Document:

exv10w1

 

Exhibit 10.1

MASTER AGREEMENT

BETWEEN

HELIX ENERGY SOLUTIONS GROUP, INC.

AND

CAL DIVE INTERNATIONAL, INC.

Dated                     , 2006

 

Table of Contents

	 	 	 	 	 
	 	 	Page
	ARTICLE I DEFINITIONS
	 	 	2	 
	1.1 Certain Definitions
	 	 	2	 
	1.2 Other Terms
	 	 	8	 
	ARTICLE II THE SEPARATION
	 	 	9	 
	2.1 Transfer of Cal Dive Assets; Assumption of Cal Dive Liabilities
	 	 	9	 
	2.2 Cal Dive Assets
	 	 	10	 
	2.3 Cal Dive Liabilities
	 	 	11	 
	2.4 Termination of Agreements
	 	 	13	 
	2.5 Governmental Approvals and Consents; Delayed Transfer Assets and
Liabilities
	 	 	14	 
	2.6 Novation of Assumed Cal Dive Liabilities
	 	 	15	 
	2.7 Novation of Liabilities other than Cal Dive Liabilities
	 	 	16	 
	2.8 Transfers of Assets and Assumption of Liabilities
	 	 	16	 
	2.9 Transfer of Excluded Assets by Cal Dive; Assumption of Excluded
Liabilities by Helix
	 	 	17	 
	2.10 DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
	 	 	18	 
	ARTICLE III INTERCOMPANY TRANSACTIONS AS OF THE CLOSING DATE
	 	 	19	 
	3.1 Time and Place of Closing
	 	 	19	 
	3.2 Closing Transactions
	 	 	19	 
	3.3 Amended and Restated Certificate of Incorporation and Amended and
Restated Bylaws
	 	 	20	 
	3.4 The Initial Public Offering
	 	 	20	 
	3.5 Proceeds of Initial Public Offering
	 	 	20	 
	3.6 Rescission
	 	 	21	 
	ARTICLE IV FINANCIAL AND OTHER INFORMATION
	 	 	21	 
	4.1 Financial and Other Information
	 	 	21	 
	4.2 Agreement for Exchange of Information; Archives
	 	 	28	 
	4.3 Ownership of Information
	 	 	29	 
	4.4 Compensation for Providing Information
	 	 	29	 
	4.5 Record Retention
	 	 	30	 

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Table of Contents

(continued)

	 	 	 	 	 
	 	 	Page
	4.6 Liability
	 	 	30	 
	4.7 Other Agreements Providing for Exchange of Information
	 	 	30	 
	4.8 Production of Witnesses; Records; Cooperation
	 	 	30	 
	4.9 Privilege
	 	 	31	 
	ARTICLE V RELEASE; INDEMNIFICATION
	 	 	32	 
	5.1 Release of Pre-Closing Claims
	 	 	32	 
	5.2 General Indemnification by Cal Dive
	 	 	34	 
	5.3 General Indemnification by Helix
	 	 	35	 
	5.4 Registration Statement Indemnification
	 	 	35	 
	5.5 Contribution
	 	 	36	 
	5.6 Indemnification Obligations Net of Insurance Proceeds and Other Amounts
on an After-Tax Basis
	 	 	37	 
	5.7 Procedures for Indemnification of Third Party Claims
	 	 	37	 
	5.8 Additional Matters
	 	 	38	 
	5.9 Remedies Cumulative; Limitations of Liability
	 	 	39	 
	5.10 Survival of Indemnities
	 	 	40	 
	ARTICLE VI OTHER AGREEMENTS
	 	 	40	 
	6.1 Further Assurances
	 	 	40	 
	6.2 Confidentiality
	 	 	41	 
	6.3 Insurance Matters
	 	 	43	 
	6.4 Allocation of Costs and Expenses
	 	 	44	 
	6.5 Covenants Against Taking Certain Actions Affecting Helix
	 	 	45	 
	6.6 No Violations
	 	 	47	 
	6.7 Registration Statements
	 	 	48	 
	6.8 Compliance with Charter Provisions
	 	 	48	 
	6.9 Future Intercompany Transactions
	 	 	48	 
	6.10 [Intentionally Omitted]
	 	 	48	 
	6.11 Helix Policies
	 	 	49	 
	6.12 Operations
	 	 	49	 
	6.13 [Intentionally Omitted]
	 	 	49	 

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Table of Contents

(continued)

	 	 	 	 	 
	 	 	Page
	6.14 Tax Matters
	 	 	49	 
	6.15 Litigation
	 	 	50	 
	ARTICLE VII DISPUTE RESOLUTION
	 	 	50	 
	7.1 General Provisions
	 	 	50	 
	ARTICLE VIII MISCELLANEOUS
	 	 	51	 
	8.1 Corporate Power; Fiduciary Duty
	 	 	52	 
	8.2 Governing Law
	 	 	52	 
	8.3 Survival of Covenants
	 	 	52	 
	8.4 Force Majeure
	 	 	52	 
	8.5 Notices
	 	 	53	 
	8.6 Severability
	 	 	53	 
	8.7 Entire Agreement
	 	 	53	 
	8.8 Assignment; No Third-Party Beneficiaries
	 	 	54	 
	8.9 Public Announcements
	 	 	54	 
	8.10 Amendment
	 	 	54	 
	8.11 Rules of Construction
	 	 	54	 
	8.12 Counterparts
	 	 	54	 

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EXHIBITS

	 	 	 
	A

	 	Form of Corporate Services Agreement
	B

	 	Form of Registration Rights Agreement
	C

	 	Form of Tax Matters Agreement
	D

	 	Form of Employee Matters Agreement
	E

	 	Form of Amended and Restated Certificate of Incorporation
	F

	 	Form of Amended and Restated Bylaws

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SCHEDULES

	 	 	 
	Schedule 1.1

	 	Vessels
	Schedule 2.2

	 	Transferred Subsidiaries
	Schedule 2.4(b)(ii)

	 	Continuing Agreements
	Schedule 6.15(b)

	 	Existing Actions

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MASTER AGREEMENT

          This MASTER AGREEMENT, dated                     , 2006 (this “Agreement”), is made between
Helix Energy Solutions Group, Inc., a Minnesota corporation (“Helix”) and Cal Dive
International, Inc., a Delaware corporation and as of the date hereof, an indirect, wholly-owned
subsidiary of Helix (“Cal Dive”). Certain capitalized terms used in this Agreement are
defined in Section 1.1 and the definitions of the other capitalized terms used in this
Agreement are cross-referenced in Section 1.2.

W I T N E S S E T H:

          WHEREAS, the board of directors of Helix has determined that it is appropriate and desirable
for Helix to separate the Cal Dive Group from Helix;

          WHEREAS, in connection with the separation of the Cal Dive Group from Helix, Helix desires to
contribute, assign or otherwise transfer, and to cause certain of its Subsidiaries to contribute,
assign or otherwise transfer, to Cal Dive and certain of Cal Dive’s Subsidiaries, certain Assets
and Liabilities associated with the Cal Dive Business;

          WHEREAS, Helix has agreed to transfer certain vessels constituting part of the Cal Dive Assets
(as defined below) to CDI Vessel Holdings LLC, a Delaware limited liability company (“Vessel
Holdings”) of which CDI Janus Holdings, Inc., a Delaware corporation (“Holdings”) owns
100% of the membership interests;

          WHEREAS, Helix owns 100% of the issued and outstanding stock of Holdings;

          WHEREAS, Vessel Holdings has entered into a Credit Agreement dated as of August ___, 2006 with
Bank of America, N.A., as Administrative Agent and the various lenders listed therein, and Cal
Dive, providing for a credit facility of up to USD 150,000,000 to be available to Vessel Holdings
(the “Transfer Credit Facility”);

          WHEREAS, as of the date hereof, Vessel Holdings has drawn the principal amount of USD
$85,000,000 under the Transfer Credit Facility;

          WHEREAS, Helix has agreed to guaranty the obligations of Vessel Holdings under the Transfer
Credit Facility pursuant to the Guaranty date as of August ___, 2006 (the “Guaranty”);

          WHEREAS, the remaining vessels and balance of the Assets will be transferred by Helix to
various subsidiaries of Holdings, and the stock of Holdings will be transferred by Helix to Cal
Dive to effect the Separation;

          WHEREAS, Cal Dive has agreed to guaranty the indebtedness of Vessel Holdings under the
Transfer Credit Facility contemporaneously with the Separation, and accordingly has agreed to
assume the liabilities of Helix under the Guaranty;

          WHEREAS, the boards of directors of Helix and Cal Dive have further approved the initial
public offering by Cal Dive of shares of its Common Stock in a registered offering under the
Securities Act, substantially concurrently with the closing of the Separation;

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          WHEREAS, immediately following the consummation of the Initial Public Offering, Helix will own
approximately                      shares of Cal Dive Common Stock;

          WHEREAS, it is appropriate and desirable to set forth the principal corporate transactions
required to effect the Separation and certain other agreements that will, following the
consummation of the Initial Public Offering, govern certain matters relating to the Separation, the
Initial Public Offering and the relationship of Helix, Cal Dive and their respective Groups; and

          WHEREAS, the terms and conditions set forth herein have not resulted from arms length
negotiations between the parties because of the context of Helix’s and Cal Dive’s parent
–subsidiary relationship, and accordingly, such terms and conditions may be in some respects less
favorable to Cal Dive than those it could obtain from unaffiliated third parties.

          NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

          1.1 Certain Definitions.

          For purposes of this Agreement, the following terms shall have the meanings specified in this
Section 1.1:

          “Action” means any demand, action, claim, dispute, suit, countersuit, arbitration,
inquiry, proceeding or investigation by or before any federal, state, local, foreign or
international Governmental Authority or any arbitration or mediation tribunal.

          “Affiliate” (and, with a correlative meaning, “affiliated”) means, with
respect to any Person, any direct or indirect Subsidiary of such Person, and any other Person that
directly, or through one or more intermediaries, controls or is controlled by or is under common
control with such first Person; provided, however, that from and after the Closing
Date, no member of the Cal Dive Group shall be deemed an Affiliate of any member of the Helix Group
for purposes of this Agreement and the Transaction Documents and no member of the Helix Group shall
be deemed an Affiliate of any member of the Cal Dive Group for purposes of this Agreement and the
Transaction Documents. As used in this definition, “control” (including with correlative
meanings, “controlled by” and “under common control with”) means possession,
directly or indirectly, of power to direct or cause the direction of management or policies, or the
power to appoint and remove a majority of directors (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise), of a Person.

          “Assets” means, with respect to any Person, the assets, properties and rights
(including goodwill) of such Person, wherever located (including in the possession of vendors or
other third parties or elsewhere), whether real, personal or mixed, tangible, intangible or
contingent, in each

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case whether or not recorded or reflected or required to be recorded or reflected on the books
and records or financial statements of such Person, including the following:

          (a) the Vessels, including all appurtenances thereto, all equipment, including without
limitation all diving and pipelaying equipment, inventory, work-in-progress and spare parts;

          (b) all computers and other electronic data processing equipment, fixtures, machinery,
furniture, office equipment, automobiles, trucks, motor vehicles and other transportation equipment
and other tangible personal property;

          (c) all interests in real property of whatever nature, including easements, whether as owner,
mortgagee or holder of a Security Interest in real property, lessor, sublessor, lessee, sublessee
or otherwise;

          (d) all accounting and other books, records and files whether in paper, microfilm, microfiche,
computer tape or disc, magnetic tape or any other form;

          (e) all license agreements, vessel charters, leases of personal property, open purchase orders
for supplies, parts or services and other contracts, agreements or commitments;

          (f) all deposits, letters of credit and performance and surety bonds;

          (g) all written technical information, data, specifications, research and development
information, engineering drawings, operating and maintenance manuals, and materials and analyses
prepared by consultants and other third parties;

          (h) all domestic and foreign intangible personal property, patents, copyrights, trade names,
trademarks, service marks and registrations and applications for any of the foregoing, trade
secrets, inventions, designs, ideas, improvements, works of authorship, recordings, other
proprietary and confidential information and licenses from third Persons granting the right to use
any of the foregoing;

          (i) all vessel logs and records of repair and maintenance for any Vessel or equipment;

          (j) all computer applications, programs and other software, including operating software,
network software firmware, middleware, design software, design tools, systems documentation and
instructions;

          (k) all cost information, sales and pricing data, customer prospect lists, supplier records,
customer and supplier lists, customer and vendor data, correspondence and lists, product
literature, artwork, design, formulations and specifications, quality records and reports and other
books, records, studies, surveys, reports, plans and documents;

          (l) all prepaid expenses, trade accounts and other accounts and notes receivables;

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          (m) all rights under contracts or agreements, all claims or rights against any Person arising
from the ownership of any Asset, all rights in connection with any bids or offers and all claims,
choses in action or similar rights, whether accrued or contingent;

          (n) all rights under insurance policies and all rights in the nature of insurance,
indemnification or contribution including without limitation any policies held through a protection
and indemnity club;

          (o) all licenses, permits, approvals and authorizations which have been issued by any
Governmental Authority;

          (p) cash or cash equivalents, bank accounts, lock boxes and other deposit arrangements; and

          (q) interest rate, currency, commodity or other swap, collar, cap or other hedging or similar
agreements or arrangements.

          “Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by Law to close. Any event the
scheduled occurrence of which would fall on a day that is not a Business Day shall be deferred
until the next succeeding Business Day.

          “Cal Dive Balance Sheet” means Cal Dive’s unaudited pro forma consolidated statement
of financial position as of June 30, 2006 included in the IPO Registration Statement.

          “Cal Dive Business” means the current businesses of the members of the Cal Dive Group,
including, without limitation, the world-wide manned diving, pipelaying, pipe burial and related
businesses described in the IPO Registration Statement.

          “Cal Dive Capital Stock” means all classes or series of capital stock of Cal Dive,
including the Common Stock, and all options, warrants and other rights to acquire such capital
stock.

          “Cal Dive Common Stock” means the common stock, $0.01 par value per share, of Cal
Dive.

          “Cal Dive Contracts” means the following contracts and agreements to which Helix or
any of its Subsidiaries is a party or by which Helix or any of its Subsidiaries or any of their
respective Assets is bound, whether or not in writing, except for any such contract or agreement
that is contemplated to be retained by Helix or any member of the Helix Group pursuant to any
provision of this Agreement or any Transaction Document:

          (a) any contract or agreement entered into in the name of, or expressly on behalf of, any
division, business unit or member of the Cal Dive Group;

          (b) any contract or agreement, including any joint venture agreement, that is used
exclusively or held for use exclusively in the Cal Dive Business;

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          (c) any guarantee, indemnity, representation, warranty or other Liability of any member of
the Cal Dive Group or the Helix Group in respect of (i) any other Cal Dive Contract or Cal Dive
Asset, (ii) any Cal Dive Liability or (iii) the Cal Dive Business; and

          (d) any contract or agreement that is otherwise expressly contemplated pursuant to this
Agreement or any of the Transaction Documents to be assigned to Cal Dive or any member of the
Cal Dive Group in connection with the Separation.

          “Cal Dive Group” means Cal Dive, each Subsidiary of Cal Dive immediately after the
Closing and each other Person that is either controlled directly or indirectly by Cal Dive
immediately after the Closing; provided that, any Delayed Transfer Asset that is
transferred to Cal Dive at any time following the Closing shall, to the extent applicable, and from
and after the Closing Date, be considered part of the Cal Dive Group for all purposes of this
Agreement.

          “Cal Dive Indebtedness” means the aggregate principal amount of total liabilities
(whether long-term or short-term) for borrowed money (including capitalized leases) of the Cal Dive
Group collectively, as determined for purposes of its financial statements prepared in accordance
with GAAP.

          “Code” means the Internal Revenue Code of 1986, as amended.

          “Consents” means any consent, waiver or approval from, or notification requirement to,
any third parties.

          “Delayed Transfer Assets” means any Cal Dive Assets that are transferred to the Cal
Dive Group from the Helix Group after the Closing Date.

          “Delayed Transfer Liabilities” means any Cal Dive Liabilities that are assumed by a
member of the Cal Dive Group from a member of the Helix Group after the Closing Date.

          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC thereunder, all as the same shall be in effect at the time that
reference is made thereto.

          “Firm Public Offering Shares” means the Common Stock sold in the Initial Public
Offering, other than Common Stock sold as a result of exercise of the Over-Allotment Option by the
Underwriters.

          “Force Majeure” means, with respect to a party, an event beyond the control of such
party (or any Person acting on its behalf), which by its nature could not have been foreseen by
such party (or such Person), or, if it could have been foreseen, was unavoidable, and includes,
without limitation, acts of God, storms, floods, riots, fires, sabotage, civil commotion or civil
unrest, interference by civil or military authorities, acts of war (declared or undeclared) or
armed hostilities or other national or international calamity or one or more acts of terrorism or
failure of energy sources or distribution facilities.

          “GAAP” means United States generally accepted accounting principles.

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          “Governmental Approvals” means any notice, report or other filing to be made with, or
any consent, registration, approval, permit or authorization to be obtained from, any Governmental
Authority.

          “Governmental Authority” means any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government, including any
governmental authority, agency, department, board, commission or instrumentality, whether federal,
state, local or foreign (or any political subdivision thereof), and any tribunal, court or
arbitrator(s) of competent jurisdiction.

          “Group” means the Helix Group or the Cal Dive Group, as the context requires.

          “Helix Group” means Helix and each Person (other than a member of the Cal Dive Group)
that is an Affiliate of Helix immediately following the Closing.

          “Holdings” has the meaning given that term in the Preamble hereof.

          “Information” means information, whether or not patentable or copyrightable, in
written, oral, electronic or other tangible or intangible form, stored in any medium, including
studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts,
know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes,
samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other
software, marketing plans, customer names, communications by or to attorneys (including
attorney-client privileged communications), memoranda and other materials prepared by attorneys or
under their direction (including attorney work product), and other technical, financial, employee
or business information or data.

          “Initial Public Offering” means the initial public offering by Cal Dive of
approximately                      shares of Common Stock.

          “Insurance Policies” means the insurance policies written by insurance carriers,
including those affiliated with Helix and any self-insurance arrangements, pursuant to which Cal
Dive or one or more of its Subsidiaries (or their respective officers or directors) will be insured
parties after the Closing Date, including without limitation any policies written by protection and
indemnity clubs with respect to the Vessels.

          “Insurance Proceeds” means those monies: (a) received by an insured from an insurance
carrier or a protection and indemnity club; (b) paid by an insurance carrier or a protection and
indemnity club on behalf of the insured; or (c) received (including by way of setoff) from any
third party in the nature of insurance, contribution or indemnification in respect of any
Liability; in any such case net of any applicable premium adjustments or adjustments to club calls
(including reserves and retrospectively rated premium adjustments) and net of any costs or expenses
incurred in the collection thereof.

