve the

general public to the AHCCCS Marketing Committee for prior approval in accordance with the ACOM

Marketing Outreach and Incentives Policy [42 CFR 438.104]. The Contractor must have signed contracts with

PCPs, specialists, dentists, and pharmacies in order for them to be included in marketing materials. Marketing

materials that have received prior approval must be resubmitted to the Division of Health Care Management

every two years for re-approval.

62. CORPORATE COMPLIANCE

In accordance with A.R.S. Section 36-2918.01, and AHCCCS Contractor Operation Manual (ACOM), Chapter

100, the Contractor and its subcontractors and providers are required to immediately notify the AHCCCS

Office of Program Integrity (OPI) regarding any suspected fraud and report the information within 10 business

days of discovery by completing the confidential AHCCCS Referral for Preliminary Investigation form for any

and all suspected fraud or abuse [42 CFR 455.1(a)(1)] This shall include acts of suspected fraud or abuse that

were resolved internally but involved AHCCCS members or funds.

As stated in A.R.S. Section 13-2310, incorporated herein by reference, any person who knowingly obtains any

benefit by means of false or fraudulent pretenses, representations, promises, or material omissions is guilty of a

Class 2 felony.

The Contractor agrees to permit and cooperate with any onsite review. A review by the AHCCCS Office of

Program Integrity may be conducted without notice and for the purpose of ensuring program compliance. The

Contractor also agrees to respond to electronic, telephonic or written requests for information within the

timeframe specified by AHCCCS Administration. The Contractor agrees to provide documents, including

original documents, to representatives of the Office of Program Integrity upon request. The OPI shall allow a

reasonable time for the Contractor to copy the requested documents, not to exceed 20 business days from the

date of the OPI request.

The Contractor must have a mandatory compliance program, supported by other administrative procedures,

that is designed to guard against fraud and abuse [42 CFR 438.608(a) and (b)] The Contractor shall have

written criteria for selecting a Compliance Officer and job description that clearly outlines the responsibilities

and authority of the position. The Compliance Officer shall have the authority to assess records and

independently refer suspected member fraud, provider fraud and member abuse cases to AHCCCS, Office of

Program Integrity or other duly authorized enforcement agencies [42 CFR 455.17].

The compliance program shall be designed to both prevent and detect suspected fraud or abuse. The

compliance program must include:

1. The written designation of a compliance officer and a compliance committee that are accountable to

   the Contractor’s top management.

2. The Compliance Officer must be an onsite management official who reports directly to top

   management.

3. Effective training and education.

4. Effective lines of communication between the compliance officer and the organization’s employees.

5. Enforcement of standards through well-publicized disciplinary guidelines.

6. Provision for internal monitoring and auditing.

7. Provision for prompt response to problems detected.

8. Written policies, procedures, and standards of conduct that articulate the organization’s commitment

   to comply with all applicable Federal and state standards.

9. A Compliance Committee which shall be made up of, at a minimum, the Compliance Officer, a

   budgetary official and other executive officials with decision making authority. The Compliance

   Committee will assist the Compliance Officer in monitoring, reviewing and assessing the

   effectiveness of the compliance program and timeliness of reporting.

10. Pursuant to the Deficit Reduction Act of 2005 (DRA), the Contractor, as a condition for receiving

   payments shall establish written policies for employees detailing:

                a. The federal False Claims Act provisions;

                b. The administrative remedies for false claims and statements;

                c. Any state laws relating to civil or criminal penalties for false claims and statements;

                d. The whistleblower protections under such laws.

11. The Contractor must establish a process for training existing staff and new hires on the compliance

   program and on the items in section 10. All training must be conducted in such a manner that can be

   verified by AHCCCS.

12. The Contractor must require, through documented policies and subsequent contract amendments, that

   providers train their staff on the following aspects of the Federal False Claims Act provisions:

                a. The administrative remedies for false claims and statements;

                b. Any state laws relating to civil or criminal penalties for false claims and statements;

                c. The whistleblower protections under such laws.

The Contractor is required to research potential overpayments identified by the AHCCCS Office of Program

Integrity [42 CFR 455.1(a)]. After conducting a cost benefit analysis to determine if such action is warranted,

the Contractor should attempt to recover any overpayments identified. The AHCCCS Office of Program

Integrity shall be advised of the final disposition of the research and advised of actions, if any, taken by the

Contractor.

63. RECORDS RETENTION

The Contractor shall maintain records relating to covered services and expenditures including reports to

AHCCCS and documentation used in the preparation of reports to AHCCCS. The Contractor shall comply with

all specifications for record keeping established by AHCCCS. All records shall be maintained to the extent and

in such detail as required by AHCCCS Rules and policies. Records shall include but not be limited to financial

statements, records relating to the quality of care, medical records, prescription files and other records specified

by AHCCCS.

The Contractor agrees to make available, at all reasonable times during the term of this contract, any of its records

for inspection, audit or reproduction by any authorized representative of AHCCCS, State or Federal government.

The Contractor shall be responsible for any costs associated with the reproduction of requested information.

The Contractor shall preserve and make available all records for a period of five years from the date of final

payment under this contract. HIPAA related documents must be retained for a period of six years per 45 CFR

164.530(j)(2).

If this contract is completely or partially terminated, the records relating to the work terminated shall be preserved

and made available for a period of five years from the date of any such termination. Records which relate to

grievances, disputes, litigation or the settlement of claims arising out of the performance of this contract, or costs

and expenses of this contract to which exception has been taken by AHCCCS, shall be retained by the Contractor

for a period of five years after the date of final disposition or resolution thereof.

64. DATA EXCHANGE REQUIREMENTS

The Contractor is authorized to exchange data with AHCCCS relating to the information requirements of this

contract and as required to support the data elements to be provided to AHCCCS in the formats prescribed by

AHCCCS, which include formats prescribed by the Health Insurance Portability and Accountability Act

(HIPAA). Details for the formats may be found in the HIPAA Transaction Companion Documents & Trading

Partner Agreements, the AHCCCS Encounter Reporting User Manual and in the AHCCCS Technical Interface

Guidelines, available on the AHCCCS website.

The information so recorded and submitted to AHCCCS shall be in accordance with all procedures, policies,

rules, or statutes in effect during the term of this contract. If any of these procedures, policies, rules, regulations

or statutes are hereinafter changed, both parties agree to conform to these changes following appropriate

notification by AHCCCS.

The Contractor is responsible for any incorrect data, delayed submission or payment (to the Contractor or its

subcontractors), and/or penalty applied due to any error, omission, deletion, or erroneous insert caused by

Contractor-submitted data. Any data that does not meet the standards required by AHCCCS shall not be accepted

by AHCCCS.

The Contractor is responsible for identifying any inconsistencies immediately upon receipt of data from

AHCCCS. If any unreported inconsistencies are subsequently discovered, the Contractor shall be responsible for

the necessary adjustments to correct its records at its own expense.

The Contractor shall accept from AHCCCS original evidence of eligibility and enrollment in a form appropriate

for electronic data exchange. Upon request by AHCCCS, the Contractor shall provide to AHCCCS updated

 date-sensitive PCP assignments in a form appropriate for electronic data exchange.

The Contractor shall be provided with a Contractor-specific security code for use in all data transmissions made

in accordance with contract requirements. Each data transmission by the Contractor shall include the Contractor's

security code. The Contractor agrees that by use of its security code, it certifies that any data transmitted is

accurate and truthful, to the best of the Contractor's Chief Executive Officer, Chief Financial Officer or

designee’s knowledge [42 CFR 438.606]. The Contractor further agrees to indemnify and hold harmless the

State of Arizona and AHCCCS from any and all claims or liabilities, including but not limited to consequential

damages, reimbursements or erroneous billings and reimbursements of attorney fees incurred as a consequence of

any error, omission, deletion or erroneous insert caused by the Contractor in the submitted input data. Neither the

State of Arizona nor AHCCCS shall be responsible for any incorrect or delayed payment to the Contractor’s

AHCCCS services providers (subcontractors) resulting from such error, omission, deletion, or erroneous input

data caused by the Contractor in the submission of AHCCCS claims.

The costs of software changes are included in administrative costs paid to the Contractor. There is no separate

payment for software changes. A PMMIS systems contact will be assigned after contract award. AHCCCS will

work with the contractor as they evaluate Electronic Data Interchange options.

Health Insurance Portability and Accountability Act (HIPAA): The Contractor shall comply with the

Administrative Simplification requirements of Subpart F of the HIPAA of 1996 (Public Law 107-191, 110

Statutes 1936) and all Federal regulations implementing that Subpart that are applicable to the operations of the

Contractor by the dates required by the implementing Federal regulations as well as all subsequent requirements

and regulations as published.

65. ENCOUNTER DATA REPORTING

Encounter Submissions

The accurate and timely reporting of encounter data is crucial to the success of the AHCCCS program. AHCCCS

uses encounter data to pay reinsurance benefits, set fee-for-service and capitation rates, determine reconciliation

amounts, determine disproportionate share payments to hospitals, and to determine compliance with performance

standards. The Contractor shall submit encounter data to AHCCCS for all services for which the Contractor

incurred a financial liability and claims for services eligible for processing by the Contractor where no financial

liability was incurred, including services provided during prior period coverage. This requirement is a condition

of the CMS grant award [42 CFR 438.242(b)(1)].

A Contractor shall prepare, review, verify, certify, and submit, encounters for consideration to AHCCCS.

Upon submission, the Contractor certifies that the services listed were actually rendered [42 CFR 455.1(a)(2)].

The encounters must be submitted in the format prescribed by AHCCCS.

Encounter data must be provided to AHCCCS as outlined in the HIPAA Transaction Companion Documents &

Trading Partner Agreements and the AHCCCS Encounter Reporting User Manual and should be received by

AHCCCS no later than 240 days after the end of the month in which the service was rendered, or the effective

date of the enrollment with the Contractor, whichever date is later. Refer to Paragraph 64, Data Exchange

Requirements, for further information.

The Contractor will be assessed sanctions for noncompliance with encounter submission requirements.

Encounter Reporting

An Encounter Submission Tracking Report (ESTR) must be maintained and made available to AHCCCS upon

request. The Tracking Report’s purpose is to link each claim to an adjudicated or pended encounter returned to

the Contractor. Further information regarding the Encounter Submission Tracking Report may be found in the

AHCCCS Encounter Reporting User Manual.

In addition to the Encounter Submission Tracking Report, the Contractor must maintain and review a report

which reconciles financial fields of a claim (health plan paid, billed amount, health plan allowed, etc.) with the

financial fields of adjudicated encounters. This report shall be available to AHCCCS upon request.

At least twice each month, AHCCCS provides the Contractor with full replacement files containing provider and

medical coding information. These files should be used by the Contractor to ensure accurate Encounter

Reporting. Refer to the AHCCCS Encounter Reporting User Manual for further information.

Pended Encounter Corrections

The Contractor must resolve all pended encounters within 120 days of the original processing date. Sanctions

will be imposed according to the following schedule for each encounter pended for more than 120 days unless

the pend is due to AHCCCS error:

0 – 120 days          121 – 180 days      181 – 240 days      241 – 360 days      361 + days

No sanction          $ 5 per month        $ 10 per month      $ 15 per month      $ 20 per month

“AHCCCS error” is defined as a pended encounter, which (1) AHCCCS acknowledges to be the result of its

own error, and/or (2) requires a change to the system programming, an update to the database reference table,

or further research by AHCCCS. AHCCCS reserves the right to adjust the sanction amount if circumstances

warrant. Upon completion of any changes to the AHCCCS system programming or updates to the database

reference tables, sanctions may be imposed from date of resolution. AHCCCS reserves the right to adjust the

sanction amount if circumstances warrant.

Before imposing sanctions, AHCCCS will notify the Contractor, in writing, of the total number of sanctionable

encounters pended more than 120 days. Pended encounters shall not be voided by the Contractor as a means

of avoiding sanctions for failure to correct encounters within 120 days. The Contractor shall document voided

encounters and shall maintain a record of the voided Claim Reference Number(s) (CRN) with appropriate

reasons indicated. The Contractor shall, upon request, make this documentation available to AHCCCS for

review. Refer to the AHCCCS Encounter Reporting User Manual for further information.

Encounter Corrections

Contractors are required to submit replacement or voided encounters in the event that claims are subsequently

corrected following the initial encounter submission as described below. This includes corrections as a result

of inaccuracies identified by fraud and abuse audits or investigations conducted by AHCCCS or the

Contractor. The Contractor must void encounters for claims that are recouped in full. For recoupments that

result in a reduced claim value or adjustments that result in an increased claim value, replacement encounters

must be submitted. For those recoupments requiring approval from AHCCCS, replacement encounters must be

submitted within 120 days of the recoupment approval from AHCCCS. Refer to the AHCCCS Encounter

Reporting User Manual for instructions regarding the submission of corrected encounters.

Encounter Validation Studies

Per the CMS requirement, AHCCCS will conduct encounter validation studies of the Contractor’s encounter

submissions, and sanction the Contractor for noncompliance with encounter submission requirements. The

purpose of encounter validation studies is to compare recorded utilization information from a medical record or

other source with the Contractor’s submitted encounter data. Any and all covered services may be validated as

part of these studies. Encounter validation studies will be conducted at least yearly.

AHCCCS may revise study methodology, timelines, and sanction amounts based on agency review or as a

result of consultations with CMS. The Contractor will be notified in writing of any significant change in study

methodology.

AHCCCS will notify the Contractor in writing of the sanction amounts and of the selected data needed for

encounter validation studies. The Contractor will have 90 days to submit the requested data to AHCCCS. In

the case of medical records requests, the Contractor’s failure to provide AHCCCS with the records requested

within 90 days may result in a sanction of $1,000 per missing medical record. If AHCCCS does not receive a

sufficient number of medical records from the Contractor to select a statistically valid sample for a study, the

Contractor may be sanctioned up to 5% of its annual capitation payment.

The criteria used in encounter validation studies may include timeliness, correctness, and omission of

encounters. Refer to the AHCCCS Data Validation User Manual for further information.

AHCCCS may also perform special reviews of encounter data, such as comparing encounter reports to the

Contractor’s claims files. Any findings of incomplete or inaccurate encounter data may result in the imposition of

sanctions or requirement of a corrective action plan.

66. ENROLLMENT AND CAPITATION TRANSACTION UPDATES

AHCCCS produces daily enrollment transaction updates identifying new members and changes to existing

members' demographic, eligibility and enrollment data, which the Contractor shall use to update its member

records. The daily enrollment transaction update, that is run immediately prior to the monthly enrollment and

capitation transaction, is referred to as the "last daily" and will contain all rate code changes made for the

prospective month, as well as any new enrollments and disenrollments as of the 1st of the prospective month.

AHCCCS also produces a daily Manual Payment Transaction, which identifies enrollment or disenrollment

activity that was not included on the daily enrollment transaction update due to internal edits. The Contractor

shall use the Manual Payment Transaction in addition to the daily enrollment transaction update to update its

member records.

On a monthly basis AHCCCS provides the Contractor with an electronic file of all Acute members who must

complete a review of their eligibility in order to maintain enrollment with the Contractor. AHCCCS strongly

encourages the Contractor to utilize this file to support member retention efforts.

A weekly capitation transaction will be produced to provide the Contractor with member-level capitation

payment information. This file will show changes to the prospective capitation payments, as sent in the monthly

file, resulting from enrollment changes that occur after the monthly file is produced. This file will also identify

mass adjustments to and/or manual capitation payments that occurred at AHCCCS after the monthly file is

produced.

The monthly enrollment and monthly capitation transaction updates are generally produced two days before the

end of every month. The update will identify the total active population for the Contractor as of the first day of

the next month. These updates contain the information used by AHCCCS to produce the monthly capitation

payment for the next month. The Contractor must reconcile their member files with the AHCCCS monthly

update. After reconciling the monthly update information, the Contractor will record the results of the

reconciliation, which will be made available upon request, and will resume posting daily updates beginning with

the last two days of the month. The last two daily updates are different from the regular daily updates in that they

pay and/or recoup capitation into the next month. If the Contractor detects an error through the monthly update

process, the Contractor shall notify AHCCCS, Information Services Division.

Refer to Section D, Paragraph 64, Data Exchange Requirements, for further information.

67. PERIODIC REPORT REQUIREMENTS

AHCCCS, under the terms and conditions of its CMS grant award, requires periodic reports and other

information from the Contractor. The submission of late, inaccurate, or otherwise incomplete reports shall

constitute failure to report subject to the penalty provisions described in Section D, Paragraph 72, Sanctions and

Attachement F, Periodic Report Requirements.

Standards applied for determining adequacy of required reports are as follows [42 CFR 438.242(b)(2)]:

                a. Timeliness: Reports or other required data shall be received on or before scheduled due dates.

                b. Accuracy: Reports or other required data shall be prepared in strict conformity with appropriate

                   authoritative sources and/or AHCCCS defined standards.

                c. Completeness: All required information shall be fully disclosed in a manner that is both responsive

                   and pertinent to report intent with no material omissions.

The Contractor shall comply with all reporting requirements contained in this contract. AHCCCS requirements

regarding reports, report content and frequency of submission of reports are subject to change at any time during

the term of the contract. The Contractor shall comply with all changes specified by AHCCCS. The Contractor

shall be responsible for continued reporting beyond the term of the contract.

68. REQUESTS FOR INFORMATION

AHCCCS may, at any time during the term of this contract, request financial or other information from the

Contractor. Responses shall fully disclose all financial or other information requested. Information may be

designated as confidential but may not be withheld from AHCCCS as proprietary. Information designated as

confidential may not be disclosed by AHCCCS without the prior written consent of the Contractor except as

required by law. Upon receipt of such written requests for information, the Contractor shall provide complete

information as requested no later than 30 days after the receipt of the request unless otherwise specified in the

request itself.

69. DISSEMINATION OF INFORMATION

Upon request, the Contractor shall assist AHCCCS in the dissemination of information prepared by AHCCCS or

the Federal government to its members. The cost of such dissemination shall be borne by the Contractor. All

advertisements, publications and printed materials that are produced by the Contractor and refer to covered

services shall state that such services are funded under contract with AHCCCS.

70. OPERATIONAL AND FINANCIAL READINESS REVIEWS

AHCCCS may conduct Operational and Financial Readiness Reviews on the Contractor and will, subject to the

availability of resources, provide technical assistance as appropriate. The Readiness Review will be conducted

prior to the start of business. The purpose of a Readiness Review is to assess Contractor’s readiness and ability to

provide covered services to members at the start of the contract. The Contractor will be permitted to commence

operations only if the Readiness Review factors are met to AHCCCS's satisfaction.

71. OPERATIONAL AND FINANCIAL REVIEWS

In accordance with CMS requirements, AHCCCS, or an independent external agent, will conduct annual

Operational and Financial Reviews for the purpose of (but not limited to) identifying best practices and ensuring

operational and financial program compliance [42 CFR 438.204]. The reviews will identify areas where

improvements can be made and make recommendations accordingly, monitor the Contractor's progress towards

implementing mandated programs and provide the Contractor with technical assistance if necessary. The

Contractor shall comply with all other medical audit provisions as required by AHCCCS Rule R9-22-521.

The type and duration of the Operational and Financial Review will be solely at the discretion of AHCCCS.

Except in cases where advance notice is not possible or advance notice may render the review less useful,

AHCCCS will give the Contractor at least three weeks advance notice of the date of the on-site review. In

preparation for the on-site Operational and Financial Reviews, the Contractor shall cooperate fully with

AHCCCS and the AHCCCS Review Team by forwarding in advance such policies, procedures, job descriptions,

contracts, logs and other information that AHCCCS may request. The Contractor shall have all requested

medical records on-site. Any documents, not requested in advance by AHCCCS, shall be made available upon

request of the Review Team during the course of the review. The Contractor personnel, as identified in advance,

shall be available to the Review Team at all times during AHCCCS on-site review activities. While on-site, the

Contractor shall provide the Review Team with appropriate workspace, access to a telephone, electrical outlets,

internet access and privacy for conferences.

The Contractor will be furnished a draft copy of the Operational and Financial Review Report and given an

opportunity to comment on any review findings prior to AHCCCS publishing the final report. Operational and

Financial Review findings may be used in the scoring of subsequent bid proposals by that Contractor.

Recommendations, made by the Review Team to bring the Contractor into compliance with Federal, State,

AHCCCS, and/or contract requirements, must be implemented by the Contractor. AHCCCS may conduct a

follow-up Operational and Financial Review to determine the Contractor's progress in implementing

recommendations and achieving program compliance. Follow-up reviews may be conducted at any time after the

initial Operational and Financial Review.

The Contractor shall not distribute or otherwise make available the Operational and Financial Review Tool,

draft Operational and Financial Review Report nor final report to other AHCCCS Contractors.

AHCCCS may conduct an Operational and Financial Review in the event the Contractor undergoes a merger,

reorganization, has a change in ownership or makes changes in three or more key staff positions within a 12-

month period.

AHCCCS may request, at the expense of the Contractor, to conduct on-site reviews of functions performed at

out-of-state locations. AHCCCS will coordinate travel arrangements and accommodations with the Contractor.

In addition to the annual Operational and Financial Review AHCCCS may conduct unannounced site visits to

monitor contractual requirements and performance as needed.

72. SANCTIONS

AHCCCS may impose monetary sanctions, suspend, deny, refuse to renew, or terminate this contract or any

related subcontracts in accordance with AHCCCS Rules R9-22-606, ACOM Sanctions Policy and the terms of

this contract and applicable Federal or State law and regulations [42 CFR 422.208, 42 CFR 438.700, 702, 704

and 45 CFR 92.36(i)(1)]. Written notice will be provided to the Contractor specifying the sanction to be

imposed, the grounds for such sanction and either the length of suspension or the amount of capitation to be

withheld. The Contractor may dispute the decision to impose a sanction in accordance with the process outlined

in A.A.C. 9-34-401 et seq. Intermediate sanctions may be imposed, but are not limited to the following actions:

a. Substantial failure to provide medically necessary services that the Contractor is required to provide under

   the terms of this contract to its enrolled members.

b. Imposition of premiums or charges in excess of the amount allowed under the AHCCCS 1115 Waiver.

c. Discrimination among members on the basis of their health status of need for health care services.

d. Misrepresentation or falsification of information furnished to CMS or AHCCCS.

e. Misrepresentation or falsification of information furnished to an enrollee, potential enrollee, or provider.

f. Failure to comply with the requirement for physician incentive plan as delineated in Section D, Paragraph 42,

   Physician Incentives/Pay for Performance.

g. Distribution directly, or indirectly through any agent or independent Contractor, of marketing materials that

   have not been approved by AHCCCS or that contain false or materially misleading information.

h. Failure to meet AHCCCS Financial Viability Standards.

i. Material deficiencies in the Contractor’s provider network.

j. Failure to meet quality of care and quality management requirements.

k. Failure to meet AHCCCS encounter standards.

l. Violation of other applicable State or Federal laws or regulations.

m. Failure to fund accumulated deficit in a timely manner.

n. Failure to increase the Performance Bond in a timely manner.

o. Failure to comply with any provisions contained in this contract and all policies referenced in this contract.

p. Failure to report recovery cases as described in Section D, Paragraph 58, Coordination of Benefits.

AHCCCS may impose the following types of intermediate sanctions:

a. Civil monetary penalties

b. Appointment of temporary management for a Contractor as provided in 42 CFR 438.706 and

   A.R.S. §36-2903 (M).

c. Granting members the right to terminate enrollment without cause and notifying the affected members of

   their right to disenroll [42 CFR 438.702(a)(3)].

d. Suspension of all new enrollments, including auto assignments after the effective date of the sanction.

e. Suspension of payment for recipients enrolled after the effective date of the sanction until CMS or AHCCCS

   is satisfied that the reason for imposition of the sanction no longer exists and is not likely to recur.

f. Additional sanctions allowed under statue or regulation that address areas of noncompliance.

Cure Notice Process: Prior to the imposition of a sanction for non-compliance, AHCCCS may provide a

written cure notice to the Contractor regarding the details of the non-compliance. The cure notice will

specify the period of time during which the Contractor must bring its performance back into compliance

with contract requirements. If, at the end of the specified time period, the Contractor has complied with

the cure notice requirements, AHCCCS will take no further action. If, however, the Contractor has not

complied with the cure notice requirements, AHCCCS may proceed with the imposition of sanctions. Refer

to the ACOM Sanctions Policy for details.

