Document:

EX-10.46

EXHIBIT 10.46

EMPLOYMENT AGREEMENT

THIS AGREEMENT (the “Agreement”) is made and entered into effective the 1st day of
January, 2012 (the “Effective Date”), by and between NORTHRIM BANCORP, INC. and its wholly owned
subsidiary, NORTHRIM BANK, a state-chartered commercial bank, with its principal office in
Anchorage, Alaska (collectively, the “Employer”), and R. Marc Langland (the “Executive”).

In consideration of the mutual promises made in this Agreement, the parties agree as follows:

1. Employment.

Employer employs Executive and Executive accepts employment with Northrim Bancorp Inc. as its
Chairman, President and Chief Executive Officer and with Northrim Bank as its Chairman.

2. Term.

The term of this Agreement (the “Term”) shall commence on the Effective Date and, unless
terminated earlier pursuant to Section 5, shall continue through December 31, 2012; provided,
however, that on January 1, 2013 and each succeeding January 1, the Term shall automatically be
extended for one additional year unless, not later than ninety (90) days prior to any such
January 1, either party shall have given written notice to the other that it does not wish to
extend the Term.

3. Duties.

The Executive will serve as Chairman, President and Chief Executive Officer of Northrim
Bancorp Inc. and Chairman of Northrim Bank. Executive shall render such executive, management and
administrative services and perform such tasks in connection with the affairs and overall operation
of the Employer as is customary for his position, subject to the direction of Employer’s Board of
Directors. Executive shall devote necessary time, attention and effort to Employer’s business in
order to properly discharge his responsibilities under this Agreement. As the Employer’s succession
plan is implemented, it is anticipated that certain duties and responsibilities may be reduced
during the time of this contract. If such changes occur, it is understood that Executive’s Base
Salary will be adjusted accordingly. Executive agrees to prepare a transition plan containing his
work schedule and commitments and to ensure that the duties of Chairman, President and CEO are
carried out during the term of this Agreement.

4. Compensation, Benefits, Reimbursement.

a. Base Salary. In consideration for all services rendered by Executive during the
term of this Agreement, Employer shall pay Executive an annual base salary (before all customary
and proper payroll deductions) of $324,012 as adjusted from time to time (“Base Salary”) and as
adjusted to the extent that Executive works less than full-time. The Board of Directors of the
Employer shall review Executive’s salary each year, in a manner consistent with that used for all
management employees of the Employer, and in its sole discretion may adjust such salary
commensurate with the Executive’s performance under this Agreement.

b. Supplemental Executive Retirement Plan (“SERP”), Supplemental Executive Retirement
Deferred Compensation Plan and Deferred Compensation Plan. Executive shall participate in the
SERP Plan however no additional principal contribution shall be made to his accounts except for
earnings contributions in conformance with the Plan.

The Executive will participate in the Employer’s Supplemental Executive Retirement Deferred
Compensation Plan. The Employer will make its customary principal contribution in 2012, but will
not make additional contributions in future years. Executive will remain a participant in the Plan
in conformance with the Plan document until he notifies Employer to the contrary.

c. Other Benefits. Throughout the term of this Agreement, Employer shall provide
Executive with reasonable health insurance, disability and other employee benefits. Executive
shall participate in all employee benefit plans and programs of Employer on a basis at least as
favorable as that accorded to any other officer of Employer, except Executive will not participate
in the Northrim Bancorp Inc. Profit Sharing Plan.

d. Expenses. Employer shall reimburse Executive for his reasonable expenses
(including, without limitation, travel, entertainment, and similar expenses) incurred in performing
and promoting the business of Employer. Executive shall present from time to time itemized
accounts and receipts of any such expenses as required by Employer, subject to any limits of
company policy and the rules and regulations of the Internal Revenue Service, including the
Internal Revenue Code, (referred to throughout this Agreement as “IRC” or the “Code”).

e. Automobile Allowance. Executive shall receive a SEVEN HUNDRED DOLLAR ($700.00)
monthly automobile allowance for his automobile, fuel and maintenance expenses for Bank business.
No other expense reimbursement will be provided for use of his vehicle.

5. Termination of Agreement.

a. Termination Due to a Change of Control. If (A) Employer (either Northrim BanCorp,
Inc. or Northrim Bank) is subjected to a Change of Control (as defined in Section 5.f.(i)), and
(B) either Employer or its assigns terminates Executive’s employment without Cause (either during
the annual term of this Agreement or by refusing to extend this Agreement when the annual
termination occurs every December 31) or Executive terminates his employment for Good Reason within
730 days of such Change of Control, then Employer shall pay Executive all Base Salary earned and
all reimbursable expenses incurred under this Agreement through such termination date; The amounts
described shall be paid no later than forty five (45) days after the day on which employment is
terminated.

b. Termination by Employer Without Cause or by Executive for Good Reason. If Employer
terminates Executive’s employment without Cause, or if Executive terminates his employment for Good
Reason, Employer shall pay Executive in a lump sum: all Base Salary earned and all reimbursable
expenses incurred under this Agreement through such termination date.

(I) Benefits Continuation. In addition, Executive shall be entitled to health and dental
insurance benefits for a period of eighteen (18) months following the termination of this
Agreement. These benefits will be provided at Employer’s expense, but such period shall count
towards the Employer’s continuation of coverage obligation under Section 4980B of the Internal
Revenue Code (commonly referred to as “COBRA”).

(II) Age and Service Credit. Executive shall also be entitled to receive age credit and
credit for period of service towards all plans, in which he participates, for the remaining period
of time covered by this Agreement. If Executive is hired by Employer, its assigns, any company in
control of Employer, or any company controlled by Employer during the period covered by this
Agreement, then Executive will be entitled to be treated for all purposes relating to future
compensation, and benefits, as if this Agreement had never been terminated and as if Executive had
performed his responsibilities as an Executive throughout the period originally covered by this
Agreement.

c. Termination by Employer for Cause or by Executive Without Good Reason. If Employer
terminates Executive’s employment for Cause or if Executive terminates his employment without Good
Reason, Employer shall pay Executive upon the effective date of such termination only such Base
Salary earned and expenses reimbursable under this Agreement incurred through such termination
date. In such case, Executive shall have no right to receive compensation or other benefits for
any period after termination under this Agreement.

d. Termination Due to Disability. If Employer terminates Executive’s employment on
account of any mental or physical Disability that prevents Executive from performing his essential
job functions , even with reasonable accommodation, Executive shall be entitled to: (i) all Base
Salary earned and reimbursement for expenses incurred under this Agreement through the termination
date, (ii) full Base Salary for the year following the termination date (less the amount of any
payments received by Executive during such one (1) year period under any Employer-sponsored
disability plan), and (iii) health and dental insurance benefits for a period of one (1) year
following the termination date, which benefits will be provided at Employer’s expense, but such
period shall count towards the Employer’s continuation of coverage obligation under Section 4980B
of Code (commonly referred to as “COBRA”). All such compensation shall be paid Executive in one
lump sum the first day of the month following a period of six (6) months after Executive’s
employment was terminated, provided that Executive has signed a Release Agreement which has become
irrevocable prior to the payment date.

If any disputed termination under Section 5.c. is subsequently determined to have been without
Cause, Executive’s recovery shall be limited to those payments and benefits set out under Section
5.b.

e. Termination Upon Death of Executive. Executive’s employment under this Agreement
shall be terminated upon the death of Executive. In such case, the Employer shall be obligated to
pay to the surviving spouse of Executive, or if there is none, to the Executive’s estate: (i) that
portion of Executive’s Base Salary that would otherwise have been paid to him for the month in
which his death occurred, and (ii) any amounts due him pursuant to the Employer’s SERP, Executive
Retirement Supplemental Deferred Compensation Plan, and any other death, insurance, employee
benefit plan or stock benefit plan provided to Executive by the Employer, according to the terms of
the respective plans.

f. Termination Definitions.

(i) “Change of Control.” For purposes of this Agreement, the term “Change of Control” shall
mean the occurrence of one or more of the following events: (A) One person or entity acquiring or
otherwise becoming the owner of twenty-five percent (25%) or more of Employer’s outstanding common
stock; (B) Replacement of a majority of the incumbent directors of Northrim BanCorp, Inc. or
Northrim Bank by directors whose elections have not been supported by a majority of the Board of
either company, as appropriate; (C) Dissolution or sale of fifty percent (50%) or more in value of
the assets, of either Northrim BanCorp, Inc. or Northrim Bank; or (D) A change “in the ownership or
effective control” or “in the ownership of a substantial portion of the assets” of Employer, within
the meaning of Section 280G of the Internal Revenue Code.

(ii) “Cause.” For purposes of this Agreement, termination for “Cause” shall include
termination because Executive (A) continually fails to substantially perform his duties with the
Employer, (B) is adjudged guilty of a felony, any crime involving dishonesty or breach of trust or
any crime involving a breach of his fiduciary duties to the Employer, (C) is willfully and
continually failing to comply with any law, rule, or regulation (other than traffic violations or
similar offenses) or final cease and desist order of a regulatory agency having jurisdiction over
Employer, (D)  commits a material act of dishonesty or disloyalty related to the business of the
Employer, or (E) is unable to substantially perform his duties with the Employer due to drug
addiction or chronic alcoholism. Notwithstanding the foregoing, Executive shall not be deemed to
have been terminated for Cause unless and until there shall have been delivered to him a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire
membership of the Employer’s Board of Directors at a meeting of the Board called for such purpose
(after reasonable notice to Executive and an opportunity for him, together with his counsel, to be
heard before the Board), finding that in the good faith opinion of the Board, he was guilty of
conduct that constitutes Cause (as defined above) and specifying the conduct in detail.

(iii) “Disability.” For purposes of this Agreement, “Disability” shall mean a medically
diagnosed physical or mental impairment that may be expected to result in death, or to be of long,
continued duration, and that renders Executive incapable of performing his essential job functions
under this Agreement even after he has been accorded reasonable accommodation. Employer’s Board of
Directors, acting in good faith, in accordance with applicable law, shall make the final
determination of whether Executive is suffering under any Disability (as herein defined) and, for
purposes of making such determination, may require Executive to submit himself to a physical
examination by a physician mutually agreed upon by the Executive and Employer’s Board of Directors
at Employer’s expense.

(iv) “Good Reason.” For purposes of this Agreement, termination for “Good Reason” shall mean
termination by Executive as a result of any material breach of this Agreement by Employer. Good
Reason shall include, but not be limited to: (A) a material reduction in Executive’s compensation
defined as a reduction equal to or greater than five percent (5%) of Executive’s then annual base
salary, (B) a material reduction in Executive’s duties and responsibilities, but not merely a
change in title, or (C) relocation of Executive’s primary workplace by more than fifty (50) miles.
“Good Reason” will only be deemed to occur if, within ninety (90) days after a material reduction
or change described above first occurs, the Executive provides notice to the Employer of the
existence of Good Reason and of the Executive’s intended termination of employment due to Good
Reason, and the Employer does not remove Good Reason condition within ninety (90) days after
receiving such notice from the Executive. The Executive’s written notice must explain the basis on
which the Executive believes Good Reason exists, the cure period, and the date on which the
Executive intends to terminate employment, which must be no later than six (6) months after the
existence of the Good Reason. The provisions of Section 5.f.(iv) are intended to comply with the
Good Reason safe harbor provisions of Code Section 409A and applicable regulations.

(v) Termination from Employment. A termination from employment under this Agreement shall
mean a “Separation from Service” as interpreted in accordance with Code Section 409A and generally
meaning the date on which the Executive is no longer performing services for the Employer. By way
of clarification, even if Executive reduces his work-time status to a level under twenty percent
(20%) that is considered a “Separation from Service” under Section 409A and triggers payment of
deferred compensation under the plans in Section 4.b., it will not be treated as a Separation from
Service for purposes of severance under this Section 5. The Executive shall not have a Separation
from Service while on military leave, sick leave, or other bona fide leave of absence if the period
of such leave does not exceed six (6) months, or if longer, so long as the Executive retains a
right to reemployment under an applicable statute or contract. A leave of absence constitutes a
bona fide leave of absence only if there is a reasonable expectation that the Executive will return
to perform services.

6. Limit on Severance Payment for Change of Control.

Notwithstanding anything above in Section 5.a., if the severance payment provided for in that
Section, together with any other payments which the Executive has the right to receive from the
Employer, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code),
the severance payment shall be reduced. The reduction shall be in an amount so that the present
value of the total amount received by the Executive from the Employer or its affiliates and
subsidiaries will be 2.99 times the Executive’s base amount (as defined in Section 280G of the
Code) and so that no portion of the amounts received by the Executive shall be subject to the
excise tax imposed by Section 4999 of the Code (excise tax). Insofar as permitted by the Code,
Employer shall reduce those elements of the severance pay package specified by the Executive,
provided, however, that Employer will not reduce the SERP credits provided for in Section 5.b.(II).
The determination as to whether any reduction in the severance payment is necessary shall be made
by the Employer in good faith, and the determination shall be conclusive and binding on Executive.
If through error or otherwise Executive should receive payments under this Plan, together with
other payments the Executive has the right to receive from the Employer, in excess of 2.99 times
his base amount Executive shall immediately repay the excess to Employer upon notification that an
overpayment has been made.

7. Covenant Not To Compete.

a. Executive agrees that for the term of this Agreement and for a period of one (1) year after
this Agreement is terminated pursuant to Section 5.a. or 5.b., Executive will not directly or
indirectly be employed by, own, manage, operate, support, join, or benefit in any way from any
business activity within the states where Employer operates that is competitive with Employer’s
business or reasonably anticipated business of which Executive has knowledge. For purposes of the
foregoing, Executive will be deemed to be connected with such business if the business is carried
on by: (i) a partnership in which Executive is a general or limited partner; or (ii) a corporation
of which Executive is a shareholder (other than a shareholder owning less than five percent (5%) of
the total outstanding shares of the corporation), officer, director, employee or consultant,
whether paid or unpaid. In the event of an alleged breach by Executive of this Section 7, the
one-year noncompete period shall be extended until such breach or violation has been duly cured,
and shall restart so that Employer has received the intended benefit of one uninterrupted year of
noncompetition by Executive.

b. The parties agree that if a trial judge with jurisdiction over a dispute related to this
Agreement should determine that the restrictive covenant set forth above is unreasonably broad, the
parties authorize such trial judge to narrow the covenant so as to make it reasonable, given all
relevant circumstances, and to enforce such covenant. The provisions of this Section 7 shall
survive termination of this Agreement.

8. Nondisclosure of Confidential Information.

a. During the term of Executive’s employment and thereafter, Executive agrees to hold
Employer’s Confidential Information in strict confidence, and not disclose or use it at any time
except as authorized by Employer and for Employer’s benefit. If anyone tries to compel Executive
to disclose any Confidential Information, by subpoena or otherwise, Executive agrees immediately to
notify Employer so that Employer may take any actions it deems necessary to protect its interests.
Executive’s agreement to protect Employer’s Confidential Information applies both during the term
of this Agreement and after employment ends, regardless of the reason it ends.

b. “Confidential Information” includes, without limitation, any information in whatever form
that Employer considers to be confidential, proprietary, information and that is not publicly or
generally available relating to Employer’s: trade secrets (as defined by the Uniform Trade Secrets
Act); know-how; concepts; methods; research and development; product, content and technology
development plans; marketing plans; databases; inventions; research data and mechanisms; software
(including functional specifications, source code and object code); procedures; engineering;
purchasing; accounting; marketing; sales; customers; advertisers; joint venture partners;
suppliers; financial status; contracts or employees. Confidential Information includes information
developed by Executive, alone or with others, or entrusted to Employer by its customers or others.

9. Nonsolicitation.

During the course of Executive’s employment and for a period of one (1) year from the date of
termination of employment for any reason, Executive shall not directly or indirectly solicit or
entice any of the following to cease, terminate or reduce any relationship with Employer or to
divert any business from Employer: (a) any person who was an employee of Employer during the one
(1) year period immediately preceding the termination of Executive’s employment; (b) any customer
or client of Employer; or (c) any prospective customer or client of Employer from whom Executive
actively solicited business within the last one (1) year of Executive’s employment. In the event
of an alleged breach by Executive of this Section 9, the one-year nonsolicitation period shall be
extended until such breach or violation has been duly cured, and shall restart so that Employer has
received the intended benefit of one (1) uninterrupted year of nonsolicitation by Executive.

10. Non-Disparagement.

Executive will not, during the Term or after the termination or expiration of this Agreement
or Executive’s employment, make disparaging statements, in any form, about Employer’s officers,
directors, agents, employees, products or services which Executive knows, or has reason to believe,
are false or misleading.

11. Mutual Agreement to Arbitrate.

a. Except as provided in Section 11.b., in the event of a dispute or claim between Executive
and Employer related to Employee’s employment or termination of employment, all such disputes or
claims will be resolved exclusively by confidential arbitration in accordance with the National
Rules for the Resolution of Employment Disputes of the American Arbitration Association (“AAA”).
This means that the parties agree to waive their rights to have such disputes or claims decided in
court by a jury. Instead, such disputes or claims will be resolved by an impartial AAA arbitrator
whose decision will be final.

b. The only disputes or claims that are not subject to arbitration are any claims by Executive
for workers’ compensation or unemployment benefits, and any claim by Executive for benefits under
an employee benefit plan that provides its own arbitration procedure. Also, Executive and Employer
may seek equitable relief (such as an injunction or declaratory relief) in court in appropriate
circumstances. Specifically, Executive recognizes that Employer does not have an adequate remedy at
law to protect its business from Executive’s breach of Sections 7, 8, or 9 of this Agreement, and
therefore Employer shall be entitled to bring an action for a temporary restraining order and
preliminary injunctive relief pre-arbitration, in the event of any actual or threatened breach by
Executive of Sections 7, 8, or 9. In such court proceeding, Employer shall not be required to post
a bond or other security, and Employer may also be awarded actual damages caused by Executive’s
breach of Sections 7, 8, or 9 of this Agreement as well as repayment of all or a portion of any
severance that Employer previously paid to Executive.

c. Except as provided by Section 11.b., the arbitration procedure will afford Executive and
Employer the full range of legal, equitable, and/or statutory remedies. Employer will pay all
costs that are unique to arbitration, except that the party who initiates arbitration will pay the
filing fee charged by AAA. Executive and Employer shall be entitled to discovery sufficient to
adequately arbitrate their claims, including access to essential documents and witnesses, as
determined by the arbitrator and subject to limited judicial review. In order for any judicial
review of the arbitrator’s decision to be successfully accomplished, the arbitrator will issue a
written decision that will decide all issues submitted and will reveal the essential findings and
conclusions on which the award is based.