          “IPO Registration Statement” means the registration statement on Form S-1 filed under
the Securities Act pursuant to which the Common Stock to be sold by Cal Dive in the Initial Public
Offering will be registered, and all amendments and supplements to such registration

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statement, including post-effective amendments, all exhibits and all materials incorporated by
reference in such registration statement.

          “Law” means any federal, state, local or foreign law (including common law), statute,
code, ordinance, rule, regulation or other requirement enacted, promulgated, issued or entered by a
Governmental Authority.

          “Liabilities” means any debt, loss, damage, adverse claim, liability or obligation of
any Person (whether direct or indirect, known or unknown, asserted or unasserted, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due, and whether
in contract, tort, strict liability or otherwise), and including all costs and expenses relating
thereto.

          “Over-Allotment Option” means the over-allotment option that may be exercised by the
underwriters of the Initial Public Offering pursuant to the Underwriting Agreement relating to the
Initial Public Offering.

          “Person” means any individual, corporation, partnership, limited liability company,
firm, joint venture, association, joint-stock company, trust, unincorporated organization,
Governmental Authority or other entity.

          “Prospectus” means the prospectus or prospectuses included in the IPO Registration
Statement, as amended or supplemented by prospectus supplement and by all other amendments and
supplements to any such prospectus, including post-effective amendments and all material
incorporated by reference in such prospectus or prospectuses.

          “SEC” means the Securities and Exchange Commission.

          “Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC thereunder, all as the same shall be in effect at the time that reference is
made thereto.

          “Security Interest” means any mortgage, security interest, pledge, lien, charge,
claim, option, right to acquire, voting or other restriction, right-of-way, covenant, condition,
easement, encroachment, restriction on transfer (other than restrictions on transfer imposed by
federal or state securities laws), or other encumbrance of any nature whatsoever.

          “Separation” means collectively, (a) the transfer of the Cal Dive Assets, to the
extent not already held by Cal Dive and the Cal Dive Group, and the assumption by Cal Dive and the
Cal Dive Group of the Cal Dive Liabilities, and (b) the transfer of certain Excluded Assets to
Helix and the Helix Group, and the assumption by Helix and the Helix Group of certain Excluded
Liabilities, all as more fully described in this Agreement and the Transaction Documents.

          “Subsidiary” or “subsidiary” means, with respect to any Person, any
corporation, limited liability company, joint venture or partnership of which such Person (a)
beneficially owns, either directly or indirectly, more than fifty percent (50%) of (i) the total
combined voting power of all classes of voting securities of such entity, (ii) the total combined
equity interests, or (iii) the capital or profit interests, in the case of a partnership; or (b)
otherwise has the power to vote,

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          either directly or indirectly, sufficient securities to elect a majority of the board of
directors or similar governing body.

          “Tax” means all federal, state, provincial, territorial, municipal, local or foreign
income, profits, franchise, gross receipts, tonnage, environmental (including taxes under Code
Section 59A), customs, duties, net worth, sales, use, goods and services, withholding, value added,
ad valorem, employment, social security, disability, occupation, pension, real property, personal
property (tangible and intangible), stamp, transfer, conveyance, severance, production, excise,
premium, retaliatory and other taxes, withholdings, duties, levies, imposts, guarantee fund
assessments and other similar charges and assessments (including any and all fines, penalties and
additions attributable to or otherwise imposed on or with respect to any such taxes, charges, fees,
levies or other assessments, and interest thereon) imposed by or on behalf of any Taxing Authority,
in each case whether such Tax arises by Law, contract, agreement or otherwise.

          “Taxing Authority” means any Governmental Authority exercising any authority to
impose, regulate, levy, assess or administer the imposition of any Tax.

          “Transactions” means, collectively, (a) the Separation, (b) the Initial Public
Offering and (c) all other transactions contemplated by this Agreement or any Transaction Document.

          “Trigger Date” means the first date on which members of the Helix Group cease to
beneficially own more than fifty percent (50%) of the total voting power of Cal Dive Common Stock.

          “Underwriters” means the managing underwriters for the Initial Public Offering.

          “Underwriting Agreement” means the Underwriting Agreement to be entered into by and
among Helix, Cal Dive and the Underwriters in connection with the offering of Cal Dive Common Stock
in the Initial Public Offering.

          “Vessel Holdings” has the meaning given that term in the Preamble hereof.

          “Vessels” means, as of the Closing Date, the vessels listed on Schedule 1.1 hereto,
and all appurtenances thereto, and thereafter, the Vessels and any after-acquired vessels of Cal
Dive.

          1.2 Other Terms. For purposes of this Agreement, the following terms have the
meanings set forth in the sections indicated.

	 	 	 
	Term	 	Section
	After-Tax Basis

	 	5.6(c) 
	Agreement

	 	Recitals 
	Annual Financial Statements

	 	4.1(a)(v) 
	Assumed Actions

	 	6.15(a) 
	Bylaws

	 	3.3 
	Cal Dive

	 	Preamble 
	Cal Dive Assets

	 	2.2(a) 
	Cal Dive Auditors

	 	4.1(b)(i) 

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	Term	 	Section
	Cal Dive Confidential Information

	 	6.2(a) 
	Cal Dive Indemnified Parties

	 	5.3 
	Cal Dive Liabilities

	 	2.3(a) 
	Cal Dive Public Documents

	 	4.1(a)(viii) 
	Cal Dive Transfer Documents

	 	2.9(a)(iii) 
	Charter

	 	3.3 
	Closing

	 	3.1 
	Closing Date

	 	3.1 
	Corporate Services Agreement

	 	3.2(b)(i) 
	Dispute

	 	7.1 
	Employee Matters Agreement

	 	3.2(b)(iv) 
	Excluded Assets

	 	2.2(b) 
	Excluded Liabilities

	 	2.3(b) 
	Existing Actions

	 	6.15(b) 
	Existing Helix Indebtedness

	 	3.5 
	Helix

	 	Preamble 
	Helix Annual Statements

	 	4.1(b)(ii) 
	Helix Auditors

	 	4.1(b)(ii) 
	Helix Confidential Information

	 	6.2(b) 
	Helix Indemnified Parties

	 	5.2 
	Helix Policies

	 	6.11 
	Helix Public Filings

	 	4.1(a)(xii) 
	Helix Transfer Documents

	 	2.8 
	Indemnified Party

	 	5.6(a) 
	Indemnifying Party

	 	5.6(a) 
	Indemnity Payment

	 	5.6(a) 
	Notification Period

	 	6.12 
	Privilege

	 	4.9 
	Quarterly Financial Statements

	 	4.1(a)(iv) 
	Registration Rights Agreement

	 	3.2(b)(ii) 
	Representatives

	 	6.2(a) 
	Tax Matters Agreement

	 	3.2(b)(iii) 
	Third Party Claim

	 	5.7(a) 
	Transaction Documents

	 	3.2(b) 
	Transfer Credit Facility

	 	Preamble 
	Transfer Documents

	 	2.9(a)(iii) 
	Transferred Subsidiaries

	 	2.2(a)(iii) 
	Utilization Limit

	 	6.12 

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ARTICLE III

THE SEPARATION

     2.1 Transfer of Cal Dive Assets; Assumption of Cal Dive Liabilities.

     (a) The Separation shall be effected in accordance with the terms and conditions of this
Agreement and the other Transfer Documents. Subject to Section 3.6, immediately following
the execution and delivery of the Underwriting Agreement by each of the parties thereto:

     (i) Helix shall, and shall cause its applicable Subsidiaries to, contribute, assign,
transfer, convey and deliver to Cal Dive or certain of Cal Dive’s Subsidiaries designated by
Cal Dive, and Cal Dive or such applicable Subsidiaries shall accept from Helix and its
applicable Subsidiaries, all of Helix’s and such Subsidiaries’ respective rights, titles and
interests in and to all Cal Dive Assets, with such contributions, assignments, transfers and
conveyances being subject to the terms and conditions of this Agreement and any applicable
Transfer Documents; and

     (ii) Cal Dive shall, and shall cause its domestic Subsidiaries to, accept, assume and
agree, on a several and not joint basis, to perform, discharge and fulfill all the Cal Dive
Liabilities, in accordance with their respective terms. Cal Dive and such Subsidiaries
shall be responsible for all Cal Dive Liabilities assumed by it, regardless of when or where
such Cal Dive Liabilities arose or arise, or whether the facts on which they are based
occurred prior to or subsequent to the Closing Date, regardless of where or against whom
such Cal Dive Liabilities are asserted or determined (including any Cal Dive Liabilities
arising out of claims made by Helix’s or Cal Dive’s respective directors, officers,
employees, agents, Subsidiaries or Affiliates against any member of the Helix Group or the
Cal Dive Group) or whether asserted or determined prior to the date hereof, and, except as
set forth in Section 2.3(b)(iii), regardless of whether arising from or alleged to
arise from negligence, recklessness, violation of Law, fraud or misrepresentation by any
member of the Helix Group or the Cal Dive Group, or any of their past or present respective
directors, officers, employees, agents, Subsidiaries or Affiliates. Such assumption of Cal
Dive Liabilities shall be subject to the terms and conditions of this Agreement and any
applicable Transfer Documents.