Automatic Sanctions: AHCCCS will assess the sanctions listed in Attachment F, Periodic Reporting

Requirements on deliverables listed under DHCM Acute Care Operations, Clinical Quality Management and

Medical Management that are not received by 5:00 PM on the due date indicated. If the due date falls on a

weekend or a State Holiday, sanctions will be assessed on deliverables not received by 5:00 PM on the next

business day.

73. BUSINESS CONTINUITY AND RECOVERY PLAN

The Contractor shall adhere to all elements of the ACOM Business Continuity and Recovery Plan Policy. The

Contractor shall develop a Business Continuity and Recovery Plan to deal with unexpected events that may affect

its ability to adequately serve members. This plan shall, at a minimum, include planning and staff training for:

            • Electronic/telephonic failure at the Contractor's main place of business

                • Complete loss of use of the main site and satellite offices out of state

                • Loss of primary computer system/records

                • Communication between the Contractor and AHCCCS in the event of a business disruption

                • Periodic Testing

The Business Continuity and Recovery Plan shall be updated annually. The Contractor shall submit a summary

of the plan as specified in the ACOM Business Continuity and Recovery Plan Policy 15 days after the start of the

contract year. All key staff shall be trained and familiar with the Plan.

74. TECHNOLOGICAL ADVANCEMENT

The Contractor must have a website with links to the following information:

                1. Formulary

                2. Provider manual

                3. Member handbook

                4. Provider listing

                5. When available, Member and Provider Survey Results

                6. Performance Measure Results

                7. Prior Authorization criteria

                8. Evidence Based Medicine Guidelines

In addition to the above, the Contractor must include member related information, as described in the

Website section of the ACOM Member Information Policy and ACOM Provider Network Information

Policy, on its website.

The Contractor must be able to perform the following functions electronically:

                1. Provide Enrollment Verification in a HIPAA compliant 270/271 format

                2. Accept the Benefit Enrollment and Maintenance transaction (834 format)

                3. Accept the Payroll Deduction and Other Group Premium Payment for Insurance Products

                   transaction (820 format)

                4. Allow Claims inquiry and response in a HIPAA compliant 276/277 format

                5. Accept HIPAA compliant electronic claims transactions in the 837 format (See Section D,

                   Paragraph 38, Claims Payment/Health Information System)

                6. Generate HIPAA compliant electronic remittance in the 835 format (See Section D, Paragraph 38,

                   Claims Payment/Health Information System)

                7. Make Claims payments via electronic funds transfer (See Section D, Paragraph 38, Claims

                   Payment/Health Information System)

                8. Acceptance of Prior Authorization requests, in a HIPAA compliant 278 format, no later than

                   10/01/09. AHCCCS will work with Contractors to develop functionality requirements.

Use of Website: The Contractor is required to post their clinical performance indicators compared to

AHCCCS standard and statewide averages on their website. In addition, AHCCCS will post Contractor

performance indicators on its website.

Arizona Health-e Connection

In February of 2007, AHCCCS was awarded a CMS Transformation Grant of $11.7M to build a health

information exchange (HIE) and a web based suite of applications for accessing electronic health records

(EHR). The HIE will serve to provide real time patient health information and clinical care automation for

AHCCCS contracted health care providers, in accordance with the Governor’s executive order #2005-25 on

Arizona Health-e Connection Roadmap.

AHCCCS will develop a unified approach for AHCCCS Contractors to meet the goal of the executive order

and to connect AHCCCS, AHCCCS Contractors, ancillary subcontractors and registered providers into a

common web based electronic health information data exchange that will meet the standards established by

State and Federal governments. AHCCCS health plans and program Contractors will cooperate in assisting

AHCCCS with developing the Health-e project plan and shall implement required data exchange interfaces as

required to meet the goals of the Governor's executive order.

CMS will provide grants to state Medicaid agencies to support development of IT infrastructure and

applications to achieve the goal of health information data exchange. AHCCCS Contractors will be required

to:

                1) Encourage lab, pharmacy and ancillary subcontractors to develop common electronic

                    interfaces for the exchange of data using standards based transactions.

                2) AHCCCS may issue Minimum Subcontract language that will require subcontractors to

                    participate in the e-Health Initiative. The Contractor must amend all provider subcontracts to

                    include the amended Minimum Subcontract provisions within six (6) months of issuance.

                3) The Contractor will cooperate in passing on any AHCCCS professional fee or facility

                    reimbursement rate adjustments to primary care providers, nursing facility contractor,

                    hospitals and any other providers determined by AHCCCS to be eligible for reimbursement

                    for participation in the health information data exchange.

AHCCCS will continually work to enhance the functionality of the health information exchange, electronic

health records, electronic prescribing and web based applications. The AHCCCS Contractor is expected to

deploy upgrades and enhancements as necessary to contracted providers.

75. PENDING LEGISLATIVE / OTHER ISSUES

The following constitute pending items that may be resolved after the issuance of this contract. Any program

changes due to the resolution of the issues will be reflected in future amendments to the contract. Capitation rates

may also be adjusted to reflect the financial impact of program changes. The items in this paragraph are subject to

change and should not be considered all-inclusive.

Federal and State Legislation: AHCCCS and its Contractors are subject to legislative mandates that may result

in changes to the program. AHCCCS will either amend the contract or incorporate changes in policies

incorporated in the contract by reference.

Member Incentives: AHCCCS may explore opportunities to develop member incentive programs to increase the

use of preventive health services and compliance with guidelines for recommended care and services for specific

health conditions. The Contractor shall participate in the development and implementation of such programs as

directed by AHCCCS.

Medical Home: AHCCCS shall initiate a process to develop, implement and expand the medical home concept.

Through the RFP process, a Contractor may be selected to work with AHCCCS and take the leadership role in

creating medical homes in conjunction with the Acute Care program. The selected Contractor will be paid an

administrative fee for the development of the medical home model. The administrative fee will only be paid until

the project is completed, as determined by AHCCCS. The Contractor will be expected to participate in all phases

of this project. The Contractor shall deploy best practices in medical home concepts as identified and selected for

implementation.

KidsShare: KidsShare is a health insurance buy-in program for children, that is currently being proposed.

KidsShare would allow families below 350% of the FPL to purchase health insurance coverage from the State

based on the KidsCare model. Eligible children would also be required to meet other challenges, such as:

being priced out of the private insurance market; having pre-existing conditions that make obtaining private

insurance extremely difficult; or not having access to employer based insurance because either it is not offered

at their parents' work or their parents' employer does not extend coverage to dependents. Unlike KidsCare, the

program would not be subsidized by the State. Benefit packages and premium levels would be designed to

make the program affordable yet self sustaining. KidsShare would be administered through KidsCare health

plans; these plans would have to go through a bidding process in order to participate.

SSDI-TMC: Due to limited funding and the high cost of the population, the covered services array is being

evaluated and may be changed.

HIFA: The state statute authorizing AHCCCS to provide services to HIFA eligible individuals expires on June

30, 2008, and will require new legislation to continue.

Enrollment Guarantees: AHCCCS intends to modify the rule requiring a 6 month enrollment guarantee as

described in R9-22 Article 17.

Eligibility Privatization: AHCCCS is currently conducting an RFP process to evaluate the potential of

awarding a contract to a private vendor for the determination of eligibility for KidsCare and HIFA Parents. A

similar RFP process will be conducted for the Title XIX eligibility determination process as well.

Coordination of Benefits: Based on the Deficit Reduction Act of 2006, there may be changes to Coordination of

Benefits requirements.

76. SUPPORT OF ARIZONA BASED TRANSLATIONAL AND CLINICAL RESEARCH

AHCCCS is collaborating with the University of Arizona Medical School, Arizona State University, TGen,

and other Arizona based research programs to encourage greater participation of the community in Arizona

based translation and clinical research. The Contractor is encouraged to support AHCCCS-approved volunteer

opportunities for member participation in community based clinical studies and translation research. As part of

this collaboration AHCCCS providers will have the opportunity to be community research associates. The

Arizona Translational Research and Education Consortium will provide statewide governance and oversight of

the community engagement in Arizona translational and clinical research. The Consortium is expecting to

receive a grant from the National Institutes of Health to support the infrastructure for this community

involvement in beneficially translation research trials and studies.

77. RESERVED

78. RESERVED

[END OF SECTION D]

SECTION E: CONTRACT CLAUSES

1) APPLICABLE LAW

Arizona Law - The law of Arizona applies to this contract including, where applicable, the Uniform

Commercial Code, as adopted in the State of Arizona.

Implied Contract Terms - Each provision of law and any terms required by law to be in this contract are a part

of this contract as if fully stated in it.

2) AUTHORITY

This contract is issued under the authority of the Contracting Officer who signed this contract. Changes to the

contract, including the addition of work or materials, the revision of payment terms, or the substitution of work

or materials, directed by an unauthorized state employee or made unilaterally by the Contractor are violations

of the contract and of applicable law. Such changes, including unauthorized written contract amendments, shall

be void and without effect, and the Contractor shall not be entitled to any claim under this contract based on

those changes.

3) ORDER OF PRECEDENCE

The parties to this contract shall be bound by all terms and conditions contained herein. For interpreting such

terms and conditions the following sources shall have precedence in descending order: The Constitution and

laws of the United States and applicable Federal regulations; the terms of the CMS 1115 waiver for the State

of Arizona; the Constitution and laws of Arizona, and applicable State rules; the terms of this contract,

including any attachments and executed amendments and modifications; and AHCCCS policies and

procedures.

4) CONTRACT INTERPRETATION AND AMENDMENT

No Parol Evidence - This contract is intended by the parties as a final and complete expression of their

agreement. No course of prior dealings between the parties and no usage of the trade shall supplement or

explain any term used in this contract.

No Waiver - Either party's failure to insist on strict performance of any term or condition of the contract shall

not be deemed a waiver of that term or condition even if the party accepting or acquiescing in the nonconforming

performance knows of the nature of the performance and fails to object to it.

Written Contract Amendments - The contract shall be modified only through a written contract amendment

within the scope of the contract signed by the procurement officer on behalf of the State.

5) SEVERABILITY

The provisions of this contract are severable to the extent that any provision or application held to be invalid

shall not affect any other provision or application of the contract, which may remain in effect without the

invalid provision, or application.

6) RELATIONSHIP OF PARTIES

The Contractor under this contract is an independent contractor. Neither party to this contract shall be deemed

to be the employee or agent of the other party to the contract.

7) ASSIGNMENT AND DELEGATION

The Contractor shall not assign any right nor delegate any duty under this contract without prior written

approval of the Contracting Officer, who will not unreasonably withhold such approval.

8) INDEMNIFICATION

Contractor/Vendor Indemnification (Not Public Agency)

The parties to this contract agree that the State of Arizona, its departments, agencies, boards and commissions

shall be indemnified and held harmless by the Contractor for the vicarious liability of the State as a result of

entering into this contract. The Contractor agrees to indemnify, defend, and hold harmless the State from and

against any and all claims, losses, liability, costs, and expenses, including attorney’s fees and costs, arising out

of litigation against the AHCCCS Administration including, but not limited to, class action lawsuits

challenging actions by the Contractor. The requirement for indemnification applies irrespective of whether or

not the Contractor is a party to the lawsuit. Each Contractor shall indemnify the State, on a pro rata basis based

on population, attorney’s fees and costs awarded against the State as well as the attorney’s fees and costs

incurred by the State in defending the lawsuit. The Contractor shall also indemnify the AHCCCS

Administration, on a pro rata basis based on population, the administrative expenses incurred by the AHCCCS

Administration to address Contractor deficiencies arising out of the litigation. The parties further agree that the

State of Arizona, its departments, agencies, boards and commissions shall be responsible for its own

negligence. Each party to this contract is responsible for its own negligence.

Contractor/Vendor Indemnification (Public Agency)

Each party (“as indemnitor”) agrees to indemnify, defend, and hold harmless the other party (“as indemnitee”)

from and against any and all claims, losses, liability, costs, or expenses (including reasonable attorney’s fees)

(hereinafter collectively referred to as ‘claims’) arising out of bodily injury of any person (including death) or

property damage but only to the extent that such claims which result in vicarious/derivative liability to the

indemnitee, are caused by the act, omission, negligence, misconduct, or other fault of the indemnitor, its

officers, officials, agents, employees, or volunteers.

9) INDEMNIFICATION -- PATENT AND COPYRIGHT

To the extent permitted by applicable law, the Contractor shall defend, indemnify and hold harmless the State

against any liability including costs and expenses for infringement of any patent, trademark or copyright

arising out of contract performance or use by the State of materials furnished or work performed under this

contract. The State shall reasonably notify the Contractor of any claim for which it may be liable under this

paragraph.

10) COMPLIANCE WITH APPLICABLE LAWS, RULES AND REGULATIONS

The Contractor shall comply with all applicable Federal and State laws and regulations including Title VI of

the Civil Rights Act of 1964; Title IX of the Education Amendments of 1972 (regarding education programs

and activities); the Age Discrimination Act of 1975; the Rehabilitation Act of 1973 (regarding education

programs and activities), and the Americans with Disabilities Act; EEO provisions; Copeland Anti-Kickback

Act; Davis-Bacon Act; Contract Work Hours and Safety Standards; Rights to Inventions Made Under a

Contract or Agreement; Clean Air Act and Federal Water Pollution Control Act; Byrd Anti-Lobbying

Amendment. The Contractor shall maintain all applicable licenses and permits.

11) ADVERTISING AND PROMOTION OF CONTRACT

The Contractor shall not advertise or publish information for commercial benefit concerning this contract

without the prior written approval of the Contracting Officer.

12) PROPERTY OF THE STATE

Except as otherwise provided in this contract, any materials, including reports, computer programs and other

deliverables, created under this contract are the sole property of AHCCCS. The Contractor is not entitled to

maintain any rights on those materials and may not transfer any rights to anyone else. The Contractor shall not

use or release these materials without the prior written consent of AHCCCS.

If a Contractor declares information to be confidential, AHCCCS will maintain the information as confidential

and will not disclose it unless it is required by law or court order.

13) THIRD PARTY ANTITRUST VIOLATIONS

The Contractor assigns to the State any claim for overcharges resulting from antitrust violations to the extent

that those violations concern materials or services supplied by third parties to the Contractor toward fulfillment

of this contract.

14) RIGHT TO ASSURANCE

If AHCCCS, in good faith, has reason to believe that the Contractor does not intend to perform or continue

performing this contract, the procurement officer may demand in writing that the Contractor give a written

assurance of intent to perform. The demand shall be sent to the Contractor by certified mail, return receipt

required. Failure by the Contractor to provide written assurance within the number of days specified in the

demand may, at the State's option, be the basis for terminating the contract.

15) TERMINATION FOR CONFLICT OF INTEREST

AHCCCS may cancel this contract without penalty or further obligation if any person significantly involved in

initiating, negotiating, securing, drafting or creating the contract on behalf of AHCCCS is, or becomes at any

time while the contract or any extension of the contract is in effect, an employee of, or a consultant to, any

other party to this contract with respect to the subject matter of the contract. The cancellation shall be effective

when the Contractor receives written notice of the cancellation unless the notice specifies a later time.

If the Contractor is a political subdivision of the State, it may also cancel this contract as provided by A.R. S.

38-511.

16) GRATUITIES

AHCCCS may, by written notice to the Contractor, immediately terminate this contract if it determines that

employment or a gratuity was offered or made by the Contractor or a representative of the Contractor to any

officer or employee of the State for the purpose of influencing the outcome of the procurement or securing the

contract, an amendment to the contract, or favorable treatment concerning the contract, including the making

of any determination or decision about contract performance. AHCCCS, in addition to any other rights or

remedies, shall be entitled to recover exemplary damages in the amount of three times the value of the gratuity

offered by the Contractor.

17) SUSPENSION OR DEBARMENT

The Contractor shall not employ, consult, subcontract or enter into any agreement for Title XIX services with

any person or entity who is debarred, suspended or otherwise excluded from Federal procurement activity or

from participating in non-procurement activities under regulations issued under Executive Order No. 12549 or

under guidelines implementing Executive Order 12549 [42 CFR 438.610(a) and (b)]. This prohibition extends

to any entity which employs, consults, subcontracts with or otherwise reimburses for services any person

substantially involved in the management of another entity which is debarred, suspended or otherwise

excluded from Federal procurement activity.

The Contractor shall not retain as a director, officer, partner or owner of 5% or more of the Contractor entity,

any person, or affiliate of such a person, who is debarred, suspended or otherwise excluded from Federal

procurement activity.

AHCCCS may, by written notice to the Contractor, immediately terminate this contract if it determines that the

Contractor has been debarred, suspended or otherwise lawfully prohibited from participating in any public

procurement activity.

18) TERMINATION FOR CONVENIENCE

AHCCCS reserves the right to terminate the contract in whole or in part at any time for the convenience of the

State without penalty or recourse. The Contracting Officer shall give written notice by certified mail, return

receipt requested, to the Contractor of the termination at least 90 days before the effective date of the

termination. In the event of termination under this paragraph, all documents, data and reports prepared by the

Contractor under the contract shall become the property of and be delivered to AHCCCS. The Contractor shall

be entitled to receive just and equitable compensation for work in progress, work completed and materials

accepted before the effective date of the termination.

19) TEMPORARY MANAGEMENT/OPERATION OF A CONTRACTOR AND TERMINATION

Temporary Management and Operation of a Contractor: Pursuant to the Balanced Budget Act of 1997, 42

CFR 438.700 et seq. and State Law ARS §36-2903, AHCCCSA is authorized to impose temporary

management for a Contractor under certain conditions. Under federal law, temporary management may be

imposed if AHCCCS determines that there is continued egregious behavior by the Contractor, including but

not limited to the following: substantial failure to provide medically necessary services the Contractor is

required to provide; imposition on enrollees premiums or charges that exceed those permitted by AHCCCSA,

discrimination among enrollees on the basis of health status or need for health care services; misrepresentation

or falsification of information to AHCCCSA or CMS; misrepresentation or falsification of information

furnished to an enrollee or provider; distribution of marketing materials that have not been approved by

AHCCCS or that are false or misleading; or behavior contrary to any requirements of Sections 1903(m) or

1932 of the Social Security Act. Temporary management may also be imposed if AHCCCSA determines that

there is substantial risk to enrollees’ health or that temporary management is necessary to ensure the health of

enrollees while the Contractor is correcting the deficiencies noted above or until there is an orderly transition

or reorganization of the Contractor. Under federal law, temporary management is mandatory if AHCCCSA

determines that the Contractor has repeatedly failed to meet substantive requirements in Sections 1903(m) or

1932 of the Social Security Act. In these situations, AHCCCSA shall not delay imposition of temporary

management to provide a hearing before imposing this sanction.

State law ARS §36-2903 authorizes AHCCCSA to operate a Contractor as specified in this contract. In

addition to the bases specified in 42 CFR 438.700 et seq., AHCCCSA may directly operate the Contractor if,

in the judgment of AHCCCSA, the Contractor's performance is in material breach of the contract or the

Contractor is insolvent. Under these circumstances, AHCCCSA may directly operate the Contractor to assure

delivery of care to members enrolled with the Contractor until cure by the Contractor of its breach, by

demonstrated financial solvency or until the successful transition of those members to other Contractors. Prior

to operation of the Contractor by AHCCCSA pursuant to state statute, the Contractor shall have the

opportunity for a hearing. If AHCCCSA determines that emergency action is required, operation of the

Contractor may take place prior to hearing. Operation by AHCCCSA shall occur only as long as it is necessary

to assure delivery of uninterrupted care to members, to accomplish orderly transition of those members to other

Contractors, or until the Contractor reorganizes or otherwise corrects contract performance failure.

If AHCCCS undertakes direct operation of the Contractor, AHCCCS, through designees appointed by the

Director, shall be vested with full and exclusive power of management and control of the Contractor as

necessary to ensure the uninterrupted care to persons and accomplish the orderly transition of persons to a new

or existing Contractor, or until the Contractor corrects the Contract Performance failure to the satisfaction of

AHCCCS. AHCCCS shall have the power to employ any necessary assistants, to execute any instrument in the

name of the Contractor, to commence, defend and conduct in its name any action or proceeding in which the

Contractor may be a party.

All reasonable expenses of AHCCCS related to the direct operation of the Contractor, including attorney fees,

cost of preliminary or other audits of the Contractor and expenses related to the management of any office or

other assets of the Contractor, shall be paid by the Contractor or withheld from payment due from AHCCCS to

the Contractor.

Termination: AHCCCSA reserves the right to terminate this contract in whole or in part due to the failure of

the Contractor to comply with any term or condition of the contract and as authorized by the Balanced Budget

Act of 1997 and 42 CFR 438.708. If the Contractor is providing services under more than one contract with

AHCCCSA, AHCCCSA may deem unsatisfactory performance under one contract to be cause to require the

Contractor to provide assurance of performance under any and all other contracts. In such situations,

AHCCCSA reserves the right to seek remedies under both actual and anticipatory breaches of contract if

adequate assurance of performance is not received. The Contracting Officer shall mail written notice of the

termination and the reason(s) for it to the Contractor by certified mail, return receipt requested. Pursuant to the

Balanced Budget Act of 1997 and 42 CFR 438.708, AHCCCSA shall provide the contractor with a pre-

determination hearing before termination of the contract.

Upon termination, all documents, data, and reports prepared by the Contractor under the contract shall become

the property of and be delivered to AHCCCSA on demand.

AHCCCSA may, upon termination of this contract, procure on terms and in the manner that it deems

appropriate, materials or services to replace those under this contract. The Contractor shall be liable for any

excess costs incurred by AHCCCSA in re-procuring the materials or services.

20) TERMINATION - AVAILABILITY OF FUNDS

Funds are not presently available for performance under this contract beyond the current fiscal year. No legal

liability on the part of AHCCCS for any payment may arise under this contract until funds are made available

for performance of this contract.

Notwithstanding any other provision in the Agreement, this Agreement may be terminated by AHCCCS, if, for

any reason, there are not sufficient appropriated and available monies for the purpose of maintaining this

Agreement. In the event of such termination, the Contractor shall have no further obligation to AHCCCS,

except as otherwise provided in this contract.

21) RIGHT OF OFFSET

AHCCCS shall be entitled to offset against any amounts due the Contractor any expenses or costs incurred by

AHCCCS concerning the Contractor's non-conforming performance or failure to perform the contract.

22) NON-EXCLUSIVE REMEDIES

The rights and the remedies of AHCCCS under this contract are not exclusive.

23) NON-DISCRIMINATION

The Contractor shall comply with State Executive Order No. 99-4, which mandates that all persons, regardless

of race, color, religion, gender, national origin or political affiliation, shall have equal access to employment

opportunities, and all other applicable Federal and state laws, rules and regulations, including the Americans

with Disabilities Act and Title VI. The Contractor shall take positive action to ensure that applicants for

employment, employees, and persons to whom it provides service are not discriminated against due to race,

creed, color, religion, gender, national origin or disability.

24) EFFECTIVE DATE

The effective date of this contract shall be the date referenced on page 1 of this contract.

25) INSURANCE

A certificate of insurance naming the State of Arizona and AHCCCS as the "additional insured" must be

submitted to AHCCCS within 10 days of notification of contract award and prior to commencement of any

services under this contract. This insurance shall be provided by carriers rated as "A+" or higher by the A.M.

Best Rating Service. The following types and levels of insurance coverage are required for this contract:

a. Commercial General Liability: Provides coverage of at least $1,000,000 for each occurrence for bodily

   injury and property damage to others as a result of accidents on the premises of or as the result of

   operations of the Contractor.

b. Commercial Automobile Liability: Provides coverage of at least $1,000,000 for each occurrence for bodily

   injury and property damage to others resulting from accidents caused by vehicles operated by the

   Contractor.

c. Workers Compensation: Provides coverage to employees of the Contractor for injuries sustained in the

   course of their employment. Coverage must meet the obligations imposed by Federal and State statutes

   and must also include Employer's Liability minimum coverage of $100,000. Evidence of qualified self-insured

   status will also be considered.

d. Professional Liability (if applicable): Provides coverage for alleged professional misconduct or lack of

   ordinary skills in the performance of a professional act of service.

The above coverages may be evidenced by either one of the following:

a. The State of Arizona Certificate of Insurance: This is a form with the special conditions required by the

   contract already pre-printed on the form. The Contractor's agent or broker must fill in the pertinent policy

   information and ensure the required special conditions are included in the Contractor's policy.

b. The Accord form: This standard insurance industry certificate of insurance does not contain the preprinted

   special conditions required by this contract. These conditions must be entered on the certificate by

   the agent or broker and read as follows:

The State of Arizona and Arizona Health Care Cost Containment System are hereby added as

additional insureds. Coverage afforded under this Certificate shall be primary and any insurance

carried by the State or any of its agencies, boards, departments or commissions shall be in excess of

that provided by the insured Contractor. No policy shall expire, be canceled or materially changed

without 30 days written notice to the State. This Certificate is not valid unless countersigned by an

authorized representative of the insurance company.

c. If the Contractor is insured pursuant to A.R.S. § 11-981, the Insurance provisions required by the Contract

   are satisfied.