12. Miscellaneous.

a. This Agreement contains the entire agreement between the parties with respect to
Executive’s employment with Employer, and is subject to modification or amendment only upon
agreement in writing signed by both parties.

b. This Agreement shall bind and inure to the benefit of the heirs, legal representatives,
successors and assigns of the parties, except that Employer’s rights and obligations may not be
assigned.

c. If any provision of this Agreement is invalid or otherwise unenforceable, in whole or in
part, then such provision shall be modified so as to be enforceable to the maximum extent permitted
by law. If such provision cannot be modified to be enforceable, the provision shall be severed
from the Agreement to the extent it is unenforceable. All other provisions and any partially
enforceable provisions shall remain unaffected and shall remain in full force and effect.

d. In the event of any claim or dispute arising out of this Agreement, the party that
substantially prevails shall be entitled to reimbursement of all expenses incurred in connection
with such claim or dispute, including, without limitation, attorneys’ fees and other professional
fees. This paragraph shall apply to expenses incurred with or without suit, and in any judicial,
arbitration or administrative proceedings, including all appeals therefrom.

e. Any notice required to be given under this Agreement to either party shall be given by
personal service (i.e. via hand delivery) or by depositing a copy of such notice in the United
States registered or certified mail, postage prepaid, addressed to the following address, or such
other address as addressee shall designate in writing:

Employer:

3111 “C” Street

Anchorage, AK 99503

Executive:

10101 Schuss Drive

Anchorage, AK 99507

f. This Agreement shall in all respects, including all matters of construction, validity and
performance, be governed by and construed and enforced according to the laws of the State of
Alaska.

g. This Agreement is intended to comply and shall be interpreted and construed in a manner
consistent with the provisions of Internal Revenue Code Section 409A, including any rule or
regulation promulgated thereunder. In the event that any provision of the Agreement would cause a
benefit or amount provided hereunder to be subject to tax under the Internal Revenue Code prior to
the time such amount is paid, such provision shall, without the necessity of further action by the
signatories to this Agreement, be null and void as of the Effective Date.

EMPLOYER:

NORTHRIM BANCORP, INC.

By: /s/Ronald A. Davis

Ronald A. Davis

Its: Chairman of the Compensation Committee of The Board of Directors

NORTHRIM BANK

By: /s/Ronald A. Davis

Ronald A. Davis

Its: Chairman of the Compensation Committee of The Board of Directors

EXECUTIVE:

/s/ R. Marc Langland

R. Marc LanglandEX-10.1

AMENDMENT NUMBER 10

MIDDLE GRAND REGION

CONTRACTOR RISK AGREEMENT

BETWEEN

THE STATE OF TENNESSEE,

d.b.a. TENNCARE

AND

AMERIGROUP TENNESSEE, INC.

CONTRACT NUMBER: FA- 07-16936-00

For and in consideration of the mutual promises herein contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree to
clarify and/or amend the Contractor Risk Agreement (CRA) by and between the State of Tennessee
TennCare Bureau, hereinafter referred to as TENNCARE, and AMERIGROUP TENNESSEE, INC., hereinafter
referred to as the CONTRACTOR as specified below.

Titles and numbering of paragraphs used herein are for the purpose of facilitating use of reference
only and shall not be construed to infer a contractual construction of language.

1. Section 1 shall be amended by adding the following definitions:

Abuse - Provider practices that are inconsistent with sound fiscal, business, or
medical practices, and result in an unnecessary cost to the Medicaid program, or in reimbursement
for services that are not medically necessary or that fail to meet professionally recognized
standards for health care. It also includes recipient practices that result in unnecessary cost to
the Medicaid program (see 42 CFR 455.2).

Breach (with respect to Protected Health Information (PHI)) — The acquisition, access, use,
or disclosure of protected health information in a manner not permitted under the HIPAA Privacy
Rule which compromises the security or privacy of the protected health information.

Fraud – An intentional deception or misrepresentation made by a person with the knowledge
that the deception could result in some unauthorized benefit to himself or some other person. It
includes any act that constitutes fraud under applicable Federal or State law (see 42 CFR 455.2).

Repayment – The process by which an MCO, the State of Tennessee or the Federal government,
or any of their Bureaus, Agencies or Contractors recover Title XIX monies paid to an MCO, provider
or enrollee.

2. Section 2.7.4.1 shall be deleted and replaced as follows:

	 	2.7.4.1.1	 	The CONTRACTOR shall develop programs and participate in activities to
enhance the general health and well-being of members. Health education and outreach
programs and activities shall include TENNderCare outreach activities (See Section
2.7.6.2) and may also include the following:

	3.	 	Section 2.7.4.2 shall be deleted and replaced by Sections 2.7.4.2 through 2.7.4.2.3 as
follows:

	 	2.7.4.2	 	The CONTRACTOR shall submit an Annual Community Outreach Plan no later than
November 30 of each year for review and approval by TENNCARE.

	 	2.7.4.2.1	 	The Annual Community Outreach Plan shall be written in accordance with
guidance prepared by TENNCARE. It shall include, but is not limited to: all proposed
community/health education events related to TENNderCare; community/health education
events unrelated to TENNderCare; rationale for participating in these events; and a
process for evaluating the benefits of the events.

	 	2.7.4.2.2	 	The CONTRACTOR’s TennCare approved Annual Community Outreach Plan shall be
implemented on January 1 of each year.

	 	2.7.4.2.3	 	Community/health education events, both related and unrelated to TENNderCare,
shall be included in the quarterly TENNderCare Report (See Section 2.30.4.4) in a
format specified by TENNCARE.

	4.	 	Section 2.7.6.2.10 shall be amended by adding the reference “(See Section 2.7.4.2)” to the
end of the first sentence.

	5.	 	Section 2.9.5.4.1 through 2.9.5.4.1.4 shall be deleted and replaced as follows:

	 	2.9.5.4.1	 	In addition to requirements pertaining to nursing facility to community
transitions (see Section 2.9.6.8), members in CHOICES Group 1 who are under the age of
21 and who are residents of a nursing facility and have requested to transition home
will be provided coordination of care by the CHOICES Care Coordinator and MCO Case
Management staff:

	 	2.9.5.4.1.1	 	The member will be informed by the CHOICES Care Coordinator of disenrollment
from CHOICES upon discharge from Nursing Facility;

	 	2.9.5.4.1.2	 	Within three (3) business days of a request to transition by or on behalf of a
Group 1 member under age 21, the member will be referred by the CHOICES Care
Coordinator to MCO Case Management for service identification and implementation in the
home setting;

	 	2.9.5.4.1.3	 	The MCO Case Manager will be responsible for developing a service plan for the
home setting;

	 	2.9.5.4.1.4	 	The CHOICES Care Coordinator will communicate weekly via phone or face-to-face
visits with the MCO Case Management staff, the member and/or his parent or guardian (as
applicable and appropriate), and the nursing facility staff to ensure timely
progression of the transition plan until the transition plan is complete; and

	6.	 	Section 2.9.6.1.6.1 shall be amended by adding a “)” after the word “computation”.

	7.	 	Section 2.9.6.2.5.1 shall be deleted and replaced as follows:

	 	2.9.6.2.5.1	 	For members enrolled in CHOICES Group 2 who are, upon CHOICES enrollment,
receiving community-based residential alternative services that are covered in CHOICES,
the CONTRACTOR shall, immediately upon notice of the member’s enrollment in CHOICES,
authorize such services from the current provider as of the effective date of CHOICES
enrollment. In the case of those members enrolled in CHOICES Group 2 on the basis of
Immediate Eligibility, community-based residential alternative services shall be
authorized immediately upon notice of the member’s categorical and financial
eligibility for TennCare CHOICES as of the effective date of CHOICES enrollment. The
CONTRACTOR shall not transition members enrolled in CHOICES Group 2 who are, upon
CHOICES enrollment, receiving services in a community-based residential alternative
setting to another facility unless: (1) the member or his/her representative
specifically requests to move, which shall be documented in the member’s file; (2) the
member or his/her representative provides written consent to move based on quality or
other concerns raised by the CONTRACTOR; or (3) the facility where the member is
residing is not a contract provider; if the facility is a non-contract provider, the
CONTRACTOR shall authorize medically necessary services from the non-contract provider
for at least thirty (30) days which shall be extended as necessary to ensure continuity
of care pending the facility’s enrollment with the CONTRACTOR or the member’s
transition to a contract provider.

	8.	 	Section 2.9.6.3.7 shall be deleted and replaced as follows:

	 	2.9.6.3.7	 	If the member does not meet the telephone screening criteria, the
CONTRACTOR shall within five (5) business days of the screening notify the member
verbally and in writing in the format prescribed by TENNCARE: (1) that he/she does not
appear to meet the criteria for enrollment in CHOICES; (2) that he/she has the right to
continue with the CHOICES intake process and, if determined not eligible, to receive
notice of such denial, including the member’s due process right to appeal; and (3) how,
if the member wishes to proceed with the CHOICES intake process, the member can submit
a written request to proceed with the CHOICES intake process to the CONTRACTOR. In the
event that a member does submit such written request, the CONTRACTOR shall process the
request as a new referral and shall conduct a face-to-face intake visit, including
level of care assessment and needs assessment, within ten (10) business days of receipt
of the member’s written request, unless a later date is requested by the member, which
shall be documented in writing in the CHOICES intake record.

	9.	 	Section 2.9.6.6.1.1 shall be amended by adding the word “CHOICES” in front of the word
“file”.

	10.	 	Section 2.9.6.6.2.7 shall be deleted and replaced as follows:

	 	2.9.6.6.2.7	 	The member’s care coordinator/care coordination team shall provide a copy
of the member’s completed plan of care, including any updates, to the member, the
member’s representative, as applicable, and the member’s community residential
alternative provider, as applicable. The member’s care coordinator/care coordination
team shall provide copies to other providers authorized to deliver care to the member
upon request, and shall ensure that such providers who do not receive a copy of the
plan of care are informed in writing prior to the scheduled implementation of services
of all relevant information needed to ensure the provision of quality care for the
member and to help ensure the member’s health, safety, and welfare, including but not
limited to the tasks and functions to be performed.

	11.	 	Section 2.9.6.6.2.8 shall be amended by adding a new Section 2.9.6.6.2.8.1 which
shall read as follows:

	 	2.9.6.6.2.8.1	 	Within three (3) business days of updating the member’s plan of care, the
member’s care coordinator/care coordination team shall provide a copy of all relevant
changes to the supports broker, as applicable, and to other providers authorized to
deliver care to the member. Relevant information shall include any information needed
to ensure the provision of quality care for the member and to help ensure the member’s
health, safety, and welfare, including but not limited to any changes in the tasks and
functions to be performed.

	12.	 	Section 2.9.6.8.25.3 and Section 2.9.6.8.25.4 shall be deleted and replaced by new
Sections 2.9.6.8.25.3, 2.9.6.8.25.4 and 2.9.6.8.25.4.1 as follows:

	 	2.9.6.8.25.3	 	The CONTRACTOR shall conduct a census at least semi-annually at no less
than one hundred twenty (120)-day intervals or as frequently as deemed necessary by
TENNCARE to confirm the residency status and Group assignment of all CHOICES members
(i.e., Group 1 receiving services in a NF or Group 2 receiving HCBS or short- term NF
services). The CONTRACTOR shall take actions as necessary to address any discrepancies
when a CHOICES member is found to no longer be receiving LTC services, or is receiving
services in a different service delivery setting, e.g., NF, HCBS, or hospice in a NF,
including, as appropriate, disenrollment from CHOICES and/or enrollment in a different
CHOICES Group.

	 	2.9.6.8.25.4	 	The CONTRACTOR shall authorize and/or reimburse short-term NF stays for Group 2
members only when the member’s stay in the facility is expected to be less than ninety
(90) days and the member is expected to return to the community upon its conclusion.
The CONTRACTOR shall monitor all short-term NF stays for Group 2 members and shall
ensure that the member is transitioned from Group 2 to Group 1 at any time a) it is
determined that the stay will not be short-term or the member will not transition back
to the community; and b) prior to exhausting the ninety (90)-day short-term NF benefit
covered for CHOICES Group 2 members.

	 	2.9.6.8.25.4.1	 	Upon request, the CONTRACTOR shall provide to TENNCARE a member-by-member
status for each Group 2 member utilizing the short-term NF stay benefit, including but
not limited to the name of each Group 2 member receiving short-term NF services, the NF
in which s/he currently resides, the date of admission for short-term stay, and the
anticipated date of discharge back to the community.

	13.	 	Section 2.9.6.9.1.1.4 shall be amended by deleting the word “and” at the end of the text
and Section 2.9.6.9.1.1.5 shall be deleted and replaced as follows:

	 	2.9.6.9.1.1.5	 	In the manner prescribed by TENNCARE and in accordance with this
Agreement and TENNCARE policies and protocols pertaining thereto: 1) facilitate
transfers between nursing facilities which, at a minimum, includes notification to the
receiving facility of the member’s level of care, and notification to DHS; and 2)
facilitate transitions to CHOICES Group 2 which shall include (but is not limited to)
timely notification to TENNCARE; and

	14.	 	Section 2.9.6.9.2.1.2 shall be deleted and replaced as follows:

	 	2.9.6.9.2.1.2	 	During the development of the member’s plan of care and as part of the
annual updates, the care coordinator shall discuss with the member his/her interest in
consumer direction when eligible CHOICES HCBS are included in the plan of care;

	15.	 	Section 2.9.6.9.2.1.15 shall be amended by deleting the word “and” at the end of the text,
Section 2.9.6.9.2.1.17 shall be amended by deleting the “.” and adding “; and”, and Section
2.9.6.9.2.1 shall be amended by adding a new Section 2.9.6.9.2.1.18 as follows:

	 	2.9.6.9.2.1.18	 	In the manner prescribed by TENNCARE, and in accordance with this
Agreement and TENNCARE policies and protocols pertaining thereto, facilitate transition
to CHOICES Group 1, which shall include (but is not limited to) timely notification to
TENNCARE.

	16.	 	Section 2.9.6.10.3 shall be deleted and replaced by new Sections 2.9.6.10.3 through
2.9.6.3.10.3.3 as follows:

	 	2.9.6.10.3	 	If a member elects not to receive eligible CHOICES HCBS using contract
providers until all necessary requirements have been fulfilled in order to implement
consumer direction of eligible CHOICES HCBS:

	 	2.9.6.10.3.1	 	The CONTRACTOR shall document this decision, including date and member/member’s
representative’s signature, in the manner specified by TENNCARE (see Section
2.9.7.4.3.2 of this Agreement).

	 	2.9.6.10.3.2	 	The member’s care coordinator shall visit the member face to face at least
monthly to ensure that the member’s needs are met, and shall continue to offer eligible
CHOICES HCBS through contract providers (See Section 2.9.7.4.3.3).

	 	2.9.6.10.3.3	 	If eligible CHOICES HCBS are not initiated within sixty (60) days following
referral to the FEA, the CONTRACTOR shall notify the member that eligible CHOICES HCBS
must be initiated by contract providers unless these HCBS are not needed on an ongoing
basis in order to safely meet the member’s needs in the community, in which case, the
CONTRACTOR shall submit documentation to TENNCARE to begin the process of disenrollment
from CHOICES Group 2.

	17.	 	Section 2.9.6.10 shall be amended by adding a new Section 2.9.6.10.11 as follows and
renumbering the remaining Section accordingly, including any references thereto.

	 	2.9.6.10.11	 	Within three (3) business days of updating the member’s plan of care, the
member’s care coordinator/care coordination team shall provide a copy of all relevant
changes to the supports broker (see Section 2.9.6.6.2.8.1. of this Agreement).

	18.	 	Section 2.9.6.11.3 through 2.9.6.11.5 shall be deleted and replaced as follows and the
remaining Section shall be renumbered accordingly, including any references thereto.

	 	2.9.6.11.3	 	The CONTRACTOR shall ensure that an adequate number of care coordinators are
available and that sufficient staffing ratios are maintained to address the needs of
CHOICES members and meet all the requirements described in this Agreement.

	 	2.9.6.11.4	 	The recommended average weighted care coordinator-to-CHOICES member staffing
ratio is no more than 1:125. Such average shall be derived by dividing the total number
of full-time equivalent care coordinators by the total weighted value of CHOICES
members as delineated below.

	 	2.9.6.11.5	 	The recommended maximum caseload for any individual care coordinator is a
weighted value of no more than one hundred seventy-five (175) CHOICES members.

	 	2.9.6.11.6	 	The contractor shall use the following methodology to calculate weighted care
coordinatorto-CHOICES member staffing ratios and care coordinator caseloads:

	 	2.9.6.11.6.1	 	Each CHOICES Group 1 member shall be factored into the weighted care
coordinator-to-CHOICES member staffing ratio and weighted caseload calculations
utilizing an acuity level of one (1), EXCEPT that:

	 	2.9.6.11.6.1.1	 	Upon completion of a Transition Assessment which indicates that a Group 1
member is a candidate for transition to the community, such member shall be factored
into the weighted caseload and staffing ratio calculations using an acuity level of two
and one- half (2.5) until such time as the member is transitioned to CHOICES Group 2 or
the member is no longer a candidate for transition;

	 	2.9.6.11.6.1.2	 	CHOICES Group 1 members under twenty-one (21) years of age shall be factored
into the weighted caseload and staffing ratio calculations utilizing an acuity level of
two and one-half (2.5).