     (b) Each of the parties agrees that Delayed Transfer Assets, if any, will be contributed,
assigned, transferred, conveyed and delivered, and Delayed Transfer Liabilities, if any, will be
accepted and assumed, in accordance with the terms of the applicable Transaction Documents.
Notwithstanding the date on which any such Delayed Transfer Asset is actually contributed,
assigned, conveyed and delivered, or the date on which any such Delayed Transfer Liability is
actually accepted and assumed, such contribution, assignment, transfer, conveyance and delivery of
any Delayed Transfer Asset, or the acceptance and assumption of any Delayed Transfer Liability,
shall be deemed to have taken place on, and shall be effective as of, the Closing Date, and the
applicable Delayed Transfer Asset or Delayed Transfer Liability shall be treated for all purposes
of this Agreement and the Transaction Documents as a Cal Dive Asset or a Cal Dive Liability, as the
case may be, from and after the Closing Date.

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     (c) If at any time or from time to time (whether prior to or after the Closing Date) any party
hereto (or any member of such party’s respective Group) shall receive or otherwise possess any
Asset that is allocated to any other Person pursuant to this Agreement or any Transaction Document,
such party shall promptly transfer, or cause to be transferred, such Asset to the Person so
entitled thereto. This Section 2.2(c) shall not apply to any Assets acquired by Helix or Cal Dive
more than one hundred eighty (180) days following the Closing Date.

     (d) Cal Dive hereby waives compliance by each member of the Helix Group with the requirements
and provisions of the “bulk-sale” or “bulk-transfer” Laws of any jurisdiction that may otherwise be
applicable with respect to the transfer or sale of any or all of the Cal Dive Assets to any member
of the Cal Dive Group.

     2.2 Cal Dive Assets.

     (a) Subject to Section 2.2(b), for purposes of this Agreement, “Cal Dive
Assets” shall mean (without duplication):

     (i) all Assets that are expressly provided by this Agreement or any Transaction
Document as Assets to be transferred by Helix and other members of the Helix Group to Cal
Dive or another designated member of the Cal Dive Group;

     (ii) all Cal Dive Contracts;

     (iii) the stock and limited liability company membership interests listed on
Schedule 2.2 hereto of the corporations and limited liability companies described on
Schedule 2.2 (the “Transferred Subsidiaries”);

     (iv) subject to Section 6.3, any rights of any member of the Cal Dive Group
under any of the Insurance Policies, including any rights thereunder arising after the
Closing Date in respect of any Insurance Policies;

     (v) all Assets reflected as Assets of Cal Dive and its Subsidiaries in the Cal Dive
Balance Sheet, other than any dispositions of such Assets subsequent to the date of the Cal
Dive Balance Sheet; and

     (vi) any and all Assets owned or held immediately prior to the Closing Date by Helix or
any of its Subsidiaries that are used exclusively in the Cal Dive Business. The intention
of this clause (vi) is only to rectify any inadvertent omission of transfer or
conveyance of any Asset that, had the parties given specific consideration to such Asset as
of the date hereof, would have otherwise been classified as a Cal Dive Asset.

     (b) Notwithstanding the foregoing, the Cal Dive Assets shall not in any event include the
Excluded Assets. For purposes of this Agreement, “Excluded Assets” shall mean Assets not
used exclusively in the Cal Dive Business, including, without limitation any and all Assets that
are expressly contemplated by this Agreement or any Transaction Document as either Assets to be
retained by Helix or any other member of the Helix Group, other than assets of the Transferred
Subsidiaries, or Assets that are to be transferred by Cal Dive or any member of the Cal Dive Group
to Helix or a designated member of the Helix Group.

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     2.3 Cal Dive Liabilities.

     (a) Subject to Section 2.3(b), for purposes of this Agreement, “Cal Dive
Liabilities” shall mean (without duplication):

     (i) all Liabilities that are expressly provided by this Agreement or any Transaction
Document as Liabilities to be assumed by Cal Dive or any other member of the Cal Dive Group,
and all agreements, obligations and Liabilities of Cal Dive or any other member of the Cal
Dive Group under this Agreement or any of the Transaction Documents;

     (ii) all Liabilities, including any environmental or employee-related Liabilities
relating to, arising out of or resulting from:

     (A) the operation of the Cal Dive Business, as conducted at any time before, on
or after the Closing Date (including any Liability relating to, arising out of or
resulting from any act or failure to act by any director, officer, employee, agent
or representative (whether or not such act or failure to act is or was within such
Person’s authority));

     (B) the operation of any business conducted by any member of the Cal Dive Group
at any time after the Closing Date (including any Liability relating to, arising out
of or resulting from any act or failure to act by any director, officer, employee,
agent or representative (whether or not such act or failure to act is or was within
such Person’s authority));

     (C) any Cal Dive Assets (including any Cal Dive Contracts and any real property
and leasehold interests), in any such case whether arising before, on or after the
Closing Date; or

     (D) the ownership and operation of the Vessels.

     (iii) all Liabilities reflected as liabilities or obligations of Cal Dive or its
Subsidiaries in the Cal Dive Balance Sheet;

     (iv) all Liabilities related to Assumed Actions and Existing Actions, as further
provided in Section 6.15;

     (v) all Liabilities related to any and all other Actions initiated on or after the
Closing Date that arise out of or relate in any material respect to the operation of the Cal
Dive Business or the ownership or use of the Cal Dive Assets, in any such case whether such
Liability arises before, on or after the Closing Date, including any such Action in which
Helix or any member of the Helix Group is named as a defendant or party subject to any claim
or investigation;

     (vi) all Liabilities for any payments to be made by any member of the Helix Group or
any member of the Cal Dive Group pursuant to the terms and conditions of purchase agreements
relating to the acquisition of Cal Dive Assets, including, without

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limitation, purchase price installment payments based on the financial performance of
the Cal Dive Asset subsequent to the acquisition;

     (vii) all Liabilities under or arising out of the Transfer Credit Facility, including,
without limitation, the obligations to repay the principal balance thereunder and accrued
interest thereon, fee and expenses of the lenders and the agent thereunder, and any
obligations to protect and indemnify the agent and the lenders thereunder, provided that Cal
Dive’s assumption thereof may take the form of a guaranty of such Transfer Credit Facility;

     (viii) all Liabilities arising out of claims made by Helix’s or Cal Dive’s respective
directors, officers, employees, agents, Subsidiaries or Affiliates against any member of the
Helix Group or the Cal Dive Group with respect to the Cal Dive Business;

     (viii) subject to Section 6.3, all Liabilities for insurance premiums and club
calls relating to the Cal Dive Assets or the Vessels; and

     (ix) Liabilities of the Transferred Subsidiaries.

     (b) Notwithstanding the foregoing, the Cal Dive Liabilities shall not in any event include the
Excluded Liabilities. For purposes of this Agreement, “Excluded Liabilities” shall mean
(without duplication):

     (i) any and all Liabilities that are expressly contemplated by this Agreement or any
Transaction Document as Liabilities to be retained or assumed by Helix or any other member
of the Helix Group, and all agreements and obligations of any member of the Helix Group
under this Agreement or any of the Transaction Documents;

     (ii) any and all Liabilities of a member of the Helix Group relating solely to, arising
solely out of or resulting from any Excluded Assets; and

     (iii) any and all liabilities arising from a knowing violation of Law, fraud or
misrepresentation by any member of the Helix Group or any of their respective directors,
officers, employees or agents (other than any individual who at the time of such act was
acting in his or her capacity as a director, officer, employee or agent of any member of the
Cal Dive Group).

     2.4 Termination of Agreements.

     (a) Except as set forth in Section 2.4(b), Cal Dive and each member of the Cal Dive
Group, on the one hand, and Helix and each member of the Helix Group, on the other hand, hereby
terminate any and all agreements, arrangements, commitments or understandings, whether or not in
writing, between or among Cal Dive or any member of the Cal Dive Group, on the one hand, and Helix
or any member of the Helix Group, on the other hand, effective as of the Closing Date. No such
terminated agreement, arrangement, commitment or understanding (including any provision thereof
which purports to survive termination) shall be of any further force or effect after the Closing
Date. Each party shall, at the reasonable request of any other party, take, or cause to be taken,
such other actions as may be necessary to effect the foregoing.

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     (b) The provisions of Section 2.4(a) shall not apply to any of the following
agreements, arrangements, commitments or understandings (or to any of the provisions thereof):

     (i) this Agreement and the Transaction Documents (and each other agreement or
instrument expressly contemplated by this Agreement or any Transaction Document to be
entered into or continued by either of the parties or any of the members of their respective
Groups);

     (ii) except to the extent redundant with any provision of or service provided under
this Agreement or any of the Transaction Documents (including any exhibits or schedules
thereto), the agreements, arrangements, commitments and understandings listed or described
on Schedule 2.4(b)(ii);

     (iii) any agreements, arrangements, commitments or understandings to which any Person
other than the parties and their respective Affiliates is a party (it being understood that
to the extent that the rights and obligations of the parties and the members of their
respective Groups under any such agreements, arrangements, commitments or understandings
constitute Cal Dive Assets or Cal Dive Liabilities, they shall be assigned pursuant to
Section 2.1);

     (iv) any accounts or notes payable or accounts or notes receivable between a member of
the Helix Group, on the one hand, and a member of the Cal Dive Group, on the other hand,
accrued as of the Closing Date and reflected in the books and records of the parties or
otherwise documented in accordance with past practices;

     (v) any agreements, arrangements, commitments or understandings to which any non-wholly
owned Subsidiary of Helix or Cal Dive, as the case may be, is a party; and

     (vi) any other agreements, arrangements, commitments or understandings that this
Agreement or any Transaction Document expressly contemplates will survive the Closing Date.