26) DISPUTES

Contract claims and disputes shall be adjudicated in accordance with State Law, AHCCCS Rules and this

contract.

Except as provided by 9 A.A.C. Chapter 28, Article 6, the exclusive manner for the Contractor to assert any

dispute against AHCCCS shall be in accordance with the process outlined in 9 A.A.C. Chapter 34, Article 4

and ARS §36-2903.01. All disputes except as provided under 9 A.A.C. Chapter 22, Article 6 shall be filed in

writing and be received by AHCCCS no later than 60 days from the date of the disputed notice. All disputes

shall state the factual and legal basis for the dispute. Pending the final resolution of any disputes involving this

contract, the Contractor shall proceed with performance of this contract in accordance with AHCCCS's

instructions, unless AHCCCS specifically, in writing, requests termination or a temporary suspension of

performance.

27) RIGHT TO INSPECT PLANT OR PLACE OF BUSINESS

AHCCCS may, at reasonable times, inspect the part of the plant or place of business of the Contractor or

subcontractor that is related to the performance of this contract, in accordance with A.R.S. §41-2547.

28) INCORPORATION BY REFERENCE

This solicitation and all attachments and amendments, the Contractor's proposal, best and final offer accepted

by AHCCCS, and any approved subcontracts are hereby incorporated by reference into the contract.

29) COVENANT AGAINST CONTINGENT FEES

The Contractor warrants that no person or agency has been employed or retained to solicit or secure this

contract upon an agreement or understanding for a commission, percentage, brokerage or contingent fee. For

violation of this warranty, AHCCCS shall have the right to annul this contract without liability.

30) CHANGES

AHCCCS may at any time, by written notice to the Contractor, make changes within the general scope of this

contract. If any such change causes an increase or decrease in the cost of, or the time required for,

performance of any part of the work under this contract, the Contractor may assert its right to an adjustment in

compensation paid under this contract. The Contractor must assert its right to such adjustment within 30 days

from the date of receipt of the change notice. Any dispute or disagreement caused by such notice shall

constitute a dispute within the meaning of Section E, Paragraph 26, Disputes, and be administered accordingly.

When AHCCCS issues an amendment to modify the contract, the provisions of such amendment will be

deemed to have been accepted 60 days after the date of mailing by AHCCCS, even if the amendment has not

been signed by the Contractor, unless within that time the Contractor notifies AHCCCS in writing that it

refuses to sign the amendment. If the Contractor provides such notification, AHCCCS will initiate termination

proceedings.

31) TYPE OF CONTRACT

Firm Fixed-Price stated as capitated per member per month, except as otherwise provided

32) AMERICANS WITH DISABILITIES ACT

People with disabilities may request special accommodations such as interpreters, alternative formats or

assistance with physical accessibility. Requests for special accommodations must be made with at least three

days prior notice by contacting the Solicitation Contact person.

33) WARRANTY OF SERVICES

The Contractor warrants that all services provided under this contract will conform to the requirements stated

herein. AHCCCS's acceptance of services provided by the Contractor shall not relieve the Contractor from its

obligations under this warranty. In addition to its other remedies, AHCCCS may, at the Contractor's expense,

require prompt correction of any services failing to meet the Contractor's warranty herein. Services corrected

by the Contractor shall be subject to all of the provisions of this contract in the manner and to the same extent

as the services originally furnished.

34) NO GUARANTEED QUANTITIES

AHCCCS does not guarantee the Contractor any minimum or maximum quantity of services or goods to be

provided under this contract.

35) CONFLICT OF INTEREST

The Contractor shall not undertake any work that represents a potential conflict of interest, or which is not in

the best interest of AHCCCS or the State without prior written approval by AHCCCS. The Contractor shall

fully and completely disclose any situation that may present a conflict of interest. If the Contractor is now

performing or elects to perform during the term of this contract any services for any AHCCCS contractor,

provider or Contractor or an entity owning or controlling same, the Contractor shall disclose this relationship

prior to accepting any assignment involving such party.

36) CONFIDENTIALITY AND DISCLOSURE OF CONFIDENTIAL INFORMATION

The Contrator shall safeguard confidential information in accordance with Federal and State laws and

regulations, including but not limited to, 42 CFR 431.300 et seq., 45 CFR parts 160 and 164, and AHCCCS

Regulation A.A.C. R9-22-512.

The Contractor shall establish and maintain procedures and controls that are acceptable to AHCCCS for the

purpose of assuring that no information contained in its records or obtained from AHCCCS or others carrying

out its functions under the contract shall be used or disclosed by its agents, officers or employees, except as

required to efficiently perform duties under the contract. Except as required or permitted by law, the contractor

also agrees that any information pertaining to individual persons shall not be divulged other than to employees

or officers of the contractor as needed for the performance of duties under the contract, unless otherwise

agreed to, in writing, by AHCCCS.

The Contractor shall not, without prior written approval from AHCCCS, either during or after the performance

of the services required by this contract, use, other than for such performance, or disclose to any person other

than AHCCCS personnel with a need to know, any information, data, material, or exhibits created, developed,

produced, or otherwise obtained during the course of the work required by this contract. This nondisclosure

requirement shall also pertain to any information contained in reports, documents, or other records furnished to

the Contractor by AHCCCS.

37) COOPERATION WITH OTHER CONTRACTORS

AHCCCS may award other contracts for additional work related to this contract and Contractor shall fully

cooperate with such other contractors and AHCCCS employees or designated agents, and carefully fit its own

work to such other contractors' work. The Contractor shall not commit or permit any act which will interfere

with the performance of work by any other contractor or by AHCCCS employees.

38) ASSIGNMENT OF CONTRACT AND BANKRUPTCY

This contract is voidable and subject to immediate cancellation by AHCCCS upon the Contractor becoming

insolvent or filing proceedings in bankruptcy or reorganization under the United States Code, or assigning

rights or obligations under this contract without the prior written consent of AHCCCS.

39) OWNERSHIP OF INFORMATION AND DATA

Any data or information system, including all software, documentation and manuals, developed by the

Contractor pursuant to this contract, shall be deemed to be owned by AHCCCS. The Federal government

reserves a royalty-free, nonexclusive, and irrevocable license to reproduce, publish, or otherwise use and to

authorize others to use for Federal government purposes, such data or information system, software,

documentation and manuals. Proprietary software which is provided at established catalog or market prices

and sold or leased to the general public shall not be subject to the ownership or licensing provisions of this

section.

Data, information and reports collected or prepared by the Contractor in the course of performing its duties and

obligations under this contract shall be deemed to be owned by AHCCCS. The ownership provision is in

consideration of the Contractor's use of public funds in collecting or preparing such data, information and

reports. These items shall not be used by the Contractor for any independent project of the Contractor or

publicized by the Contractor without the prior written permission of AHCCCS. Subject to applicable state and

Federal laws and regulations, AHCCCS shall have full and complete rights to reproduce, duplicate, disclose

and otherwise use all such information. At the termination of the contract, the Contractor shall make available

all such data to AHCCCS within 30 days following termination of the contract or such longer period as

approved by AHCCCS, Office of the Director. For purposes of this subsection, the term "data" shall not

include member medical records.

Except as otherwise provided in this section, if any copyrightable or patentable material is developed by the

Contractor in the course of performance of this contract, the Federal government, AHCCCS and the State of

Arizona shall have a royalty-free, nonexclusive, and irrevocable right to reproduce, publish, or otherwise use,

and to authorize others to use, the work for state or Federal government purposes. The Contractor shall

additionally be subject to the applicable provisions of 45 CFR Part 74 and 45 CFR Parts 6 and 8.

40) AUDITS AND INSPECTIONS

The Contractor shall comply with all provisions specified in applicable AHCCCS Rule R9-22-521 and

AHCCCS policies and procedures relating to the audit of the Contractor's records and the inspection of the

Contractor's facilities. The Contractor shall fully cooperate with AHCCCS staff and allow them reasonable

access to the Contractor's staff, subcontractors, members, and records [42 CFR 438.6(g)].

At any time during the term of this contract, the Contractor's or any subcontractor's books and records shall be

subject to audit by AHCCCS and, where applicable, the Federal government, to the extent that the books and

records relate to the performance of the contract or subcontracts [42 CFR 438.242(b)(3)].

AHCCCS, or its duly authorized agents, and the Federal government may evaluate through on-site inspection

or other means, the quality, appropriateness and timeliness of services performed under this contract.

41) LOBBYING

No funds paid to the Contractor by AHCCCS, or interest earned thereon, shall be used for the purpose of

influencing or attempting to influence an officer or employee of any Federal or State agency, a member of the

United States Congress or State Legislature, an officer or employee of a member of the United States Congress

or State Legislature in connection with awarding of any Federal or State contract, the making of any Federal or

State grant, the making of any Federal or State loan, the entering into of any cooperative agreement, and the

extension, continuation, renewal, amendment or modification of any Federal or State contract, grant, loan, or

cooperative agreement. The Contractor shall disclose if any funds, other than those paid to the Contractor by

AHCCCS, have been used or will be used to influence the persons and entities indicated above and will assist

AHCCCS in making such disclosures to CMS.

42) CHOICE OF FORUM

The parties agree that jurisdiction over any action arising out of or relating to this contract shall be brought or

filed in a court of competent jurisdiction located in the State of Arizona.

43) DATA CERTIFICATION

The Contractor shall certify that financial and encounter data submitted to AHCCCS is complete, accurate and

truthful. Certification of financial and encounter data must be submitted concurrently with the data.

Certification may be provided by the Contractor CEO, CFO or an individual who is delegated authority to sign

for, and who report directly to the CEO or CFO [42 CFR 438.604 et seq.].

44) OFF SHORE PERFORMANCE OF WORK PROHIBITED

Due to security and identity protection concerns, direct services under this contract shall be performed within

the borders of the United States. Any services that are described in the specifications or scope of work that

directly serve the State of Arizona or its clients and may involve access to secure or sensitive data or personal

client data or development or modification of software for the State shall be performed within the borders of

the United States. Unless specifically stated otherwise in the specifications, this definition does not apply to

indirect or “overhead” services, redundant back-up services or services that are incidental to the performance

of the contract. This provision applies to work performed by subcontractors at all tiers.

45) FEDERAL IMMIGRATION AND NATIONALITY ACT

The Contractor shall comply with all federal, state and local immigration laws and regulations relating to the

immigration status of their employees during the term of the contract. Further, the Contractor shall flow down

this requirement to all subcontractors utilized during the term of the contract. The State shall retain the right to

perform random audits of Contractor and subcontractor records or to inspect papers of any employee thereof to

ensure compliance. Should the State determine that the Contractor and/or any subcontractors be found

noncompliant, the State may pursue all remedies allowed by law, including, but not limited to; suspension of

work, termination of the contract for default and suspension and/or debarment of the Contractor.

46) IRS W-9 FORM

In order to receive payment under any resulting contract, the Contractor shall have a current IRS W-9 Form on

file with the State of Arizona.

47) CONTINUATION OF PERFORMANCE THROUGH TERMINATION

The Contractor shall continue to perform, in accordance with the requirements of the contract, up to the date of

termination and as directed in the termination notice.

[END OF SECTION E]

SECTION F: RESERVED

SECTION G: REPRESENTATIONS and CERTIFICATIONS of OFFEROR

The Offeror must complete all information requested below.

1. CERTIFICATION OF ACCURACY OF INFORMATION PROVIDED

By signing this offer, the Offeror certifies, under penalty of law, that the information provided herein is true,

correct and complete to the best of the Offeror's knowledge and belief. The Offeror also acknowledges that,

should investigation at any time disclose any misrepresentation or falsification, any subsequent contract may be

terminated by AHCCCS without penalty to or further obligation by AHCCCS.

2. CERTIFICATION OF NON-COERCION

By signing this offer, the Offeror certifies, under penalty of law, that it has not made any requests or inducements

to any provider not to contract with another potential program contractor in relation to this solicitation.

3. CERTIFICATION OF COMPLIANCE - ANTI-KICKBACK / LABORATORY TESTING

By signing this offer, the Offeror certifies that it has not engaged and will not engage in any violation of the

Medicare Anti-Kickback or the “Stark I” and “Stark II” laws governing related-entity and compensation

therefrom. If the Offeror provides laboratory testing, it certifies that it has complied with, and has sent to

AHCCCS, simultaneous copies of the information required to be sent to the Centers for Medicare and Medicaid

Services (see 42 USC §1320a-7b, P.L. 101-239 and 42 CFR §411.361).

4. AUTHORIZED SIGNATORY

Authorized Signatory for _________________________________________________________

                                                                               
[OFFEROR’S Name]

_____________________________________ ___________________________________

                [INDIVIDUAL'S Name]
                                                     
[Title]

is the person authorized to sign this contract on behalf of the Offeror.

5. OFFEROR'S MAILING ADDRESS

AHCCCS should address all notices relative to this offer to the attention of:

________________________________________________________________________

Name
                                                                    
Title

________________________________________________________________________

Address
                                                               
Telephone Number

________________________________________________________________________

Fax Number
                                                         
Email Address

________________________________________________________________________

City
                                                                       
State                                       ZIP

OFFEROR GENERAL INFORMATION (Page 1 of 2)

1. If other than a governmental agency, when was your organization formed? _______________________

2. License/Certification: Attach a list of all licenses and certifications (e.g. federal HMO status or state

certifications) your organization maintains. Use a separate sheet of paper listing the license requirement and the

renewal dates.

Have any licenses been denied, revoked or suspended within the past 10 years? Yes _____ No _____

If yes, please explain.

__________________________________________________________________________________________

__________________________________________________________________________________________

3. Civil Rights Compliance Data: Has any federal or state agency ever made a finding of noncompliance with

any civil rights requirements with respect to your program? Yes _____ No_____ If yes, please explain.

__________________________________________________________________________________________

__________________________________________________________________________________________

4. Accessibility Assurance: Does your organization provide assurance that no qualified person with a

disability will be denied benefits of, or excluded from, participation in a program or activity because the Offeror's

facilities (including subcontractors) are inaccessible to, or unusable by, persons with disabilities? (Note: Check

local zoning ordinances for accessibility requirements). Yes____ No____ If yes, describe how such assurance

is provided or how your organization is taking affirmative steps to provide assurance.

__________________________________________________________________________________________

__________________________________________________________________________________________

5. Prior Convictions: List all felony convictions within the past 15 years of any key personnel (i.e.,

Administrator, Medical Director, financial officers, major stockholders or those with controlling interest, etc.).

Failure to make full and complete disclosure shall result in the rejection of your proposal.

__________________________________________________________________________________________

__________________________________________________________________________________________

6. Compliance Agreements/Criminal or Civil Judgments: List any compliance agreements the organization

has entered into within the last 10 years with any regulatory body (include name of regulator and summary of

agreement). Additionally, list any criminal or civil judgments against the organization within the last 10 years

(provide a summary of the judgment).

__________________________________________________________________________________________

__________________________________________________________________________________________

7. Federal Government Suspension/Exclusion: Has the Offeror been suspended or excluded from any

federal government programs for any reason? Yes_____ No_____ If yes, please explain.

_________________________________________________________________________________________

_________________________________________________________________________________________

8. Did a firm or organization provide the Offeror with any assistance in making this offer (to include

developing capitation rates or providing any other technical assistance)? Yes_____ No_____ If yes, what

is the name of this firm or organization?

__________________________________________________________________________________________

Name

__________________________________________________________________________________________

Address
                                                                                               
City
                                                       
State

FINANCIAL DISCLOSURE STATEMENT (Page 1 of 2)

The Offeror must provide the following information as required by 42 CFR 455.103. This Financial Disclosure

Statement shall be prepared as of 12/31/07 or as specified below. However, continuing Offerors who have filed

the required Financial Disclosure Statement within the last 12 months need not complete this section if no

significant changes have occurred since the last filing.

1. Ownership: List the name and address of each person with an ownership or controlling interest, as defined

by 42 CFR 455.101, in the entity submitting this offer:

                                                                                                                                               
Percent of

Name
                                                                    
Address
                                               
Ownership or Control

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

2. Subcontractor Ownership: List the name and address of each person with an ownership or control interest

in any subcontractor in which the Offeror has direct or indirect ownership of 5% or more:

                                                                                                                                               
Percent of

Name
                                                                    
Address
                                               
Ownership or Control

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

Names of above persons who are related to one another as spouse, parent, child or sibling:

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

3. Ownership in Other Entities: List the name of any other entity in which a person with an ownership or

controlling interest in the Offeror entity also has an ownership or controlling interest:

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

FINANCIAL DISCLOSURE STATEMENT (Page 2 of 2)

4. Long-Term Business Transactions: List any significant business transactions, as defined in 42 CFR

455.101, between the Offeror and any wholly-owned provider or supplier during the five-year period ending on

the Contractor’s most recent fiscal year end:

Describe Ownership                            Type of Business
                                               
Dollar Amount

of Wholly Owned Provider                Transaction with Provider
                                 of Transaction

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

5. Criminal Offenses: List the name of any person who has ownership or control interest in the Offeror, or is

an agent or managing employee of the Offeror and has been convicted of a criminal offense related to that

person’s involvement in any program under Medicare, Medicaid or the Title XIX or Title XXI services program

since the inception of those programs:

Name
                                                                    
Address
                                               
Title

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

6. Creditors: List the name and address of each creditor whose loans or mortgages exceed 5% of total Offeror

equity and are secured by assets of the Offeror’s company.

                                                                                                               
Description           Amount

Name
                                                                    
Address                 of Debt                   of Security

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

RELATED PARTY TRANSACTIONS (Page 1 of 1)

1. Board of Directors: List the names and addresses of the Board of Directors of the Offeror.

Name/Title
                                                           
Address

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

2. Related Party Transactions: Describe transactions between the Offeror and any related party in which a

transaction or series of transactions during any one fiscal year exceeds the lesser of $50,000 or 2% of the total

operating expenses of the Offeror. The Offeror must list property, goods, services and facilities in detail noting,

the dollar amounts or other consideration for each transaction and the date thereof. Include a justification as to

(1) the reasonableness of the transaction, (2) its potential adverse impact on the fiscal soundness of the Offeror,

and (3) that the transaction is without conflict of interest:

a) Describe all transactions between Offeror and any related party which includes advances of money,

the lending of money, extensions of credit or any investment in a related party.

Description of
                                      Name of Related Party
                        Dollar Amount for

Transaction                                           and
Relationship                                  Reporting Period

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

Justification:

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

b) List the name and address of any individual who owns or controls more than 10% of stock or that has

a controlling interest (i.e., formulates, determines or vetoes business policy decisions):

                                                                                                                                                               
Has Controlling

                                                                                                               
Owner or                                Interest?

Name
                                                                    
Address                 Controller
                             Yes / No

_____________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

[END OF SECTION G]

SECTION H: EVALUATION FACTORS AND SELECTION PROCESS

AHCCCS has established a scoring methodology that is designed to evaluate fairly an Offeror’s ability to provide

cost-effective, high-quality contract services in a managed care setting in accordance with the AHCCCS overall

mission and goals. The following evaluation factors will be weighted in the order listed:

                1. Capitation

                2. Program

                3. Organization

                4. Network

Capitation and the Network Development portion of the Network section will be scored by Geographic Service

Area. The remaining submission areas; the Network Management portion of Network, Program and

Organization, are anticipated to be scored statewide, except as otherwise specified in the submission requirements

listed in Section I, Instructions to Offerors. The scores received for each of the four required components will be

weighted separately and combined to derive a final score for the Offeror by GSA. A contract will be awarded to

a qualified Offeror whose proposal is deemed to be advantageous to the State in accordance with Section I,

Paragraph 10, Award of Contract.

In the case of negligible differences between two or more competing proposals for a particular GSA, in the

best interest of the State, AHCCCS may consider one or all of the following factors in awarding the contract:

            • an Offeror who is an incumbent Contractor and has performed in an adequate manner (in the interest

                   of continuity of care);

            • an Offeror who participates satisfactorily in other lines of AHCCCS business;

            • an Offeror’s past performance with AHCCCS;

            • an Offeror is a Medicare Advantage Plan, or has developed formal relationships with a Medicare

                   Advantage Plan that allow the Contractor to provide coordinated care for dual eligible members;

            • an award of contract would enhance the diversity of the AHCCCS Contractor network.;

            • the nature, frequency and significance of any compliance agreements with any regulatory authority;

            • any convictions or civil judgments entered against the organization.

Offerors are encouraged to submit a bid for more than one GSA and/or for more than just urban GSAs.

AHCCCS reserves the right to waive immaterial defects or omissions in this solicitation or submitted proposals.

The Offeror should note that, if successful, it must meet all AHCCCS requirements, irrespective of what is

requested and evaluated through this solicitation. The proposal provided by the Offeror will become part of the

contract with AHCCCS.

__________________________________________________________________________________________

All of the components listed below will be evaluated against relevant statutes, AHCCCS Rules and policies and

the requirements contained in this RFP. The Offeror’s Checklist (Attachment J) contains RFP references for

each of these items:

1. CAPITATION

The Offeror shall submit initial capitation bids by risk group within a GSA. These initial bids will be evaluated

and scored. The lowest bid within each GSA and risk group will receive the maximum allowable points. If a bid

is below the actuarial rate range, the bid will be evaluated as if it were at the bottom of the actuarial rate range.

No additional points will be given for bids below the actuarial rate range. Conversely, the highest bid (within or

above the actuarial rate range) will receive the least number of points.

If AHCCCS requests best and final offers, these offers will be scored using the same methodology as was used to

score the initial bids. The initial bid will be weighted 60% and the final bid 40%.

Offerors should note that AHCCCS may not offer the opportunity to submit best and final offers.

2. PROGRAM

Program refers to the Offeror’s policies and procedures supporting the provision of all covered services. In

particular, the Offeror's proposal will be evaluated on the following:

                a. Quality Management

                b. Medical Management

                c. EPSDT/Maternal and Child Health

                d. Behavioral Health

3. ORGANIZATION

Organization refers to the Offeror's ability to perform the administrative tasks necessary to support the

requirements identified in this solicitation. The following areas will be evaluated:

                a. Organization and Staffing

                b. Information Systems

                c. Claims

                d. Corporate Compliance

                e. Encounters

                f. Member Services

                g. Grievance and Appeals

                h. Finance

4. NETWORK

Network refers to the Offeror’s capacity to develop and manage a provider network sufficient for the provision of

all covered services. A signed Letter of Intent will receive the same weight and consideration as a signed contract.

The following areas will be evaluated:

                a. Network Development

                b. Network Management

[END OF SECTION H]

SECTION I: INSTRUCTIONS TO OFFERORS

1. PROSPECTIVE OFFEROR’S INQUIRIES

Any questions related to this solicitation must be directed to the Solicitation Contact Person listed in Section

A. Offerors shall not contact or ask questions of other AHCCCS staff unless authorized by the Contracting

Solicitation Contact Person. Questions shall be e-mailed, hand delivered or mailed to the Solicitation Contact

Person in the prescribed MS Word format available in the Bidder’s Library. In addition, questions hand

delivered or mailed must also be submitted on a Compact Disk (CD) and saved in the specified format. The

envelope must be marked "RFP Questions- ACUTE CARE". All questions are due to AHCCCS by the dates

found in Paragraph 11 of this section. AHCCCS will respond, in writing, to all questions submitted through

this process. Written responses will be posted in the Bidder’s Library in accordance with the schedule of

milestone dates found in Paragraph 11 of this section.

2. PROSPECTIVE OFFEROR’S CONFERENCE AND TECHNICAL INTERFACE MEETING

An Offeror’s Conference will be held on February 11, 2008, from 8:30 a.m. until 5:00 p.m., at AHCCCS, 701 E.

Jefferson St., Phoenix, Arizona, in the third floor Gold Room. The purpose of this conference will be to: 1) orient

new Offerors to AHCCCS, 2) clarify the contents of this solicitation, and 3) clarify the AHCCCS PMMIS System

and interface requirements. Any doubt as to the contents and requirements of this solicitation or any apparent

omission or discrepancy should be presented at this conference. Questions posed during the Prospective Offeror’s

Conference must also be submitted as specified in Paragraph 1 of this section. Verbal responses provided during

the Conference are not binding.