	 	2.9.6.11.6.2	 	Each CHOICES Group 2 member shall be factored into the weighted caseload and
staffing ratio calculations utilizing an acuity level of two and one-half (2.5);

	 	2.9.6.11.6.3	 	Using the delineated acuity factors, the following provides examples of the
composition of caseloads with a weighted value of 125:

	 	2.9.6.11.6.4	 	Using the delineated acuity factors, the following delineates the
composition of caseloads with a weighted value of 175:

	2.9.6.11.7	 	The CONTRACTOR shall proactively plan for staff turnover and shall monitor caseload
assignments and weighted care coordinator-to-CHOICES member staffing ratios and adjust hiring
practices and care coordinator assignments as necessary to meet the requirements of this
Agreement and to address members’ needs.

	2.9.6.11.8	 	Upon request, the CONTRACTOR shall provide to TENNCARE documentation of such monitoring,
including an itemized list by care coordinator of the total number of members assigned, and
the number of Group 1 members (including members in transition and children under age 21) and
Group 2 members that comprise each care coordinator’s caseload.

	2.9.6.11.9	 	In the event that the CONTRACTOR is determined to be deficient with any requirement
pertaining to care coordination as set forth in this agreement, the amount of financial
sanctions assessed shall take into account whether or not the CONTRACTOR has complied with the
recommended average weighted care coordinator to CHOICES member staffing ratio and the maximum
weighted care coordinator caseload amounts set forth in Sections 2.9.6.11.4 and 2.9.6.11.5,
based on the most recent monthly CHOICES Caseload and Staffing Ratio Report (see Section
2.30.6.8). All applicable sanctions set forth in Sections 4.20.2.2.6., 4.20.2.2.7.A.16,
4.20.2.2.7.A.18, 4.20.2.2.7.A.19, 4.20.2.2.7.A.20, 4.20.2.2.7.A.21, 4.20.2.2.7.A.22,
4.20.2.2.7.A.23, 4.20.2.2.7.A.28, 4.20.2.2.7.A.29, 4.20.2.2.7.A.30, 4.20.2.2.7.A.31,
4.20.2.2.7.B.21, and 4.20.2.2.7.C.7 of this agreement shall be multiplied by two (2) when the
CONTRACTOR has not complied with these recommendations.

	2.9.6.11.10	 	TennCare will reevaluate Care Coordinator-to-CHOICES member staffing ratio
recommendations and requirements on at least an annual basis and may make adjustments based on
the needs of CHOICES members, CHOICES program requirements and MCO performance.

	2.9.6.11.11	 	TENNCARE may request changes in the CONTRACTOR’s Care Coordination Staffing Plan at any
time it determines that the CONTRACTOR does not have sufficient care coordination staff to
properly and timely perform its obligations under this Agreement.

	19.	 	The renumbered Section 2.9.6.11.18 shall be amended by deleting the words “at least
annually”.

	20.	 	Section 2.9.6.11 shall be amended by adding a new Section 2.9.6.11.19 as follows and
renumbering the remaining Section including any references thereto.

	 	2.9.6.11.19	 	The CONTRACTOR shall establish an ongoing training program for care
coordinators. Topics to be covered shall be determined by the CONTRACTOR based on its
monitoring of care coordination (see Section 2.9.6.12) and the CHOICES program, and
feedback from TENNCARE.

	21.	 	Section 2.9.6.12.7 shall be amended by adding the words “and document” as follows:

	 	2.9.6.12.7	 	The CONTRACTOR shall develop and maintain an electronic case management
system that includes the functionality to ensure and document compliance with all
requirements specified in the Section 1115 TennCare Demonstration Waiver, federal and
state laws and regulations, this Agreement, and TennCare policies and protocols,
including but not limited to the following:

	22.	 	Section 2.12.4 shall be deleted and replaced as follows:

2.12.4 LEFT BLANK INTENTIONALLY

	23.	 	Section 2.12.9 shall be deleted and replaced as follows and all references to Section
2.12.9 shall be updated accordingly.

	2.12.9	 	All provider agreements executed by the CONTRACTOR, and all provider agreements
executed by subcontracting entities or organizations, shall, except as otherwise provided in
Section 2.12.13, at a minimum, meet the following requirements:

	2.12.9.1	 	Be in writing. All new provider agreements and existing provider agreements as they are
renewed, shall include a signature page which contains CONTRACTOR and provider names which are
typed or legibly written, provider company with titles, and dated signatures of all
appropriate parties;

	2.12.9.2	 	Specify the effective dates of the provider agreement;

	2.12.9.3	 	Specify that the provider agreement and its attachments contain all the terms and
conditions

agreed upon by the parties;

	2.12.9.4	 	Assure that the provider shall not enter into any subsequent agreements or subcontracts
forany of the work contemplated under the provider agreement without the prior written
approval of the CONTRACTOR;

	2.12.9.5	 	Identify the population covered by the provider agreement;

	2.12.9.6	 	Specify that the provider may not refuse to provide covered medically necessary or
covered preventive services to a child under the age of twenty-one (21) or a TennCare Medicaid
patient under this Agreement for non-medical reasons. However, the provider shall not be
required to accept or continue treatment of a patient with whom the provider feels he/she
cannot establish and/or maintain a professional relationship;

	2.12.9.7	 	Specify the functions and/or services to be provided by the provider and assure that the
functions and/or services to be provided are within the scope of his/her
professional/technical practice;

	2.12.9.8	 	Specify the amount, duration and scope of services to be provided by the provider and
inform the provider of TennCare non-covered services as described in Section 2.10 of this
Agreement and the TennCare rules and regulations;

	2.12.9.9	 	Provide that emergency services be rendered without the requirement of prior authorization
of any kind;

	2.12.9.10	 	Require compliance with applicable access requirements, including but not limited to
appointment and wait times as referenced in Section 2.11 of the CONTRACTOR’s Agreement with
TENNCARE;

	2.12.9.11	 	Specify that unreasonable delay in providing care to a pregnant member seeking prenatal
care shall be considered a material breach of the provider’s agreement with the CONTRACTOR and
include the definition of unreasonable delay as described in Section 2.7.5.2.3 of this
Agreement;

	2.12.9.12	 	If the provider performs laboratory services, require the provider to meet all applicable
requirements of the Clinical Laboratory Improvement Amendments (CLIA) of 1988;

	2.12.9.13	 	Require the provider to have and maintain documentation necessary to demonstrate that

covered services were provided in compliance with state and federal requirements;

	2.12.9.14	 	Require that an adequate record system be maintained and that all records be maintained
for five (5) years from the close of the provider agreement (behavioral health records shall
be maintained at the provider level for ten (10) years after the termination of the provider
agreement pursuant to TCA 33-3-101) or retained until all evaluations, audits, reviews or
investigations or prosecutions are completed for recording enrollee services, servicing
providers, charges, dates and all other commonly accepted information elements for services
rendered to enrollees pursuant to the provider agreement (including but not limited to such
records as are necessary for the evaluation of the quality, appropriateness, and timeliness of
services performed under the provider agreement and administrative, civil or criminal
investigations and prosecutions);

	2.12.9.15	 	Include a statement that as a condition of participation in TennCare, enrollees and
providers shall give TENNCARE or its authorized representative, the Office of the Comptroller
of the Treasury, and any health oversight agency, such as OIG, TBI MFCU, DHHS Office of
Inspector General (DHHS OIG), and DOJ, and any other authorized state or federal agency,
access to their records. Said records shall be made available and furnished immediately upon
request by the provider for fiscal audit, medical audit, medical review, utilization review,
and other periodic monitoring as well as for administrative, civil and criminal investigations
or prosecutions upon the request of an authorized representative of the CONTRACTOR,

TENNCARE or authorized federal, state and Office of the Comptroller of the
Treasury personnel, including, but not limited to, the OIG, the TBI MFCU, the DHHS
OIG and the DOJ;

2.12.9.16 Include medical records requirements found in Section 2.24.6 of this Agreement;

	 	2.12.9.17	 	Contain the language described in Section 2.25.6 of this Agreement regarding Audit
Requirements and Section 2.25.5 of this Agreement regarding Availability of Records;

	 	2.12.9.18	 	Provide that TENNCARE, DHHS OIG, Office of the Comptroller of the Treasury, OIG,
TBI MFCU, and DOJ, as well as any authorized state or federal agency or entity shall
have the right to evaluate through inspection, evaluation, review or request, whether
announced or unannounced, or other means any records pertinent to this Agreement
including, but not limited to medical records, billing records, financial records,
and/or any records related to services rendered, quality, appropriateness and
timeliness of services and/or any records relevant to an administrative, civil and/or
criminal investigation and/or prosecution and such evaluation, inspection, review or
request, and when performed or requested, shall be performed with the immediate
cooperation of the provider. Upon request, the provider shall assist in such reviews
including the provision of complete copies of medical records. Include a statement that
HIPAA does not bar disclosure of protected health information (PHI) to health oversight
agencies, including, but not limited to, OIG, TBI MFCU, DHHS OIG and DOJ. Provide that
any authorized state or federal agency or entity, including, but not limited to
TENNCARE, OIG, TBI MFCU, DHHS OIG, DOJ, Office of the Comptroller of the Treasury, may
use these records and information for administrative, civil or criminal investigations
and prosecutions;

	 	2.12.9.19	 	Provide for monitoring, whether announced or unannounced, of services rendered to
members;

	 	2.12.9.20	 	Provide for the participation and cooperation in any internal and external QM/QI,
monitoring, utilization review, peer review and/or appeal procedures established by the
CONTRACTOR and/or TENNCARE;

	 	2.12.9.21	 	Specify CONTRACTOR’s responsibilities under this Agreement and its agreement with
the provider, including but not limited to, provision of a copy of the member handbook
and provider handbook whether via web site or otherwise and requirement that the
CONTRACTOR notice a provider of denied authorizations;

	 	2.12.9.22	 	Specify that the CONTRACTOR shall monitor the quality of services delivered under
the provider agreement and initiate corrective action where necessary to improve
quality of care, in accordance with that level of medical, behavioral health, or
long-term care which is recognized as acceptable professional practice in the
respective community in which the provider practices and/or the standards established
by TENNCARE;

	 	2.12.9.23	 	Require that the provider comply with corrective action plans initiated by the
CONTRACTOR;

	 	2.12.9.24	 	Provide for the timely submission of all reports and clinical information required
by the CONTRACTOR;

2.12.9.25 Provide the name and address of the official payee to whom payment shall be made;

	 	2.12.9.26	 	Make full disclosure of the method and amount of compensation or other
consideration to be received from the CONTRACTOR. However, the agreement shall not
include rate methodology that provides for an automatic increase in rates;

	 	2.12.9.27	 	Specify that the CONTRACTOR shall only pay providers for services (1) provided in
accordance with the requirements of this Agreement, the CONTRACTOR’s policies and
procedures implementing this Agreement, and state and federal law and (2) provided to
TennCare enrollees who are enrolled with the CONTRACTOR; and specify that the provider
is responsible for (1) ensuring that any applicable authorization requirements are met
and (2) verifying that a person is eligible for TennCare on the date of service;

	 	2.12.9.28	 	Provide for prompt submission of information needed to make payment. Specify that
a provider shall have one hundred twenty (120) calendar days from the date of rendering
a covered service to file a claim with the CONTRACTOR except in situations regarding
coordination of benefits or subrogation in which case the provider is pursuing payment
from a third party or if an enrollee is enrolled in the MCO with a retroactive
eligibility date. In situations of third party benefits, the maximum time frames for
filing a claim shall begin on the date that the third party documented resolution of
the claim. In situations of enrollment in the CONTRACTOR’s MCO with a retroactive
eligibility date, the time frames for filing a claim shall begin on the date that the
CONTRACTOR receives notification from TENNCARE of the enrollee’s
eligibility/enrollment;

	 	2.12.9.29	 	Provide for payment to the provider upon receipt of a clean claim properly
submitted by the provider within the required time frames as specified in TCA 56-32-126
and Section 2.22.4 of this Agreement;

	 	2.12.9.30	 	Specify the provider shall accept payment or appropriate denial made by the
CONTRACTOR (or, if applicable, payment by the CONTRACTOR that is supplementary to the
enrollee’s third party payer) plus the amount of any applicable TennCare cost sharing
responsibilities, as payment in full for covered services provided and shall not
solicit or accept any surety or guarantee of payment from the enrollee in excess of the
amount of applicable TennCare cost sharing responsibilities. Enrollee shall include the
patient, parent(s), guardian, spouse or any other legally responsible person of the
enrollee being served;

	 	2.12.9.3	 	1 Specify that in the event that TENNCARE deems the CONTRACTOR unable to timely
process and reimburse claims and requires the CONTRACTOR to submit provider claims for
reimbursement to an alternate claims processor to ensure timely reimbursement, the
provider shall agree to accept reimbursement at the CONTRACTOR’s contracted
reimbursement rate or the rate established by TENNCARE, whichever is greater;

	 	2.12.9.32	 	Specify the provider’s responsibilities and prohibited activities regarding cost
sharing as provided in Section 2.6.7 of this Agreement;

	 	2.12.9.33	 	Specify the provider’s responsibilities regarding third party liability (TPL) ,
including the provider’s obligation to identify third party liability coverage,
including Medicare and longterm care insurance as applicable, and, except as otherwise
provided in the CONTRACTOR’s Agreement with TENNCARE, to seek such third party
liability payment before submitting claims to the CONTRACTOR;

	 	2.12.9.34	 	For those agreements where the provider is compensated via a capitation
arrangement, language which requires:

	 	2.12.9.34.1	 	That if a provider becomes aware for any reason that he or she is not entitled
to a capitation payment for a particular enrollee (a patient dies, for example), the
provider shall immediately notify both the CONTRACTOR and TENNCARE by certified mail,
return receipt requested; and

	 	2.12.9.34.2	 	The provider shall submit utilization or encounter data as specified by the
CONTRACTOR so as to ensure the CONTRACTOR’s ability to submit encounter data to
TENNCARE that meets the same standards of completeness and accuracy as required for
proper adjudication of fee-for-service claims;

	 	2.12.9.35	 	Require the provider to comply with fraud and abuse requirements described in
Section 2.20 of this Agreement;

	 	2.12.9.36	 	Require that the provider comply with the Affordable Care Act and TennCare policy
and procedures, including but not limited to, reporting overpayments and, when it is
applicable, return overpayments to the CONTRACTOR within sixty (60) days from the date
the overpayment is identified. Overpayments that are not returned within sixty (60)
days from the date the overpayment was identified may result in a penalty pursuant to
state or federal law;

	 	2.12.9.37	 	Require the provider to comply and submit to the CONTRACTOR disclosure of
information in accordance with the requirements, including timeframes, specified in 42
CFR Part 455, Subpart B and TennCare policies and procedures. The timeframes for this
requirement shall include, at a minimum, at the time of initial contracting, contract
renewal, at any time there is a change to any of the information on the disclosure
form, at least once every three (3) years, and at anytime upon request;

	 	2.12.9.38	 	Any reassignment of payment must be made in accordance with 42 CFR 447.10.
All tax-reporting provider entities shall not be permitted to assign TennCare
funds/payments to billing agents or alternative payees without executing a billing
agent or alternative payee assignment agreement. The billing agents and alternative
payees are subject to initial and monthly federal exclusion (LEIE) and debarment (EPLS)
screening by the assignee if the alternative payee assignment is on-going. Further,
direct and indirect payments to out of country individuals and/or entities are
prohibited;

	 	2.12.9.39	 	Require providers to screen their employees and contractors initially and on an
ongoing monthly basis to determine whether any of them has been excluded from
participation in Medicare, Medicaid, SCHIP, or any Federal health care programs (as
defined in Section 1 128B(f) of the Social Security Act) and not employ or contract
with an individual or entity that has been excluded or debarred. The provider shall be
required to immediately report to the CONTRACTOR any exclusion information discovered.
The provider shall be informed by the CONTRACTOR that civil monetary penalties may be
imposed against providers who employ or enter into contracts with excluded individuals
or entities to provide items or services to TennCare members;

	 	2.12.9.40	 	The provider, subcontractor or any other entity agrees to abide by the Medicaid
laws, regulations and program instructions that apply to the provider. The provider,
subcontractor or any other entity understands that payment of a claim by TennCare or a
TennCare Managed Care Contractor and/or Organization is conditioned upon the claim and
the underlying

transaction complying with such laws, regulations, and program instructions
(including, but not limited to, the Federal anti-kickback statute and the Stark
law), and is conditioned on the provider’s, subcontractor’s or any other entity’s
compliance with all applicable conditions of participation in Medicaid. The
provider, subcontractor or any other entity understands and agrees that each claim
the provider, subcontractor or any other entity submits to TennCare or a TennCare
Managed Care Contractor and/or Organization constitutes a certification that the
provider, subcontractor or any other entity has complied with all applicable
Medicaid laws, regulations and program instructions (including, but not limited
to, the Federal anti-kickback statute and the Stark law), in connection with such
claims and the services provided therein;

	 	2.12.9.41	 	Require the provider to conduct background checks in accordance with state law and
TennCare policy;

	 	2.12.9.42	 	Require the provider to report suspected abuse, neglect, and exploitation of
adults in accordance with TCA 71-6-103 and to report suspected brutality, abuse, or
neglect of children in accordance with TCA 37-1-403 and TCA 37-1-605;

	 	2.12.9.43	 	Require that, for CHOICES members, the provider facilitate notification of the
member’s care coordinator by notifying the CONTRACTOR, in accordance with the
CONTRACTOR’s processes, as expeditiously as warranted by the member’s circumstances, of
any known significant changes in the member’s condition or care, hospitalizations, or
recommendations for additional services;

	 	2.12.9.44	 	Require hospitals, including psychiatric hospitals, to cooperate with the
CONTRACTOR in developing and implementing protocols as part of the CONTRACTOR’s nursing
facility diversion plan (see Section 2.9.6.7), which shall, include, at a minimum, the
hospital’s obligation to promptly notify the CONTRACTOR upon admission of an eligible
member regardless of payor source for the hospitalization; how the hospital will
identify members who may need home health, private duty nursing, nursing facility, or
CHOICES HCBS upon discharge, and how the hospital will engage the CONTRACTOR in the
discharge planning process to ensure that members receive the most appropriate and
cost-effective medically necessary services upon discharge;

	 	2.12.9.45	 	As a condition of reimbursement for global procedures codes for obstetric care,
the provider shall submit utilization or encounter data as specified by the CONTRACTOR
in a timely manner to support the individual services provided;