     2.5 Governmental Approvals and Consents; Delayed Transfer Assets and Liabilities.

     (a) To the extent that the Separation requires any Governmental Approvals or Consents, the
parties will use their commercially reasonable efforts to obtain such Governmental Approvals and
Consents; provided, however, that neither Helix nor Cal Dive shall be obligated to contribute
capital in any form to any entity in order to obtain such Governmental Approvals and Consents.

     (b) If and to the extent that the valid, complete and perfected contribution, transfer or
assignment to the Cal Dive Group of any Cal Dive Assets or the assumption by the Cal Dive Group of
any Cal Dive Liabilities would be a violation of applicable Law or require any Consent or
Governmental Approval in connection with the Separation or the Initial Public Offering, then,
unless the parties mutually shall otherwise determine, the transfer or assignment to the Cal Dive
Group of such Cal Dive Assets or the assumption by the Cal Dive Group of such Cal Dive

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Liabilities shall be automatically deemed deferred and any such purported contribution,
transfer, assignment or assumption shall be null and void until such time as all legal impediments
are removed or such Consents or Governmental Approvals have been obtained. If and when the
Consents and Governmental Approvals are obtained, the contribution, transfer or assignment of the
applicable Cal Dive Asset or Cal Dive Liability shall be effected in accordance with the terms of
this Agreement and/or the applicable Transfer Document. Any such Liability shall be deemed a
Delayed Transfer Liability. Any such Asset shall be deemed a Delayed Transfer Asset and
notwithstanding the foregoing, a Cal Dive Asset for purposes of determining whether any Liability
is a Cal Dive Liability.

     (c) If any contribution, transfer or assignment of any Cal Dive Asset intended to be
contributed, transferred or assigned hereunder or any assumption of any Cal Dive Liability intended
to be assumed by the Cal Dive Group hereunder is not consummated on the Closing Date for any
reason, then, insofar as reasonably possible, (i) the member of the Helix Group retaining such Cal
Dive Asset shall thereafter hold such Cal Dive Asset for the use and benefit of the member of the
Cal Dive Group entitled thereto (at the expense of the member of the Cal Dive Group entitled
thereto) and (ii) Cal Dive shall, or shall cause the applicable member of the Cal Dive Group to,
pay or reimburse the member of the Helix Group retaining such Cal Dive Liability for all amounts
paid or incurred in connection with such Cal Dive Liability. In addition, the member of the Helix
Group retaining such Cal Dive Asset shall, insofar as reasonably possible and to the extent
permitted by applicable Law, treat such Asset in the ordinary course of business in accordance
with past practice and take such other actions as may be reasonably requested by the Cal Dive Group
member to whom such Cal Dive Asset is to be transferred in order to place such Cal Dive Group
member in the same position as if such Cal Dive Asset had been transferred as contemplated hereby
and so that all the benefits and burdens relating to such Cal Dive Asset, including possession,
use, risk of loss, potential for gain, and dominion, control and command over such Cal Dive Asset,
is to inure from and after the Closing Date to the Cal Dive Group.

     (d) The Person retaining an Asset or Liability due to the deferral of the transfer of such
Asset or the deferral of the assumption of such Liability shall not be obligated, in connection
with the foregoing, to expend any money unless the necessary funds are advanced (or otherwise made
available) by the Person entitled to the Asset or the Person intended to be subject to the
Liability, other than reasonable out-of-pocket expenses, attorneys’ fees and recording or similar
fees, all of which shall be promptly reimbursed by the Person entitled to such Asset or the Person
intended to be subject to the Cal Dive Liability.

     2.6 Novation of Assumed Cal Dive Liabilities.

     (a) Each of Helix and Cal Dive, at the request of the other, shall use commercially reasonable
efforts to obtain, or to cause to be obtained, any Consent, substitution or amendment required to
novate or assign all obligations under agreements, leases, licenses and other obligations or
Liabilities of any nature whatsoever that constitute Cal Dive Liabilities, or to obtain in writing
the unconditional release of all parties to such arrangements (other than any member of the Cal
Dive Group), so that, in any such case, Cal Dive and the other members of the Cal Dive Group will
be solely responsible for such Cal Dive Liabilities; provided, however, that
neither the Helix Group nor the Cal Dive Group shall be obligated to pay any consideration or

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assume any additional obligation therefor to any third party from whom any such Consent,
substitution or amendment is requested.

     (b) If Helix or Cal Dive is unable to obtain, or to cause to be obtained, any such required
Consent, release, substitution or amendment, the applicable member of the Helix Group shall
continue to be bound by such agreement, lease, license or other obligation that constitutes a Cal
Dive Liability and, unless not permitted by Law or the terms thereof, as agent or subcontractor for
such member of the Helix Group, Cal Dive shall, or shall cause a member of the Cal Dive Group to,
pay, perform and discharge fully all the obligations or other Liabilities of members of the Helix
Group thereunder that constitute Cal Dive Liabilities from and after the Closing Date. Cal Dive
shall indemnify each Helix Indemnified Party, and hold each of them harmless against any
Liabilities arising in connection therewith; provided that, Cal Dive shall have no
obligation to indemnify any Helix Indemnified Party with respect to any matter to the extent that
such Helix Indemnified Party has engaged in any knowing violation of Law, fraud or
misrepresentation in connection therewith. Helix shall, without further consideration, promptly
pay and remit, or cause to be promptly paid or remitted, to Cal Dive, all money, rights and other
consideration received by it or any member of the Helix Group in respect of such performance
(unless any such consideration is an Excluded Asset). If and when any such Consent, release,
substitution or amendment shall be obtained or such agreement, lease, license or other rights or
obligations shall otherwise become assignable or able to be novated, Helix shall thereafter assign,
or cause to be assigned, all rights and obligations of any member of the Helix Group thereunder and
any other Cal Dive Liabilities thereunder to Cal Dive or a designated member of the Cal Dive Group,
without payment of further consideration and Cal Dive, or a designated member of the Cal Dive
Group, shall, without the payment of any further consideration, assume such Cal Dive Liabilities
and rights.

     2.7 Novation of Liabilities other than Cal Dive Liabilities.

     (a) Each of Helix and Cal Dive, at the request of the other, shall use commercially reasonable
efforts to obtain, or to cause to be obtained, any Consent, substitution, or amendment required to
novate or assign all obligations under agreements, leases, licenses and other obligations or
Liabilities for which a member of the Helix Group and a member of the Cal Dive Group are jointly or
severally liable and that do not constitute Cal Dive Liabilities, or to obtain in writing the
unconditional release of all parties to such arrangements other than any member of the Helix Group,
so that, in any such case, the members of the Helix Group will be solely responsible for such
Liabilities; provided, however, that neither the Helix Group nor the Cal Dive Group
shall be obligated to pay any consideration therefor to any third party from whom any such Consent,
substitution or amendment is requested.

     (b) If Helix or Cal Dive is unable to obtain, or to cause to be obtained, any such required
Consent, release, substitution or amendment, the applicable member of the Cal Dive Group shall
continue to be bound by such agreement, lease, license or other obligation that does not constitute
a Cal Dive Liability and, unless not permitted by Law or the terms thereof, as agent or
subcontractor for such member of the Cal Dive Group, Helix shall, or shall cause a member of the
Helix Group to, pay, perform and discharge fully all the obligations or other Liabilities of such
member of the Cal Dive Group thereunder from and after the Closing Date. Helix shall indemnify
each Cal Dive Indemnified Party and hold each of them harmless against

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any Liabilities (other than Cal Dive Liabilities) arising in connection therewith;
provided that, Helix shall have no obligation to indemnify any Cal Dive Indemnified
Party with respect to any matter to the extent that such Cal Dive Indemnified Party has engaged in
any knowing violation of Law, fraud or misrepresentation in connection therewith. Cal Dive shall,
without further consideration, promptly pay and remit, or cause to be promptly paid or remitted, to
Helix or to another member of the Helix Group specified by Helix, all money, rights and other
consideration received by it or any member of the Cal Dive Group in respect of such performance
(unless any such consideration is a Cal Dive Asset). If and when any such Consent, release,
substitution or amendment shall be obtained or such agreement, lease, license or other rights or
obligations shall otherwise become assignable or able to be novated, Cal Dive shall promptly
assign, or cause to be assigned, all rights, obligations and other Liabilities thereunder of any
member of the Cal Dive Group to Helix or to another member of the Helix Group specified by Helix,
without payment of any further consideration and Helix, or another member of the Helix Group,
without the payment of any further consideration shall assume such rights and Liabilities.

     2.8 Transfers of Assets and Assumption of Liabilities.

     In furtherance of the contribution, assignment, transfer and conveyance of Cal Dive Assets and
the assumption of Cal Dive Liabilities, on the Closing Date, (a) Helix shall execute and deliver,
and shall cause the other members of the Helix Group to execute and deliver, such stock powers,
merger certificates, bills of sale, certificates of title, assignments of contracts and other
instruments of contribution, transfer, conveyance and assignment as and to the extent necessary to
evidence the contribution, transfer, merger, conveyance and assignment of all of the Helix Group’s
right, title and interest in and to the Cal Dive Assets to the Cal Dive Group, and (b) Cal Dive
shall execute and deliver, and shall cause the other members of the Cal Dive Group to execute and
deliver, such assumptions of contracts and other instruments of assumption as and to the extent
necessary to evidence the valid and effective assumption of the Cal Dive Liabilities by the Cal
Dive Group. All of the foregoing documents contemplated by this Section 2.8 shall be
referred to collectively herein as the “Helix Transfer Documents.”