3. PROPOSAL OPENING

Proposals will be opened publicly immediately following the proposal due date and time. The name of each

Offeror will be read aloud and recorded, but no other information contained in the proposals will be disclosed.

Proposals will not be available for public inspection until after contract award.

4. LATE PROPOSALS

Late proposals will not be considered.

5. WITHDRAWAL OF PROPOSAL

At any time prior to the proposal due date and time, the Offeror (or designated representative) may withdraw its

proposal. Withdrawals must be provided in writing and submitted to the Solicitation Contact Person listed in

Section A.

6. AMENDMENTS TO RFP

Amendments may be issued subsequent to the issue date of this solicitation. Receipt of solicitation amendments

must be acknowledged by signing and returning the signature page of the amendment to the Solicitation Contact

Person listed in Section A.

7. ON-SITE REVIEW

Prior to or as part of a contract award, all Offerors may be subject to on-site review(s) to determine that an

infrastructure is in place that will support the provision of services to the Acute population within the GSAs bid.

8. BEST AND FINAL OFFERS

AHCCCS reserves the right to accept any or all initial offers without further negotiation and may choose not to

request a best and final offer (BFO). Offerors are therefore advised to submit their most competitive offers at

the outset. However, if it is considered in the best interest of the State, AHCCCS may issue a written request

to submit a BFO in a particular GSA. The purpose of a BFO request is to allow Offerors an opportunity to

resubmit bids for rates not previously accepted by AHCCCS. This request will notify the Offeror of the date,

time and place for the resubmission of the capitation rate bid. In addition, AHCCCS will disclose to each

Offeror which of its bid rates are acceptable (within or below actuarial rate range), and which are not

acceptable (above the actuarial rate range). Final bid rates that fall below the bottom of the actuarial rate range

will be increased to the bottom of that rate range after the final BFO. If an Offeror does not submit a notice of

withdrawal or participate in a requested BFO, its immediate previous offer will be considered its best and final

offer.

All BFOs must be submitted via the AHCCCS website. AHCCCS will limit the number of BFO rounds if it is in

the best interest of the State. Offerors will be permitted, within the restrictions and limitations defined below, to

adjust a capitation rate upward for a risk group that was previously accepted to offset the reduction of a capitation

rate in another risk group in the first BFO round only. These restrictions and limitations include, but are not

limited to:

                a. An Offeror will be allowed to adjust upward a previously accepted rate only during the first BFO round;

                b. The weighted amount of BFO increase cannot exceed the weighted amount of BFO reduction.

                   AHCCCS will furnish the Offeror, in the Data Supplement, the enrollment percentages, by risk group,

                   by GSA, to be used in determining the weighted amount. Should the weighted amount of the

                   adjustment exceed the weighted amount of the BFO reduction, AHCCCS shall reject the first BFO

                   and the adjustment (costing the Offeror the loss of the first BFO round in that GSA). Since a risk

                   group can only be adjusted during the first BFO round, the Offeror will lose the opportunity to make

                   an upward capitation adjustment to previously accepted risk group bids in that GSA.

                For example, assume that SSI w/o Medicare was the risk group where a BFO was needed and the

                Offeror reduced this rate by $10 PMPM. Also assume the SSI w/o Medicare risk group accounted for

                9% of the members in the GSA.

                Weighted Average Capitation Reduction - 9% X $10.00 = $.90

                Assume the risk group adjusted upward was TANF and this risk group was increased by $2.00 PMPM.

                Also assume this risk group accounted for 50% of the members in the GSA.

                Weighted Average Capitation Increase - 50% X $2.00 = $1.00

                Therefore, the BFO would be rejected because the weighted amount of the BFO upward adjustment

                exceeded the weighted amount of the BFO reduction.

                c. Offerors will not be allowed to decrease a bid in a BFO round if the initial bid was below the bottom of

                   the rate range. If such a BFO is submitted it will be rejected.

                d. If an adjustment during the initial BFO round causes the Offeror to exceed the upper range of any risk

                   group, AHCCCS will reject the adjustment and return the (adjusted) risk group to the initial capitation

                   rate bid by the Offeror. Since a previously accepted risk group bid can only be adjusted during the first

                   BFO round, the Offeror will lose the opportunity to make an upward capitation adjustment for this risk

                   group.

                e. AHCCCS reserves the sole right to accept or reject any adjustment. By submitting an adjustment to a

                   risk group, the Offeror is requesting approval by AHCCCS; such approval shall not be automatic. If

                   an initial bid is below the bottom of a rate range, it cannot be adjusted downward by the Offeror in a

                   BFO round.

Capitation Rates Offered after the BFOs: As stated above, AHCCCS may limit the number of BFO rounds.

After the final BFO round is complete, provided it is in the best interest of the State, AHCCCS will cease issuing

BFO requests. At this point, should the Offeror have a risk group without an accepted capitation rate, AHCCCS

shall offer a capitation rate to the Offeror. The capitation rate offered should be somewhere in the bottom half of

the rate range (specific placement to be determined by AHCCCS and its actuaries). Note that all rates offered in

this manner shall be identical for all offerors in the same GSA and risk group.

9. AWARD OF CONTRACT

AHCCCS has determined that the provision of covered services to eligible populations in the GSAs as described

below will stabilize risk sharing. The Offeror must therefore bid on at least one entire GSA in order to be

considered for a contract award. Although AHCCCS encourages Offerors to bid on multiple GSAs, AHCCCS

may limit the number of GSAs awarded to any one Offeror, if deemed in the best interest of the State.

Notwithstanding any other provision of this solicitation, AHCCCS expressly reserves the right to:

                a. Waive any immaterial mistake or informality;

                b. Reject any or all proposals, or portions thereof; and/or

                c. Reissue a Request for Proposal

AHCCCS will not make an award in a single GSA to any single organization that owns or manages more than

one contract, or to two Contractors that utilize the same management service company.

If there are significant compliance issues with a current Contractor, or a Contractor’s contract in a particular GSA

has been previously terminated, AHCCCS retains the right to address that compliance or termination issue on an

individual basis, according to what is deemed in the best interest of the State. A new bid proposal may not be

accepted until it has been determined that the reason for the significant compliance or termination issue has been

resolved and there is a reasonable assurance that it will not recur.

If there are significant compliance issues with a new Offeror’s performance in another state or with another

governmental entity, AHCCCS retains the right to address that compliance or termination issue on an individual

basis according to what is deemed in the best interest of the State.

Subsequent to the award of contracts, in the event of significant non-compliance issues with a Contractor in a

particular GSA, AHCCCS may refer back to the results of the evaluation of this solicitation and select another

Contractor for a particular GSA that is considered to be in the best interest of the State.

A response to this Request for Proposals is an offer to contract with AHCCCS based upon the terms, conditions,

scope of work and specifications of the RFP. All of the terms and conditions of the contract are contained in this

solicitation, solicitation amendments and subsequent contract amendments, if any, signed by the Contracting

Officer. Proposals do not become contracts unless and until they are accepted by the Contracting Officer. The

proposal provided by the Offeror will become part of the contract with AHCCCS. A contract is formed when the

AHCCCS Contracting Officer signs the award page and provides written notice of the award(s) to the successful

Offeror(s), and the Offeror accepts any special provisions to the contract and the final rates awarded. AHCCCS

may also, at its sole option, modify any requirements described herein. All Offerors will be promptly notified of

award.

AHCCCS reserves the right to specify and/or modify the number of contracts to be awarded in any GSA.

AHCCCS anticipates awarding contracts as follows:

	
GSA#:

	
 

	
County or Counties

	
 

	
Number of Awards

	
2

 4

 6

 8

 10

 12

 14

	
 

	
Yuma, La Paz

 Apache, Coconino, Mohave, and Navajo

 Yavapai

 Gila, Pinal

 Pima, Santa Cruz*

 Maricopa

 Graham, Greenlee, Cochise

		
Maximum of 2

 Maximum of 2

 Maximum of 2

 Maximum of 2

 Maximum of 5

 Maximum of 6

 Maximum of 2

Note: *AHCCCS anticipates awarding up to five contracts in the Pima County portion of the Pima/Santa Cruz

GSA. Contracts will be awarded in Santa Cruz County to only two of the five Pima contract awardees.

An existing contractor in Maricopa or Pima County who is not awarded a CYE 09 contract may request to have

its enrollment capped and to continue providing services under the terms and conditions of this new Contract.

AHCCCS may, at its sole option, grant or deny such a request. If AHCCCS approves such an enrollment cap, the

Contractor would continue to serve its existing members but would not receive any new members and their

membership will not be included in the Conversion Group described below. The enrollment cap will not be lifted

during the term of this or any subsequent contract period unless one of the following conditions exists:

                a. Another contractor is terminated and increased member capacity is needed, or

                b. Legislative action creates a sudden and substantial increase in the overall AHCCCS population, or

                c. Extraordinary and unforeseen circumstances make such an action necessary and in the best interest of the State.

If an existing contractor is not awarded a new or capped (as mentioned above) contract, AHCCCS will assign the

membership as follows:

Conversion Group

On June 30, 2008, AHCCCS will identify all members that are currently enrolled in a plan that is exiting any

GSA effective September 30, 2008, and will classify those members as the Conversion Group. The

Conversion Group members will be auto-assigned to select Contractors as described in Attachment G Auto-

Assignment Algorithm.

On July 1, 2008, the Conversion Group will be mailed a letter indicating that the Contractor with which they

are currently enrolled will no longer be available, and will be provided with the name of the Contractor that

they will be assigned to as of October 1, 2008. From July, 1, 2008, to August 31, 2008, and again from

October 1, 2008 to November 30, 2008, the Conversion Group will be provided with an opportunity to change

plans by selecting from the Contractors that have been awarded CYE09 contracts in their GSA.

AHCCCS will provide all Contractors with a potential membership files on July 1, 2008 that contains the

Conversion Group Contractor assignments that will be effective October 1, 2008 as well as any regular Annual

Enrollment Choice plan changes. Contractors will receive additional membership files on or about August 15,

September 1, and September 15, 2008. These additional files will identify the members that have elected to

change Contractors.

Beginning on September 2, 2008, Relinquishing Contractors (Contractors who are exiting a GSA) will

provide electronic files containing member transition information, in the format established by AHCCCS, to

the Receiving Contractors (those Contractors to which Conversion Group members are assigned). This

information exchange must be completed by September 5, 2008.

Based on the importance of continuity of care during the transition period, the Receiving Contractor is

expected to honor the Relinquishing Contractor’s previously issued prior authorizations or waive its own prior

authorization requirements for any previously scheduled outpatient services and/or prescribed pharmaceuticals

until November 30, 2008. The Contractor is also expected to waive any requirement for Conversion Group

members to use the Contractor’s provider network until October 31, 2008. The Receiving Contractor should

apply medical necessity criteria when paying for services.The Contractor will receive an official enrollment

file for October enrollment prior to October 1, 2008. Receiving Contractors are expected to secure an

appropriate network for the membership identified in the transition files in order to address any potential

service gaps by November 30, 2008. Receiving Contractors must attempt to contract with Primary Care

Physicians historically utilized by the transitioning members for both continuity of care and to maintain its

membership.

New Members after Contract Awards

Members who become eligible and enrolled between May 1, 2008 and July 31, 2008 will have the opportunity

to choose from all of the Contractors currently contracted with AHCCCS. AHCCCS will continue to auto

assign members to all Contractors currently contracted with AHCCCS until July 31, 2008. Starting August 1,

2008, new members will only be offered choice of Continuing Contractors (currently an AHCCCS Contractor

in the GSA and awarded a CYE 09 Contract). Members who do not make a choice will be auto assigned to a

Continuing Contractor.

If none of the current Contractors in a GSA are awarded a CYE09 contract, members will have the ability to

choose Contractors in their GSA that are currently contracted with AHCCCS in that GSA. Members that do

not make a choice will be auto assigned to one of the Contractors in their GSA that are currently contracted

with AHCCCS in that GSA.

Members who have chosen or have been assigned to an Exiting Contractor (a Contractor not awarded a CYE

09 contract) between May 1, 2008 and June 30, 2008 will be included in the Conversion Group, assigned to a

new Contractor, and their transition must be managed as indicated in the Conversion Group section.

Members who have chosen or have been assigned to an Exiting Contractor after June 30, 2008, through and

including July 31, 2008 will be auto assigned by the process described in Attachment G Auto-Assignment

Algorithm and included in the October official enrollment file.

Although choice of an Exiting Contractor ends July 31, 2008, there are limited instances (family continuity,

newborn enrollment or 90-day re-enrollment) when assignment to an Exiting Contractor will occur through

September 30, 2008. Members assigned under these circumstances will be moved via the process described in

Attachment G Auto-Assignment Algorithm and included in the October official enrollment file.

All of the members who became eligible and enrolled after contracts have been awarded but before October 1,

2008, that are not transitioned into the Conversion Group, will also be provided with the opportunity to select

any of the Contractors available in their GSA from October 1, 2008 to November 30, 2008. The Contractor is

encouraged to execute contracts with the providers utilized by the transitioning members, in an attempt to

maintain its membership.

Annual Enrollment Choice

AHCCCS will suspend Annual Enrollment Choice for all members who would have been notified of their

AEC opportunity for the months of May, June and July 2008. The affected members will be afforded an

opportunity to choose from the Contractors awarded CYE09 contracts in their GSA starting in August, 2008

for an October 1, 2008 effective date.

10. FEDERAL DEADLINE FOR SIGNING CONTRACT

The Center for Medicare and Medicaid Services (CMS) has imposed strict deadlines for finalization of

contracts in order to qualify for federal financial participation. This contract, and all subsequent amendments,

must be completed and signed by both parties, and must be available for submission to CMS prior to the

beginning date for the contract term (October 1, 2008). All public entity Offerors must ensure that the

approval of this contract is placed on appropriate agendas well in advance to ensure compliance with this

deadline. Any withholding of federal funds caused by the Offeror’s failure to comply with this requirement

shall be borne in full by the Offeror.

11. RFP MILESTONE DATES

The following is the schedule of events regarding the solicitation process. These dates are subject to change

based on the best interest of the State:

	
Activity

	
 

	
Date                                                       

	
RFP Issued

	
 

	
February 1, 2008

	
Prospective Offerors Conference and Technical Assistance Session

	
 

	
February 11, 2008 - AM

	
Information Technology (IT) PMMIS Technical Interface Meeting

	
 

	
February 11, 2008 – PM

	
Technical Assistance and RFP Questions Due by 5:00 P.M. MST

	
 

	
February 15, 2008

	
RFP Amendment, if necessary, and Formal Response to Questions

	
 

	
February 29, 2008

	
Second Set of Technical Assistance and RFP Questions Due Due by

 5:00 P.M. MST

	
 

	
March 7, 2008

	
Second RFP Amendment Issued, if necessary, and Formal Response to

 Second Set of Questions

	
 

	
March 14, 2008

	
Proposals Due by 3:00 P.M. MST

	
 

	
March 28, 2008

	
Contracts Awarded

	
 

	
May 1, 2008

	
Readiness Reviews Begin

	
 

	
July 1, 2008

	
New Contracts Effective

	
 

	
October 1, 2008

12. AHCCCS BIDDER’S LIBRARY

The Bidder’s Library contains critical reference material including, but not limited to, AHCCCS policies;

utilization; member data; and performance requirements to assist the Offeror in preparing a thorough and realistic

response to this solicitation. References are made throughout this solicitation to material in the Bidder’s Library

and on the AHCCCS website. Offerors are responsible for reviewing the contents of the Bidder’s Library material

as if they were printed in full herein. All such material is incorporated into the contract by reference. The

Bidder’s Library is located on the AHCCCS website at http://www.azahcccs.gov/Contracting/BidderLib.asp

13. OFFEROR’S INABILITY TO MEET REQUIREMENTS

If a potential offeror cannot meet the minimum capitalization requirements, the performance bond requirements,

or the minimum network standards described herein, AHCCCS requests that the potential offeror not submit a

bid.

Minimum Capitalization Requirements:

The Offeror must meet a minimum capitalization requirement for each GSA bid in order for the bid to be

scored. The capitalization requirement must be met within 30 days after contract award.

Minimum capitalization requirements by GSA are as follows:

Geographic Service Area (GSA)      Capitalization Requirement

Mohave/Coconino/Apache/Navajo $4,400,000

La Paz/Yuma                                         $3,000,000

Maricopa
                                             
$5,000,000

Pima/Santa Cruz                                   $4,500,000

Cochise/Graham/ Greenlee                 $2,150,000

Pinal/Gila
                                             
$2,400,000

Yavapai
                                                
$1,600,000

New Offerors (any Offeror that is not currently an Acute Care Contractor with AHCCCS): To be

considered for a contract award in a given GSA or group of GSAs, a new Offeror must meet the minimum

capitalization requirements listed above. The capitalization requirement is subject to a $10,000,000 ceiling

regardless of the number of GSAs awarded. This requirement is in addition to the Performance Bond

requirements defined in Section D, Paragraphs 46, Performance Bond or Bond Substitute, and 47, Amount of

Performance Bond, and must be met with cash with no encumbrances, such as a loan subject to repayment.

The capitalization requirement may be applied toward meeting the equity per member requirement (see

Section D, Paragraph 50, Financial Viability Standards) and is intended for use in operations of the Contractor.

Continuing Offerors: Continuing Offerors that are bidding a county or GSA in which they currently have a

contract must meet the equity per member standard (see Section D, Paragraph 50, Financial Viability

Standards) for their current membership. Continuing Offerors that do not meet the equity standard must fund,

through capital contribution, the necessary amount to meet the minimum capitalization requirement.

Continuing Offerors that are bidding a new GSA must provide the additional capitalization for the new GSA

they are bidding. The amount of the required capitalization for continuing Offerors may differ from that for

new Offerors due to size of the continuing Offeror’s current enrollment. Continuing Offerors will not be

required to provide additional capitalization for new GSAs if they currently meet the equity per member

standard with their existing membership and their excess equity is sufficient to cover the proposed additional

members, or they have at least $10,000,000 in equity.

14. CONTENTS OF OFFEROR'S PROPOSAL

All proposals (original and seven copies) shall be organized with strict adherence to the Offeror’s Checklist

(Attachment J) as described in this section and submitted using the forms and specifications provided in this RFP.

All pages of the Offeror's proposal must be numbered sequentially with documents placed in sturdy 3-inch, 3-ring

binders. All responses shall be in 11 point font or larger with borders no less than 1⁄2”. Unless otherwise

specified, responses to each submission requirement must be limited to three (3) 81⁄2” x 11” one sided, single

spaced, type written pages. Erasures, interlineations or other modifications in the proposal must be initialed in

original ink by the authorized person signing the offer. A policy, brochure, or reference to a policy or manual

does not constitute an adequate response. AHCCCS will not reimburse the Offeror the cost of proposal

preparation.

It is the responsibility of the Offeror to examine the entire RFP, seek clarification of any requirement that may not

be clear, and check all responses for accuracy before submitting its proposal. The proposal becomes a part of the

contract; thus, what is stated in the proposal may be evaluated either during the proposal evaluation process or

during other reviews. Proposals may not be withdrawn after the published due date and time.

All proposals will become the property of AHCCCS. The Offeror may designate certain information to be

proprietary in nature by typing the word "proprietary" on top of every page for which nondisclosure is requested.

Final determinations of nondisclosure, however, rest with the AHCCCS Director. Regardless of such

determinations, all portions of the Offeror's proposal, even pages that are proprietary, will be provided to CMS.

All proposals shall be organized according to the following major categories:

                I. General Matters

                II. Network

                III. Capitation

                IV. Program

                V. Organization

                VI. Other

Each section shall be separated by a divider and contain all information requested in this solicitation. Numbering

of pages should continue in sequence through each separate section. For example, "Provider Network" would

begin with the page number following the last page number in "Program”. Each section shall begin with a table

of contents.

Proposals that are not submitted in conformance with the guidelines described herein will not be considered.

References to various sections of the RFP document in Section I are intended to be of assistance and are not

intended to represent all requirements. Other possible resources may be found in the Bidder’s Library.

All responses incorporating examples of past performance and/or outcome data must comply with the following

requirements:

            • Incumbents must submit based on their AHCCCS Acute line of business

                • New Offerors currently operating as Managed Care Organizations (MCO), must submit all historical

                  information from the same MCO/line of business

The following specifies the submission requirements.

I. General Matters

See the Offeror’s Checklist (Attachment J) for information to be submitted under this section.

II. Network

The Offeror shall have in place an adequate network of providers capable of meeting contract requirements.

Attachment B lists minimum geographic network requirements by GSA. The following specifies the submission

requirements.

Required Submissions: Network

Network Questions

1. The Offeror must provide the:

                a. Network Attestation Statement and attachments, located in the Bidder’s Library, listing the

                   number of providers by provider type in each community listed within for each GSA bid.

                b. The Offeror must also submit 3 CDs containing the Offeror’s complete network by GSA on the

                   CYE ‘09 RFP Minimum Network Standards Excel Spreadsheet located in the Bidder’s

                   Library.

References: Section D, Paragraph 27, Attachment B; Network Attestation Statement; Minimum Network

Standards Excel Spreadsheet; Minimum Network Standards Instructions

2. The Offeror must submit a Network Development and Management plan. The submission may

   exceed the three (3) page maximum.

   References: Section D, Paragraphs 27, Network Development, and 29, Network Management; ACOM

   415, Provider Network Development and Management Plan Policy

3. Any Offeror that is new to a GSA or is a Continuing Offeror with less than 50,000 members in the

   Maricopa GSA, or 30,000 members in Pima County, or less than 50% of the members in a rural GSA,

   must submit a description of how it will launch a network capable of supporting this minimum

   membership by October 1, 2008. (Current Contractors that are not bidding on a new GSA and have a

   membership higher than those listed above in the GSAs in which they are currently operating, will not

   be evaluated on this Submission Requirement)

   References: Section D, Paragraph 6, Auto Assignment Algorithm, 27, Network Development, and 29,

   Network Management; ACOM 415, Provider Network Development and Management Plan Policy,

   and 416, Provider Information Policy

4. Describe the methodologies and interventions used by the Offeror that are considered to be innovative

   and proactive for reducing unnecessary ER utilization. Include the reason(s) why these are felt to be

   innovative and proactive.

   References: Section D, Paragraph 27, Network Development; ACOM 415, Provider Network

   Information Policy; AMPM Chapter 400.

5. Describe the contents of the initial PCP training offered to providers that are new to the network.

   References: Section D, Paragraph 29, Network Management; ACOM 416, Provider Information Policy;

   AMPM Chapter 400

6. Describe how the organization will communicate with its provider network regarding program standards,

   changes in laws and regulations and changes in subcontract requirements.

   References: Section D, Paragraph, 29, Network Management; ACOM 416, Provider Information Policy

7. Describe the process for accepting and managing provider inquiries, complaints, and requests for

   information that are received outside of the Claim Dispute process.

   References: Section D, Paragraph 29, Network Management

8. Describe how the results obtained through various types of provider and network monitoring (i.e.,

   Provider Relations, Quality Management, Case Management, Grievance System, Medical Management

   etc.) are used to manage and improve the network. Identify how provider issues are communicated

   within the organization.

   References: Section D, Paragraph 27, Network Development, and 29, Network Management; ACOM

   415, Provider Network Development and Management Plan Policy

9. Describe how the organization will monitor the potential for and handle the loss (i.e., contract

   termination, closure or natural disaster) in a GSA of a) hospital/hospital system and/or b) a large

   provider group. The response must address how the Offeror will ensure that members receive

   medically necessary services if such a situation occurs.

   References: Section D, Paragraphs 27, Network Development, and 29, Network Management;

   ACOM 104, Business Continuity and Recovery Plan

10. Describe how feedback (turnover, complaints, survey results etc.) from the contracted network is used to

     drive changes and/or improvements to the Offeror’s Operations.

     References: Section D, Paragraphs 19, Surveys, 27, Network Development, and 29, Network

     Management;

11. Describe the process to identify and reduce the member no-show rate for appointments across the

      spectrum of care (e.g. oral heath, physician, transportation, Children’s Rehabilitative Services,

      etc.). Describe no-show identification methods, interventions, best practices, member and

      provider outreach approaches, and how outcomes of the processes implemented to reduce the noshow

      rate are or will be evaluated for effectiveness. Submission requirement can be a maximum

      of five (5) pages.