	 	2.12.9.46	 	Except as otherwise specified in Sections 2.12.11 or 2.12.12, require the provider
to secure all necessary liability and malpractice insurance coverage as is necessary to
adequately protect the CONTRACTOR’s members and the CONTRACTOR under the provider
agreement. The provider shall maintain such insurance coverage at all times during the
provider agreement and upon execution of the provider agreement furnish the CONTRACTOR
with written verification of the existence of such coverage;

	 	2.12.9.47	 	Specify both the CONTRACTOR and the provider agree to recognize and abide by all
state and federal laws, regulations and guidelines applicable to the CONTRACTOR and the
provider. Provide that the agreement incorporates by reference all applicable federal
law and state laws, TennCare rules and regulations, consent decrees or court orders,
and revisions of such laws, regulations, consent decrees or court orders shall
automatically be incorporated into the provider agreement, as they become effective;

	 	2.12.9.48	 	Specify procedures and criteria for any alterations, variations,
modifications, waivers, extension of the provider agreement termination date, or early
termination of the agreement and specify the terms of such change. If provision does
not require amendments be valid only when reduced to writing, duly signed and attached
to the original of the provider agreement, then the terms shall include provisions
allowing at least thirty (30) calendar days to give notice of rejection and requiring
that receipt of notification of amendments be documented (e.g., certified mail,
facsimile, hand-delivered receipt, etc);

	 	2.12.9.49	 	Include provisions that allow the CONTRACTOR to suspend, deny, refuse to renew or
terminate any provider agreement in accordance with the terms of the CONTRACTOR’s
Agreement with TENNCARE (see Section 4.4) and applicable law and regulation;

	 	2.12.9.50	 	Specify that TENNCARE reserves the right to direct the CONTRACTOR to terminate or
modify the provider agreement when TENNCARE determines it to be in the best interest of
the State;

	 	2.12.9.51	 	Specify that both parties recognize that in the event of termination of this
Agreement between the CONTRACTOR and TENNCARE for any of the reasons described in
Section 4.4 of this Agreement, the provider shall immediately make available, to
TENNCARE, or its designated representative, in a usable form, any or all records,
whether medical or financial, related to the provider’s activities undertaken pursuant
to the CONTRACTOR/provider agreement. The provision of such records shall be at no
expense to TENNCARE;

	 	2.12.9.52	 	Specify that the TennCare Provider Independent Review of Disputed Claims process
shall be available to providers to resolve claims denied in whole or in part by the
CONTRACTOR as provided at TCA 56-32-126(b);

	 	2.12.9.53	 	Include a Conflict of Interest clause as stated in Section 4.19 of this Agreement,
Gratuities clause as stated in Section 4.23 of this Agreement, and Lobbying clause as
stated in Section 4.24 of this Agreement between the CONTRACTOR and TENNCARE;

	 	2.12.9.54	 	Specify that at all times during the term of the agreement, the provider shall
indemnify and hold TENNCARE harmless from all claims, losses, or suits relating to
activities undertaken pursuant to the Agreement between TENNCARE and the CONTRACTOR.
This indemnification may be accomplished by incorporating Section 4.31 of the
TENNCARE/CONTRACTOR Agreement in its entirety in the provider agreement or by use of
other language developed by the CONTRACTOR and approved in writing by TENNCARE;

	 	2.12.9.55	 	Require safeguarding of information about enrollees according to applicable state
and federal laws and regulations and as described in Sections 2.27 and 4.33 of this
Agreement;

	 	2.12.9.56	 	Require the provider to comply with 42 CFR Part 438, Managed care, including but
not limited to 438.6(f)(2)(i), compliance with the requirements mandating provider
identification of provider-preventable conditions as a condition of payment. At a
minimum, this shall mean non-payment of provider-preventable conditions as well as
appropriate reporting as required by the CONTRACTOR and TENNCARE;

2.12.9.57 Specify provider actions to improve patient safety and quality;

	 	2.12.9.58	 	Provide general and targeted education to providers regarding emergency
appeals, including when an emergency appeal is appropriate, and procedures for
providing written certification thereof, and specify that the provider shall comply
with the appeal process, including but not limited to the following:

	 	2.12.9.58.1	 	Assist an enrollee by providing appeal forms and contact information including
the appropriate address, telephone number and/or fax number for submitting appeals for
state level review; and

	 	2.12.9.58.2	 	Require in advance, that providers seek prior authorization, when they feel they
cannot order a drug on the TennCare PDL as well as taking the initiative to seek prior
authorization or change or cancel the prescription when contacted by an enrollee or
pharmacy regarding denial of a pharmacy service due to system edits (e.g., therapeutic
duplication, etc.);

	 	2.12.9.59	 	Require the provider to coordinate with the TennCare PBM regarding authorization
and payment for pharmacy services;

	 	2.12.9.60	 	Specify any liquidated damages, sanctions or reductions in payment that the
CONTRACTOR may assess on the provider for specific failures to comply with contractual
and/or credentialing requirements. This shall include, but may not be limited to a
provider’s failure or refusal to respond to the CONTRACTOR’s request for information,
the request to provide medical records, credentialing information, etc.; at the
CONTRACTOR’s discretion or a directive by TENNCARE, the CONTRACTOR shall impose
financial consequences against the provider as appropriate;

	 	2.12.9.61	 	Require that the provider display notices of the enrollee’s right to appeal
adverse action affecting services in public areas of their facility(s) in accordance
with TennCare rules and regulations, subsequent amendments, or any and all consent
decrees and court orders. The CONTRACTOR shall ensure that providers have a correct and
adequate supply of public notices;

	 	2.12.9.62	 	Include language which informs providers of the package of benefits that
TENNderCare offers and which requires providers to make treatment decisions based upon
children’s individual medical and behavioral health needs. TENNderCare requirements are
contained in Section 2.7.6 of this Agreement. All provider agreements shall contain
language that references the TENNderCare requirements in this Agreement between
TENNCARE and the CONTRACTOR, and the provider agreement shall either physically
incorporate these sections of the Agreement or include language to require that these
sections be furnished to the provider upon request;

	 	2.12.9.63	 	Include a provision which states that providers are not permitted to encourage or
suggest, in any way, that TennCare children be placed into state custody in order to
receive medical, behavioral, or long-term care services covered by TENNCARE;

	 	2.12.9.64	 	Require that providers offer hours of operation that are no less than the hours of
operation offered to commercial enrollees;

	 	2.12.9.65	 	Specify that the provider have written procedures for the provision of language
interpretation and translation services for any enrollee who needs such services,
including but not limited to, enrollees with Limited English Proficiency;

	 	2.12.9.66	 	The provider shall not use TennCare’s name or trademark for any materials intended
for dissemination to their patients unless said material has been submitted to TENNCARE
by the CONTRACTOR for review and has been approved by TENNCARE in accordance with
Section 2.17 of this Agreement. This prohibition shall not include references to
whether or not the provider accepts TennCare; and

	 	2.12.9.67	 	Require that if any requirement in the provider agreement is determined by
TENNCARE to conflict with the Agreement between TENNCARE and the CONTRACTOR, such
requirement shall be null and void and all other provisions shall remain in full force
and effect.

	24.	 	Section 2.12.12.9 shall be amended by adding a new Section 2.12.12.9.3 which shall read as
follows:

	 	2.12.12.9.3	 	Communicating with hospitals, discharge planners or other institutions for
the purposes of soliciting potential CHOICES members that should instead be referred to
the person’s MCO or AAAD, as applicable;

	25.	 	Section 2.12.12.10 shall be amended by deleting the word “and” at the end of the sentence.

	26.	 	Section 2.12.12 shall be amended by adding new Sections 2.12.12.12 and 2.12.12.13 as follows:

	 	2.12.12.12	 	Prohibit CHOICES providers from altering in any manner official CHOICES or
MFP brochures or other CHOICES or MFP materials unless the CONTRACTOR has submitted a
request to do so to TENNCARE and obtained prior written approval from TENNCARE in
accordance with Section 2.17 of this Agreement; and

	 	2.12.12.13	 	Prohibit CHOICES providers from reproducing for its own use the CHOICES or MFP
logos unless the CONTRACTOR has submitted a request to do so to TENNCARE and obtained
prior written approval from TENNCARE in accordance with Section 2.17 of this Agreement.

	27.	 	Section 2.13.1 shall be amended by deleting and replacing Section 2.13.1.5 and adding new
Sections 2.13.1.6, 2.13.1.7 and 2.13.1.8 as follows:

	 	2.13.1.5	 	The CONTRACTOR shall ensure that payments are not issued to providers that
have not obtained a Tennessee Medicaid provider number or for which disclosure
requirements, as applicable, have not been obtained by the CONTRACTOR in accordance
with 42 CFR 455.100 through 106, Section 2.12.9.37 of this Agreement, and TennCare
policies and procedures.

	 	2.13.1.6	 	The CONTRACTOR, as well as its subcontractors and tax-reporting provider entities
shall not be permitted to assign TennCare funds/payments to billing agents or
alternative payees without executing a billing agent or alternative payee assignment
agreement. The billing agents and alternative payees are subject to initial and monthly
federal exclusion (LEIE) and debarment (EPLS) screening by the assignee if the
alternative payee assignment is on-going. Further, direct and indirect payments to out
of country individuals and/or entities are prohibited.

	 	2.13.1.7	 	For any entities to which the CONTRACTOR makes payment via electronic transfers,
the CONTRACTOR shall have a signed EFT form that shall have 42 CFR 455.18 and 455.19
statements immediately preceding the “Signature” section.

	 	2.13.1.8	 	The CONTRACTOR’s failure to implement State Budget Reductions as described by
TENNCARE may, at the discretion of TENNCARE, result in the CONTRACTOR forfeiting
savings that would have been realized based on the timely implementation, including the
forfeiture of recoupment from providers.

	28.	 	Section 2.14.1 shall be amended by deleting and replacing Section 2.14.1.1 and adding new
Sections 2.14.1.2 through 2.14.1.4. The remaining Sections shall be renumbered accordingly,
including any references thereto.

	 	2.14.1.1	 	The CONTRACTOR shall develop and maintain a utilization management (UM)
program which shall be documented in writing. As part of this program the CONTRACTOR
shall have policies and procedures with defined structures and processes. The UM
program shall assign responsibility to appropriate individuals including a designated
senior physician and shall involve a designated behavioral health care practitioner in
the implementation of behavioral health aspects of the program and a designated
long-term care professional in the implementation of the long-term care aspects of the
program.

	 	2.14.1.2	 	The UM program shall be supported by an associated work plan and shall be evaluated
annually and updated as necessary.

	 	2.14.1.3	 	The UM program description, associated work plan, and annual evaluation of the UM
program shall be submitted to TENNCARE (See Section 2.30.11.1).

	 	2.14.1.4	 	The UM program, including the UM program description, associated work plan, and
annual evaluation shall address Emergency Department (ED) utilization and ED diversion
efforts..

	29.	 	The renumbered Section 2.14.1.16.1 shall be deleted and replaced as follows:

	 	2.14.1.16.1	 	Review ED utilization data, at a minimum, every six (6) months to identify
members with utilization exceeding the threshold defined by TENNCARE as ten (10) or
more visits in the defined six (6) month period. The review due March 31st
shall cover ED utilization during the preceding July through December; the review due
September 30th shall cover ED utilization during the preceding January
through June (See Section 2.30.11.7).

	30.	 	Section 2.15.6.1 shall be amended by adding a new Section 2.15.6.1.1 and 2.15.6.1.2 which
shall read as follows:

	 	2.15.6.1.1	 	Beginning with HEDIS 2012, the CONTRACTOR shall utilize the Hybrid
methodology (i.e., gathered from administrative and medical record data) as the data
collection method for any Medicaid HEDIS measure containing Hybrid Specifications as
identified by NCQA.

	 	2.15.6.1.2	 	The CONTRACTOR shall submit to TENNCARE by June 15 of each calendar year a

detailed explanation for any Medicaid HEDIS measure marked as “Not Reported”.

31. Section 2.15.7 shall be deleted and replaced as follows:

2.15.7 Critical Incident Reporting and Management

2.15.7.1 CHOICES Critical Incident Reporting and Management

	 	2.15.7.1.1	 	The CONTRACTOR shall develop and implement a critical incident reporting and
management system for incidents that occur in a home and community-based long-term care
service delivery setting, including: community-based residential alternatives; adult
day care centers; other CHOICES HCBS provider sites; and a member’s home, if the
incident is related to the provision of covered CHOICES HCBS.

	 	2.15.7.1.2	 	The CONTRACTOR shall identify and track critical incidents and shall review and
analyze critical incidents to identify and address potential and actual quality of care
and/or health and safety issues. The CONTRACTOR shall regularly review the number and
types of incidents (including, for example, the number and type of incidents across
settings, providers, and provider types) and findings from investigations (including
findings from APS and CPS if available); identify trends and patterns; identify
opportunities for improvement; and develop and implement strategies to reduce the
occurrence of incidents and improve the quality of CHOICES HCBS.

	 	2.15.7.1.3	 	Critical incidents shall include but not be limited to the following incidents
when they occur in a home and community-based long-term care service delivery setting
(as defined in Section 2.15.7.1.1 above):

	 	 	 
	2.15.7.1.3.1

2.15.7.1.3.2

2.15.7.1.3.3

2.15.7.1.3.4

2.15.7.1.3.5

2.15.7.1.3.6

2.15.7.1.3.7
	 	Unexpected death of a CHOICES member;

Suspected physical or mental abuse of a CHOICES member;

Theft or financial exploitation of a CHOICES member;

Severe injury sustained by a CHOICES member;

Medication error involving a CHOICES member;

Sexual abuse and/or suspected sexual abuse of a CHOICES member; and

Abuse and neglect and/or suspected abuse and neglect of a CHOICES member.

	 	2.15.7.1.4	 	The CONTRACTOR shall require its staff and contract CHOICES HCBS providers to
report, respond to, and document critical incidents as specified by the CONTRACTOR.
This shall include, but not be limited to the following:

2.15.7.1.4.1 Requiring that the CONTRACTOR’s staff and contract CHOICES HCBS providers

report critical incidents to the CONTRACTOR in accordance with applicable
requirements. The CONTRACTOR shall develop and implement a critical incident
reporting process, including the form to be used to report critical incidents
and reporting timeframes. The maximum timeframe for reporting an incident to
the CONTRACTOR shall be twenty-four (24) hours. The initial report of an
incident within twenty-four (24) hours may be submitted verbally, in which
case the person/agency/entity making the initial report shall submit a
follow-up written report within forty-eight (48) hours.

	2.15.7.1.4.2	 	Requiring that suspected abuse, neglect, and exploitation of members who are
adults is immediately reported in accordance with TCA 71-6-103 and suspected brutality, abuse,
or neglect of members who are children is immediately reported in accordance with TCA 37-1-403
or TCA 37-1-605 as applicable.

	2.15.7.1.4.3	 	Requiring that its staff and contract CHOICES HCBS providers immediately (which shall
not exceed twenty-four hours) take steps to prevent further harm to any and all members and
respond to any emergency needs of members.

	2.15.7.1.4.4	 	Requiring that contract CHOICES HCBS providers with a critical incident conduct an
internal critical incident investigation and submit a report on the investigation within the
timeframe specified by the CONTRACTOR. The timeframe for submitting the report shall be as
soon as possible, may be based on the severity of the incident, and, except under extenuating
circumstances, shall be no more than thirty (30) days after the date of the incident. The
CONTRACTOR shall review the provider’s report and follow-up with the provider as necessary to
ensure that an appropriate investigation was conducted and corrective actions were implemented
within applicable timeframes.

	2.15.7.1.4.5	 	Requiring that its staff and contract CHOICES HCBS providers cooperate with any
investigation conducted by the CONTRACTOR or outside agencies (e.g., TENNCARE, APS, CPS, and
law enforcement).

	2.15.7.1.4.6	 	Defining the role and responsibilities of the fiscal employer agent (see definition in
Section 1) in reporting, responding to, documenting, and investigating any critical incidents,
which shall include reporting incidents to the CONTRACTOR using the process developed in a
accordance with Section 2.15.7.1.4.1, investigating critical incidents, submitting a report on
investigations to the CONTRACTOR and reporting to the CONTRACTOR within 24 hours in accordance
with the abuse and neglect plan protocols anytime there is a suspicion of abuse or neglect
(see Section 2.9.7.8.6); training employees, contractors of the FEA (including supports
brokers), and consumer-directed workers regarding reporting, responding to, documenting, and
cooperating with the investigation of any critical incidents; and training consumers and
caregivers regarding critical incident reporting and management. Such role and
responsibilities shall be defined in a manner that is consistent with requirements in this
Section 2.15.7.1.4 as well as TENNCARE’s contract with the fiscal employer agent and the model
contract between the CONTRACTOR and the FEA.

	2.15.7.1.4.7	 	Reviewing the FEA’s reports and investigations regarding critical incidents and
follow-up with the FEA as necessary regarding corrective actions determined by the member

and/or his/her representative to help ensure the member’s health and safety.

	2.15.7.1.4.8	 	Providing appropriate training and taking corrective action as needed to ensure its
staff, contract CHOICES HCBS providers, the FEA, and workers comply with critical incident
requirements.

	2.15.7.1.4.9	 	Conducting oversight, including but not limited to oversight of its staff, contract
CHOICES HCBS providers, and the FEA, to ensure that the CONTRACTOR’s policies and procedures
are being followed and that necessary follow-up is being conducted in a timely manner.

2.15.7.2 Behavioral Health Adverse Occurrences

	 	2.15.7.2.1	 	Adverse occurrences shall include but not be limited to the following incidents
when they occur while the member is in the care of a behavioral health inpatient,
residential or crisis stabilization unit:

	 	 	 
	2.15.7.2.1.1

2.15.7.2.1.2

2.15.7.2.1.3

2.15.7.2.1.4

2.15.7.2.1.5

2.15.7.2.1.6

2.15.7.2.1.7

2.15.7.2.1.8

2.15.7.2.1.9
	 	Suicide death

Non-suicide death

Death-cause unknown

Homicide

Homicide Attempt with significant medical intervention

Suicide Attempt with significant medical intervention

Allegation of Abuse/Neglect (Physical, Sexual, Verbal)

Accidental Injury with significant medical intervention

Use of Restraints/Seclusion (Isolation) requiring significant medical intervention; or

	 	2.15.7.2.1.10	 	Treatment complications (medication errors and adverse medication reaction)
requiring significant medical intervention.	 