     2.9 Transfer of Excluded Assets by Cal Dive; Assumption of Excluded Liabilities by
Helix.

     (a) To the extent any Excluded Asset or Excluded Liability is transferred to a member of the
Cal Dive Group at the Closing or remains owned or held by a member of the Cal Dive Group after the
Closing, from and after the Closing:

     (i) Cal Dive shall, and shall cause the members of the Cal Dive Group to, promptly
contribute, assign, transfer, convey and deliver to Helix or designated Helix Group members,
and Helix or such Helix Group members shall accept from Cal Dive and its applicable Group
members, all of Cal Dive’s and such Group members’ respective rights, titles and interests
in and to such Excluded Assets.

     (ii) Helix and certain Helix Group members designated by Helix, shall promptly accept,
assume and agree to perform, discharge and fulfill all such Excluded Liabilities in
accordance with their respective terms.

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     (iii) In furtherance of the assignment, transfer and conveyance of Excluded Assets and
the assumption of Excluded Liabilities (A) Cal Dive shall execute and deliver, and shall
cause its Subsidiaries to execute and deliver, such bills of sale, stock powers,
certificates of title, assignments of contracts and other instruments of transfer,
conveyance and assignment as and to the extent necessary to evidence the transfer,
conveyance and assignment of all of Cal Dive’s and its Subsidiaries’ right, title and
interest in and to the Excluded Assets to Helix and its Subsidiaries, and (B) Helix shall
execute and deliver such assumptions of contracts and other instruments of assumption as and
to the extent necessary to evidence the valid and effective assumption of the Excluded
Liabilities by Helix. All of the foregoing documents contemplated by this Section
2.9(a)(iii) shall be referred to collectively herein as the “Cal Dive Transfer
Documents” and, together with the Helix Transfer Documents, the “Transfer
Documents.”

     (iv) To the extent that the transfer of such Excluded Assets and the assumption of such
Excluded Liabilities requires any Governmental Approvals or Consents, the parties shall use
commercially reasonable efforts to obtain such Governmental Approvals and Consents;
provided, however, that neither Helix nor Cal Dive shall be obligated to
contribute capital in any form to any entity in order to obtain such Governmental Approvals
and Consents.

     (v) If and to the extent that the valid, complete and perfected transfer or assignment
to the Helix Group of any Excluded Assets or the assumption by the Helix Group of any
Excluded Liabilities would be a violation of applicable Law or require any Consent or
Governmental Approval, then, unless the parties mutually shall otherwise determine, the
transfer or assignment to the Helix Group of such Excluded Assets or the assumption by the
Helix Group of such Excluded Liabilities shall be automatically deemed deferred and any such
purported transfer, assignment or assumption shall be null and void until such time as all
legal impediments are removed or such Consents or Governmental Approvals have been obtained.

     (b) If any transfer or assignment of any Excluded Asset intended to be transferred or assigned
hereunder or any assumption of any Excluded Liability intended to be assumed by Helix hereunder is
not consummated on the Closing Date, whether as a result of the failure to obtain any required
Governmental Approvals or Consents or any other reason, then, insofar as reasonably possible, (i)
the member of the Cal Dive Group retaining such Excluded Asset shall thereafter hold such Excluded
Asset for the use and benefit of Helix (at Helix’s expense) and (ii) Helix shall, or shall cause
its applicable Group member to, pay or reimburse the member of the Cal Dive Group retaining such
Excluded Liability for all amounts paid or incurred in connection with such Excluded Liability. In
addition, the member of the Cal Dive Group retaining such Excluded Asset shall, insofar as
reasonably possible and to the extent permitted by applicable Law, treat such Excluded Asset in the
ordinary course of business in accordance with past practice and take such other actions as may be
reasonably requested by Helix in order to place Helix in the same position as if such Excluded
Asset had been transferred as contemplated hereby and so that all the benefits and burdens relating
to such Excluded Asset, including possession, use, risk of loss, potential for gain, and dominion,
control and command over such Excluded Asset, is to inure from and after the Closing Date to the
Helix Group.

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     (c) If and when the Consents and Governmental Approvals, the absence of which caused the
deferral of transfer of any Excluded Asset or the deferral of assumption of any Excluded Liability,
are obtained, the transfer or assignment of the applicable Excluded Asset or Excluded Liability
shall be effected in accordance with the terms of this Agreement and/or the applicable Transfer
Document.

     (d) Any member of the Cal Dive Group retaining an Excluded Asset or Excluded Liability due to
the deferral of the transfer of such Excluded Asset or the deferral of the assumption of such
Excluded Liability shall not be obligated, in connection with the foregoing, to expend any money
unless the necessary funds are advanced (or otherwise made available) by Helix or the member of the
Helix Group intended to be subject to the Excluded Liability, other than reasonable out-of-pocket
expenses, attorneys’ fees and recording or similar fees, all of which shall be promptly reimbursed
by Helix or the member of the Helix Group entitled to such Excluded Asset or intended to be subject
to such Excluded Liability.

     2.10 DISCLAIMER OF REPRESENTATIONS AND WARRANTIES.

     EACH OF HELIX (ON BEHALF OF ITSELF AND EACH MEMBER OF THE HELIX GROUP) AND CAL DIVE (ON BEHALF
OF ITSELF AND EACH MEMBER OF THE CAL DIVE GROUP) UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY
SET FORTH HEREIN OR IN ANY TRANSACTION DOCUMENT, NO PARTY TO THIS AGREEMENT, ANY TRANSACTION
DOCUMENT OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT, ANY TRANSACTION
DOCUMENT OR OTHERWISE, IS REPRESENTING OR WARRANTING IN ANY WAY AS TO THE ASSETS, BUSINESSES OR
LIABILITIES CONTRIBUTED, TRANSFERRED OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, AS TO ANY
CONSENTS OR APPROVALS REQUIRED IN CONNECTION HEREWITH OR THEREWITH, AS TO THE VALUE OR FREEDOM FROM
ANY SECURITY INTERESTS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY, OR AS TO THE
ABSENCE OF ANY DEFENSES OR RIGHT OF SETOFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY CLAIM
OR OTHER ASSET, INCLUDING ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY
CONTRIBUTION, ASSIGNMENT, DOCUMENT, CERTIFICATE OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY TITLE
TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF. EXCEPT
AS MAY EXPRESSLY BE SET FORTH HEREIN OR IN ANY TRANSACTION DOCUMENT, ALL SUCH ASSETS ARE BEING
TRANSFERRED ON AN “AS IS,” “WHERE IS” BASIS (AND, IN THE CASE OF ANY REAL PROPERTY, BY MEANS OF A
QUITCLAIM OR SIMILAR FORM DEED OR CONVEYANCE) AND THE RESPECTIVE TRANSFEREES SHALL BEAR THE
ECONOMIC AND LEGAL RISKS THAT (I) ANY CONVEYANCE SHALL PROVE TO BE INSUFFICIENT TO VEST IN THE
TRANSFEREE GOOD TITLE, FREE AND CLEAR OF ANY SECURITY INTEREST, AND (II) ANY NECESSARY CONSENTS OR
GOVERNMENTAL APPROVALS ARE NOT OBTAINED OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT
COMPLIED WITH.

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ARTICLE III

INTERCOMPANY TRANSACTIONS AS OF THE CLOSING DATE

     3.1 Time and Place of Closing.

     Subject to the terms and conditions of this Agreement, all transactions contemplated by this
Agreement shall be consummated at a closing (the “Closing”) to be held at such place as
Helix and Cal Dive mutually agree and on the date on which (and after) the Underwriting Agreement
is executed and delivered by each of the parties thereto or at such other time as Helix and Cal
Dive may mutually agree (the day on which the Closing takes place being the “Closing
Date”).

     3.2 Closing Transactions.

     In each case subject to Section 3.6, after execution and delivery of the Underwriting
Agreement by all parties thereto, at the Closing:

     (a) The Separation shall be effected in accordance with this Agreement and the applicable
Transfer Documents.

     (b) The appropriate parties shall enter into, and (as necessary) shall cause the respective
members of their Group to enter into, the agreements set forth below (collectively with the
Transfer Documents, the “Transaction Documents”):

     (i) the Corporate Services Agreement in the form attached as Exhibit A (the
“Corporate Services Agreement”);

     (ii) the Registration Rights Agreement in the form attached as Exhibit B (the
“Registration Rights Agreement”);

     (iii) the Tax Matters Agreement in the form attached as Exhibit C (the “Tax
Matters Agreement”); and

     (iv) the Employee Matters Agreement in the form attached as Exhibit D (the
“Employee Matters Agreement”).

     3.3 Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws.

     At or prior to the Closing, Helix and Cal Dive shall each take all necessary actions that may
be required to provide for the adoption by Cal Dive of the Amended and Restated Certificate of
Incorporation of Cal Dive in the form attached hereto as Exhibit E (the “Charter”),
and the Amended and Restated Bylaws of Cal Dive in the form attached hereto as Exhibit F
(the “Bylaws”). The Charter and Bylaws shall be in full force and effect as of the Closing
Date.

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     3.4 The Initial Public Offering.

     The Initial Public Offering will be a primary offering of Common Stock. Cal Dive shall (a)
consult with, and cooperate in all respects with, Helix in connection with the pricing of the
Common Stock to be offered in the Initial Public Offering; (b) at the direction of Helix, execute
and deliver the Underwriting Agreement in such form and substance as is reasonably satisfactory to
Helix; and (c) at the direction of Helix, promptly take any and all actions necessary or desirable
to consummate the Initial Public Offering as contemplated by the IPO Registration Statement and the
Underwriting Agreement.