      References: Section D, Paragraph 33, Appointment Standards; ACOM 417, Appointment

      Availability Monitoring and Reporting Policy

III. Capitation

Capitation is a fixed (per-member) monthly payment to a Contractor for the provision of covered services to

members. It is an actuarially sound amount to cover expected utilization and costs for the individual risk groups

in a risk-sharing, managed care environment. The Offeror must demonstrate that the capitation rates proposed

are actuarially sound. In general terms, this means that the Offeror that is awarded a contract should be able to

keep utilization at or near its proposed levels and should be able to contract for unit costs that average at or near

the amounts shown on the CCFR. This requirement also applies to bids submitted in best and final offer rounds.

Prior Period Coverage (PPC), Delivery Supplement, SOBRA Family Planning, SSDI-TMC and State Only

Transplant rates will be set by the AHCCCS actuaries and not bid by the Contractor. See Section D, Paragraph

53, Compensation, for information regarding risk sharing for the PPC time period and the SSDI-TMC members.

All other risk groups will be subject to competitive bidding.

To facilitate the preparation of capitation proposals, a Data Supplement is provided in the Bidder’s Library. This

data source should not be used as the sole source of information in making decisions concerning the capitation

proposal. Each Offeror is solely responsible for research, preparation and documentation of its capitation

proposal.

Required Submission: Capitation

Capitation

12. Submit a capitation proposal using the AHCCCS bid web tool. Instructions for accessing and using

     the web tool will be issued on or about February 15, 2008. The Offeror must have an actuary who is a

     member of the American Academy of Actuaries certify that the bid submission is actuarially sound.

     This certification is also required with subsequent submissions in Best and Final Offer rounds (if

     applicable). The Offeror must also submit hard copy print outs of the web tool. Refer to Attachment E

     for more details.

     The Offeror should assume that all AHCCCS-covered medical services are included in the capitation

     rates. The Offeror must prepare and submit its capitation proposal assuming a $20,000 deductible

     level for regular reinsurance, for all risk groups, in all GSAs. AHCCCS will provide the reinsurance

     offset amounts via the bid web tool and Section N of the data supplement for each risk group, for each

     GSA. Prior to the contract award AHCCCS will provide a table of per-member per-month reinsurance

     adjustments to be made to capitation rates for the Contractor whose actual deductible level exceeds

     $20,000.

IV. Program

Required Submissions: Program

Program Questions

13. Describe how the Offeror identifies quality improvement opportunities. Describe the process to select

     a performance improvement project, and the process to develop multi-departmental interventions to

     improve care or services. Describe the process for evaluating the effectiveness of the interventions. In

     addition to the three-page submission the Offeror must include a two-page sample Performance

     Improvement methodology for a relevant topic.

     References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapter 900

14. Describe how the results of the Offeror’s monitoring and evaluation of overall performance is

     incorporated into the Quality Management/Quality Improvement Program structure.

     References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapter 900

15. Describe how peer review is utilized by Offeror and incorporated into quality management processes.

     References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapter 900

16. Describe how quality of care and service complaints are identified, researched, resolved and the

     resolution will be communicated to the member.

     References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapter 900

17. Describe the qualifications of the staff that will perform the quality management and quality

     improvement functions for the Offeror. Note if these persons are solely responsible for quality

     management functions.

     References: Section D, Paragraph 16, Staff Requirements and Support Services; AMPM, Chapter 900

18. Describe the process for provisional credentialing, initial credentialing, recredentialing and

     organizational credentialing for all provider types specified in the AMPM. Please include a

     description of the Quality Management Unit and the Medical Director’s role in the Offeror’s process.

     References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapter 900

19. Describe the process utilized to train Offeror’s staff, other than Quality Management staff, regarding

     identification and appropriate referral of quality of care concerns.

     References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapter 900

20. Describe the process utilized to coordinate care or provide additional assistance to members identified

     as having difficulties with accessing care. Include processes for assisting challenging members

     identified through the quality of care process and those members that may be referred by AHCCCS.

     References: Section D, Paragraphs 23, Quality Management (QM), and 24, Medical Management;

     AMPM, Chapters 400, 900, and 1000

21. Describe the Offeror’s experience and commitment to improving quality of care and performance in

     specific measures of health care services, and how this commitment is spread throughout the

     organization.

     References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapter 900.

22. Provide results/rates for any HEDIS or HEDIS-like measure from a state in which the Offeror

     participates in the Medicaid line of business and in which the Offeror has experienced sustained,

     statistically significant improvement within the last three years. Include a minimum of three years of

     results, including numerators and denominators for the measure and statistical significance of change

      (e.g. chi-square test).

     References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapter 900.

23. Describe how the Offeror gathers and analyzes utilization data. In addition to no more than three

     pages of narrative, the Offeror must include three pages of example utilization reports.

     References: Section D, Paragraph 24, Medical Management (MM); AMPM, Chapter 1000

24. Provide an example of when the Offeror’s analysis of data resulted in changes to medical management

     programs.

     References: Section D, Paragraph 24, Medical Management (MM); AMPM, Chapter 1000

25. Describe the Offeror’s existing or planned disease/chronic care management programs that are

     designed to improve care for members with one or more chronic illnesses.

     References: Section D, Paragraph 24, Medical Management (MM); AMPM, Chapter 1000

26. Describe the staff and processes utilized by the Offeror to conduct concurrent and retrospective review

     of hospital stays.

     References: Section D, Paragraph 24, Medical Management (MM); AMPM, Chapter 1000

27. Describe the staff and processes utilized by the Offeror to review requests for prior authorization.

     References: Section D, Paragraph 24, Medical Management (MM); AMPM, Chapter 1000

28. Describe existing or planned relationships with Medicare plans (MA, PDP or PDP) that will allow for

     coordination of care between Medicare and Medicaid services.

     References: Section D, Paragraphs 10, Scope of Services, and 60, Medicare Services and Cost

     Sharing; Section H, Evaluation Factors and Selection Process

29. Describe how the Offeror identifies members needing assistance navigating the health care delivery

     system. Describe what assistance is provided, and how the effectiveness of the assistance is evaluated.

     References: Section D, Paragraphs 11, Special Health Care Needs, 23, Quality Management (QM),

     and 24, Medical Management (MM); AMPM, Chapters 900 and 1000

30. Describe planned health promotion, outreach, and monitoring of adult preventive/early detection

     services including well woman, well man, adult immunizations and chronic disease.

     References: Section D, Paragraph 10, Scope of Services; AMPM, Chapters 400, 900 and 1000

31. Describe planned health promotion, outreach, and monitoring for Early and Periodic Screening,

     Diagnosis and Treatment (EPSDT) and explain how the EPSDT program is integrated within the

     organization. Describe how EPSDT Tracking Forms are utilized to identify specific member needs

     such as AzEIP referral, PEDS tool, behavioral health, oral health, and CRS conditions.

     References: Section D, Paragraph 10, Scope of Services - EPSDT; AMPM, Chapters 400 and 900

32. Describe planned outreach and care coordination processes for populations of children with special

     health care needs and other hard-to-reach populations such as those identified through the use of the

     PEDS tool and eligible or enrolled in the AzEIP, CRS and/or a Regional Behavioral Health Authority

      (RBHA).

     References: Section D, Paragraph 11, Special Health Care Needs; AMPM, Chapters 400 and 900

33. Describe planned health promotion, outreach, and monitoring strategies for maternity care, including

     post partum care. Include a description of how care will be coordinated for physical and behavioral

     care needs. Describe process to increase provider participation in Baby Arizona.

     References: Section D, Paragraphs 10, Scope of Services, and 30, Primary Care Provider Standards;

     AMPM, Chapters 400, 900 and 1000

34. Describe how intervention activities to improve access to adult preventive health/early detection,

     EPSDT and maternity care will be evaluated for effectiveness. Describe what the Offeror will do if

     interventions are not effective.

     References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapters 400 and 900

35. Describe the Offeror’s EPSDT and Maternal (MCH) organizational structure. Describe the staff

     functions within the organizational structure to ensure care needs are met. The Offeror must note if

     staff persons are dedicated solely to EPSDT and/or MCH functions.

     References: Section D, Paragraph 16, Staff Requirements and Support Services; AMPM, Chapters

     400 and 900

36. Describe strategies, both implemented and planned, to improve utilization of EPSDT oral health

     services to ensure increased member participation beginning at age 1 and continuing through age 20.

     References: Section D, Paragraph 10, Scope of Services; AMPM, Chapter 400

37. Describe how members are educated on the availability of family planning services and how to access

     those services. Describe the process to be used to facilitate access to primary care services (a noncovered

     benefit) by SOBRA Family Planning Extension participants, as well as no- or low-cost family

     planning services when these members lose eligibility.

     References: Section D, Paragraphs 10, Scope of Services, and 32, Referral Management Procedures

     and Standards; AMPM, Chapter 400; AHCCCS 1115 Waiver, Special Terms and Conditions #39

38. Describe Offeror’s participation and/or planned participation in the Arizona Quality Improvement

     Organization’s initiatives such as, but not limited to: diabetes management, hospital quality

     improvement, and activities/initiatives of other Arizona community organizations.

     References: Section D, Paragraph 23, Quality Management (QM); AMPM, Chapters 400 and 900

39. Describe how the Offeror identifies members with Behavioral Health needs.

     References: Section D, Paragraph 12, Behavioral Health Services; AMPM, Chapters 400, 500, 900

     and 1000

40. Describe the Offeror’s process for referring members with behavioral health care needs to the RBHA,

     and for assisting members in accessing services in the RBHA system.

     References: Section D, Paragraph 12, Behavioral Health Services; AMPM, Chapters 400, 500, 900

     and 1000

41. Describe the Offeror’s process for coordinating care between the RBHA/treating provider and the

     PCP.

     References: Section D, Paragraph 12, Behavioral Health Services; AMPM, Chapters 400, 500, 900

     and 1000

42. Describe how PCPs are educated on their ability to treat attention deficit/hyperactivity disorder

      (ADHD), depression and anxiety behavioral health conditions, and monitors PCPs to ensure

     appropriate care is provided.

     References: Section D, Paragraph 12, Behavioral Health Services; AMPM, Chapters 400, 500, and

     900

43. Essay – Describe how the Offeror envisions Medical Homes to be developed and integrated as a

      service for members with special health care needs and for members with chronic illnesses who

      would benefit from the assistance a Medical Home would provide. Please include in the

      description what services would be provided and by what type of staff (provider or health plan),

      how providers would be involved in and participate in the Medical Home model, and how

      reimbursement would be modified to appropriately reimburse for a true Medical Home.

      Consideration should also be given to how outcomes of the Medical Home, including utilization

      patterns, would be evaluated.

                –Please include a description of how Offeror will staff/resource
this project if

                selected as the successful Offeror, with additional funding anticipated to be paid

                until the project is completed as determined by AHCCCS (prorated if less than a

                complete year).

                –The response submitted for this submission requirement will not be
used to

                consider contract award for the RFP. The response will be evaluated to

                determine the potential award of additional administrative funds for one to two

                Offerors awarded contracts in this RFP. The AHCCCS Administration reserves

                the right to request additional information before making final awards in the

                development of a Medical Home model program.

                References: Section D Paragraph 75, Pending Legislative/Other Issues; AMPM Chapters 400,

                900 and 1000

V. Organization

Organization refers to the Offeror's ability to perform the administrative tasks necessary to support the

requirements identified throughout this RFP. The following identifies the submission requirements.

Required Submissions: Organization

Organization Questions

44. Submit resumes of key personnel. Include information on how long the personnel have been in these

     positions. If personnel are not in place, submit job descriptions outlining the minimum qualifications of

     the position(s). Each resume or job description is limited to three pages.

     References: Section D, Paragraph 16, Staff Requirements and Support Services

45. Submit an organizational chart down to the supervisor level that includes the number of employees

     under the supervisor for the following functional areas: Member Services, Provider Services, Medical

     Management, Grievance System, Finance, Claims, Encounters, Information Systems, EPSDT and

     Quality Management.

                –The chart must identify the functions that have been subcontracted
in a Delegated

                Agreement, Management Service Agreement and or Service Level Agreement.

                –Provide the number of full-time equivalent employees who are or
will be devoted to

                the program by functional area.

                References: Section D, Paragraphs 16, Staff Requirements and Support Services, and 37,

                Subcontracts

46. Describe the Offeror’s initial and ongoing employee training program. In addition to the three page

     submission the Offeror must include a syllabus of the Offeror’s initial and ongoing trainings.

     References: Section D, Paragraph 16, Staff Requirements and Support Services

47. Describe the Offeror’s experience as a managed care contractor in a publicly funded program and or as a

     managed care organization in a non-publicly funded program. Include a table showing current Medicare

     and Medicaid risk contracts and other risk contracts to include date started and enrollees by risk group.

     In addition, include a table of Medicare and Medicaid contracts discontinued within the past five years

      (January 1, 2003) and the reason(s) for the termination.

48. Please provide the information listed below for a minimum of three governmental entities with

      which the Offeror or a related organization (e.g. parent company) holds a managed care risk

      agreement. If the Offeror does not have three separate contracts with governmental entities, the

      Offeror must specify this fact and submit the information below for all governmental entities with

      which it holds a contract.

                –Contact information must include: name of governmental entity,
type of contract

                and relevant contract number(s), contact person, telephone number and address.

                –Submissions must include, and identify, at least one reference
(other than

                Arizona) for an entity with which the Offeror has received a performance

                sanction (does not have to be monetary). Not applicable if no sanctions have

                been levied.

49. Describe the Offeror’s process to select and monitor subcontracted entities (Delegated Agreement,

     Management Service Agreement and or Service Level Agreement) providing services in any or all of

     the following functional areas: health plan Administration, Member Services, Provider Services,

     Medical Management, Grievance System, Finance, Claims, Encounters, Information Systems, EPSDT

     and Quality Management. Describe the authority the Offeror’s CEO (as identified on the Organization

     Chart, not the CEO of the subcontractor) has to effectuate change over each subcontracted functional

     area.

     References: Section D, Paragraph 37, Subcontracting

50. Describe any sanctions levied against the Offeror, its parent corporation or any legally related

     corporate entity since January 1, 2005 that have been imposed by AHCCCS, Medicaid programs in

     other states, Medicare or any state insurance regulatory body. Include the description of the sanction,

     the specific reason for the sanction and the timeline to resolve or correct the deficiency. Sanctions are

     defined as any monetary and non-monetary punitive actions taken by regulatory bodies.

51. Describe the Offeror’s information services organization, and the hardware and software that will

     support the AHCCCS line of business, including a diagram of the information system and data

     processing flow with all existing or planned interfaces. If not a current Contractor, the Offeror must

     include a detailed plan for ensuring that all IS requirements will be met prior to the contract start date.

      (Submission requirement not to exceed 10 pages, plus flowcharts)

     References: Section D, Paragraphs 38, Claims Payment/Health Information System, and 64, Data

     Exchange Requirements

52. Describe the Offeror’s information system change order or software modification processes, the date

     of the last major version update, and indicate if there is a planned system conversion within the

     contract period (five years). If yes, indicate which subsystems will be affected and describe the

     planning and system implementation process.

     System conversion is defined as a significant modification to the managed care system used

     by the Offeror. Significant modification would include migration from one software product

     or vendor to another, or a major version upgrade to the product from its current vendor. This

     would also include any significant changes or enhancements in functionality to the system for

     enrollment of members, maintenance of member benefits, premium/capitation payment

     posting, provider contracts, prior authorization of claims, and payment/encounter reporting.

     References: Section D, Paragraphs 38, Claims Payment/Health Information System, and 64, Data

     Exchange Requirements

53. When was the last IT-specific external operational audit or external performance review of the

     Offeror’s system/division? Provide the contact information for the external organization if applicable.

     References: Section D, Paragraphs 38, Claims Payment/Health Information System, and 64, Data

     Exchange Requirements

54. Describe Offeror’s HIPAA version migration plans, ability to support future HIPAA mandates, and

     the system’s ability to support E-health connectivity (i.e., electronic health records)

     References: Section D, Paragraphs 38, Claims Payment/Health Information System, and 64, Data

     Exchange Requirements, and 74, Technology Advancements

55. Indicate how many years the Offeror’s IT organization or software vendor has supported the

     information system, and whether or the not the software version currently operated by the Offeror is

     supported by the software vendor. If Offeror’s software is vendor supported, include vendor name(s),

     address, contact person and version(s) being used.

     References: Section D, Paragraphs 38, Claims Payment/Health Information System, and 64, Data

     Exchange Requirements

56. Provide a detailed flowchart and narrative description of the claims adjudication process, addressing both

     paper and electronic claims submissions. Include processing timeliness standards, coordination of benefit

     activities and how claim inquiries are handled. The submission requirement should not exceed three

     pages of narrative and an additional three pages of flowcharts.

     References: Section D, Paragraphs 38, Claims Payment/Health Information System, and 58,

     Coordination of Benefits

57. Provide a description of the monitoring process for accurate and timely claim adjudication and how

     identified deficiencies are resolved.

     References: Section D, Paragraph 38, Claims Payment/Health Information System

58. Provide a description of the clinical edits and data related edits included in the claims adjudication

     process.

     References: Section D, Paragraph 38, Claims Payment/Health Information System

59. Describe the Offeror’s Corporate Compliance Program.

     References: Section D, Paragraph 62, Corporate Compliance

60. Describe the Compliance Officer’s level of authority and reporting relationships.

     References: Section D, Paragraph 62, Corporate Compliance

61. Submit a description of the Offeror’s encounter submissions process including, but not limited to, how

     accuracy, timeliness and completeness are ensured and the remediation process when AHCCCS

     standards are not met.

     References: Section D, Paragraph 65, Encounter Data Reporting; Encounter Reporting User Manual

62. Describe the Member Grievance process from identification to resolution. Include the communication

     process with other departments, internal benchmarks for timely resolution and average time of

     resolution.

     References: Section D, Paragraph 26, Grievance System; Attachment H(1); ACOM Enrollee

     Grievance Policy

63. Describe how the organization monitors the operational effectiveness of the Member Services

     Department.

     References: Section D, Paragraph 25, Administrative Performance Standards

64. Describe the Offeror’s member orientation and on-going education regarding how to access benefits.

     References: Section D, Paragraphs 8, Mainstreaming of AHCCCS Members, 18, Member Information,

     20, Cultural Competency; ACOM 404, Member Information Policy

65. Describe how feedback (disenrollment, complaints, survey results etc.) from members is used to drive

     changes and/or improvements to the Offeror’s operations.

     References: Section D, Paragraph 26, Grievance System; Attachments H(1), Enrollee Grievance System

     Standards and Policy; ACOM, 406 Enrollee Grievance Policy

66. Provide a flowchart and written description of the Offeror’s grievance system. At a minimum, the

     description should include the member grievance and appeal process, and the provider and

     subcontractor claim dispute process. The submission requirement should not excced five pages of

     narrative with a maximum of three pages of flowcharts.

     References: Section D, Paragraph 26, Grievance System; Attachments H(1), Enrollee Grievance System

     Standards and Policy, and H(2), Provider Claim Dispute Standards and Policy

67. Describe how data resulting from the grievance system is used to improve the operational

     performance of the Offeror.

     References: Section D, Paragraph 26, Grievance System; Attachments H(1), Enrollee Grievance System

     Standards and Policy, and H(2), Provider Claim Dispute Standards and Policy

68. Submit the Offeror’s plan for meeting the Performance Bond or Bond Substitute requirement

     including the type of bond to be posted, source of funding and timeline for meeting the requirement.

     References: Section D, Paragraphs 46, Performance Bond or Bond Substitute, and 47, Amount of

     Performance Bond

69. Submit a plan for meeting the minimum capitalization requirement.

     References: Section I, Paragraph 13, Minimum Capitalization Requirements

70. Provide the Offeror’s two most recent audited financial statements, including enrollment and member

     month amounts. Include the parent company’s two most recent audited statements as well, if

     applicable. There is no page limit on this requirement. Current Acute Care Contractors who have met

     this requirement through deliverable submission do not need to resubmit.

                The Offeror refers to the separate corporation established for the purposes of this contract. If no

                separate corporation exists, the Offeror should submit audited financial statements for the line of

                business most like the services provided under this contract. If no other financial information is

                available, AHCCCS will accept the Offeror’s corporate financial statement, with an explanation

                of why other data is not available.

     References: AHCCCS Reporting Guide for Acute Health Care Contractors

71. Provide the organization’s most recent quarterly financial statements, including year-to-date

     information where applicable and including enrollment and member month amounts. There is no page

     limit on this requirement. Current Acute Care Contractors who have met this requirement through

     deliverable submission do not need to resubmit.

     References: AHCCCS Reporting Guide for Acute Health Care Contractors

72. Submit prospective time period financial forecasts by GSA and statewide totals for the first three years

     of the contract starting with October 1, 2008, including a balance sheet and a statement of revenues,

     expenses and changes in equity in at least the level of detail specified for annual audited financial

     statements as outlined in the AHCCCS Reporting Guide for Acute Health Care Contractors. Balance

     sheet and changes in equity statements should be statewide. Income statements should be by GSA and

     statewide. Include all assumptions used for the forecasts, including enrollment and member months.

     There is no page limit to this requirement. For the purposes of this question, “Statewide” should be

     understood to mean all of the GSAs for which the Offeror is submitting a bid combined.

     References: AHCCCS Reporting Guide for Acute Health Care Contractors

73. Submit financial viability calculations for the three-year financial projections.

     References: Section D, Paragraph 50, Financial Viability Standards; AHCCCS Reporting Guide for

     Acute Health Care Contractors

74. Describe the Offeror’s process for monitoring the appropriateness of the Total Medical Claims

     liability including the frequency of internal and external reviews; the individuals or entity that will

     conduct the review; and the method for necessary adjustments resulting from such reviews.

     References: AHCCCS Reporting Guide for Acute Health Care Contractors

75. Describe the Offeror’s methodology for recording reinsurance revenue and reinsurance receivables

     and the process for monitoring the appropriateness of reinsurance revenue and reinsurance

     receivables. The description should include the frequency of review and adjustment.

     References: Section D, Paragraph 57, Reinsurance; AHCCCS Reporting Guide for Acute Health Care

     Contractors

VI. Other

This submission requirement will not be scored or used to determine contract awards for AHCCCS Acute or

KidsCare business pursuant to this request for proposals.

Required Submissions: Other

Other Question

76. As described in Section D, Paragraph 75, KidsShare is a health insurance program being considered in

     the 2008 Legislative Session. Should the program be enacted, it is currently structured as follows:

                Program Design:

                                • A full risk
program for children only (under 19 years of age)

                                • AHCCCS would
set a capitation rate range; Offerors awarded contracts under this RFP will

                                   be afforded an opportunity to bid a capitation rate and
potentially be offered a KidsShare

                                   contract.

                                • Benefit would
be designed based on an affordable premium

                Eligibility Criteria including but not limited to:

                                • Resident of
Arizona, citizen of the US, or a legal resident

                                • Family income
above 200% not to exceed 350% of the Federal Poverty Level

                                • Parent/guardian employer does not offer insurance, or coverage is not extended to dependents

                                • Employer
sponsored coverage or private commercial coverage is unaffordable for the family,

                                   i.e. greater than 10% of the family income or exceeding 150%
of the premium(s) for KidsShare.

                                • Child or
family member has preexisting conditions that precludes coverage under commercial coverage.

                Eligibility and Enrollment:

                                • AHCCCS would
determine eligibility

                                • Family would
choose a Contractor

                Please indicate if Offeror is interested in participating in this program. Identify any additional issues

                for consideration in the development or design of the program. Response must be limited to one page.

[END OF SECTION I]

SECTION J: LIST OF ATTACHMENTS

Attachment A: Minimum Subcontract Provisions

Attachment B: Geographic Service Area; Minimum Network Requirements

Attachment C: RESERVED

Attachment D: Sample Letter of Intent: Network Submission Requirements

Attachment E: Instructions for Preparing Capitation Proposal

Attachment F: Periodic Reporting Requirements

Attachment G: Auto-Assignment Algorithm

Attachment H: Grievance System Standards and Policy

Attachment I: RESERVED

Attachment J: Offeror’s Checklist

Attachment K: Cost Sharing Copayments

ATTACHMENT A: MINIMUM SUBCONTRACT PROVISIONS

For the sole purpose of this Attachment, the following definitions apply:

“Subcontract” means any contract between the Contractor and a third party for the performance of any or all

services or requirements specified under the Contractor’s contract with AHCCCS.

“Subcontractor” means any third party with a contract with the Contractor for the provision of any or all

services or requirements specified under the Contractor’s contract with AHCCCS.

Subcontractors who provide services under the AHCCCS ALTCS and or the Acute Care Program must

comply with the following applicable rules and statutes:

            • Rules for the ALTCS are found in Arizona Administrative Code (AAC) Title 9, Chapter 28.