	 	2.15.7.3	 	The CONTRACTOR shall report to TENNCARE any death and any incident that could
significantly impact the health or safety of a member (e.g., physical or sexual abuse)
within twenty-four (24) hours of detection or notification.

2.15.7.4 As specified in Sections 2.30.12.7 and 2.30.12.8, the CONTRACTOR shall submit
quarterly

reports to TENNCARE regarding all critical incidents and adverse occurrences.

	32.	 	Section 2.15 shall be amended by adding a new Section 2.15.8 as follows:

2.15.8 Provider Preventable Conditions

The CONTRACTOR shall comply with 42 CFR Part 438 requirements mandating provider
identification of provider-preventable conditions as a condition of payment, as well as the
prohibition against payment for provider-preventable conditions as set forth in 42 CFR
§434.6(a)(12) and § 447.26. The CONTRACTOR shall submit all identified Provider Preventable
Conditions in a form or frequency as described by TENNCARE.

	33.	 	Section 2.16.2 shall be deleted and replaced as follows:

	2.16.2	 	The prohibition on enrollee marketing shall not apply to health education and outreach
activities (see Section 2.7.4) that are described in the CONTRACTOR’s TennCare approved Annual
Community Outreach Plan.

	34.	 	Section 2.17.1.1 shall be deleted and replaced as follows:

2.17.1.1 The CONTRACTOR shall submit to TENNCARE for review and prior written approval
all

materials that will be distributed to members (referred to as member materials).
This includes but is not limited to member handbooks, provider directories, member
newsletters, identification cards, fact sheets, notices, brochures, form letters,
mass mailings, system generated letters and any other additional, but not
required, materials and information provided to members designed to promote health
and/or educate members.

	35.	 	Section 2.17.2.7 shall be amended by adding additional text as follows:

2.17.2.7 All written member materials shall be made available in alternative formats
for persons with

special needs at no expense to the member. Alternative formats may include, but
may not be limited to: Braille, large print, and audio and shall be based on the
needs of the individual enrollee. The CONTRACTOR shall have processes in place to
ensure that alternative format material will be made available to the enrollee
within forty five (45) days of a request;

	36.	 	Section 2.17.4.7.7 shall be deleted in its entirety and the remaining Section shall be
renumbered accordingly, including any references thereto.

	37.	 	Section 2.18.5.3 shall be amended by deleting and replacing Section 2.18.5.3.14 and adding a
new Section 2.18.5.3.15 as follows. The remaining Section shall be renumbered accordingly,
including any references thereto.

	 	2.18.5.3.14	 	Information for CHOICES HCBS providers regarding prohibition of
facilitating CHOICES referrals with the expectation of being selected as the service
provider or petitioning existing CHOICES members to change CHOICES providers (See
Section 2.12.12.9);

	 	2.18.5.3.15	 	Requirements regarding the prohibition of the reproduction and/or use of CHOICES
and MFP materials and logos (See Sections 2.12.12.12 and 2.12.12.13).

	38.	 	Section 2.18.6.3.16 shall be amended by adding “and behavioral health” as follows:

	 	2.18.6.3.16	 	Critical incident reporting and management for CHOICES HCBS and behavioral
health providers;

	39.	 	Section 2.18.6 shall be amended by adding a new Section 2.18.6.9 and renumbering the
remaining Section accordingly including any references thereto.

	 	2.18.6.9	 	The CONTRACTOR shall provide documented and routine education and training to
providers regarding proper billing.

	40.	 	Section 2.20.1 shall be deleted and replaced as follows and all references shall be
updated accordingly.

2.20.1 General

2.20.1.1 The Tennessee Bureau of Investigation, Medicaid Fraud Control Unit (TBI MFCU) is
the

state agency responsible for the investigation of provider fraud and abuse in the
TennCare program.

	 	 	 
	2.20.1.2

2.20.1.3
	 	The Office of Inspector General (OIG) has the primary responsibility to investigate TennCare

enrollee fraud and abuse.

The CONTRACTOR shall have surveillance and utilization control programs and procedures

(42 CFR 456.3, 456.4, 456.23) to safeguard the Medicaid funds against unnecessary
or inappropriate use of Medicaid services and against improper payments. The
CONTRACTOR shall have internal controls and policies and procedures in place that
are designed to prevent, detect, and report known or suspected fraud and abuse
activities.

2.20.1.4 The CONTRACTOR, as well as its subcontractors and providers, whether contract or
non-

contract, shall comply with all federal requirements (42 CFR Part 455) on
disclosure reporting. All tax-reporting provider entities that bill and/or receive
TennCare funds as the result of this Agreement shall submit routine disclosures in
accordance with timeframes specified in 42 CFR Part 455, Subpart B and TennCare
policies and procedures, including at the time of initial contracting, contract
renewal, at any time there is a change to any of the information on the disclosure
form, at least once every three (3) years, and at anytime upon request.

2.20.1.5 The CONTRACTOR, as well as its subcontractors and providers, whether contract or
non-

contract, shall comply with all federal requirements (42 C.F.R. § 1002) on
exclusion and debarment screening. All tax-reporting provider entities that bill
and/or receive TennCare funds as the result of this Agreement shall screen their
owners and employees against the federal exclusion databases (such as LEIE and
EPLS). Any unallowable funds made to excluded individuals as full or partial wages
and/or benefits shall be refunded to and/or obtained by the State and/or the
CONTRACTOR dependent upon the entity that identifies the payment of unallowable
funds to excluded individuals.

2.20.1.6 The CONTRACTOR shall have adequate staffing and resources to investigate unusual

incidents and develop and implement corrective action plans to assist the
CONTRACTOR in preventing and detecting potential fraud and abuse activities.

	 	2.20.1.7	 	The CONTRACTOR is prohibited from the repayment of funds paid by the CONTRACTOR to
any provider when the issues, services or claims upon which the repayment is based
meets one or more of the following:

	 	2.20.1.7.1	 	Have been obtained by the State of Tennessee, either by TENNCARE directly or as
part of a resolution of a state or federal investigation and/or lawsuit, including but
not limited to false claims act cases; or

2.20.1.7.2 Have been obtained by the States Recovery Audit Contractor (RAC) contractor; or

	 	2.20.1.7.3	 	When the issue, services or claims that are the basis of the repayment are
currently being investigated by the State of Tennessee, are the subject of pending
Federal or State litigation, or are being audited by the TennCare RAC.

2.20.1.8 This prohibition described above in Section 2.20.1.7 shall be limited to a specific
provider(s),

for specific dates, and for specific issues, services or claims. The CONTRACTOR
shall check with the Bureau of TennCare, Program Integrity Unit before initiating
any repayment of any program integrity related funds (See Section 2.20.1.7) to
ensure that the repayment is permissible. In the event that the CONTRACTOR obtains
funds in cases where repayment is prohibited under this section, the CONTRACTOR
will return the funds to the provider.

2.20.1.9 The CONTRACTOR shall comply with all federal and state requirements regarding fraud

and abuse, including but not limited to Sections 1128, 1156, and 1 902(a)(68) of
the Social Security Act.

	41.	 	Section 2.20.2 shall be amended by adding the word “,subcontractors” after the word
“CONTRACTOR” in Section 2.20.2.9 and by adding a new Section 2.20.2.13 as follows:

	 	2.20.2.13	 	In accordance with the Affordable Care Act and TennCare policy and
procedures, the CONTRACTOR shall report overpayments made by TENNCARE to the CONTRACTOR
as well as overpayments made by the CONTRACTOR to a provider and/or subcontractor (See
Section 2.12.9.36 and Section 3.16.5.1).

	42.	 	Sections 2.20.3.2.7 and 2.20.3.2.8 shall be amended by adding the word “Include” to the
beginning of the sentence and change the following word “A” to “a”.

	43.	 	Section 2.20.3.2 shall be amended by adding new Sections 2.20.3.2.2 and 2.20.3.2.14 as
follows and renumbering the remaining Section accordingly, including any references thereto.

	 	2.20.3.2.2	 	Include a risk assessment of the CONTRACTOR’s various fraud and
abuse/program integrity processes. A risk assessment shall also be submitted on an ‘as
needed’ basis and immediately after a program integrity related action, including
financial-related actions (such as overpayment, repayment and fines), is issued on a
provider with concerns of fraud and abuse. The CONTRACTOR shall inform TENNCARE of such
action and provide details of such financial action. The assessment shall also include
a listing of the CONTRACTOR’s top three vulnerable areas and shall outline action plans
in mitigating such risks;

	 	2.20.3.2.14	 	Include work plans for conducting both announced and unannounced site visits and
field audits to providers defined as high risk (providers with cycle/auto billing
activities, providers offering DME, home health, mental health, and transportation
services) to ensure services are rendered and billed correctly.

	44.	 	The renumbered Section 2.20.3.2.12 shall be amended by deleting the word “and” at the end
of the sentence and the renumbered Section 2.20.3.2.13 shall be amended by deleting “.” and
adding “; and” to the end of the sentence.

	45.	 	Section 2.20.3.6 shall be amended as follows:

2.20.3.6 The CONTRACTOR shall have provisions in its Compliance Plan regarding
conducting

monthly comparison of their provider files, including atypical providers, against
both the Excluded Parties List System (EPLS) and the HHS-OIG List of Excluded
Individuals/Entities (LEIE) and provide a report of the result of comparison to
TENNCARE each month. The CONTRACTOR shall establish an electronic database to
capture identifiable information on the owners, agents and managing employees
listed on providers’ Disclosure forms.

	46.	 	Section 2.22.2.1 shall be deleted and replaced as follows:

2.22.2.1 The CONTRACTOR shall maintain a claims management system that can uniquely
identify

the provider of the service (ensuring all billing information related to
tax-reporting business entities and information related to individuals who provide
services are properly reported on claims), date of receipt (the date the
CONTRACTOR receives the claim as indicated by a date-stamp), real-time-accurate
history of actions taken on each provider claim (i.e., paid, denied, suspended,
appealed, etc.), date of payment (the date of the check or other form of payment)
and all data elements as required by TENNCARE for encounter data submission (see
Section 2.23), and can track and report service use against benefit limits in
accordance with a methodology set by TENNCARE.

	47.	 	Section 2.22.2 shall be amended by adding a new Section 2.22.2.6 as follows and
renumbering the remaining Section accordingly, including any references thereto.

2.22.2.6 For any entities to which the CONTRACTOR makes payment via electronic
transfers, the

CONTRACTOR shall have a signed EFT form that shall have 42 CFR 455.18 and 455.19
statements immediately preceding the “Signature” section.

	48.	 	Section 2.22 shall be amended by adding a new Section 2.22.7 as follows and renumbering
the remaining Section accordingly, including any references thereto.

2.22.7 Monthly Focused Claims Testing

2.22.7.1 In addition to the claims payment accuracy testing procedures described in Section
2.22.6, the

CONTRACTOR shall perform a monthly self test on the accuracy of claims processing
based on claims judgmentally selected by TDCI. The maximum number of claims
selected by TDCI each month will not exceed twenty-five (25), unless TDCI, at its
discretion, determines a larger sample is warranted based on the results of the
accuracy tests. The results reported by the CONTRACTOR are not intended to
represent the percentage of compliance or noncompliance for the total population
of claims processed by the CONTRACTOR or subcontractors.

2.22.7.2 The monthly focused claims testing procedures include:

	 	2.22.7.2.1	 	The CONTRACTOR shall complete the attribute sheets provided by TDCI for each
claim to be tested within thirty (30) calendar days of receipt from TDCI.	 

2.22.7.2.2 The CONTRACTOR shall submit a plan of correction as requested by TDCI.

	49.	 	The renumbered Section 2.22.8 shall be amended by adding a new Section 2.22.8.3 as follows
and renumbering the remaining Section accordingly including any references thereto.

2.22.8.3 Identify improper payments made to invalid, missing, and/or mismatched NPIs,
and/or

TINs/EINs.

	50.	 	Section 2.24.4.2.4 shall be amended by deleting the reference to “Section 2.15.7.4” and
replacing it with “Section 2.15.7.1.4”.

	51.	 	Section 2.26.11 shall be deleted and replaced as follows:

2.26.11 Assignability

	 	2.26.11.1	 	Transportation and claims processing subcontracts shall include language requiring
that the subcontract agreement shall be assignable from the CONTRACTOR to the State, or
its designee: i) at the State’s discretion upon written notice to the CONTRACTOR and
the affected subcontractor; or ii) upon CONTRACTOR’s request and written approval by
the State. Further, the subcontract agreement shall include language by which the
subcontractor agrees to be bound by any such assignment, and that the State, or its
designee, shall not be responsible for past obligations of the CONTRACTOR.

	 	2.26.11.2	 	Subcontractors shall not be permitted to assign TennCare funds/payments to billing
agents or alternative payees without executing a billing agent or alternative payee
assignment agreement. The billing agents and alternative payees are subject to initial
and monthly federal exclusion (LEIE) and debarment (EPLS) screening by the assignee if
the alternative payee assignment is on-going. Further, direct and indirect payments to
out of country individuals and/or entities are prohibited.

	52.	 	Section 2.27 shall be deleted and replaced as follows:

	 	 	 
	2.27 COMPLIANCE WITH HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT (HIPAA) AND HEALTH INFORMATION
	TECHNOLOGY FOR ECONOMIC AND CLINICAL HEALTH ACT (HITECH)
	2.27.1 TENNCARE and the CONTRACTOR shall comply with obligations under the Health Insurance Portability and
	Accountability Act of 1996 (HIPAA) and Health Information Technology for Economic and Clinical Health Act (HITECH)
	under the American Recovery and Reinvestment Act of 2009 (ARRA) and their accompanying regulations, and as amended.
	2.27.2 The CONTRACTOR warrants to TENNCARE that it is familiar with the requirements of HIPAA and HITECH and their
	accompanying regulations, and shall comply with all applicable HIPAA and HITECH requirements in the course of this
	Agreement including but not limited to the following:
	2.27.2.1

2.27.2.2

2.27.2.3

2.27.2.4

2.27.2.5
	 	Compliance with the Privacy Rule, Security Rule, and Notification Rule;

The creation of and adherence to sufficient Privacy and Security Safeguards and Policies;

Timely Reporting of Violations in the Access, Use and Disclosure of PHI; and

Timely Reporting of Privacy and/or Security Incidents.

Failure to comply may result in actual damages that the State incurs as a result of the breach

and liquidated damages in accordance with Section 4.20.

	2.27.3	 	The CONTRACTOR warrants that it shall cooperate with TENNCARE, including cooperation and
coordination with TENNCARE privacy officials and other compliance officers required by HIPAA
and HITECH and their accompanying regulations, in the course of performance of the Agreement
so that both parties will be in compliance with HIPAA and HITECH.

	 	 	TENNCARE and the CONTRACTOR shall sign documents, including, but not limited to, business associate
agreements, as required by HIPAA and HITECH, that are reasonably necessary to keep TENNCARE
and the CONTRACTOR in compliance with HIPAA and HITECH.

	2.27.4	 	As a party to this Agreement, the CONTRACTOR hereby acknowledges its designation as a
covered entity and/or business associate under the HIPAA regulations and agrees to comply with
all applicable HIPAA and HITECH (hereinafter “HIPAA/HITECH”) regulations.

	2.27.5	 	In accordance with HIPAA/HITECH regulations, the CONTRACTOR shall, at a minimum:

	2.27.5.1	 	Comply with requirements of the Health Insurance Portability and Accountability Act of
1996 and the Health Information Technology for Economic and Clinical Health Act of 2009
(HITECH), including, but not limited to, the transactions and code sets, privacy, security,
and identifier regulations, by their designated compliance dates. Compliance includes meeting
all required transaction formats and code sets with the specified data sharing agreements
required under the regulations;

	2.27.5.2	 	Transmit/receive from/to its providers, subcontractors, clearinghouses and TENNCARE all
transactions and code sets required by the HIPAA/HITECH regulations in the appropriate
standard formats, utilizing appropriate and adequate safeguards, as specified under the law
and as directed by TENNCARE so long as TENNCARE direction does not conflict with the law;

	2.27.5.3	 	Agree that if it is not in compliance with all applicable standards defined within the
transactions and code sets, privacy, security and all subsequent HIPAA/HITECH standards, that
it will be in breach of this Agreement and will then take all reasonable steps to cure the
breach or end the violation as applicable. Since inability to meet the transactions and code
sets requirements, as well as the privacy and security requirements can bring basic business
practices between TENNCARE and the CONTRACTOR and between the CONTRACTOR and its providers
and/or subcontractors to a halt, if for any reason the CONTRACTOR cannot meet the requirements
of this Section, TENNCARE may terminate this Agreement in accordance with the Business
Associate Agreement ancillary to this Agreement;

	 	2.27.5.4	 	Ensure that Protected Health Information (PHI) exchanged between the CONTRACTOR and
TENNCARE is used only for the purposes of treatment, payment, or health care operations
and health oversight and its related functions. All PHI not transmitted for these
purposes or for purposes allowed under the federal HIPAA/HITECH regulations shall be
de-identified to secure and protect the individual enrollee’s PHI;

	 	2.27.5.5	 	Report to TENNCARE’s Privacy Office immediately upon becoming aware of any use or
disclosure of PHI in violation of this Agreement by the CONTRACTOR, its officers,
directors, employees, subcontractors or agents or by a third party to which the
CONTRACTOR disclosed PHI;

2.27.5.6 Specify in its agreements with any agent or subcontractor that will have access to
PHI that

such agent or subcontractor agrees to be bound by the same restrictions, terms and
conditions that apply to the CONTRACTOR pursuant to this Section;

2.27.5.7 Make available to TENNCARE enrollees the right to amend their PHI in accordance
with the

federal HIPAA regulations. The CONTRACTOR shall also send information to enrollees
educating them of their rights and necessary steps in this regard;

	 	 	 
	2.27.5.8

2.27.5.9
	 	Make an enrollee’s PHI accessible to TENNCARE immediately upon request by

TENNCARE;

Make its internal policies and procedures, records and other documentation related to the use

and disclosure of PHI available to the U.S. Secretary of Health and Human Services
for the purposes of determining compliance with the HIPAA/HITECH regulations upon
request;

	 	2.27.5.10	 	Create and adopt policies and procedures to periodically audit adherence to all
HIPAA/HITECH regulations, and for which CONTRACTOR acknowledges and promises to
perform, including but not limited to, the following obligations and actions:

	 	2.27.5.10.1	 	Agree to ensure that any agent, including a subcontractor, to whom it provides
PHI that was created, received, maintained, or transmitted on behalf of TENNCARE agrees
to use reasonable and appropriate safeguards to protect the PHI.