     3.5 Proceeds of Initial Public Offering.

     Cal Dive agrees that it shall, on the date it receives the proceeds of the Initial Public
Offering, or on the next succeeding Business Day, apply such proceeds as follows:

     (a) first, to pay any and all costs and expenses relating to the Initial Public Offering; and

     (b) second, to transfer the remaining proceeds to Helix by way of dividend.

     3.6 Rescission.

     NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS AGREEMENT, IF DELIVERY OF THE FIRM
PUBLIC OFFERING SHARES TO THE UNDERWRITERS AGAINST PAYMENT THEREFOR IS NOT COMPLETE WITHIN TEN (10)
BUSINESS DAYS AFTER THE CLOSING DATE, ALL TRANSACTIONS THERETOFORE COMPLETED UNDER THIS AGREEMENT
OR ANY OF THE TRANSACTION DOCUMENTS SHALL IMMEDIATELY BE RESCINDED IN ALL RESPECTS AND THIS
AGREEMENT AND ALL OF THE TRANSACTION DOCUMENTS SHALL TERMINATE AND ALL ASSETS TRANSFERRED PURSUANT
TO THE TRANSACTION DOCUMENTS SHALL BE RETURNED TO THE ENTITIES THAT TRANSFERRED SUCH ASSETS, AND
ALL ASSUMPTIONS OF LIABILITIES HEREUNDER AND THEREUNDER SHALL BE RESCINDED AND NULLIFIED.

ARTICLE IV

FINANCIAL AND OTHER INFORMATION

     4.1 Financial and Other Information.

     (a) Financial Information. Cal Dive agrees that, for so long as Helix is required to
either consolidate the results of operations and financial position of Cal Dive and the other
members of the Cal Dive Group with the results of operations and financial position of Helix, or to
account for its investment in Cal Dive under the equity method of accounting (determined in
accordance with GAAP and consistent with SEC reporting requirements):

     (i) Disclosure of Financial Controls. Cal Dive will, and will cause each other
member of the Cal Dive Group to, maintain, as of and after the Closing Date, disclosure
controls and procedures and internal control over financial reporting as defined in

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Exchange Act Rule 13a-15 promulgated under the Exchange Act; Cal Dive will cause each
of its principal executive and principal financial officers to sign and deliver
certifications to Cal Dive’s periodic reports and will include the certifications in Cal
Dive’s periodic reports, as and when required pursuant to Exchange Act Rule 13a-14 and Item
601 of Regulation S-K; Cal Dive will cause its management to evaluate Cal Dive’s disclosure
controls and procedures and internal control over financial reporting (including any change
in internal control over financial reporting) as and when required pursuant to Exchange Act
Rule 13a-15; Cal Dive will disclose in its periodic reports filed with the SEC information
concerning Cal Dive management’s responsibilities for and evaluation of Cal Dive’s
disclosure controls and procedures and internal control over financial reporting (including,
without limitation, the annual management report and attestation report of Cal Dive’s
independent auditors relating to internal control over financial reporting) as and when
required under Items 307 and 308 of Regulation S-K and other applicable SEC rules; and,
without limiting the general application of the foregoing, Cal Dive will, and will cause
each other member of the Cal Dive Group to, maintain as of and after the Closing Date
internal systems and procedures that will provide reasonable assurance that (A) the
Financial Statements are reliable and timely prepared in accordance with GAAP and applicable
law, (B) all transactions of members of the Cal Dive Group are recorded as necessary to
permit the preparation of the Financial Statements, (C) the receipts and expenditures of
members of the Cal Dive Group are authorized at the appropriate level within Cal Dive, and
(D) unauthorized use or disposition of the assets of any member of the Cal Dive Group that
could have material effect on the financial statements of the Cal Dive Group is prevented
or detected in a timely manner.

     (ii) Fiscal Year. Cal Dive will, and will cause each member of the Cal Dive
Group organized in the United States to, maintain a fiscal year that commences and ends on
the same calendar day as Helix’s fiscal year commences and ends, and to maintain monthly
accounting periods that commence and end on the same calendar days as Helix’s monthly
accounting periods commence and end.

     (iii) Monthly Financial Reports. No later than five (5) Business Days after
the end of each monthly accounting period of Cal Dive following the Closing Date (including
the last monthly accounting period of Cal Dive of each fiscal year), Cal Dive will deliver
to Helix a consolidated income statement, balance sheet and statement of cash flow for Cal
Dive for such period and an income statement, balance sheet and statement of cash flow for
each Cal Dive Affiliate that is consolidated with Cal Dive, as the case may be, in such
format and detail as Helix may request.

     (iv) Quarterly Financial Statements. As soon as practicable, and in any event
no later than the earlier of (x) ten (10) Business Days prior to the date on which Cal Dive
is required to file a Form 10-Q or other document containing Quarterly Financial Statements
with the SEC for each of the first three (3) fiscal quarters in each fiscal year of Cal
Dive, and (y) five (5) Business Days prior to the date on which Helix has notified Cal Dive
that Helix intends to file its Form 10-Q or other document containing quarterly financial
statements with the SEC, Cal Dive will deliver to Helix drafts of (A) the consolidated
financial statements of the Cal Dive Group (and notes thereto) for such

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periods and for the period from the beginning of the current fiscal year to the end of
such quarter, setting forth in each case in comparative form for each such fiscal quarter of
Cal Dive the consolidated figures (and notes thereto) for the corresponding quarter and
periods of the previous fiscal year and all in reasonable detail and prepared in accordance
with Article 10 of Regulation S-X and GAAP, and (B) a discussion and analysis by Cal Dive’s
management of the Cal Dive Group’s financial condition and results of operations for such
fiscal period, including, without limitation, an explanation of any material
period-to-period change and any off-balance sheet transactions, all in reasonable detail and
prepared in accordance with Item 303(b) of Regulation S-K; provided,
however, that Cal Dive will deliver such information at such earlier time upon
Helix’s written request with thirty (30) days’ notice resulting from Helix’s determination
to accelerate the timing of the filing of its financial statements with the SEC. The
information set forth in clauses (A) and (B) above is referred to in this
Agreement as the “Quarterly Financial Statements.” No later than the earlier of (1)
three (3) Business Days prior to the date Cal Dive publicly files the Quarterly Financial
Statements with the SEC or otherwise makes such Quarterly Financial Statements publicly
available, and (2) three (3) Business Days prior to the date on which Helix has notified Cal
Dive that Helix intends to file its quarterly financial statements with the SEC, Cal Dive
will deliver to Helix the final form of the Quarterly Financial Statements and
certifications thereof by the principal executive and financial officers of Cal Dive in the
forms required under SEC rules for periodic reports; provided, however, that
Cal Dive may continue to revise such Quarterly Financial Statements prior to the filing
thereof in order to make corrections and non-substantive changes which corrections and
changes will be delivered by Cal Dive to Helix as soon as practicable, and in any event
within eight (8) hours thereafter; provided, further, that Helix’s and Cal
Dive’s financial Representatives will actively consult with each other regarding any changes
(whether or not substantive) that Cal Dive may consider making to the Quarterly Financial
Statements and related disclosures during the two (2) Business Days immediately prior to any
anticipated filing with the SEC, with particular focus on any changes which would have an
effect upon Helix’s financial statements or related disclosures. In addition to the
foregoing, no Quarterly Financial Statement or any other document which refers to, or
contains information not previously publicly disclosed with respect to, Helix’s ownership
interest in Cal Dive or the Separation will be filed with the SEC or otherwise made public
by any Cal Dive Group member without the prior written consent of Helix. Notwithstanding
anything to the contrary in this Section 4.1(a)(iv), Cal Dive will file the
Quarterly Financial Statements with the SEC on the same date and at substantially the same
time that Helix files its quarterly financial statements with the SEC unless otherwise
required by applicable law.

     (v) Annual Financial Statements. As soon as practicable, and in any event no
later than the earlier of (x) ten (10) Business Days prior to the date on which Cal Dive is
required to file a Form 10-K or other document containing its Annual Financial Statements
with the SEC, and (y) ten (10) Business Days prior to the date on which Helix has notified
Cal Dive that Helix intends to file its Form 10-K or other document containing annual
financial statements with the SEC, Cal Dive will deliver to Helix (A) drafts of the
consolidated financial statements of the Cal Dive Group (and notes thereto) for such year,
setting forth in each case in comparative form the consolidated figures (and notes thereto)
for the previous fiscal year and all in reasonable detail and prepared in

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accordance with Regulation S-X and GAAP, and (B) a discussion and analysis by Cal
Dive’s management of the Cal Dive Group’s financial condition and results of operations for
such year, including, without limitation, an explanation of any material period-to-period
change and any off-balance sheet transactions, all in reasonable detail and prepared in
accordance with Item 303(a) of Regulation S-K. The information set forth in clauses
(A) and (B) above is referred to in this Agreement as the “Annual Financial
Statements.” Cal Dive will deliver to Helix all revisions to such drafts as soon as any
such revisions are prepared or made. No later than the earlier of (1) five (5) Business Days
prior to the date Cal Dive publicly files the Annual Financial Statements with the SEC or
otherwise makes such Annual Financial Statements publicly available, and (2) five (5)
Business Days prior to the date on which Helix has notified Cal Dive that Helix intends to
file its annual financial statements with the SEC, Cal Dive will deliver to Helix the final
form of the Cal Dive Annual Financial Statements and certifications thereof by the principal
executive and financial officers of Cal Dive in the forms required under SEC rules for
periodic reports; provided, however, that Cal Dive may continue to revise
such Annual Financial Statements prior to the filing thereof in order to make corrections
and non-substantive changes which corrections and changes will be delivered by Cal Dive to
Helix as soon as practicable, and in any event within eight (8) hours thereafter;
provided, further, that Helix and Cal Dive financial Representatives will
actively consult with each other regarding any changes (whether or not substantive) which
Cal Dive may consider making to the Annual Financial Statements and related disclosures
during the three (3) Business Days immediately prior to any anticipated filing with the SEC,
with particular focus on any changes which would have an effect upon Helix’s financial
statements or related disclosures. In addition to the foregoing, no Annual Financial
Statement or any other document which refers to, or contains information not previously
publicly disclosed with respect to, Helix’s ownership interest in Cal Dive or the Separation
will be filed with the SEC or otherwise made public by any Cal Dive Group member without the
prior written consent of Helix, except to the extent required by applicable law. In any
event, Cal Dive will deliver to Helix, no later than three (3) Business Days prior to the
date on which Helix has notified Cal Dive that Helix intends to file its annual financial
statements with the SEC, the final form of the Annual Financial Statements accompanied by an
opinion thereon by Cal Dive’s independent certified public accountants. Notwithstanding
anything to the contrary in this Section 4.1(a)(v), Cal Dive will file the Annual
Financial Statements with the SEC on the same date and at substantially the same time that
Helix files its annual financial statements with the SEC unless otherwise required by
applicable law.