                AHCCCS statutes for long term care are generally found in Arizona Revised Statue (ARS) 36,

                Chapter 29, Article 2.

            • Rules for the Acute Care Program are found in AAC Title 9, Chapter 22. AHCCCS statutes for the

                Acute Care Program are generally found in ARS 36, Chapter 29, Article 1. Rules for the KidsCare

                Program are found in AAC Title 9, Chapter 31 and the statutes for KidsCare Program may be found in

                ARS 36, Chapter 29, Article 4.

All statutes, rules and regulations cited in this attachment are listed for reference purposes only and are not

intended to be all inclusive.

[The following provisions must be included verbatim in every contract.]

1. ASSIGNMENT AND DELEGATION OF RIGHTS AND RESPONSIBILITIES

No payment due the Subcontractor under this subcontract may be assigned without the prior approval of the

Contractor. No assignment or delegation of the duties of this subcontract shall be valid unless prior written

approval is received from the Contractor. (AAC R2-7-305)

2. AWARDS OF OTHER SUBCONTRACTS

AHCCCS and/or the Contractor may undertake or award other contracts for additional or related work to the

work performed by the Subcontractor and the Subcontractor shall fully cooperate with such other contractors,

subcontractors or state employees. The Subcontractor shall not commit or permit any act which will interfere

with the performance of work by any other contractor, subcontractor or state employee. (AAC R2-7-308)

3. CERTIFICATION OF COMPLIANCE – ANTI-KICKBACK AND LABORATORY TESTING

By signing this subcontract, the Subcontractor certifies that it has not engaged in any violation of the Medicare

Anti-Kickback statute (42 USC §§1320a-7b) or the “Stark I” and “Stark II” laws governing related-entity

referrals (PL 101-239 and PL 101-432) and compensation there from. If the Subcontractor provides laboratory

testing, it certifies that it has complied with 42 CFR §411.361 and has sent to AHCCCS simultaneous copies of

the information required by that rule to be sent to the Centers for Medicare and Medicaid Services. (42 USC

§§1320a-7b; PL 101-239 and PL 101-432; 42 CFR §411.361)

4. CERTIFICATION OF TRUTHFULNESS OF REPRESENTATION

By signing this subcontract, the Subcontractor certifies that all representations set forth herein are true to the best

of its knowledge.

5. CLINICAL LABORATORY IMPROVEMENT AMENDMENTS OF 1988

The Clinical Laboratory Improvement Amendment (CLIA) of 1988 requires laboratories and other facilities that

test human specimens to obtain either a CLIA Waiver or CLIA Certificate in order to obtain reimbursement from

the Medicare and Medicaid (AHCCCS) programs. In addition, they must meet all the requirements of 42 CFR

493, Subpart A.

To comply with these requirements, AHCCCS requires all clinical laboratories to provide verification of CLIA

Licensure or Certificate of Waiver during the provider registration process. Failure to do so shall result in either a

termination of an active provider ID number or denial of initial registration. These requirements apply to all

clinical laboratories.

Pass-through billing or other similar activities with the intent of avoiding the above requirements are prohibited.

The Contractor may not reimburse providers who do not comply with the above requirements (CLIA of 1988; 42

CFR 493, Subpart A).

6. COMPLIANCE WITH AHCCCS RULES RELATING TO AUDIT AND INSPECTION

The Subcontractor shall comply with all applicable AHCCCS Rules and Audit Guide relating to the audit of the

Subcontractor's records and the inspection of the Subcontractor's facilities. If the Subcontractor is an inpatient

facility, the Subcontractor shall file uniform reports and Title XVIII and Title XIX cost reports with AHCCCS

(ARS 41-2548; 45 CFR 74.48 (d)).

7. COMPLIANCE WITH LAWS AND OTHER REQUIREMENTS

The Subcontractor shall comply with all federal, State and local laws, rules, regulations, standards and executive

orders governing performance of duties under this subcontract, without limitation to those designated within this

subcontract [42 CFR 434.70 and 42 CFR 438.6(l)].

8. CONFIDENTIALITY REQUIREMENT

Confidential information shall be safeguarded pursuant to 42 CFR Part 431, Subpart F, ARS §36-107, 36-2932,

41-1959 and 46-135, AHCCCS Rules and the Health Insurance Portability and Accountability Act (CFR 164).

9. CONFLICT IN INTERPRETATION OF PROVISIONS

In the event of any conflict in interpretation between provisions of this subcontract and the AHCCCS Minimum

Subcontract Provisions, the latter shall take precedence.

10. CONTRACT CLAIMS AND DISPUTES

Contract claims and disputes shall be adjudicated in accordance with AHCCCS Rules.

11. ENCOUNTER DATA REQUIREMENT

If the Subcontractor does not bill the Contractor (e.g., Subcontractor is capitated), the Subcontractor shall submit

encounter data to the Contractor in a form acceptable to AHCCCS.

12. EVALUATION OF QUALITY, APPROPRIATENESS, OR TIMELINESS OF SERVICES

AHCCCS or the U.S. Department of Health and Human Services may evaluate, through inspection or other

means, the quality, appropriateness or timeliness of services performed under this subcontract.

13. FRAUD AND ABUSE

If the Subcontractor discovers, or is made aware, that an incident of suspected fraud or abuse has occurred, the

Subcontractor shall report the incident to the prime Contractor as well as to AHCCCS, Office of Program

Integrity. All incidents of potential fraud should be reported to AHCCCS, Office of the Director, Office of

Program Integrity.

14. GENERAL INDEMNIFICATION

The parties to this contract agree that AHCCCS shall be indemnified and held harmless by the Contractor and

Subcontractor for the vicarious liability of AHCCCS as a result of entering into this contract. However, the

parties further agree that AHCCCS shall be responsible for its own negligence. Each party to this contract is

responsible for its own negligence.

15. INSURANCE

[This provision applies only if the Subcontractor provides services directly to AHCCCS members]

The Subcontractor shall maintain for the duration of this subcontract a policy or policies of professional liability

insurance, comprehensive general liability insurance and automobile liability insurance in amounts that meet

Contractor’s requirements. The Subcontractor agrees that any insurance protection required by this subcontract,

or otherwise obtained by the Subcontractor, shall not limit the responsibility of Subcontractor to indemnify, keep

and save harmless and defend the State and AHCCCS, their agents, officers and employees as provided herein.

Furthermore, the Subcontractor shall be fully responsible for all tax obligations, Worker's Compensation

Insurance, and all other applicable insurance coverage, for itself and its employees, and AHCCCS shall have no

responsibility or liability for any such taxes or insurance coverage. (45 CFR Part 74) The requirement for

Worker’s Compensation Insurance does not apply when a Subcontractor is exempt under ARS 23-901, and

when such Subcontractor executes the appropriate waiver (Sole Proprietor/Independent Contractor) form.

16. LIMITATIONS ON BILLING AND COLLECTION PRACTICES

Except as provided in federal and state law and regulations, the Subcontractor shall not bill, or attempt to collect

payment from a person who was AHCCCS eligible at the time the covered service(s) were rendered, or from the

financially responsible relative or representative for covered services that were paid or could have been paid by

the System.

17. MAINTENANCE OF REQUIREMENTS TO DO BUSINESS AND PROVIDE SERVICES

The Subcontractor shall be registered with AHCCCS and shall obtain and maintain all licenses, permits and

authority necessary to do business and render service under this subcontract and, where applicable, shall comply

with all laws regarding safety, unemployment insurance, disability insurance and worker's compensation.

18. NON-DISCRIMINATION REQUIREMENTS

The Subcontractor shall comply with State Executive Order No. 99-4, which mandates that all persons,

regardless of race, color, religion, gender, national origin or political affiliation, shall have equal access to

employment opportunities, and all other applicable Federal and state laws, rules and regulations, including the

Americans with Disabilities Act and Title VI. The Subcontractor shall take positive action to ensure that

applicants for employment, employees, and persons to whom it provides service are not discriminated against

due to race, creed, color, religion, sex, national origin or disability. (Federal regulations, State Executive order

# 99-4)

19. PRIOR AUTHORIZATION AND UTILIZATION MANAGEMENT

The Contractor and Subcontractor shall develop, maintain and use a system for Prior Authorization and

Utilization Review that is consistent with AHCCCS Rules and the Contractor’s policies.

20. RECORDS RETENTION

The Subcontractor shall maintain books and records relating to covered services and expenditures including

reports to AHCCCS and working papers used in the preparation of reports to AHCCCS. The Subcontractor shall

comply with all specifications for record keeping established by AHCCCS. All books and records shall be

maintained to the extent and in such detail as required by AHCCCS Rules and policies. Records shall include

but not be limited to financial statements, records relating to the quality of care, medical records, dental records,

prescription files and other records specified by AHCCCS.

The Subcontractor agrees to make available at its office at all reasonable times during the term of this contract

and the period set forth in the following paragraphs, any of its records for inspection, audit or reproduction by any

authorized representative of AHCCCS, State or Federal government.

The Subcontractor shall preserve and make available all records for a period of five years from the date of final

payment under this contract unless a longer period of time is required by law.

If this contract is completely or partially terminated, the records relating to the work terminated shall be preserved

and made available for a period of five years from the date of any such termination. Records which relate to

grievances, disputes, litigation or the settlement of claims arising out of the performance of this contract, or costs

and expenses of this contract to which exception has been taken by AHCCCS, shall be retained by the

Subcontractor for a period of five years after the date of final disposition or resolution thereof unless a longer

period of time is required by law. (45 CFR 74.53; 42 CFR 431.17; ARS 41-2548)

21. SEVERABILITY

If any provision of these standard subcontract terms and conditions is held invalid or unenforceable, the

remaining provisions shall continue valid and enforceable to the full extent permitted by law.

22. SUBJECTION OF SUBCONTRACT

The terms of this subcontract shall be subject to the applicable material terms and conditions of the contract

existing between the Contractor and AHCCCS for the provision of covered services.

23. TERMINATION OF SUBCONTRACT

AHCCCS may, by written notice to the Subcontractor, terminate this subcontract if it is found, after notice and

hearing by the State, that gratuities in the form of entertainment, gifts, or otherwise were offered or given by the

Subcontractor, or any agent or representative of the Subcontractor, to any officer or employee of the State with a

view towards securing a contract or securing favorable treatment with respect to the awarding, amending or the

making of any determinations with respect to the performance of the Subcontractor; provided, that the existence

of the facts upon which the state makes such findings shall be in issue and may be reviewed in any competent

court. If the subcontract is terminated under this section, unless the Contractor is a governmental agency,

instrumentality or subdivision thereof, AHCCCS shall be entitled to a penalty, in addition to any other damages

to which it may be entitled by law, and to exemplary damages in the amount of three times the cost incurred by

the Subcontractor in providing any such gratuities to any such officer or employee. (AAC R2-5-501; ARS 41-

2616 C.; 42 CFR 434.6, a. (6))

24. VOIDABILITY OF SUBCONTRACT

This subcontract is voidable and subject to immediate termination by AHCCCS upon the Subcontractor

becoming insolvent or filing proceedings in bankruptcy or reorganization under the United States Code, or upon

assignment or delegation of the subcontract without AHCCCS’s prior written approval.

25. WARRANTY OF SERVICES

The Subcontractor, by execution of this subcontract, warrants that it has the ability, authority, skill, expertise and

capacity to perform the services specified in this contract.

26. OFF-SHORE PERFORMANCE OF WORK PROHIBITED

Due to security and identity protection concerns, direct services under this contract shall be performed within the

borders of the United States. Any services that are described in the specifications or scope of work that directly

serve the State of Arizona or its clients and may involve access to secure or sensitive data or personal client data

or development or modification of software for the State shall be performed within the borders of the United

States. Unless specifically stated otherwise in specifications, this definition does not apply to indirect or

“overhead” services, redundant back-up services or services that are incidental to the performance of the contract.

This provision applies to work performed by subcontractors at all tiers.

27. FEDERAL IMMIGRATION AND NATIONALITY ACT

The Subcontractor shall comply with all federal, state and local immigration laws and regulations relating to the

immigration status of their employees during the term of the contract. Further, the Subcontractor shall flow down

 this requirement to all subcontractors utilized during the term of the contract. The State shall retain the right to

perform random audits of Contractor and subcontractor records or to inspect papers of any employee thereof to

ensure compliance. Should the State determine that the Contractor and/or any subcontractors be found

noncompliant, the State may pursue all remedies allowed by law, including, but not limited to; suspension of

work, termination of the contract for default and suspension and/or debarment of the Contractor.

ATTACHMENT B: MINIMUM NETWORK STANDARDS (By Geographic Service Area)

INSTRUCTIONS:

Contractors shall have in place an adequate network of providers capable of meeting contract requirements. The

information that follows describes the minimum network requirements by Geographic Service Area (GSA).

In some GSAs there are required service sites located outside of the geographical boundary of a GSA. The

reason for this relates to practical access to care. In certain instances, a member must travel a much greater

distance to receive services within their assigned GSA, than if the member were not allowed to receive services in

an adjoining Border Community.

Split zip codes occur in some counties. Split zip codes are those which straddle two different counties.

Enrollment for members residing in these zip codes is based upon the county and GSA to which the entire zip

code has been assigned by AHCCCS. The Contractor shall be responsible for providing services to members

residing in the entire zip code that is assigned to the GSA for which the Contractor has agreed to provide services.

The split zip codes GSA assignments are as follows:

	
ZIP CODE

	
 

	
SPLIT BETWEEN

 THESE COUNTIES

	
 

	
COUNTY ASSIGNED

 TO

	
 

	
ASSIGNED GSA

	

	
85220

		
Pinal and Maricopa

		
Maricopa

		
12

	
85242

		
Pinal and Maricopa

		
Maricopa

		
12

	
85292

		
Gila and Pinal

		
Gila

		
12

	
85342

		
Yavapai and Maricopa

		
Maricopa

		
12

	
85358

		
Yavapai and Maricopa

		
Maricopa

		
12

	
85390

		
Yavapai and Maricopa

		
Maricopa

		
12

	
85643

		
Graham and Cochise

		
Cochise

		
14

	
85645

		
Pima and Santa Cruz

		
Santa Cruz

		
10

	
85943

		
Apache and Navajo

		
Navajo

		
4

	
86336

		
Coconino and Yavapai

		
Yavapai

		
6

	
86351

		
Coconino and Yavapai

		
Coconino

		
4

	
86434

		
Mohave and Yavapai

		
Yavapai

		
6

	
86340

		
Coconino and Yavapai

		
Yavapai

		
6

If outpatient specialty services (OB, family planning, and pediatrics) are not included in the primary care provider

contract, at least one subcontract is required for each of these specialties in the service sites specified.

In Tucson (GSA 10) and Metropolitan Phoenix (GSA 12), the Contractor must have a network that is able to

provide PCP, dental and pharmacy services so that members do not need to travel more than 5 miles from their

residence. The Contractor must also obtain at least one hospital contract in each service district listed on the

Hospitals in Phoenix and Tucson Metropolitan area pages within this section, respectively. Metropolitan

Phoenix is further defined on the Minimum Network Standard page specific to GSA # 12.

At a minimum, the Contractor shall have contracts with physicians with admitting and treatment privileges at

each hospital in its network.

For the remaining GSAs and areas not included in the Phoenix or Tucson Metropolitan Areas, the Contractor is

required to obtain contracts with Physician(s) with admission and treatment privileges in the communities

identified under Hospitals on the Minimum Network Standard page specific to each GSA. The Contractor must

have a network that is able to provide PCP, dental and pharmacy services in each of the communities identified

on the Minimum Network Standard Page specific to each GSA.

Provider categories required at various service delivery sites included in the Service Area Minimum Network

Standards are indicated as follows:

H Hospitals

P Primary Care Providers (physicians, certified nurse practitioners and physician assistants)

D Dentists

Ph Pharmacies

HOSPITALS IN PHOENIX METROPOLITAIN AREA (By service district, by zip code)

DISTRICT 1

85006 Banner Good Samaritan Medical Center

85281 St. Luke’s Medical Center

85008 Maricopa Medical Center

85013 St. Joseph’s Hospital & Medical Center

85020 John C. Lincoln Hospital – North Mountain

DISTRICT 2

85015 Phoenix Baptist Hospital & Medical Center

85027 John C. Lincoln Hospital – Deer Valley

85037 Banner Estrella Medical Center

85306 Banner Thunderbird Medical Center

85308 Arrowhead Community Hospital & Medical Center

85338 West Valley Hospital

85351 Walter O. Boswell Memorial Hospital

85375 Del E. Webb Memorial Hospital

85031 Maryvale Hospital Medical Center

DISTRICT 3

85031 Paradise Valley Hospital

85054 Mayo Clinic Hospital

85251 Scottsdale Healthcare – Osborn

85261 Scottsdale Healthcare – Shea

85255 Scottsdale Healthcare – Thompson Peak

DISTRICT 4

85201 Mesa General Hospital Medical Center

85201 Mesa Lutheran Hospital

85202 Banner Desert Medical Center

85206 Valley Lutheran Hospital

85224 Chandler Regional Hospital

85281 Tempe St. Luke’s Hospital

85296 Mercy Gilbert

85234 Banner Gateway

85209 Mountain Vista

HOSPITALS IN TUCSON METROPOLITAN AREA (By service district, by zip code)

DISTRICT 1

85719 University Medical Center

85741 Northwest Hospital

85745 Carondelet St. Mary’s Hospital

85775 Northwest Medical Center Oro Valley

DISTRICT 2

85711 Carondelet St. Joseph’s Hospital

85712 El Dorado Hospital

85717 Tucson Medical Center

85713 University Physicians Hospital at Kino Campus

COUNTIES: LA PAZ AND YUMA – Geographic Service Area 2

HospitalsPhysician(s) w/admit and

treatment privileges required

in the following communities

Blythe, CA

Lake Havasu City

Parker

Yuma

Primary Care Providers

Blythe, CA

Lake Havasu City

Parker

San Luis

Somerton

Wellton

Yuma

Dentists

Blythe, CA

Lake Havasu City

Parker

San Luis

Yuma

Pharmacies

Blythe, CA

Lake Havasu City

Parker

Somerton

San Luis

Yuma

H=Hospital P=Primary Care Physician D=Dentist Ph=Pharmacy

COUNTIES: APACHE, COCONINO, MOHAVE, AND NAVAJO – Geographic Service Area 4

HospitalsPhysician(s) w/admit

and treatment privileges required

in the following communities

Bullhead City

Flagstaff

Gallup, NM

Kanab, UT

Kingman

Lake Havasu City

Needles, CA

Page

Payson

Show Low

Springerville

St. George, UT

Winslow

Primary Care Providers

Ash Fork/Seligman

Bullhead City

Colorado City or Hilldale or Kanab, UT

Flagstaff

Fort Mohave

Gallup, NM

Holbrook

Kingman

Lake Havasu City

Page

Payson

Sedona

Show Low or Pinetop or Lakeside

Snowflake or Taylor

Springerville or Eager

St. George, UT or Mesquite, NV

St. Johns

Williams

Winslow

Dentists

SAME AS PRIMARY

CARE PROVIDERS

(except for Fort Mohave,

no dentist required)

Pharmacies

SAME AS PRIMARY

CARE PROVIDERS

H=Hospital P=Primary Care Physician D=Dentist Ph=Pharmacy

COUNTY: YAVAPA – Geographic Service Area 6

HospitalsPhysician(s) w/admit

and treatment privileges required

in the following communities

Cottonwood

Flagstaff

Maricopa County

Prescott

Primary Care Providers

Ash Fork or Seligman

Camp Verde

Cottonwood

Maricopa County or Wickenburg

Prescott

Prescott Valley

Sedona

Dentists

SAME AS PRIMARY CARE

PROVIDERS

Pharmacies

SAME AS PRIMARY CARE

PROVIDERS

(except for Ash Fork/Seligman,

no pharmacy required)

H=Hospital P=Primary Care Physician D=Dentist Ph=Pharmacy

COUNTIES: PINAL AND GILA – Geographic Service Area 8

HospitalsPhysician(s) w/admit

and treatment privileges required

in the following communities

Casa Grande

Globe

Maricopa County District 4

Payson

Primary Care Providers

Apache Junction

Casa Grande

Coolidge or Florence

Eloy

Globe or Miami or Claypool

Kearney

Mammoth or San Manuel or

Oracle

Mesa or Gilbert or Queen Creek

Payson

Dentists

Apache Junction

Casa Grande

Coolidge or Florence

Eloy

Globe or Miami or Claypool

Kearney

Mammoth or San Manuel or

Oracle

Mesa or Gilbert or Queen Creek

Payson

Pharmacies

Apache Junction

Casa Grande

Coolidge or Florence

Globe or Miami or Claypool

Kearney

Mammoth or San Manuel or

Oracle

Mesa or Gilbert or Queen Creek

Payson

H=Hospital P=Primary Care Physician D=Dentist Ph=Pharmacy

COUNTY: PIMA AND SANTA CRUZ – Geographic Service Area 10

Hospital

Tucson

District 1

Contract Required

District 2

Contract Required

Nogales

Physician(s) w/admit and

treatment privileges required

Primary Care Providers

Ajo

Green Valley

Marana

Nogales

Oro Valley

Tucson

Dentists

SAME AS PRIMARY CARE

PROVIDERS

Pharmacies

SAME AS PRIMARY CARE

PROVIDERS

H=Hospital P=Primary Care Physician D=Dentist Ph=Pharmacy

COUNTY: MARICOPA – Geographic Service Area 12

Hospital

Metropolitan Phoenix*

   District 1

Contract Required

   District 2

Contract Required

   District 3

Contract Required

   District 4

Contract Required

Primary Care Providers

Buckeye

Cave Creek or Carefree

Gila Bend

Goodyear or Litchfield Park

Metropolitan Phoenix*

Queen Creek

Wickenburg

Dentists

Buckeye or Goodyear or Litchfield Park

Metropolitan Phoenix*

Wickenburg

Pharmacies

Buckeye

Cave Creek or Carefree

Goodyear or Litchfield Park

Metropolitan Phoenix*

Wickenburg

*For Purposes of this RFP, Metropolitan Phoenix encompasses the following: Apache Junction, Avondale, Chandler, El Mirage, Fountain Hills, Gilbert, Glendale, Mesa, Paradise Valley, Peoria, Phoenix, Scottsdale, Sun City/Sun
City West, Surprise, Tempe, Tolleson, and Youngtown. Within this area, distance standards must be met as specified in Attachment B.

H=Hospital P=Primary Care Physician D=Dentist Ph=Pharmacy

COUNTIES: COCHISE, GRAHAM AND GREENLEE – Geographic Service Area 14

HospitalsPhysician(s) w/admit and treatment privileges required in the following communities

Benson

Bisbee

Douglas

Safford

Sierra Vista

Tucson

Willcox

Primary Care Providers

Benson

Bisbee

Douglas

Morenci or Clifton

Safford

Sierra Vista

Willcox

Dentists

Benson or Willcox

Bisbee

Douglas

Morenci or Clifton

Safford

Sierra Vista

Pharmacies

Benson

Bisbee

Douglas

Morenci or Clifton

Safford or Thatcher

Sierra Vista

Willcox

H=Hospital P=Primary Care Physician D=Dentist Ph=Pharmacy

ATTACHMENT C: RESERVED

ATTACHMENT D: SAMPLE LETTER OF INTENT

The following information is provided as early notification for Offerors’ benefit. However, complete

instructions regarding this Letter of Intent will be provided when the RFP is released. Only instructions

included in the RFP are considered official. Do not send completed Letter of Intent to AHCCCS at this time.

Letter of Intent Instructions

The following is the mandated format for the Arizona Health Care Cost Containment System, Contract Year

Ending 2007 Letter of Intent (LOI). It is to be used to show a provider’s intention to enter into a contract with

an Offeror. No alterations or changes are permitted, except for shaded areas which identify the Offeror. The

Offeror may print the form on its letterhead or insert its name or logo in the box at the top of the forms. The

completed LOI or an executed contract will be acceptable evidence of an Offeror’s proposed network.

If a provider has multiple sites that offer identical services, only one LOI should be signed, with additional

service site information (items 1 to 6) attached to the LOI. If services differ between sites, a separate LOI must

be obtained for each service site.

If a representative signs an LOI on behalf of a provider, evidence of authority for the representative must be

available upon request.