	 	2.27.5.11	 	If feasible, return or destroy all PHI, in whatever form or medium (including any
electronic medium) and all copies of an any data or compilations derived from and
allowing identification of any individual who is a subject of that PHI upon
termination, cancellation, expiration or other conclusion of the Agreement, and in
accordance with this Section of this Agreement. The CONTRACTOR shall complete such
return or destruction as promptly as possible, but not later than thirty (30) days
after the effective date of the termination, cancellation, expiration or other
conclusion of the Agreement. The CONTRACTOR shall identify any PHI that cannot feasibly
be returned or destroyed. Within such thirty (30) days after the effective date of the
termination, cancellation, expiration or other conclusion of the Agreement, the
CONTRACTOR shall: (1) certify on oath in writing that such return or destruction has
been completed; (2) identify any PHI which cannot feasibly be returned or destroyed;
and (3) certify that it will only use or disclose such PHI for those purposes that make
its return or destruction infeasible;

	 	2.27.5.12	 	Implement all appropriate administrative, physical and technical safeguards to
prevent the use or disclosure of PHI other than pursuant to the terms and conditions of
this Agreement and, including, but not limited to, privacy, security and
confidentiality requirements in 45 CFR Parts 160 and 164;

	 	2.27.5.13	 	Set up appropriate mechanisms to limit use or disclosure of PHI to the minimum
necessary to accomplish the intended purpose of the use or disclosure;

	 	2.27.5.14	 	Create and implement policies and procedures to address present and future
HIPAA/HITECH regulatory requirements as needed, including, but not limited to: use and
disclosure of data; de-identification of data; minimum necessary access; accounting of
disclosures; enrollee’s right to amend, access, request restrictions; notice of privacy
practices and right to file a complaint;

	 	2.27.5.15	 	Provide an appropriate level of training to its staff and employees regarding
HIPAA/HITECH-related policies, procedures, enrollee rights and penalties prior to the
HIPAA/HITECH implementation deadlines and at appropriate intervals thereafter;

	 	2.27.5.16	 	Track training of CONTRACTOR staff and employees and maintain signed
acknowledgements by staff and employees of the CONTRACTOR’s HIPAA/HITECH policies;

	 	2.27.5.17	 	Be allowed to use and receive information from TENNCARE where necessary for the
management and administration of this Agreement and to carry out business operations
where permitted under the regulations;

2.27.5.18 Be permitted to use and disclose PHI for the CONTRACTOR’s own legal
responsibilities;

	 	2.27.5.19	 	Adopt the appropriate procedures and access safeguards to restrict and regulate
access to and use by CONTRACTOR employees and other persons performing work for the
CONTRACTOR to have only minimum necessary access to PHI and personally identifiable
data within their organization;

	 	2.27.5.20	 	Continue to protect and secure PHI AND personally identifiable information
relating to enrollees who are deceased;

	 	2.27.5.2	 	1 Be responsible for informing its enrollees of their privacy rights in the manner
specified under the regulations;

2.27.5.22 Make available PHI in accordance with 45 CFR 164.524;

	 	2.27.5.23	 	Make available PHI for amendment and incorporate any amendments to PHI in
accordance with 45 CFR 164.526; and

	 	2.27.5.24	 	Obtain a third (3rd) party certification of their HIPAA transaction compliance
ninety (90) calendar days before the start date of operations.

	2.27.6	 	The CONTRACTOR shall track all security incidents as defined by HIPAA/HITECH, and, as
required by the HIPAA/HITECH Reports. The CONTRACTOR shall periodically report in summary
fashion such security incidents.

	2.27.7	 	TENNCARE and the CONTRACTOR are “information holders” as defined in TCA 47-18-2107. In the
event of a breach of the security of CONTRACTOR’s information system, as defined by TCA 47-18-
2 107, the CONTRACTOR shall indemnify and hold TENNCARE harmless for expenses and/or damages
related to the breach. Such obligations shall include, but not be limited to, mailing
notifications to affected enrollees. Substitute notice to written notice, as defined by TCA
47-18-21 07(e)(2)and(3), shall only be permitted with TENNCARE’s express written approval. The
CONTRACTOR shall notify

TENNCARE’s Privacy Office immediately upon becoming aware of any security incident
that would constitute a “breach of the security of the system” as defined in TCA 47-18-2
107.

	 	 	2.27.8 NOTIFICATION OF BREACH & NOTIFICATION OF PROVISIONAL BREACH. The CONTRACTOR
shall notify TENNCARE’s Privacy Office immediately upon becoming aware of any incident, either
confirmed or provisional, that represents or may represent unauthorized access, use or
disclosure of encrypted or unencrypted computerized data that materially compromises the
security, confidentiality, or integrity of enrollee PHI maintained or held by the CONTRACTOR,
including any unauthorized acquisition of enrollee PHI by an employee or otherwise authorized
user of the CONTRACTOR’s system. This includes, but is not limited to, loss or suspected loss
of remote computing or telework devices such as laptops, PDAs, Blackberrys or other
Smartphones, USB drives, thumb drives, flash drives, CDs, and/or disks.

	53.	 	Section 2.28.2 and 2.28.3 shall be deleted and replaced as follows:

	2.28.2	 	In order to demonstrate compliance with federal and state regulations of Title VI of
the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, Title II of the
Americans with Disabilities Act of 1990, the Age Discrimination Act of 1975 and the Omnibus
Budget Reconciliation Act of 1981 (P.L. 97- 35), the Church Amendments (42 U.S.C. 300a-7),
Section 245 of the Public Health Service Act (42 U.S.C. 238n.), and the Weldon Amendment
(Consolidated Appropriations Act 2008, Public Law 110-161, Div. G, Sec. 508 (d), 121 Stat.
1844, 2209), the CONTRACTOR shall designate a staff person to be responsible for
non-discrimination compliance as required in Section 2.29.1.

2.28.2.1 This person shall develop a CONTRACTOR non-discrimination compliance training plan

within thirty (30) days of the implementation of this Agreement, to be approved by
the Bureau of TennCare. This person shall be responsible for the provision of
instruction regarding the plan to all CONTRACTOR staff within sixty (60) days of
the implementation of this Agreement. This person shall be responsible for the
provision of instruction regarding the plan to providers and direct service
subcontractors within ninety (90) days of the implementation of this Agreement.
The CONTRACTOR shall be able to show documented proof of such instruction.

	2.28.3	 	The CONTRACTOR’s non-discrimination compliance plan shall include written policies and
procedures that demonstrate non-discrimination in the provision of services to members. The
policy shall also demonstrate non-discrimination in the provision of services for members with
Limited English Proficiency and those requiring communication assistance in alternative
formats (see Section 2.18.2). These policies and procedures shall be prior approved in writing
by TENNCARE.

	54.	 	Section 2.30.3 shall be deleted and replaced as follows:

2.30.3 Annual Community Outreach Plan

The CONTRACTOR shall submit an Annual Community Outreach Plan no later than November 30 of
each year for review and approval by TENNCARE. The Annual Community Outreach Plan shall be
written in accordance with guidance prepared by TENNCARE. It shall include, but is not
limited to: all proposed community/health education events related to TENNderCare;
community/health education events unrelated to TENNderCare; rationale for participating in
these events; and a process for evaluating the benefits of the events.

	55.	 	Section 2.30.6 shall be amended by adding a new Section 2.30.6.8 as follows and
renumbering the remaining Section accordingly, including any references thereto.

	 	2.30.6.8	 	Beginning April 2012, the CONTRACTOR shall submit a monthly CHOICES Caseload
and Staffing Ratio Report.

	 	2.30.6.8.1	 	The report shall reflect the weighted care coordinator-to-CHOICES member staffing
ratios and care coordinator caseloads on the last business day of the month prior to
the report submission (e.g. the report submitted in April 2012 will reflect the
weighted caseloads and staffing ratios as they appeared on March 31, 2012);

2.30.6.8.2 The report shall include at a minimum;

2.30.6.8.2.1 The weighted average care coordinator-to CHOICES member staffing ratio; and

2.30.6.8.2.2 The weighted caseload of CHOICES member assignments to each individual care
coordinator.

	56.	 	Section 2.30 shall be amended by adding a new Section 2.30.7 “LEFT BLANK INTENTIONALLY”,
renumbering the remaining Section accordingly including any references thereto and by deleting
and replacing the renumbered Section 2.30.9 as “LEFT BLANK INTENTIONALLY.

	57.	 	The renumbered Section 2.30.11.2 shall be deleted and replaced as follows:

	 	2.30.11.2	 	The CONTRACTOR shall submit quarterly Cost and Utilization Reports. These reports
shall be in an Excel spreadsheet format and submitted with a ninety (90) day lag and
shall be due to TENNCARE one hundred twenty (120) calendar days following the quarter
for which the CONTRACTOR is reporting. These reports shall be submitted on both a
cumulative year basis and on a rolling twelve (12) month basis.

	58.	 	The renumbered Section 2.30.11.7 shall be deleted and replaced as follows:

	 	2.30.11.7	 	The CONTRACTOR shall submit a semi-annual Emergency Department Threshold
Report (See Section 2.14.1.16.1) to TENNCARE no later than March 31st and
September 30th each year identifying interventions initiated for members who
exceeded the defined threshold for ED usage.

	59.	 	The renumbered Section 2.30.12 shall be amended by adding a new Section 2.30.12.5 as
follows and renumbering the remaining Sections accordingly, including any references thereto.

	 	2.30.12.5	 	The CONTRACTOR shall submit to TENNCARE by June 15 of each calendar year a
detailed explanation for any Medicaid HEDIS measure marked as “Not Reported”.

	60.	 	The renumbered Section 2.30.12 shall be amended by adding a new Section 2.30.12.8
as follows and renumbering the remaining Sections accordingly, including any references
thereto.

	 	2.30.12.8	 	The CONTRACTOR shall submit a quarterly Behavioral Health Adverse Occurrences
Report in accordance with Section 2.15.7.2 that provides information, by month
regarding specified measures, which shall include but not be limited to the following:

2.30.12.8.1 The number of adverse occurrences, overall and by:

2.30.12.8.1.1 Date of occurrence

2.30.12.8.1.2 Type of adverse occurrence;

2.30.12.8.1.3 Location;

2.30.12.8.1.4 Provider name; and

2.30.12.8.1.5 Action Taken by Facility/Provider.

	61.	 	The renumbered Section 2.30.15.4 shall be deleted in its entirety and replaced as follows:

	 	2.30.15.4	 	Effective July 1, 2012, the CONTRACTOR shall submit a quarterly Disclosure
Submission Rate report which shall provide the percentage of providers for which the
CONTRACTOR has obtained a complete and current disclosure form in accordance with 42
CFR 455, TennCare policies and procedures, and this Agreement (see Section 2.12.9.37).
The rate shall be provided for all tax-reporting entities with billing activities
during the prior quarter. The quarterly report shall include a companion listing which
shall include all tax-reporting entities with reimbursement amounts received in the
prior reporting quarter along with the disclosure status. For all subcontractors and
providers with a signed contract and/or with billing activities, the CONTRACTOR shall
maintain a minimum of ninety-five percent (9 5%) compliance on all entities excluding
providers who bill under emergency provisions. Should the CONTRACTOR attain a
disclosure rate below ninety-five percent (95%), the CONTRACTOR shall be subject to
liquidated damages and shall submit a corrective action plan that shall address the
root causes of the non–compliance.

	62.	 	The renumbered Section 2.30.15.5 shall be amended as follows:

	 	2.30.15.5	 	The CONTRACTOR shall submit a monthly Program Integrity Exception List report
that identifies employees or contractors (as defined in Section 2.21.9) that have been
reported on the HHS-OIG LEIE (List of Excluded Individuals/Entities)
(http://oig.hhs.gov/fraud/exclusions/exclusions—list.asp), the Excluded Parties
List System (EPLS), and/or the listing of Monthly Disciplinary Actions issued by the
Professional Health Board.

	63.	 	The renumbered Section 2.30.17 shall be amended by adding a new Section 2.30.17.2
and the renumbered Section 2.30.17.4 shall be amended by adding the phrase “number of
adjustments (including repayments),” as follows. The remaining Section shall be renumbered
accordingly including any references thereto.

	 	2.30.17.2	 	The CONTRACTOR shall submit a monthly Focused Claims Testing Report. The
report shall include the results of the self test on the accuracy of claims processing
based on claims that have been judgmentally selected by TDCI (see Section 2.22.7). The
CONTRACTOR shall complete the attribute sheets provided by TDCI for each claim to be
tested within thirty (30) calendar days of receipt from TDCI.

	 	2.30.17.4	 	The CONTRACTOR shall submit a weekly Claims Activity Report. This report shall
identify the number of claims received, number of claims denied (by reason), number of
claims paid, number of adjustments (including repayments), and total amount paid by the
categories of service specified by TENNCARE.

	64.	 	The renumbered Section 2.30.2 1 shall be deleted and replaced as follows:

2.30.21 HIPAA/HITECH Reports

The CONTRACTOR shall submit a Privacy/Security Incident Report. This report shall be
provided at least annually, but the CONTRACTOR shall provide the report more frequently if
requested by TENNCARE. The report shall include, at a minimum, the date of the incident, the
date of notification to TENNCARE’s privacy officer, the nature and scope of the incident,
the CONTRACTOR’s response to the incident, and the mitigating measures taken by the
CONTRACTOR to prevent similar incidents in the future. Upon TENNCARE’s request, the
CONTRACTOR shall provide additional details within a reasonable amount of time. “Port scans”
or other unsuccessful queries to the CONTRACTOR’s information system shall not be considered
a privacy/security incident for purposes of this report.

	65.	 	Section 3.9.2.5 and 3.9.2.6 shall be deleted and replaced as follows:

3.9.2.5 If TENNCARE has determined the CONTRACTOR is not in compliance with a
requirement

of this Agreement in any given month, TENNCARE may issue a written notice of
deficiency and TENNCARE may retain the amount withheld for the month prior to
TENNCARE identifying the compliance deficiencies.

3.9.2.6 The withhold amounts for subsequent months thereafter in which the CONTRACTOR has

not cured the deficiencies may at TENNCARE’s discretion be applied in accordance
with Section 3.9.2.1 as described above. If the CONTRACTOR has attained a two and
one half percent (2.5%) withhold and TENNCARE subsequently determines the
CONTRACTOR is not in compliance with a requirement of this Agreement, TENNCARE may
provide written notice of such determination and TENNCARE may, at the discretion
of TENNCARE, reinstitute the retention of the withhold as described in Section
3.9.2.1 at the next capitation payment cycle. Monthly retention of the withhold
amount may continue for each subsequent month so long as the identified
deficiencies have not been corrected. These funds may not be distributed to the
CONTRACTOR unless it is determined by TENNCARE the CONTRACTOR has come into
compliance with the Agreement requirement(s) within six (6) months of TENNCARE
identifying these deficiencies. For example, if a specified deficiency(s) is
corrected within four (4) months and there are no other identified deficiencies

which the CONTRACTOR has been given written notice of by TENNCARE, the withhold
for the four (4) consecutive months will be paid to the CONTRACTOR upon TENNCARE
determination that the deficiency(s) was corrected. However, any amounts withheld
by TENNCARE for six (6) consecutive months for the same or similar compliance
deficiency(s) may be permanently retained by TENNCARE on the first day after the
sixth consecutive month period and may not be paid to the CONTRACTOR. If the same
or similar specified deficiency(s) continues beyond six (6) consecutive months,
TENNCARE may declare the MCO ineligible for future distribution of the ten percent
(10%) incentive withhold and may continue to permanently retain any amounts
withheld by TENNCARE for six (6) consecutive months. Such ineligibility will
continue for each month TENNCARE determines the same or similar specified
deficiency(s) continues to exist. Once a CONTRACTOR corrects the deficiency(s),
TENNCARE may reinstate the MCO’s eligibility for distribution of the ten percent
(10%) compliance incentive payment of future withholds. If TENNCARE determines
that distribution of the ten percent (10%) withhold is appropriate, distribution
of the ten percent (10%) shall be made at the time of the next scheduled monthly
check write which includes all other payments due the CONTRACTOR.

	66.	 	Section 3.16.1.1 shall be deleted and replaced as follows:

3.16.1.1 In no event shall the maximum liability of the State under this Agreement
during the original

term of the Agreement exceed five billion, one hundred eighty five million, three
hundred sixty eight thousand, four hundred eighty dollars ($5,185,368,480.00).

	67.	 	Section 3.16.5 shall be amended by adding a new Section 3.16.5.1 as follows and
renumbering the remaining Section accordingly, including any references thereto.

3.16.5 Return of Funds and Deductions

3.16.5.1 In accordance with the Affordable Care Act and TennCare policy and procedures, the

CONTRACTOR shall report overpayments and, when it is applicable, return
overpayments to TENNCARE within sixty (60) days from the date the overpayment is
identified by the CONTRACTOR. Overpayments that are not returned within sixty (60)
days from the date the overpayment was identified by the CONTRACTOR may result in
a penalty pursuant to state or federal law.

	 	3.16.5.2	 	The CONTRACTOR shall refund to TENNCARE any overpayments due or funds disallowed
pursuant to this Agreement within thirty (30) calendar days of the date of written
notification from TENNCARE, unless otherwise authorized by TENNCARE in writing.

3.16.5.2 The State reserves the right to deduct from amounts which are or shall become due
and

payable to the CONTRACTOR under this or any Agreement or contract between the
CONTRACTOR and the State of Tennessee any amounts which are or shall become due
and payable to the State of Tennessee by the CONTRACTOR.

	68.	 	Section 4.3 shall be amended by adding a new Section 4.3.2 as follows and renumbering the
remaining Section 4.3 accordingly, including any references thereto.

	4.3.2	 	42 CFR Part 438, Managed care, including but not limited to 438.6(f)(2)(i), compliance
with the requirements mandating provider identification of provider-preventable conditions as
a condition of payment, as well as the prohibition against payment for provider-preventable
conditions as set forth in §434.6(a)(1 2) and § 447.26 of this subchapter.

	69.	 	Section 4.4.8.2 shall be amended by adding a new Section 4.4.8.2.7 as follows and
renumbering the remaining Section accordingly, including any references thereto.

	 	4.4.8.2.7	 	Promptly make available all signed provider agreements/contracts, including
historical agreements/contracts, to TENNCARE in PDF format. (The CONTRACTOR shall have
the option to submit said agreements on an on-going basis during the term of this
Agreement rather than at the end of this Agreement). Upon termination of this Agreement
and completion of the CONTRACTOR’s continuing obligations, the State will reserve all
rights to pursue improper payments and false claims with the CONTRACTOR and/or directly
with the CONTRACTOR’s subcontractors and providers.

	70.	 	Section 4.20.2.2.6 shall be amended by adding a new Section 4.20.2.2.6.1 as follows:

	 	4.20.2.2.6	 	TENNCARE reserves the right to assess a general liquidated damage of five
hundred dollars ($500) per occurrence with any notice of deficiency.

4.20.2.2.6.1 In circumstances for which TENNCARE has applied this general liquidated damage
to a

notice of a deficiency that is related in any way to CHOICES care
coordination processes and requirements which shall be determined by TENNCARE,
the amounts shall be multiplied by two (2) when the CONTRACTOR has not
complied with the Caseload and Staffing recommendations as specified in
Section 2.9.6.11.9 of this Agreement.

	71.	 	Sections 4.20.2.2.7, Items A.16, A.18, A.19,.A.20, A.21, A.22, A.23, the renumbered Items
A.28, A.29, A.30, A.31, and Item C.7 shall be amended by adding a new paragraph to the end of
the existing text in the Damage column as follows:

“These amounts shall be multiplied by two (2) when the CONTRACTOR has not complied with
the Caseload and Staffing recommendations as specified in Section 2.9.6.11.9 of this
Agreement.”

	72.	 	Section 4.20.2.2.7 shall be amended by deleting and replacing Items A.23 through A.26 and
adding a new Item A.27 as follows and renumbering the remaining Items.

	73.	 	Section 4.20.2.2.7 shall be amended by deleting and replacing Items B.15 and B.21 as follows:

	74.	 	“Mental Health Case Management” Services in Attachment I shall be deleted and replaced
as follows:

SERVICE Mental Health Case Management

DEFINITION

Mental health case management is a supportive service provided to enhance treatment effectiveness
and outcomes with the goal of maximizing resilience and recovery options and natural supports for
the individual. Mental health case management is consumer-centered, consumer focused and
strength-based, with services provided in a timely, appropriate, effective, efficient and
coordinated fashion. It consists of activities performed by a team or a single mental health case
manager to support clinical services. Mental health case managers assist in ensuring the
individual/family access to services.

The Case Management Society of America (CMSA) defines case management as a collaborative process of
assessment, planning, facilitation and advocacy for options and services to meet an individual’s
and family’s comprehensive health needs through communication and available resources to promote
quality cost-effective outcomes.

Mental health case management requires that the mental health case manager and the individual
and/or family have a strong productive relationship which includes viewing the individual/family as
a responsible partner in identifying and obtaining the necessary services and resources. Services
rendered to children and youth shall be consumer-centered and family-focused with case managers
working with multiple systems (e.g. education, child welfare, juvenile justice). Mental health case
management is provided in community settings, which are accessible and comfortable to the
individual/family. The service should be rendered in a culturally competent manner and be outcome
driven. Mental health case management shall be available 24 hours a day, 7 days a week. The service
is not time limited and provides the individual/family the opportunity to improve their quality of
life.

The CONTRACTOR shall ensure mental health case management is rendered in accordance with all of the
service components and guidelines herein.

SERVICE DELIVERY
The CONTRACTOR
shall:

	 	•	 	Determine caseload size based on an average number of individuals per case manager, with
the expectation being that case managers will have mixed caseloads of clients and
flexibility between Levels 1and 2a and 2b (Levels 1 and 2 are defined below); and

	 	•	 	Ensure that caseload sizes and minimum contacts are met as follows:

The CONTRACTOR shall ensure that the following requirements are met:

	 	1)	 	All mental health case managers shall have, at a minimum, a bachelor’s degree or be
licensed as a Registered Nurse;

	 	2)	 	Supervisors shall maintain no greater than a 1:30 supervisory ratio with mental
health case managers;

	 	3)	 	Mental health case managers who are assigned to both a parent(s) and child in the
same family, should have skills and experience needed for both ages; mental health case
managers who are assigned to individuals with co-occurring disorders (mental illness and
substance abuse disorders) should have the skills and experience to meet the needs of
these individuals;

	 	4)	 	A minimum of fifty-one percent (51%) of all mental health case management services
should take place outside the case manager’s office at the most appropriate setting;

	 	5)	 	The children and youth (C&Y) (under age eighteen (18)) mental health case management
model shall provide a transition from C&Y services into adult services, including adult
mental health case management services. The decision to serve an 18-year old youth via
the C&Y case management system versus the adult system shall be a clinical one made by a
provider. Transition from children’s services, including mental health case management,
shall be incorporated into the child’s treatment plan; and

	 	6)	 	All mental health case management services shall be documented in a treatment plan.
Mental health case management activities are correlated to expected outcomes and outcome
achievement and shall be monitored, with progress being noted periodically in a written
record.

Level 1

Level 1 mental health case management is the most intense level of service. It provides frequent
and comprehensive support to individuals with a focus on recovery and resilience. The CONTRACTOR
shall ensure the provision of level 1 mental health case management to the most severely disabled
adults and emotionally disturbed children and youth, including individuals who are at high risk of
future hospitalization or placement out of the home and require both community support and
treatment interventions. Level 1 mental health case management shall be rendered through a team
approach. Team approaches may include such models as ACT, CTT, CCFT and PACT, as described below:
Assertive Community Treatment (ACT)

ACT is a way of delivering comprehensive and effective services to adults diagnosed with severe
mental illness and who have needs that have not been well met by traditional approaches to
delivering services. The principles of ACT include:

1) Services targeted to a specific group of individuals with severe mental illness;

2) Treatment, support and rehabilitation services provided directly by the ACT team;

3) Sharing of responsibility between team members and individuals served by the team;

4) Small staff (all team staff including case managers) to individual ratios (approx. 1 to 10);

5) Comprehensive and flexible range of treatment and services;

6) Interventions occurring in community settings rather than in hospitals or clinic settings;

7) No arbitrary time limit on receiving services;

8) Individualized treatment, support and rehabilitation services;

9) Twenty-four (24) hour a day availability of services; and

10) Engagement of individuals in treatment and monitoring.

Continuous Treatment Team (CTT)

CTT is a coordinated team of staff (to include physicians, nurses, case managers, and other
therapists as needed) who provide a range of intensive, integrated mental health case management,
treatment, and rehabilitation services to adults and children and youth. The intent is to provide
intensive treatment to families of children and youth with acute psychiatric problems in an effort
to prevent removal from the home to a more restrictive level of care. An array of services are
delivered in the home or in natural settings in the community, and are provided through a strong
partnership with the family and other community support systems. The program provides services
including crisis intervention and stabilization, counseling, skills building, therapeutic
intervention, advocacy, educational services, medication management as indicated, school based
counseling and consultation with teachers, and other specialized services deemed necessary and
appropriate.

Comprehensive Child and Family Treatment (CCFT)

CCFT services are high intensity, time-limited services designed for children and youth to provide
stabilization and deter the “imminent” risk of State custody for the individual. There is usually
family instability and high-risk behaviors exhibited by the child/adolescent. CCFT services are
concentrated on child, family, and parental/guardian behaviors and interaction. CCFT services are
more treatment oriented and situation specific with a focus on short-term stabilization goals. The
primary goal of CCFT is to reach an appropriate point of stabilization so the individual can be
transitioned to a less intense outpatient service.

Program of Assertive and Community Treatment (PACT)

PACT is a service delivery model for providing comprehensive community-based treatment to adults
with severe

and persistent mental illness. It involves the use of a multi-disciplinary team of mental health
staff organized as an

accountable, mobile mental health agency or group of providers who function as a team
interchangeably to

provide the treatment, rehabilitation and support services persons with severe and/or
persistent mental illnesses need to live successfully in the community.

Level 2a and Level 2b

Level 2 mental health case management is a less intensive level of service than Level 1 and is
focused on resilience and recovery. The CONTRACTOR shall ensure that level 2 mental health case
management is provided to individuals whose symptoms are at least partially stabilized or reduced
in order to allow treatment and rehabilitation efforts.

Where available, peer support might be used as an adjunct to the case manager in monitoring the
service recipient prior to discharge from Level 2 case management. However, at no time should peer
support in the form of Certified Peer Specialists, or any other form, become a substitute for case
managers in the delivery of case management services.

SERVICE COMPONENTS

The CONTRACTOR shall ensure that mental health case management incorporates the following
service components:

Crisis Facilitation

Crisis facilitation is provided in situations requiring immediate attention/resolution for a
specific individual or other person(s) in relation to a specific individual. It is the process of
accessing and coordinating services for an individual in a crisis situation to ensure the
necessary services are rendered during and following the crisis episode. Most crisis facilitation
activities would involve face-to-face contact with the individual.

Assessment of Daily Functioning

Assessment of daily functioning involves the on-going monitoring of how an individual is coping
with life on a day to day basis for the purposes of determining necessary services to maintain
community placement and improve level of functioning. Most assessments of daily functioning are
achieved by face-to-face contact with the individual in his or her natural environment.

Assessment/Referral/Coordination

Assessment/referral/coordination involves assessing the needs of the individual for the purposes
of referral and coordination of services that will improve functioning and/or maintain stability
in the individual’s natural environment.

Mental Health Liaison

Mental health liaison services are offered to persons who are not yet assigned to mental health
case management. It is a short-term service for the purposes of service referral and continuing
care until other mental health services are initiated.

	75.	 	The paragraph regarding “Supported Housing” in Attachment I shall be deleted and
replaced as follows:

Supported Housing

Supported housing services refers to services rendered at facilities that are staffed twenty-four
(24) hours per day, seven (7) days a week with associated mental health staff supports for
individuals who require treatment services and supports in a highly structured setting. These
mental health services are for priority enrollees and are intended to prepare individuals for more
independent living in the community while providing an environment that allows individuals to live
in community settings. Given this goal, every effort should be made to place individuals in
facilities near their families and other support systems and original areas of residence. Supported
housing services are mental health services and do not include the payment of room and board.

	76.	 	Attachment VIII shall be amended by deleting and replacing the list of DELIVERABLE ITEMS
as follows:

DELIVERABLE ITEMS

	1.	 	Evidence of TDCI license for CONTRACTOR and subcontractors (as applicable) to ensure
compliance with Section 2.1.1	 

	2.	 	Notification that a member may satisfy any of the conditions for termination from the
TennCare program in accordance with Section 2.5.4

	3.	 	Request for prior approval/notice of use of cost effective alternative services in
accordance with Section 2.6.5	 

	4.	 	Request for prior approval of incentives in accordance with Section 2.6.6

	5.	 	Policies and procedures for patient liability that ensure compliance with Section 2.6.7.2

	6.	 	Policies and procedures for self-direction of health care tasks in accordance with Section
2.7.3

	7.	 	Description of health education and outreach programs and activities to ensure
compliance with Section 2.7.4	 

	8.	 	TENNderCare policies and procedures that ensure compliance with the requirements of Section
2.7.6

	9.	 	Policies and procedures for advance directives that ensure compliance with Section 2.7.7

	10.	 	Disease management program policies and procedures that ensure compliance with Section 2.8

	11.	 	Service coordination policies and procedures that ensure compliance with Section 2.9.1

	12.	 	Policies and procedures for transition of new members that ensure compliance with the
requirements of Section 2.9.2	 

	13.	 	Policies and procedures for transition of member receiving long-term care services at the
time of CHOICES implementation that ensure compliance with Section 2.9.3

	 	14.	 	Transition of care policies and procedures that ensure compliance with Section 2.9.4

15. MCO case management policies and procedures that ensure compliance with Section 2.9.5

16. Care coordination policies and procedures that ensure compliance with Section 2.9.6

	 	17.	 	Policies and procedures for consumer direction of eligible CHOICES HCBS that ensure
compliance with Section 2.9.7	 

	 	18.	 	Policies and procedures for coordination of physical health, behavioral health, and
long-term care services that ensure compliance with Section 2.9.9	 

	 	19.	 	If CONTRACTOR subcontracts for the provision of behavioral health services,
agreement with the subcontractor in accordance with Section 2.9.9.2 to ensure
compliance with Section 2.9.9	 

	 	20.	 	Policies and procedures for coordination among behavioral health providers that ensure
compliance with Section 2.9.10	 

	 	21.	 	Policies and procedures for coordination of pharmacy services that ensure compliance with
Section 2.9.11

	 	22.	 	Policies and procedures for coordination of dental services that ensure compliance with
Section 2.9.12

	 	23.	 	Identification of members serving on the claims coordination committee in
accordance with Section 2.9.12.5.3	 

	 	24.	 	Policies and procedures for coordination with Medicare that ensure compliance with
Section 2.9.13

	 	25.	 	Policies and procedures for inter-agency coordination that ensure compliance with Section
2.9.15

	 	26.	 	Policies and procedures regarding non-covered services that ensure compliance with
Section 2.10

	 	27.	 	Policies and procedures to develop and maintain a provider network that ensure
compliance with Section 2.11.1, including policies and procedures for selection and/or
retention of providers	 

	 	28.	 	Policies and procedures for PCP selection and assignment that ensure compliance with
Section 2.11.2, including policies and procedures regarding change of PCP and use of
specialist as PCP	 

	 	29.	 	Plan to identify, develop, or enhance existing inpatient and residential treatment
capacity for adults and adolescents with co-occurring mental health and substance abuse
disorders to ensure compliance with Section 2.11.5.2	 

	 	30.	 	Credentialing manual and policies and procedures that ensure compliance with Section
2.11.8

	 	31.	 	Policies and procedures that ensure compliance with notice requirements in Section 2.11.9

	 	32.	 	Notice of provider and subcontractor termination and additional documentation as
required by Section 2.11.9.2	 

	 	33.	 	Provider agreement template(s) and revisions to TDCI as required in Section 2.12

	 	34.	 	Indemnity language in provider agreements if different than standard indemnity
language (see Section 2.12.9.54)	 

	 	35.	 	Intent to use a physician incentive plan (PIP) to TennCare Bureau and TDCI (see Section
2.13.9)

	 	36.	 	Any provider agreement templates or subcontracts that involve a PIP for review as a
material modification (to TDCI) as required by (see Section 2.13.9)

	 	37.	 	Pricing policies for emergency services provided by non-contract providers that ensure
compliance with Section 2.13.10.1	 

	 	38.	 	Policies and procedures for PCP profiling to ensure compliance with Section 2.14.9

	 	39.	 	Information on PCP profiling as requested by TENNCARE (see Section 2.14.9)

	 	40.	 	QM/QI policies and procedures to ensure compliance with Section 2.15

	 	41.	 	Copy of signed contract with NCQA approved vendor to perform CAHPS as required by Section
2.15.5

	 	42.	 	Copy of signed contract with NCQA approved vendor to perform HEDIS audit as required
by Section 2.15.5	 

	 	43.	 	Evidence that NCQA accreditation application submitted and fee paid (Section 2.15.5.1)

	 	44.	 	HEDIS BAT as required by Section 2.15.6

	 	45.	 	Copy of signed NCQA survey contract as required by Section 2.15.5.1

	 	46.	 	Notice of date for ISS submission and NCQA on-site review as required by Section 2.15.5.1

	 	47.	 	Notice of final payment to NCQA as required by Section 2.15.5.1

	 	48.	 	Notice of submission of ISS to NCQA as required by Section 2.15.5.1

	 	49.	 	Copy of completed NCQA survey and final report as required by Section 2.15.5.1

	 	50.	 	Notice of any revision to NCQA accreditation status

	 	51.	 	Policies and procedures regarding critical incident management and reporting to ensure
compliance with Section 2.15.7.1	 

	 	52.	 	Policies and procedures regarding behavioral health adverse occurrence reporting to
ensure compliance with Section 2.15.7.2	 

	 	53.	 	Report critical incidents or adverse occurrences to TENNCARE within twenty-four (24)
hours pursuant to Sections 2.15.7.1, 2.15.7.2, and 2.15.7.3	 

	 	54.	 	Provider Preventable Conditions Reporting (see Section 2.15.8)

	 	55.	 	If applicable, information on the use of the name of the CONTRACTOR’s TennCare MCO
pursuant to Section 2.16.3	 

	 	56.	 	Member materials as described in Section 2.17, including but not limited to, member
handbook, quarterly member newsletters, identification card, and provider directory along
with any required supporting materials	 

	 	57.	 	Member services phone line policies and procedures that ensure compliance with Section
2.18.1

	 	58.	 	Policies and procedures regarding interpreter and translation services that ensure
compliance with Section 2.18.2	 

	 	59.	 	Provider service and phone line policies and procedures that ensure compliance with Section
2.18.4

	 	60.	 	Description of 24/7 ED Assistance Line (see Section 2.18.4.7)

	 	61.	 	Provider handbook that is in compliance with requirements in Section 2.18.5

	 	62.	 	Provider education and training plan and materials that ensure compliance with Section
2.18.6

	 	63.	 	Provider relations policies and procedures in compliance with Section 2.18.7

	 	64.	 	Protocols regarding one-on-one assistance to long-term care providers that ensure
compliance with Section 2. 18.7.2