[OFFEROR’S LOGO]

Please do not sign this Letter of Intent unless you seriously intend to enter into negotiations with the Offeror mentioned below and understand that the Arizona Health Care Cost Containment System Administration (AHCCCS)
requires all contracts to include Minimum Subcontract Provisions as listed at http://www.azahcccs.gov/Contracting/BidderLib_Acute.asp.

No alterations or changes are permitted, except for shaded areas which identify the Offeror. This letter is subject to verification by AHCCCS.

The provider signing below is willing to enter into contract negotiations with (Offeror’s name), for provision of covered services to AHCCCS members enrolled with (Offeror’s name). This provider intends to sign a
contract with (Offeror’s name) if (Offeror’s name) is awarded an AHCCCS contract beginning October 1, 2008 in the provider’s service area and an acceptable agreement can be reached between the provider and (Offeror’s name). Signing this Letter
of Intent does not obligate the provider to sign a contract with (Offeror’s name) however, please do not sign this Letter of Intent unless you seriously intend to enter into negotiations with the above mentioned health plan.

The following information is furnished by the provider:

1. NATIONAL PROVIDER IDENTIFICATION NUMBER (NPI) or AHCCCS PROVIDER IDENTIFICATION NUMBER

_____________________________________________________________

2. PROVIDER’S PRINTED NAME ____________________________________________________________

3. ADDRESS (where services will be provided) ___________________________________________________

_________________________________________________ZIP CODE________________________________

4. COUNTY ________________ 5. TELEPHONE ________________ 6. FAX _________________________

___ Please check here if additional service site information is attached to the Letter of Intent

7. CHECK ALL THAT APPLY

___ A. Primary Care Physician                          ___ Family Practice

                                                                               
___ General Practice

                                                                               
___ Pediatrics

                                                                               
___ Internal Medicine

                                               
Services:                ___ EPSDT

                                                                               
___ OB

___ B. Primary Care Nurse Practitioner            ___ Family Practice

                                                                               
___ Adult

                                                                               
___ Pediatrics

                                                                               
___ Midwife

                                               
Services:                ___ EPSDT

                                                                               
___ OB

___ C. Primary Care Physician’s Assistant

                                               
Services:                ___ EPSDT

                                                                               
___ OB

___ D. Physician – Specialist – (Specify)_____________________________________________________

___ E. Hospital

___ F. Urgent Care Facility

___ G. Pharmacy

___ H. Laboratory

___ I. Medical Imaging

___ J. Medically Necessary Transportation

___ K. Nursing Facility

___ L. Dentist

___ M. Therapy (Specify Physical Therapy, Occupational Therapy, Speech, Respiratory) _____________

________________________________________________________________________________

___ N. Behavioral Health Provider (Specify) __________________________________________________

___ O. Durable Medical Equipment

___ P. Home Health Agency

___ Q. Other (Please Specify)______________________________________________________________

8. LANGUAGES SPOKEN BY THE PROVIDER (OTHER THAN ENGLISH) _____________________

______________________________________________________________________________________

9. NAME OF HOSPITAL(S) WHERE PHYSICIAN HAS ADMITTING PRIVILEGES ______________

______________________________________________________________________________________

NOTICE TO PROVIDERS: This Letter of Intent will be used by AHCCCS in its bid evaluation and contract award process. You should only sign this Letter of Intent if you intend to enter into contract
negotiations with (Offeror’s name) should they receive a contract award. If you are signing on behalf of a physician, please provide evidence of your authority to do so.

Do not return completed Letter of Intent to AHCCCS. Completed Letter of Intent needs to be returned to (Offeror’s name).

10. PROVIDER’S SIGNATURE ____________________________________DATE _______________

11. PRINTED NAME OF SIGNER _________________________________TITLE _______________

[OFFEROR’S LOGO]

ADDITIONAL SERVICE SITES:

1. NATIONAL PROVIDER IDENTIFICATION NUMBER (NPI) or AHCCCS PROVIDER IDENTIFICATION NUMBER

_____________________________________________________________

2. PROVIDER’S PRINTED NAME ____________________________________________________________

3. ADDRESS (where services will be provided) ___________________________________________________

_________________________________________________ZIP CODE________________________________

4. COUNTY ________________ 5. TELEPHONE ________________ 6. FAX _________________________

3. ADDRESS (where services will be provided) ___________________________________________________

_________________________________________________ZIP CODE________________________________

4. COUNTY ________________ 5. TELEPHONE ________________ 6. FAX _________________________

3. ADDRESS (where services will be provided) ___________________________________________________

_________________________________________________ZIP CODE________________________________

4. COUNTY ________________ 5. TELEPHONE ________________ 6. FAX _________________________

3. ADDRESS (where services will be provided) ___________________________________________________

_________________________________________________ZIP CODE________________________________

4. COUNTY ________________ 5. TELEPHONE ________________ 6. FAX _________________________

3. ADDRESS (where services will be provided) ___________________________________________________

_________________________________________________ZIP CODE________________________________

4. COUNTY ________________ 5. TELEPHONE ________________ 6. FAX _________________________

3. ADDRESS (where services will be provided) ___________________________________________________

_________________________________________________ZIP CODE________________________________

4. COUNTY ________________ 5. TELEPHONE ________________ 6. FAX _________________________

ATTACHMENT E: INSTRUCTIONS FOR PREPARING CAPITATION PROPOSAL

All capitation rate bid proposals (including best and final offers, if applicable) must be submitted to AHCCCS

via the AHCCCS Web Based Capitation Rate Proposal application. A CCFR must be completed for every risk

group in each Geographic Service Area (GSA) in which the Offeror bids.

The Offeror must also use the Web Tool to print and submit Section B, Capitation Rates, of the Request for

Proposal (RFP). In the event that the Web Tool bid submission differs from the bid submission included with

Section B of the RFP, the bid submitted via the Web Tool will prevail. The first page of Section B should be the

certification that the capitation rates are actuarially sound, signed by an actuary who is a member of the American

Academy of Actuaries.

The Web Tool will present the CCFR bid screens by GSA and Risk Group.

The following is a list of the GSAs and the counties associated to each GSA that will be effective 10/1/08.

GSA #     County or Counties

2              Yuma, La Paz

4              Apache, Coconino, Mohave, and Navajo

6              Yavapai

8              Gila, Pinal

10            Pima, Santa Cruz

12            Maricopa

14            Graham, Greenlee, Cochise

The following is a listing of the risk groups for which capitation rates need to be bid. All risk groups apply to

each GSA.

1. TANF <1

2. TANF 1-13

3. TANF 14-44 Female

4. TANF 14-44 Male

5. TANF 45+

6. SSI with Medicare

7. SSI without Medicare

8. MED

9. AHCCCS Care (Non-MED)

Note: 1931s, KidsCare, HIFA Parents, SOBRA Children, SOBRA Mothers, and Breast and Cervical Cancer

Treatment Program populations are included in TANF risk groups. See the Data Supplement for the roll up of

rate codes in the risk groups.

Detailed instructions for the Web tool will be included within the Data Supplement. These instructions will

include general guidelines for the usage of the Web tool as well as the following items:

            • Process to receive a unique ID and password for the Web Tool

                • Application software requirements

                • Customer technical support desk phone number

ATTACHMENT F: PERIODIC REPORT REQUIREMENTS

The following table is a summary of the periodic reporting requirements for the Contractor and is subject to

change at any time during the term of the contract. The table is presented for convenience only and should not

be construed to limit the Contractor’s responsibilities in any manner. Content for all deliverables is subject to

review; AHCCCS may assess sanctions if it is determined that inaccurate or incomplete data is submitted.

The deliverables listed below are due by 5:00 PM on the due date indicated, if the due date falls on a weekend

or a State Holiday the due date is 5:00 PM on the next business day.

	
REPORT

	
WHEN DUE

	
SOURCE/REFERENCE

	
SEND TO:

	
DHCM Finance

	
 

	
 

	
 

	
Monthly Financial

 Reporting Package

	
30 days after the end of the

 month, only when required

 by AHCCCS

	
Reporting Guide For Acute

 Health Care Contractors

	
Finance Manager

	
Quarterly Financial

 Reporting Package

	
60 days after the end of

 each quarter

	
Reporting Guide For Acute

 Health Care Contractors

	
Finance Manager

	
FQHC Member Information

	
60 days after the end of

 each quarter

	
Reporting Guide For Acute

 Health Care Contractors;

 Section D, Paragraph 34

	
Finance Manager

	
Draft Annual Financial

 Reporting Package

	
90 days after the end of

 each fiscal year

	
Reporting Guide For Acute

 Health Care Contractors

	
Finance Manager

	
Final Annual Financial

 Reporting Package

	
120 days after the end of

 each fiscal year

	
Reporting Guide For Acute

 Health Care Contractors

	
Finance Manager

	
Advances/Loans/Equity

 Distributions

	
Submit for approval prior

 to effective date

	
Section D, Paragraph 49;

	
Finance Manager

	
Premium Tax Reporting

	
March 15th, June 15th,

 September 15th and

 December 15th

	
ACOM Premium Tax Reporting

 Policy

	
Finance Manager

	
 

	
 

	
 

	
 

	
REPORT

	
WHEN DUE

	
SOURCE/REFERENCE

	
SEND TO:

	
DHCM Data Analysis and

 Research

	
 

	
 

	
 

	
Corrected Pended

 Encounter Data

	
Monthly, according to

 established schedule

	
Encounter Reporting User

 Manual

	
Encounter Administrator

	
New Day Encounter

	
Monthly, according to

 established schedule

	
Encounter Reporting User

 Manual

	
Encounter Administrator

	
Medical Records for Data

 Validation

	
90 days after the request

 received from AHCCCS

	
Data Validation User Manual

	
Encounter Administrator

	
 

	
 

	
 

	
 

	
REPORT

	
WHEN DUE

	
SOURCE/REFERENCE

	
SEND TO:

	
Office of Program Integrity

	
 

	
 

	
 

	
Provider Fraud/Abuse

 Report

	
Within 10 days of

 discovery

	
 Section D, Paragraph 62

	
Office of Program

 Integrity Manager

	
Eligible Person Fraud/Abuse

 Report

	
Within 10 days of

 discovery

	
 Section D, Paragraph 62

	
Office of Program

 Integrity Manager

AHCCCS will assess the following sanctions on the deliverables listed below, under DHCM Acute Care

Operations, Clinical Quality Management and Medical Management that are not received by 5:00 PM on the

due date indicated, if the due date falls on a weekend or a State Holiday, sanctions will be assessed on

deliverables not received by 5:00 PM on the next business day.

Late Deliverables

1st time “late” sanction/ 1-10 days:                  $5,000

1st time “late” sanction/ 11-20 days:                $10,000

1st time “late” sanction/ over 21 days:             $15,000

2nd time “late” sanction/ 1-10 days: $10,000

2nd time “late” sanction/ 11-20 days:               $20,000

2nd time “late” sanction/over 21 days:            $30,000

3rd time “late” sanction/ 1-10 days:                  $20,000

3rd time “late” sanction/ 11-20 days:                $40,000

3rd time “late” sanction/over 21 days:             $60,000

The sanctions outlined above are deliverable specific. For example, if the Contractor submits its claims

dashboard 5 days late in January, a $5,000 sanction will be assessed. The next month, if the Contractor

submits its administrative measures 5 days late, it will be assessed a 1st time late sanction of $5,000. However

if the Contractor submits the claims dashboard 5 days late again in March AHCCCS will asses a 2nd time late

sanction of $10,000.

	
REPORT

	
WHEN DUE

	
SOURCE/REFERENCE

	
SEND TO:

	
DHCM Acute Care Operations

	
 

	
 

	
 

	
 Annual Subcontractor

 Assignment  and Evaluation

 Report

	
90 days after the beginning

 of the contract year

	
Section D, Paragraph 37;

 Section D, Paragraph 43

	
Operations and Compliance Officer

	
Provider Affiliation

 Transmission

	
15 days after the end of

 each quarter

	
Provider Affiliation

 Transmission Manual, submitted

 to PMMIS Provider-to-

 Contractor FTP

	
 

Operations and Compliance Officer

	
Claims Dashboard

	
15th day of each month

 following the reporting

 period

	
Section D, Paragraph 38; Claims

 Dashboard Reporting Guide

	
Operations and Compliance Officer

	
Subcontracts

	
As required by Contract

	
Section D, Paragraph 37;

  ACOM Templates Policy

	
Operations and Compliance Officer

	
Third Party Administrator

 subcontracts

	
30 days prior to the

 effective date of the

 subcontract

	
Section D, Paragraph 37;

 ACOM Templates Policy

	
Operations and Compliance Officer

	
Provider Advances

	
As required by Policy

	
ACOM Provider and Affiliate

 Advance Request Policy

	
Operations and Compliance Officer

	
Claim recoupments

 >$50,000

	
Upon identification by

 Contractor

	
Section D, Paragraph 38;

 ACOM Recoupment Request

 Policy

	
Operations and Compliance Officer

	
Administrative Measures

	
15th day of each month

 following the reporting

 period

	
Section D, Paragraph 25

	
Operations and Compliance Officer

	
Grievance System Report

	
See Grievance System

 Reporting Guide for

 frequency

	
Section D, Paragraph 26;

 Grievance System Reporting

 Guide

	
Operations and Compliance Officer

	
Provider Network

 Development and

 Management Plan

	
45 days after the first day

 of a new contract year

	
Section D, Paragraph 27;

 ACOM Provider Network

 Development and Management

 Plan Policy

	
Operations and Compliance Officer

	
Cultural Competency Plan

	
45 days after the first day

 of a new contract year

	
ACOM Cultural Competency

 Policy

	
Operations and Compliance Officer

	
Business Continuity and

 Recovery Plan

	
15 days after the beginning

 of each contract year

	
ACOM Business Continuity and

 Recovery Plan Policy

	
Operations and Compliance Officer

	
Marketing Attestation

 Statement

	
45 days after the beginning

 of each contract year

	
ACOM Marketing Outreach and

 Incentives Policy

	
Operations and Compliance Officer

	
Marketing and Outreach

 Materials

	
30 days prior to

 dissemination

	
ACOM Marketing Outreach and

 Incentives Policy

	
Marketing Committee Chairperson

	
Member Handbook

	
By August 15th of contract

 year, or within 4 weeks of

 receiving annual

 amendment, whichever is

 later.

	
Section D, Paragraph 18;

 ACOM Member Information

 Policy

	
Operations and Compliance Officer

	
Provider Network –

 Material Change

	
Submit change for

 approval prior to effective

 date

	
Section D, Paragraph 29;

 ACOM Provider Network

 Information Policy

	
Operations and Compliance Officer

	
Provider Network –

 Unexpected change

	
Within one business day

	
Section D, Paragraph 29

	
Operations and Compliance Officer

	
System Change Plan

	
Six months prior to

 implementation

	
Section D, Paragraph 38

	
Operations and Compliance Officer

	
Key Position Change

	
Within 7 days after an

 employee leaves and as

 soon as new hire has taken

 place

	
Section D, Paragraph 16 

	
Operations and Compliance Officer

	
Listing of Local Presence

	
Within 45 days of the

 beginning of the Contract

 Year

	
Section D, Paragraph 16

	
Operations and Compliance Officer

	
REPORT

	
WHEN DUE

	
SOURCE/REFERENCE

	
SEND TO:

	
DHCM Clinical Quality

 Management

	
 

	
 

	
 

	
EPSDT Quarterly

 Monitoring Report

	
Annually on December

 15th

	
Section D, Paragraph 10, Scope

 of Services, AMPM, Chapter 400

	
DHCM/CQM

	
EPSDT Improvement and

 Adult Quarterly Monitoring

 Report (Template must be

 used)

	
15 days after the end of

 each quarter

	
Section D, Paragraph 10, Scope

 of Services,

 AMPM, Chapter 400

	
DHCM/CQM

	
Quality

 Assessment/Performance

 Improvement Plan and

 Evaluation (Checklist to be

 submitted with Document)

	
Annually on December

 15th

	
AMPM, Chapter 900

	
DHCM/CQM

	
Credentialing Quarterly

 Report

	
30 days after the end of

 each quarter

	
Section D, Paragraph 25

	
DHCM/CQM

	
Monthly

 Pregnancy Termination

 Report

	
End of the month

 following the pregnancy

 termination

	
AMPM, Chapter 400

	
DHCM/CQM

	
Maternity Care Plan

	
Annually on December

 15th

	
AMPM, Chapter 400

	
DHCM/CQM

	
Sterilization Report

	
Immediately following

 procedure

	
AMPM, Chapter 400

	
DHCM/CQM

	
Stillbirth Report

	
Immediately following

 procedure

	
AMPM, Chapter 400

	
DHCM/CQM

	
Semi-annual report of

 number of pregnant women

 who are HIV/AIDS positive

	
30 days after the end of the

 2nd and 4th quarter of each

 contract year

	
AMPM, Chapter 400

	
DHCM/CQM

	
Performance Improvement

 Project Baseline Report

 (Standardized format to be

 utilized)

 

	
Annually on December

 15th

	
AMPM, Chapter 900

	
DHCM/CQM

 

	
Performance Improvement

 Project Re-measurement

 Report (Standardized format

 to be utilized)

	
Annually on December

 15th

	
AMPM, Chapter 900

	
DHCM/CQM

	
Performance Improvement

 Project Final Report

 (Standardized format to be

 utilized)

	
Within 180 days of the end

 of the project, as defined in

 the project proposal

 approved by AHCCCS

 DHCM

	
AMPM, Chapter 900

	
DHCM/CQM

	
QM Quarterly Report

	
30 Days after the end of

 each quarter

	
 Section D, Paragraph 23

	
DHCM/CQM

	
Pediatric Immunization

 Audit

	
As requested

	
Section D, Paragraph 23

	
DHCM/CQM

	
REPORT

	
WHEN DUE

	
SOURCE/REFERENCE

	
SEND TO:

	
DHCM Medical

 Management

	
 

	
 

	
 

	
Quarterly Inpatient Hospital

 Showing

	
15 days after the end of

 each quarter

	
State Medicaid Manual and the

 AMPM, Chapter 1000

	
DHCM/MM

	
Utilization

 Management Plan and

 Evaluation

	
Annually on December

 15th

	
AMPM, Chapter 900

	
DHCM/MM

	
UM Quarterly Report

	
60 Days after the end of

 each quarter

	
 Section D, Paragraph 24

	
DHCM/MM

	
HIV Specialty Provider List

	
Annually, on December

 15th

	
AMPM, Chapter 300

	
DHCM/MM

	
Transplant Report

	
15 days after the end of

 each month

	
AMPM, Chapter 1000

	
DHCM/MM

	
Non-Transplant

 Catastrophic

 Reinsurance covered

 Diseases

	
Annually, within 30 days

 of the beginning of the

 contract year, enrollment

 to the plan, and when

 newly diagnosed.

	
Section D, Paragraph 57

	
DHCM/MM

ATTACHMENT G: AUTO-ASSIGNMENT ALGORITHM

Members who have the right to choose, but do not exercise this right, will be assigned to a Contractor through an

auto-assignment algorithm. The algorithm is a mathematical formula used to distribute members to the various

Contractors in a manner that is consistent with AHCCCS goals.

With the exception of an enhanced auto-assignment algorithm that may be in effect at the start of a new contract

cycle (October 1, 2008) for a three to six month period, the auto-assignment algorithm calculation details are as

follows:

The algorithm employs a data table and a formula to assign cases (a case may be a member or a household of

members) to Contractors using the target percentages developed. The algorithm data table consists of all the

geographic service areas (GSA) in the state, all Contractors serving each GSA, and the target percentages by risk

group within each GSA.

The Contractor farthest away from its target percentage within a GSA and risk group, the largest negative

difference, is assigned the next case for that GSA. The equation used is:

                (t/T) – P = d

t = The total members assigned to the GSA, per risk group category, for the Contractor

T = The total members assigned to the GSA, per risk group category, all Contractors combined

P = The target percentage of members per risk group for the Contractor

d = The difference

The algorithm is calculated after each assignment to give a new difference for each Contractor. When more than

one Contractor has the same difference, and their differences are greater than all other Contractors, the Contractor

with the lowest Health Plan I.D. Number will be assigned the case.

Assignment by the algorithm applies to:

                1.             Members who are newly eligible to the AHCCCS program that
did not choose a Contractor within

                                 the prescribed time limits.

                2.             Members whose assigned health plan is no longer available
after the member moves to a new

                                 GSA and did not choose a new Contractor within the prescribed time
limits.

All Contractors, within a given geographic service area (GSA) and for each risk group, will have a placement in

the algorithm and will receive members accordingly. A Contractor with a more favorable target percentage in the

algorithm will receive proportionally more members. Conversely, a Contractor with a lower target percentage in

the algorithm will receive proportionally fewer members. The initial algorithm formula favors Contractors with

both lower awarded capitation rates and higher scores on the Program Component of the proposal.

In future contract years, AHCCCS may adjust the auto-assignment algorithm in consideration of Contractors’

clinical performance measure results when calculating target percentages. Ranking in the algorithm may be

weighted based on the number of Performance Measures for which a Contractor is meeting the current AHCCCS

Minimum Performance Standard (MPS) as a percentage of the total number of measures utilized in the

calculation. AHCCCS will determine the Performance Measures used to evaluate Contractor performance and

apply the criterion universally when making the adjustment.

Development of the Target Percentages

Beginning in CYE ’09, the algorithm target percentages will be developed using the methodology described

below, subject to the enhanced algorithm described below, if applicable. However, for subsequent years,

AHCCCS reserves the right to change the algorithm methodology to assure assignments are made in the best

interest of the AHCCCS program and the State.

A Contractor’s placement in the algorithm is based upon the following two factors, which are weighted as

follows:

	
#

	
Factor

	
Weighting

	
1

	
                The Contractor’s final awarded capitation rate from AHCCCS.

	
50%

	
2

	
                The Contractor’s score on the Program component of the proposal.

	
50%

Points will be assigned to each Contractor by risk group by GSA. Based on the rankings of the final awarded

capitation rates and the final Program component scores, each Contractor will be assigned a number of points for

each of these two components separately using the table below:

TABLE OF POINTS FOR FACTORS #1 (LOWEST CAPITATION RATE) AND #2 (HIGHEST

PROGRAM SCORE)

	
Number of Awards in GSA

	

 1st Place

	
2nd

 Place

	
3rd

 Place

	
4th

 Place

	
5th

 Place

	
6th

 Place

	
2

	
60

	
40

	
 

	
 

	
 

	
 

	
3

	
44

	
32

	
24

	
 

	
 

	
 

	
4

	
35

	
28

	
22

	
15

	
 

	
 

	
5

	
30

	
25

	
20

	
15

	
10

	
 

	
6

	
26

	
23

	
19

	
15

	
11

	
6

Two or more Contractors that have equal final awarded capitation rates or Program component scores in a GSA

for the same risk group will be given an equal percentage of the points for all of the positions held by the tied

Contractors combined.

The points awarded for the two components will be combined as follows to give the target percentage for each

Contractor by GSA by risk group:

Final Awarded Capitation Rate (.50) + Program Component Score (.50)= TARGET PERCENTAGE

Enrollment Considerations

AHCCCS will favor new and small Contractors in each GSA with increased auto-assignment. A new Contractor

is defined as a Contractor new to the AHCCCS program or an incumbent Contractor that is new to a GSA. Small

Contractors will be determined based on enrollment as of May 1, 2008. A small Contractor is defined by GSA

and has a membership level as delineated in the following table:

	
County/GSA

	
GSA-specific Enrollment Threshold

	
Maricopa – GSA 12   

	
<50,000

	
Pima County Only

	
<30,000

	
Rural GSAs (including Santa Cruz County)                    

	
less than or equal to 45% of enrollment in the entire

 GSA as of May 1, 2008

Conversion Group Auto-Assignment

Members who are enrolled as of June 30, 2008 in an Exiting Contractor (Conversion Group) will be assigned to

new and small Contractors within their GSA, effective October 1, 2008 via the coversion auto-assignment

algorithm. These members will be allowed to remain with the Contractor to which they were auto-assigned or to

choose a different Contractor by August 31, 2008 from any of the incumbent or new Contractors in the GSA that

are effective October 1, 2008. These members will again have an opportunity to change Contractors from

October 1, 2008 until November 30, 2008 in order to provide them with the choice of any incumbent or new

Contractors.

If the number of members in the Conversion Group in a GSA is enough to bring all new and small Contractors

within the GSA above the thresholds listed in the table above, the conversion auto-assignment algorithm will be

applied until all of the new and small Contractors reach the thresholds. The remaining members of the

Conversion Group will be auto-assigned to all Contractors in the GSA according to the initial algorithm

methodology based on awarded capitation rates and Program Component scores.