	 	65.	 	Policies and procedures to monitor and ensure provider compliance with the Agreement
(see Section 2.18.7.3)	 

	 	66.	 	Policies and procedures for a provider complaint system that ensure compliance with Section
2.18.8

	 	67.	 	FEA education and training plan and materials that ensure compliance with Section 2.18.9

	 	68.	 	Policies and procedures regarding member involvement with behavioral health
services that ensure compliance with Section 2.18.10	 

	 	69.	 	Appeal and complaint policies and procedures that ensure compliance with Section 2.19

	 	70.	 	Fraud and abuse policies and procedures that ensure compliance with Section 2.20

	 	71.	 	Report all confirmed or suspected fraud and abuse to the appropriate agency as required in
Section 2.20.2

	 	72.	 	Fraud and abuse compliance plan (see Section 2.20.3)

	 	73.	 	A risk assessment annually and “as needed” (see Section 2.20.3.2.2)

	 	74.	 	TPL policies and procedures that ensure compliance with Section 2.21.4

	 	75.	 	Accounting policies and procedures that ensure compliance with Section 2.21.7

	 	76.	 	Proof of insurance coverage (see Section 2.21.8)

	 	77.	 	Executed agreement for audit accounts that contains the required language (see Section
2.21.11)

	 	78.	 	Claims management policies and procedures that ensure compliance with Section 2.22

79. Internal claims dispute procedure (see Section 2.22.5)

80. EOB policies and procedures to ensure compliance with Section 2.22.8

	 	81.	 	Systems policies and procedures, manuals, etc. to ensure compliance with Section
2.23 (see Section 2.23.10)	 

	 	82.	 	Proposed approach for remote access in accordance with Section 2.23.6.10

	 	83.	 	Information security plan as required by Section 2.23.6.11

	 	84.	 	Notification of Systems problems in accordance with Section 2.23.7

	 	85.	 	Systems Help Desk services in accordance with Section 2.23.8

	 	86.	 	Notification of changes to Systems in accordance with Section 2.23.9

	 	87.	 	Notification of changes to membership of behavioral health advisory committee and
current membership lists in accordance with Section 2.24.2	 

	 	88.	 	Notification of changes to membership of CHOICES Advisory Group and current
membership lists in accordance with Section 2.24.3	 

	 	89.	 	An abuse and neglect plan in accordance with Section 2.24.4

	 	90.	 	Medical record keeping policies and procedures that ensure compliance with Section 2.24.6

	 	91.	 	Subcontracts (see Section 2.26)

	 	92.	 	HIPAA policies and procedures that ensure compliance with Section 2.27

	 	93.	 	Notification of breach and provisional breach in accordance with Section 2.27

	 	94.	 	Third (3rd) party certification of HIPAA transaction compliance in accordance with
Section 2.27

	 	95.	 	Non-discrimination policies and procedures as required by Section 2.28

	 	96.	 	Names, resumes, and contact information of key staff as required by Section 2.29.1.2

	 	97.	 	Changes to key staff as required by Section 2.29.1.2

	 	98.	 	Staffing plan as required by Section 2.29.1.8

	 	99.	 	Changes to location of staff from in-state to out-of-state as required by Section
2.29.1.9

	 	100.	 	Background check policies and procedures that ensure compliance with Section 2.29.2.1

	 	101.	 	List of officers and members of Board of Directors (see Section 2.29.3)

102. Changes to officers and members of Board of Directors (see Section 2.29.3)

103. Eligibility and Enrollment Data (see Section 2.30.2.1)

104. Monthly Enrollment/Capitation Payment Reconciliation Report (see Section 2.30.2.2)

105. Quarterly Member Enrollment/Capitation Payment Report (see Section 2.30.2.3)

106. Information on members (see Section 2.30.2.4)

107. Annual Community Outreach Plan (see Section 2.30.3)

108. Psychiatric Hospital/RTF Readmission Report (see Section 2.30.4.1)

109. Post-Discharge Services Report (see Section 2.30.4.2)

110. Behavioral Health Crisis Response Report (see Section 2.30.4.3)

111. TENNderCare Report (see Section 2.30.4.4)

112. Disease Management Update Report (see Section 2.30.5.1)

113. Disease Management Report (see Section 2.30.5.2)

114. Disease Management Program Description (see Section 2.30.5.3)

115. MCO Case Management Program Description (see Section 2.30.6.1.1)

116. MCO Case Management Services Report (see Section 2.30.6.1.2)

117. MCO Case Management Update Report (see Section 2.30.6.1.3)

118. Status of Transitioning CHOICES Member Report (see Section 2.30.6.2)

119. CHOICES Nursing Facility Diversion Activities Report (see Section 2.30.6.3)

120. CHOICES Nursing Facility to Community Transition Report (see Section 2.30.6.4)

121. CHOICES HCBS Late and Missed Visits Report (see Section 2.30.6.5)

122. CHOICES Consumer Direction of eligible CHOICES HCBS Report (see Section 2.30.6.6)

123. CHOICES Care Coordination Report (see Section 2.30.6.7)

124. Monthly CHOICES Caseload and Staffing Ratio Report (see Section 2.30.6.8)

125. Quarterly MFP Participants Report (see Section 2.30.6.9)

126. Members identified as potential pharmacy lock-in candidates (see Section 2.30.6.10)

127. Pharmacy Services Report (see Section 2.30.6.11)

128. Pharmacy Services Report, On Request (see Section 2.30.6.12)

129. Provider Enrollment File (see Section 2.30.8.1)

130. Provider Compliance with Access Requirements Report (see Section 2.30.8.2)

131. PCP Assignment Report (see Section 2.30.8.3)

132. Report of Essential Hospital Services (see Section 2.30.8.4)

133. Annual Plan for the Monitoring of Behavioral Health Appointment Timeliness (see Section
2.30.8.5)

134. Quarterly Behavioral Health Appointment Timeliness Summary Report (see Section 2.30.8.6)

135. CHOICES Qualified Workforce Strategies Report (see Section 2.30.8.7)

136. FQHC Reports (see Section 2.30.8.8)

137. Related Provider Payment Report (see Section 2.30.10.1)

138. Check Run Summaries Report (see Section 2.30.10.2)

139. Claims Data Extract Report (see Section 2.30.10.3)

140. Reconciliation Payment Report (see Section 2.30.10.4)

141. Administrative Services Only Invoice Report (See Section 2.30.10.5)

142. UM program description, work plan, and evaluation (see Section 2.30.11.1)

143. Cost and Utilization Reports (see Section 2.30.11.2)

144. Cost and Utilization Summaries (see Section 2.30.11.3)

145. Identification of high-cost claimants (see Section 2.30.11.4)

146. CHOICES Utilization Report (see Section 2.30.11.5)

147. Referral Provider Listing and supporting materials (see Section 2.30.11.6)

148. Emergency Department Threshold Report (see Section 2.30.11.7)

149. QM/QI Program Description, Associated Work Plan and Annual Evaluation (see Section 2.30.12.1)

150. Report on Performance Improvement Projects (see Section 2.30.12.2)

151. NCQA Accreditation Report (see Section 2.30.12.3)

152. NCQA revaluation of accreditation status based on HEDIS scores (see Section 2.30.12.4)

	 	153.	 	Medicaid HEDIS measures marked as “Not Reported” (see Section 2.30.12.5)

154. Reports of Audited CAHPS Results and Audited HEDIS Results (see Section 2.30.12.6)

155. CHOICES HCBS Critical Incidents Report (see Section 2.30.12.7)

156. Behavioral Health Adverse Occurrences Report (see Section 2.30.12.8)

	 	157.	 	Member Services, Provider Services, and Utilization Management Phone Line Report (see
Section 2.30. 13. 1. 1)	 

	 	158.	 	24/7 Nurse Triage Line Report (see Section 2.30.13.1.2)

	 	159.	 	ED Assistance Tracking Report (see Section 2.30.13.1.3)

	 	160.	 	Translation/Interpretation Services Report (see Section 2.30.13.3)

	 	161.	 	Provider Satisfaction Survey Report (see Section 2.30.13.4)

	 	162.	 	Provider Satisfaction Survey Report and CHOICES Provider Satisfaction Survey Report (see
Sections 2.30.13.4 and 2.30.13.5)

	 	163.	 	Member Complaints Report (see Section 2.30.14)

	 	164.	 	Fraud and Abuse Activities Report (see Section 2.30.15.1)

	 	165.	 	Policies in compliance with Section 1902(a)(68) of the Social Security Act (see Section
2.30.15.3)

	 	166.	 	Disclosure Submission Rate Report (see Section 2.30.15.4)

	 	167.	 	Program Integrity Exception List Report (see Section 2.30.15.5)

	 	168.	 	List of Involuntary Terminations Report (see Section 2.30.15.6)

	 	169.	 	Recovery and Cost Avoidance Report (see Section 2.30.16.1.1)

	 	170.	 	Other Insurance Report (see Section 2.30.16.1.2)

	 	171.	 	Medical Loss Ratio (MLR) Report (see Section 2.30.16.2.1)

	 	172.	 	Ownership and Financial Disclosure Report (see Section 2.30.16.2.2)

	 	173.	 	Annual audit plan (see Section 2.30.16.2.3)

	 	174.	 	Financial Plan and Projection of Operating Results Report (to TDCI) (see Section
2.30.16.3.1)

	 	175.	 	Comparison of Actual Revenues and Expenses to Budgeted Amounts Report (to TDCI) (see
Section 2.30.16.3.2)	 

	 	176.	 	Annual Financial Report (to TDCI) (see Section 2.30.16.4.3)

	177.	 	Quarterly Financial Report (to TDCI) (see Section 2.30.16.3.4)

178. Audited Financial Statements (to TDCI) (see Section 2.30.16.3.5)

179. Claims Payment Accuracy Report (see Section 2.30.17.1)

180. EOB Report (see Section 2.30.17.2)

181. Claims Activity Report (see Section 2.30.17.3)

182. CHOICES Cost Effective Alternatives Report (see Section 2.30.17.4)

183. Systems Refresh Plan (see Section 2.30.18.1)

184. Encounter Data Files (see Section 2.30.18.2)

185. Electronic version of claims paid reconciliation (see Section 2.30.18.3)

186. Information and/or data to support encounter data submission (see Section 2.30.18.4)

187. Systems Availability and Performance Report (see Section 2.30.18.5)

188. Business Continuity and Disaster Recovery Plan (see Section 2.30.18.6)

	189.	 	Reports on the Activities of the CONTRACTOR’s Behavioral Health Advisory Committee (see
Section 2.30. 19. 1)	 

	190.	 	Report on the Activities of the CONTRACTOR’s CHOICES Advisory Group (see Section 2.30.19.2)

	191.	 	Subcontracted claims processing report (see Section 2.30.20.1)

	192.	 	HIPAA/HITECH Report (Privacy/Security Incident Report) (see Section 2.30.21)

	193.	 	Non-discrimination policy (see Section 2.30.22.1)

	194.	 	Summary Listings of Servicing Providers (see Section 2.30.22.2)

	195.	 	Non-Discrimination Compliance Plan and Assurance of Non-Discrimination (see Section
2.30.22.3)

	196.	 	Non-Discrimination Compliance Report (see Section 2.30.22.4)

	197.	 	Disclosure of conflict of interest (see Section 2.30.23.1)

	198.	 	Attestation Re: Personnel Used in Contract Performance (see Section 2.30.23.2)

	199.	 	Provider reimbursement rates for services incurred prior to the start date of operations
in accordance with Section 3.7.1.2.1	 

	200.	 	Return of funds in accordance with Section 3.16.5

	201.	 	Termination plan in accordance with Section 4.4.8.2.8

	 	202.	 	Policies and procedures for delivering NEMT services, including an operating
procedures manual, as provided in Section A. 1 of Attachment XI	 

	77.	 	Attachment VI shall be deleted and replaced as follows:

ATTACHMENT VI

FORMS FOR REPORTING FRAUD AND ABUSE

POTENTIAL FRAUD ALLEGATION REFERRAL FORM

(template with sample data)

DATE: Month/Day/Year

TO: Office of Program Integirty

FROM: Your MCE Name

Contact Person: 1st & Last name; Telephone; EMail;

SUBJECT (ENTITY/NAME/SPECIALTY): ABC Clinic,
John Smith MD, Family Practice

SUBJECT ADDRESS/TELEPHONE:

100 Great Circle Rd, TN 37234 Phone: Fax:

PROVIDER INFORMATION(S):

HealthPlan IDs: 123456789 (Clinic) and 12345 (John Smith)
Medicaid ID(s): 7654321 (Clinic) and 9876543 (John Smith)
NPI(s): 1234567890 (Clinic) and 2345678900 (John Smith)
License – 1001 (John Smith)

DEA – 12345 (John Smith)

Tax ID – 621039594; SSN (2345678)

PROVIDER OPERATING REGION: East TN

PROVIDER INCOME:

$374,729 (April 2, 2007 – February 7, 2011)

DATES OF SERVICE AUDITED: November 1,
2009 – November 9, 2010

OVERPAYMENT IDENTIFIED: $ 31,861

ALLEGATION:

Provider is allegedly billing an excessive number of services per day.

SOURCE/PREDICATION:

Data analysis internal lead from the Medicaid Plan

PROCEDURE CODE and MODIFIERS: 99214 – Office/outpatient visit for the evaluation and mgmt of an
estab patient Mod 25 – A significant, separately identifiable service by the same physician on the
same day of the procedure or other service.

	 	 	Mod 59 – Distinct procedural service is distinct and or independent from other
services performed on same day. Identifies procedures not normally reported
together.	 

BILLING ENTITY:

Payments are made to the group via EFT.

MEDICAL RECORD TYPE: Hard
copy, hand written

SUMMARY OF PRELIMINARY INVESTIGATION ACTIONS:

Sampling: 

A sample for 99214s with modifiers 25 and/or 59 for dates of service 11/1/0911/9/10 was
generated. The universe size was 430 whereas a sample 30 of dates of service was
pulled. A total of $100,000 was paid to the universe.

Medical Record Review and Findings: 

On January 15, 2010 the medical record review was completed by an internal certified
professional coder (CPC). There were a total of 138 services reviewed. The following
is a summary of the services:

Modifier 25 was appended to the E/M services 97% of the time. It is inappropriate to append this
modifier to an E/M service when it is billed in conjunction with laboratory services; 13
services were denied based on this rule.

Modifier 59 was appended on all ancillary codes (other than J codes) 100% of the time. It
did not appear to be appropriately used in any instances. For example, claims for the
therapeutic, prophylactic, or diagnostic injection and infusions (CPT 96365 or CPT 96372) that
were appended with modifier 59 were denied 16 times.

Under certain circumstances, it may be necessary to indicate that a procedure of service was
distinct or independent from other non E/M services performed on the same day. Modifier 59 is used
to identify procedures/services, other than E/M services, that are not normally reported together,
but are appropriate under the circumstances. However, when another already established modifier is
appropriate it should be used rather than modifier 59, only if no more descriptive modifier is
available, and the use of modifier 59 best explains the circumstances, should modifier 59 be used.

Note: it is not necessary to appended modifier 59 to multiple laboratory services as it does not
meet the circumstances stated above.

PRIOR EDUCATIONS: None
recorded

PREPAYMENT REVIEW: None

INTERAGENCY CONTACT: None

ADDITIONAL SUBJECT INFORMATION:

John Smith has hospital privileges at ABC Community Hospital.

DISCLOSURE OF OWNERSHIP and CONTROL: John Smith
owns 100% of the entity.

DETERMINATION:

Based on the medical record review it has been determined that the provider is abusing “modifier
25 and 59” in order to have add on services reimbursed that are typically already covered in the
reimbursement of the E/M code.

RECOMMENDATION:

Petition for the Health Plan to pursue administratively by issuing/implementing:

Initiate pre payment review

Demand letter for repayment

Educate the provider on proper billing and medical record
documentation. Initiate a Corrective Action Plan with the provider

Continued monitoring of the provider’s billing after notification of overpayment.

TennCare Recommended MCC Referral Protocol: 

1) the submission of documents related to the provider fraud and abuse referral
should be via TennCare SFTP server

(path: tncare.sftp.state.tn.us/tncare/MCC###/orr/OPI/in ) with password protections on
documents;

2) concurrently, a notice of submission should be e-mailed to

ProgramIntegrity.TennCare@tn.gov with a subject line stating “MCC### Notice of
Referral Submission via SFTP”

along with password notices on opening documents.

STATE OF TENNESSEE

OFFICE OF TENNCARE INSPECTOR GENERAL

PO BOX 282368

NASHVILLE, TENNESSEE 37228

FRAUD TOLL FREE HOTLINE 1-800-433-3982 • FAX (615)

256-3852

E-Mail Address: www.tennessee.gov/tenncare (follow the prompts that read

“Report Fraud Now”)

	78.	 	Attachment VI shall be amended by deleting the performance standard for Non-IMD
Inpatient Use in its entirety.

	79.	 	Attachment IX, Exhibit I shall be deleted and replaced with “LEFT BLANK INTENTIONALLY”.

	80.	 	The first two populations listed in Attachment IX, Exhibit K shall be deleted and replaced as
follows:

• Medicaid (Child and Adult)

• Uninsured (Child and Adult)

	81.	 	Item 14 of Exhibit A of Attachment XI shall be deleted and replaced as follows:

14. Tennessee Department of Intellectual and Developmental Disabilities (DIDD): The
state

agency responsible for providing services and supports to Tennesseans with mental
retardation.

DIDD is a division of the Tennessee Department of Finance and Administration.

	82.	 	Attachment XII shall be amended by adding a new Exhibit G as follows:

EXHIBIT G

CAPITATION RATES

AmeriGroup

EFFECTIVE July 1, 2011

All of the provisions of the
original Agreement not specifically deleted or modified herein shall remain in full force and
effect. Unless a provision contained in this Amendment specifically indicates a different effective
date, for purposes of the provisions contained herein, this Amendment shall become effective
January 1, 2012.

The CONTRACTOR, by signature of this Amendment, hereby affirms that this Amendment has not been
altered and therefore represents the identical document that was sent to the CONTRACTOR by
TENNCARE.

IN WITNESS WHEREOF, the parties have by their duly authorized representatives set their signatures.

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