If the number of Conversion Group members in a GSA is not enough to bring all new and small Contractors

within the GSA above the thresholds listed in the table above, an enhanced auto-assignment will be utilized to

bring all new and small Contractors as close to equal as possible, without reducing any Contractor size.

In a rural GSA, if both Contractors are new to AHCCCS, the Conversion Group members will be auto-assigned

approximately equally between the two Contractors.

For details on member choice of Contractors for the months of July, August and September 2008, see Section

I. For members being auto-assigned in July 2008, the algorithm will be based on the CYE 08 Contract. For

members auto-assigned during August and September 2008, the algorithm will be based on the CYE 08

Contract with exiting Contractors in each GSA excluded, except in family continuity, newborn enrollment, and

90-day re-enrollment situations. For GSAs in which all Contractors are exiting, the CYE 08 algorithm will

remain in effect through September 30, 2008.

Post-Conversion Auto-Assignment

For purposes of determining the enhanced algorithm, new Contractors and Continuing Contractors still below

the thresholds on September 1, 2008 will receive members under the enhanced auto-assign algorithm

beginning October 1, 2008. The enhanced algorithm will continue to favor those Contractors below the

threshold, for at least three months but no longer than six months, regardless of their membership level during

or at the end of the time period. In this situation, the plans not qualifying for the enhanced autoassignment

algorithm will not receive any members via auto-assignment for the time period. After the

three to six month time period, the algorithm will revert to the initial methodology based on final awarded

capitation and Program Component score and all Contractors will again be included in the algorithm.

All efforts will be made to auto-assign members based on the methodology and thresholds above, however

amounts may not be exact due to issues such as family continuity, newborns, 90-day re-enrollment etc.

ATTACHMENT H(1): ENROLLEE GRIEVANCE SYSTEM STANDARDS AND POLICY

The Contractor shall have a written policy delineating its Grievance System which shall be in accordance with

applicable Federal and State laws, regulations and policies, including, but not limited to 42 CFR Part 438

Subpart F. The Contractor shall provide the ACOM Enrollee Grievance Policy to all providers and

subcontractors at the time of contract. The Contractor shall also furnish this information to enrollees within a

reasonable time after the Contractor receives notice of the enrollment. Additionally, the Contractor shall

provide written notification of any significant change in this policy at least 30 days before the intended

effective date of the change.

The written information provided to enrollees describing the Grievance System including the grievance process,

the appeals process, enrollee rights, the grievance system requirements and timeframes, shall be in each prevalent

non-English language occurring within the Contractor’s service area and in an easily understood language and

format. The Contractor shall inform enrollees that oral interpretation services are available in any language, that

additional information is available in prevalent non-English languages upon request and how enrollees may

obtain this information.

Written documents, including but not limited to the Notice of Action, the Notice of Appeal Resolution, Notice of

Extension for Resolution, and Notice of Extension of Notice of Action shall be translated in the enrollee’s

language if information is received by the Contractor, orally or in writing, indicating that the enrollee has a

limited English proficiency. Otherwise, these documents shall be translated in the prevalent non-English

language(s) or shall contain information in the prevalent non-English language(s) advising the enrollee that the

information is available in the prevalent non-English language(s) and in alternative formats along with an

explanation of how enrollees may obtain this information. This information must be in large, bold print

appearing in a prominent location on the first page of the document.

At a minimum, the Contractor’s Grievance System Standards and Policy shall specify:

1. That the Contractor shall maintain records of all grievances and appeals and requests for hearing.

2. Information explaining the grievance, appeal, and fair hearing procedures and timeframes. This

   information shall include a description of the circumstances when there is a right to a hearing, the method

   for obtaining a hearing, the requirements which govern representation at the hearing, the right to file

   grievance and appeals and the requirements and timeframes for filing a grievance, appeal, or request for

   hearing.

3. The availability of assistance in the filing process and the Contractor’s toll-free numbers that an enrollee

   can use to file a grievance or appeal by phone if requested by the enrollee.

4. That the Contractor shall acknowledge receipt of each grievance and appeal. For Appeals, the Contractor

   shall acknowledge receipt of standard appeals in writing within five business days of receipt and within

   one business day of receipt of expedited appeals.

5. That the Contractor shall permit both oral and written appeals and grievances and that oral inquiries

   appealing an action are treated as appeals.

6. That the Contractor shall ensure that individuals who make decisions regarding grievances and appeals are

   individuals not involved in any previous level of review or decision making and that individuals who make

   decisions regarding: 1) appeals of denials based on lack of medical necessity, 2) a grievance regarding

   denial of expedited resolution of an appeal or 3) grievances or appeals involving clinical issues are health

   care professionals as defined in 42 CFR 438.2 with the appropriate clinical expertise in treating the

   enrollee’s condition or disease.

7. The resolution timeframes for standard appeals and expedited appeals may be extended up to 14 days if

   the enrollee requests the extension or if the Contractor establishes a need for additional information and

   that the delay is in the enrollee’s interest.

8. That if the Contractor extends the timeframe for resolution of an appeal when not requested by the

   enrollee, the Contractor shall provide the enrollee with written notice of the reason for the delay.

9. The definition of grievance as a member’s expression of dissatisfaction with any aspect of their care, other

   than the appeal of actions.

10. That an enrollee must file a grievance with the Contractor and that the enrollee is not permitted to file a

   grievance directly with the AHCCCS Administration.

11. That the Contractor must dispose of each grievance in accordance with the ACOM Enrollee Grievance

   Policy, but in no case shall the timeframe exceed 90 days.

12. The definition of action as the [42 CFR 438.400(b)]:

                a. Denial or limited authorization of a requested service, including the type or level of service;

                b. Reduction, suspension, or termination of a previously authorized service;

                c. Denial, in whole or in part, of payment for a service;

                d. Failure to provide services in a timely manner;

                e. Failure to act within the timeframes required for standard and expedited resolution of appeals

                   and standard disposition of grievances; or

                f. Denial of a rural enrollee’s request to obtain services outside the Contractor’s network under

                   42 CFR 438.52(b)(2)(ii), when the contractor is the only Contractor in the rural area.

13. The definition of a service authorization request as an enrollee’s request for the provision of a service [42

   CFR 431.201].

14. The definition of appeal as the request for review of an action, as defined above.

15. Information explaining that a provider acting on behalf of an enrollee and with the enrollee’s written

   consent, may file an appeal.

16. That an enrollee may file an appeal of: 1) the denial or limited authorization of a requested service

   including the type or level of service, 2) the reduction, suspension or termination of a previously

   authorized service, 3) the denial in whole or in part of payment for service, 4) the failure to provide

   services in a timely manner, 5) the failure of the Contractor to comply with the timeframes for dispositions

   of grievances and appeals and 6) the denial of a rural enrollee’s request to obtain services outside the

   Contractor’s network under 42 CFR 438.52(b)(2)(ii) when the Contractor is the only Contractor in the rural

   area.

17. The definition of a standard authorization request. For standard authorization decisions, the Contractor

   must provide a Notice of Action to the enrollee as expeditiously as the enrollee’s health condition requires,

   but not later than 14 days following the receipt of the authorization request with a possible extension of up

   to 14 days if the enrollee or provider requests an extension or if the Contractor establishes a need for

   additional information and delay is in the enrollee’s best interest [42 CFR 438.210(d)(1)]. The Notice of

   Action must comply with the advance notice requirements when there is a termination or reduction of a

   previously authorized service OR when there is a denial of an authorization request and the physician

   asserts that the requested service/treatment is a necessary continuation of a previously authorized service.

18. The definition of an expedited authorization request. For expedited authorization decisions, the Contractor

   must provide a Notice of Action to the enrollee as expeditiously as the enrollee’s health condition requires,

   but not later than 3 business days following the receipt of the authorization request with a possible

   extension of up to 14 days if the enrollee or provider requests an extension or if the Contractor establishes

   a need for additional information and delay is in the enrollee’s interest [42 CFR 438.210(d)(2)].

19. That the Notice of Action for a service authorization decision not made within the standard or expedited

   timeframes, whichever is applicable, will be made on the date that the timeframes expire. If the Contractor

   extends the timeframe to make a standard or expedited authorization decision, the contractor must give the

   enrollee written notice of the reason to extend the timeframe and inform the enrollee of the right to file a

   grievance if the enrollee disagrees with the decision. The Contractor must issue and carry out its decision

   as expeditiously as the enrollee’s health condition requires and no later than the date the extension expires.

20. That the Contractor shall notify the requesting provider of the decision to deny or reduce a service

   authorization request. The notice to the provider must be written.

21. The definition of a standard appeal and that the Contractor shall resolve standard appeals no later than 30

   days from the date of receipt of the appeal unless an extension is in effect. If a Notice of Appeal

   Resolution is not completed when the timeframe expires, the member’s appeal shall be considered to be

   denied by the Contractor, and the member can file a request for hearing.

22. The definition of an expedited appeal and that the Contractor shall resolve all expedited appeals not later

   than three business days from the date the Contractor receives the appeal (unless an extension is in effect)

   where the Contractor determines (for a request from the enrollee), or the provider (in making the request

   on the enrollee’s behalf indicates) that the standard resolution timeframe could seriously jeopardize the

   enrollee’s life or health or ability to attain, maintain or regain maximum function. The Contractor shall

   make reasonable efforts to provide oral notice to an enrollee regarding an expedited resolution appeal. If a

   Notice of Appeal Resolution is not completed when the timeframe expires, the member’s appeal shall be

   considered to be denied by the Contractor, and the member can file a request for hearing.

23. That if the Contractor denies a request for expedited resolution, it must transfer the appeal to the 30-day

   timeframe for a standard appeal. The Contractor must make reasonable efforts to give the enrollee prompt

   oral notice and follow-up within two days with a written notice of the denial of expedited resolution.

24. That an enrollee shall be given 60 days from the date of the Contractor’s Notice of Action to file an appeal.

25. That the Contractor shall mail a Notice of Action: 1) at least 10 days before the date of a termination,

   suspension or reduction of previously authorized AHCCCS services, except as provided in (a)-(e) below;

   2) at least 5 days before the date of action in the case of suspected fraud; 3) at the time of any action

   affecting the claim when there has been a denial of payment for a service, in whole or in part; 4) within 14

   days from receipt of a standard service authorization request and within three business days from receipt

   of an expedited service authorization request, unless an extension is in effect. For service authorization

   decisions, the Contractor shall also ensure that the Notice of Action provides the enrollee with advance

   notice and the right to request continued benefits for all terminations and reductions of a previously

   authorized service and for denials when the physician asserts that the requested service/treatment which

   has been denied is a necessary continuation of a previously authorized service. As described below, the

   Contractor may elect to mail a Notice of Action no later than the date of action when:

                a. The Contractor receives notification of the death of an enrollee;

                b. The enrollee signs a written statement requesting service termination or gives information

                requiring termination or reduction of services (which indicates understanding that the

                termination or reduction will be the result of supplying that information);

                c. The enrollee is admitted to an institution where he is ineligible for further services;

                d. The enrollee’s address is unknown and mail directed to the enrollee has no forwarding

                address;

                e. The enrollee has been accepted for Medicaid in another local jurisdiction;

26. That the Contractor include, as parties to the appeal, the enrollee, the enrollee’s legal representative, or the

   legal representative of a deceased enrollee’s estate.

27. That the Notice of Action must explain: 1) the action the Contractor has taken or intends to take, 2) the

   reasons for the action, 3) the enrollee’s right to file an appeal with the Contractor, 4) the procedures for

   exercising these rights, 5) circumstances when expedited resolution is available and how to request it and

   6) the enrollee’s right to receive continued benefits pending resolution of the appeal, how to request

   continued benefits and the circumstances under which the enrollee may be required to pay for the cost of

   these services. The Notice of Action shall comply with ACOM Policy 414.

28. That benefits shall continue until a hearing decision is rendered if: 1) the enrollee files an appeal before

   the later of a) 10 days from the mailing of the Notice of Action or b) the intended date of the Contractor’s

   action, 2) a) the appeal involves the termination, suspension, or reduction of a previously authorized

   course of treatment or b) the appeal involves a denial and the physician asserts that the requested

   service/treatment is a necessary continuation of a previously authorized service, 3) the services were

   ordered by an authorized provider and 4) the enrollee requests a continuation of benefits.

   For purposes of this paragraph, benefits shall be continued based on the authorization which was in place

   prior to the denial, termination, reduction, or suspension which has been appealed.

29. That for appeals, the Contractor provides the enrollee a reasonable opportunity to present evidence and

   allegations of fact or law in person and in writing and that the Contractor informs the enrollee of the

   limited time available in cases involving expedited resolution.

   

30. That for appeals, the Contractor provides the enrollee and his representative the opportunity before and

   during the appeals process to examine the enrollee’s case file including medical records and other

   documents considered during the appeals process.

31. That the Contractor must ensure that punitive action is not taken against a provider who either requests an

   expedited resolution or supports an enrollee’s appeal.

32. That the Contractor shall provide written Notice of Appeal Resolution to the enrollee and the enrollee’s

   representative or the representative of the deceased enrollee’s estate which must contain: 1) the results of

   the resolution process, including the legal citations or authorities supporting the determination, and the

   date it was completed, and 2) for appeals not resolved wholly in favor of enrollees: a) the enrollee’s right

   to request a State fair hearing (including the requirement that the enrollee must file the request for a

   hearing in writing) no later than 30 days after the date the enrollee receives the Contractor’s notice of

   appeal resolution and how to do so, b) the right to receive continued benefits pending the hearing and how

   to request continuation of benefits and c) information explaining that the enrollee may be held liable for

   the cost of benefits if the hearing decision upholds the Contractor.

33. That the Contractor continues extended benefits originally provided to the enrollee until any of the

   following occurs: 1) the enrollee withdraws appeal, 2) the enrollee has not specifically requested

   continued benefits pending a hearing decision within 10 days of the Contractor mailing of the appeal

   resolution notice, or 3) the AHCCCS Administration issues a state fair hearing decision adverse to the

   enrollee.

34. That if the enrollee files a request for hearing the Contractor must ensure that the case file and all

   supporting documentation is received by the AHCCCS Office of Administrative Legal Services (OALS)

   as specified by OALS. The file provided by the Contractor must contain a cover letter that includes:

                a. Enrollee’s name

                b. Enrollee’s AHCCCS I.D. number

                c. Enrollee’s address

                d. Enrollee’s phone number (if applicable)

                e. date of receipt of the appeal

                f. summary of the Contractor’s actions undertaken to resolve the appeal and summary of the

                   appeal resolution

35. The following material shall be included in the file sent by the Contractor:

                a. the Enrollee’s written request for hearing

                b. copies of the entire appeal file which includes all supporting documentation including

                    pertinent findings and medical records;

                c. the Contractor’s Notice of Appeal Resolution

                d. other information relevant to the resolution of the appeal

36. That if the Contractor or the State fair hearing decision reverses a decision to deny, limit or delay services

   not furnished during the appeal or the pendency of the hearing process, the Contractor shall authorize or

   provide the services promptly and as expeditiously as the enrollee's health condition requires irrespective

   of whether the Contractor contests the decision..

37. That if the Contractor or State fair hearing decision reverses a decision to deny authorization of services

   and the disputed services were received pending appeal, the Contractor shall pay for those services, as

   specified in policy and/or regulation.

38. That if the Contractor or State fair hearing decision upholds a decision to deny authorization of services

   and the disputed services were received pending appeal, the Contractor may recover the cost of those

   services from the enrollee.

ATTACHMENT H(2): PROVIDER CLAIM DISPUTE STANDARDS AND POLICY

The Contractor shall have in place a written claim dispute policy for providers. The policy shall be in

accordance with applicable Federal and State laws, regulations and policies. The claim dispute policy shall

include the following provisions:

1. The Provider Claim Dispute Policy shall be provided to all subcontractors at the time of contract. For

   providers without a contract, the claim dispute policy may be mailed with a remittance advice,

   provided the remittance is sent within 45 days of receipt of a claim.

2. The Provider Claim Dispute Policy must specify that all claim disputes challenging claim payments,

   denials or recoupments must be filed in writing with the Contractor no later than 12 months from the

   date of service, 12 months after the date of eligibility posting or within 60 days after the payment,

   denial or recoupment of a timely claim submission, whichever is later.

3. Specific individuals are appointed with authority to require corrective action and with requisite

   experience to administer the claim dispute process.

4. A log is maintained for all claim disputes containing sufficient information to identify the

   Complainant, date of receipt, nature of the claim dispute and the date the claim dispute is resolved.

   Separate logs must be maintained for provider and behavioral health recipient claim disputes.

5. Within five business days of receipt, the Complainant is informed by letter that the claim dispute has

   been received.

6. Each claim dispute is thoroughly investigated using the applicable statutory, regulatory, contractual

   and policy provisions, ensuring that facts are obtained from all parties.

7. All documentation received by the Contractor during the claim dispute process is dated upon receipt.

8. All claim disputes are filed in a secure designated area and are retained for five years following the

   Contractor’s decision, the Administration’s decision, judicial appeal or close of the claim dispute,

   whichever is later, unless otherwise provided by law.

9. A copy of the Contractor’s Notice of Decision (hereafter referred to as Decision) shall be mailed to

   all parties no later than 30 days after the provider files a claim dispute with the Contractor, unless the

   provider and Contractor agree to a longer period. The Decision must include and describe in detail,

   the following:

                a. the nature of the claim dispute

                b. the issues involved

                c. the reasons supporting the Contractor’s Decision, including references to applicable statute,

                   rule, applicable contractual provisions, policy and procedure

                d. the Provider’s right to request a hearing by filing a written request for hearing to the

                   Contractor no later than 30 days after the date the Provider receives the Contractor’s decision.

                e. If the claim dispute is overturned, the requirement that the Contractor shall reprocess and pay

                the claim(s) in a manner consistent with the decision within 15 business days of the date of

                the Decision.

10. If the Provider files a written request for hearing, the Contractor must ensure that all supporting

   documentation is received by the AHCCCS Office Administrative Legal Services (OALS), no later

   than five business days from the date the Contractor receives the provider’s written hearing request.

   The file sent by the Contractor must contain a cover letter that includes:

                a. Provider’s name

                b. Provider’s AHCCCS ID number

                c. Provider’s address

                d. Provider’s phone number (if applicable)

                e. the date of receipt of claim dispute

                f. a summary of the Contractor’s actions undertaken to resolve the claim dispute and basis of the

                   determination

11. The following material shall be included in the file sent by the Contractor:

                a. written request for hearing filed by the Provider

                b. copies of the entire file which includes pertinent records; and the Contractor’s Decision

                c. other information relevant to the Notice of Decision of the claim dispute

12. If the Contractor’s decision regarding a claim dispute is reversed through the appeal process, the

   Contractor shall reprocess and pay the claim (s) in a manner consistent with the decision within 15

   business days of the date of the Decision.

ATTACHMENT I: RESERVED

ATTACHMENT J: OFFEROR’S CHECKLIST

Offerors must submit all items below, unless otherwise noted. In the column titled “Offeror’s Page #”, the

Offeror must enter the appropriate page number(s) from its proposal where the AHCCCS Evaluation Panel

may find the Offeror’s response to the specified requirement.

I. GENERAL MATTERS

	
Subject

	
Reference

	
Offeror’s Page #

	
Offeror’s signature page

	
(Front Page)

	
N/A

	
Solicitation Amendment #1 signature page

	
(Front Page of Amendment)

	
 

	
Solicitation Amendment #2 signature page

	
(Front Page of Amendment)

	
 

	
Offeror’s Checklist (this attachment)

	
N/A

	
 

	
Completion of all items in Section G of the RFP

	
Section G

	
 

II. PROVIDER NETWORK

	
Subject

	
Reqmt. #               

	
Offeror’s Page #

	
Provider Network Management

	
 

	
 

	
 

	
1

	
 

	
Provider Network Development

	
 

	
 

	
 

	
2

	
 

	
 

	
3

	
 

	
 

	
4

	
 

	
 

	
5

	
 

	
 

	
6

	
 

	
 

	
7

	
 

	
 

	
8

	
 

	
 

	
9

	
 

	
 

	
10

	
 

	
 

	
11

	
 

III. CAPITATION

	
Subject                 

	
Reqmt. #               

	
Offeror’s Page #

	
Capitation

	
12

	
 

IV. PROGRAM

	
Subject

	
Reqmt. #               

	
Offeror’s Page #

	
Quality Management

	
 

	
 

	
 

	
13

	
 

	
 

	
14

	
 

	
 

	
15

	
 

	
 

	
16

	
 

	
 

	
17

	
 

	
 

	
18

	
 

	
 

	
19

	
 

	
 

	
20

	
 

	
 

	
21

	
 

	
 

	
22

	
 

	
Medical Management

	
 

	
 

	
 

	
23

	
 

	
 

	
24

	
 

	
 

	
25

	
 

	
 

	
26

	
 

	
 

	
27

	
 

	
 

	
28

	
 

	
 

	
29

	
 

	
EPSDT/Maternal Health

	
 

	
 

	
 

	
30

	
 

	
 

	
31

	
 

	
 

	
32

	
 

	
 

	
33

	
 

	
 

	
34

	
 

	
 

	
35

	
 

	
 

	
36

	
 

	
 

	
37

	
 

	
 

	
38

	
 

	
Behavioral Health

	
 

	
 

	
 

	
39

	
 

	
 

	
40

	
 

	
 

	
41

	
 

	
 

	
42

	
 

	
Medical Homes

	
 

	
 

	
 

	
43

	
 

V. ORGANIZATION

	
Subject

	
Reqmt. #               

	
Offeror’s Page #

	
Organization and Staffing

	
 

	
 

	
 

	
44

	
 

	
 

	
45

	
 

	
 

	
46

	
 

	
 

	
47

	
 

	
 

	
48

	
 

	
 

	
49

	
 

	
 

	
50

	
 

	
Information Systems

	
 

	
 

	
 

	
51

	
 

	
 

	
52

	
 

	
 

	
53

	
 

	
 

	
54

	
 

	
 

	
55

	
 

	
Claims

	
 

	
 

	
 

	
56

	
 

	
 

	
57

	
 

	
 

	
58

	
 

	
Corporate Compliance

	
 

	
 

	
 

	
59

	
 

	
 

	
60

	
 

	
Encounters

	
 

	
 

	
 

	
61

	
 

	
Member Services

	
 

	
 

	
 

	
62

	
 

	
 

	
63

	
 

	
 

	
64

	
 

	
 

	
65

	
 

	
Grievance and Appeals

	
 

	
 

	
 

	
66

	
 

	
 

	
67

	
 

	
Finance

	
 

	
 

	
 

	
68

	
 

	
 

	
69

	
 

	
 

	
70

	
 

	
 

	
71

	
 

	
 

	
72

	
 

	
 

	
73

	
 

	
 

	
74

	
 

	
 

	
75

	
 

VI. OTHER

	
Subject                 

	
Reqmt. #               

	
Offeror’s Page #

	
KidsShare

	
 

	
 

	
 

	
76

	
 

ATTACHMENT K: COST SHARING COPAYMENTS

I.              EXEMPT POPULATIONS (REGARDLESS OF RATE CODE)

                The following populations are exempt from copayments for ALL services ($0 copay):

                • All members under the age of 19, including all KidsCare members

                • All Pregnant Women

                • All ALTCS enrolled members

                • All persons with Serious Mental Illness receiving RBHA services

                • All members who are receiving CRS services

                • SOBRA Family Planning Services Only members

                Additionally, no member may be asked to make a copayment for family planning services or

                supplies.

II.            STANDARD COPAYMENTS APPLY TO THE TITLE XIX WAIVER GROUP

                Services to this population may not be denied for failure to pay copayment.

                The standard copayments apply to the Title XIX Waiver Group, including RBHA General Mental

                Health and Substance Abuse service members. The standard copayments are as follows:

	
Service

	
Copayment

	
Generic Prescriptions or Brand Name if generic not available

	
$  0

	
Brand Name Prescriptions when generic is available

	
$ 0

	
Non Emergency Use of ER

	
$ 1

	
Physician Office Visits

	
$ 1

III.           STANDARD COPAYMENTS APPLY TO THE FOLLOWING POPULATIONS

                Services to this population may not be denied for failure to pay copayment.

            • AHCCCS for Families with Children

                • Supplemental Security Income with and without Medicare

	
Service

	
Copayment

	
Generic Prescriptions or Brand Name if generic not available

	
$  0

	
Brand Name Prescriptions when generic is available

	
$  0

	
Non Emergency Use of ER

	
$  1

	
Physician Office Visits

	
$  0

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