     (vi) Affiliate Financial Statements. Cal Dive will deliver to Helix all
Quarterly Financial Statements and Annual Financial Statements of each Cal Dive Affiliate
which is itself required to file financial statements with the SEC or otherwise make such
financial statements publicly available, with such financial statements to be provided in
the same manner and detail and on the same time schedule as those financial statements of
Cal Dive required to be delivered to Helix pursuant to this Section 4.1.

     (vii) Conformance with Helix Financial Presentation. All information provided
by any Cal Dive Group member to Helix or filed with the SEC pursuant to Sections
4.1(a)(iii) through (vi) inclusive will be consistent in terms of format and
detail and

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otherwise with Helix’s policies with respect to the application of GAAP and practices
in effect on the Closing Date with respect to the provision of such financial information by
such Cal Dive Group member to Helix (and, where appropriate, as presently presented in
financial reports to Helix’s board of directors), with such changes therein as may be
requested by Helix from time to time consistent with changes in such accounting principles
and practices.

     (viii) Cal Dive Reports Generally. Each Cal Dive Group member that files
information with the SEC will deliver to Helix: (A) substantially final drafts, as soon as
the same are prepared, of (x) all reports, notices and proxy and information statements to
be sent or made available by such Cal Dive Group member to its respective security holders,
(y) all regular, periodic and other reports to be filed or furnished under Sections 13, 14
and 15 of the Exchange Act (including Reports on Forms 10-K, 10-Q and 8-K and Annual Reports
to Shareholders), and (z) all registration statements and prospectuses to be filed by such
Cal Dive Group member with the SEC or any securities exchange pursuant to the listed company
manual (or similar requirements) of such exchange (collectively, the documents identified in
clauses (x), (y) and (z) above are referred to as the “Cal Dive
Public Documents”); and (B) as soon as practicable, but in no event later than four (4)
Business Days (other than with respect to Current Reports on Form 8-K) prior to the earliest
of the dates the same are printed, sent or filed, current drafts of all such Cal Dive Public
Documents and, with respect to Current Reports on Form 8-K, as soon as practicable, but in
no event later than two (2) Business Days prior to the earliest of the dates the same are
printed, sent or filed in the case of planned Current Reports on Form 8-K and as soon as
practicable, but in no event less than two (2) hours in the case of unplanned Current
Reports on Form 8-K; provided, however, that Cal Dive may continue to revise
such Cal Dive Public Documents prior to the filing thereof in order to make corrections and
non-substantive changes which corrections and changes will be delivered by Cal Dive to Helix
as soon as practicable, and in any event within eight (8) hours thereafter;
provided, further, that Helix and Cal Dive financial Representatives will
actively consult with each other regarding any changes (whether or not substantive) which
Cal Dive may consider making to any of its Cal Dive Public Documents and related disclosures
prior to any anticipated filing with the SEC, with particular focus on any changes which
would have an effect upon Helix’s financial statements or related disclosures. In addition
to the foregoing, no Cal Dive Public Document or any other document which refers to, or
contains information not previously publicly disclosed with respect to, Helix’s ownership
interest in Cal Dive or the Separation will be filed with the SEC or otherwise made public
by any Cal Dive Group member without the prior written consent of Helix, except as required
by applicable law.

     (ix) Budgets and Financial Projections. Cal Dive will, as promptly as
practicable, deliver to Helix copies of all annual and other budgets and financial
projections (consistent in terms of format and detail and otherwise required by Helix)
relating to the Cal Dive Group on a consolidated basis and will provide Helix an opportunity
to meet with management of Cal Dive to discuss such budgets and projections.

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     (x) Other Information. With reasonable promptness, Cal Dive will deliver to
Helix such additional financial and other information and data with respect to the Cal Dive
Group and their business, properties, financial positions, results of operations and
prospects as from time to time may be reasonably requested by Helix.

     (xi) Press Releases and Similar Information. Cal Dive and Helix will consult
with each other as to the timing of their annual and quarterly earnings releases and any
interim financial guidance for a current or future period and will give each other the
opportunity to review the information therein relating to the Cal Dive Group and to comment
thereon. Helix and Cal Dive will make commercially reasonable efforts to issue their
respective annual and quarterly earnings releases at approximately the same time on the same
date. No later than eight (8) hours prior to the time and date that a party intends to
publish its regular annual or quarterly earnings release or any financial guidance for a
current or future period, such party will deliver to the other party copies of substantially
final drafts of all press releases and other statements to be made available by any member
of that party’s Group to employees of any member of that party’s Group or to the public
concerning any matters that could be reasonably likely to have a material financial impact
on the earnings, results of operations, financial condition or prospects of any Cal Dive
Group member. In addition, prior to the issuance of any such press release or public
statement that meets the criteria set forth in the preceding two sentences, the issuing
party will consult with the other party regarding any changes (other than typographical or
other similar minor changes) to such substantially final drafts. Immediately following the
issuance thereof, the issuing party will deliver to the other party copies of final drafts
of all press releases and other public statements.

     (xii) Cooperation on Helix Filings. Cal Dive will cooperate fully, and will
cause Cal Dive Auditors to cooperate fully, with Helix to the extent requested by Helix in
the preparation of Helix’s public earnings or other press releases, Quarterly Reports on
Form 10-Q, Annual Reports to Shareholders, Annual Reports on Form 10-K, any Current Reports
on Form 8-K and any other proxy, information and registration statements, reports, notices,
prospectuses and any other filings made by Helix with the SEC, any national securities
exchange or otherwise made publicly available (collectively, the “Helix Public
Filings”). Cal Dive agrees to provide to Helix all information that Helix reasonably
requests in connection with any Helix Public Filings or that, in the judgment of Helix’s
legal department, is required to be disclosed or incorporated by reference therein under any
law, rule or regulation. Cal Dive will provide such information in a timely manner on the
dates requested by Helix (which may be earlier than the dates on which Cal Dive otherwise
would be required hereunder to have such information available) to enable Helix to prepare,
print and release all Helix Public Filings on such dates as Helix will determine but in no
event later than as required by applicable law. Cal Dive will use commercially reasonable
efforts to cause Cal Dive Auditors to consent to any reference to them as experts in any
Helix Public Filings required under any law, rule or regulation. If and to the extent
requested by Helix, Cal Dive will diligently and promptly review all drafts of such Helix
Public Filings and prepare in a diligent and timely fashion any portion of such Helix Public
Filing pertaining to Cal Dive. Prior to any printing or public release of any Helix Public
Filing, an appropriate executive officer of Cal Dive will, if requested by Helix, certify
that the information relating to any Cal

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Dive Group member or the Cal Dive Business in such Helix Public Filing is accurate,
true, complete and correct in all material respects. Unless required by law, rule or
regulation, Cal Dive will not publicly release any financial or other information which
conflicts with the information with respect to any Cal Dive Group member or the Cal Dive
Business that is included in any Helix Public Filing without Helix’s prior written consent.
Prior to the release or filing thereof, Helix will provide Cal Dive with a draft of any
portion of a Helix Public Filing containing information relating to the Cal Dive Group and
will give Cal Dive an opportunity to review such information and comment thereon;
provided that, Helix will determine in its sole and absolute discretion the
final form and content of all Helix Public Filings.

     (b) Auditors and Audits; Annual Statements and Accounting. Cal Dive agrees that, for
so long as Helix is required to either consolidate the results of operations and financial position
of Cal Dive and any members of the Cal Dive Group, or to account for its investment in Cal Dive
under the equity method of accounting (in accordance with GAAP and consistent with SEC reporting
requirements):

     (i) Selection of Cal Dive Auditors. Unless required by law, Cal Dive will not
select a different accounting firm than Ernst & Young LLP (or its affiliate accounting
firms) (unless so directed by Helix in accordance with a change by Helix in its accounting
firm) to serve as its (and the Cal Dive Group’s) independent certified public accountants
(“Cal Dive Auditors”), without Helix’s prior written consent (which will not be
unreasonably withheld); provided, however, that, to the extent any members
of the Cal Dive Group are currently using a different accounting firm to serve as their
independent certified public accountants, such members of the Cal Dive Group may continue to
use such accounting firm provided such accounting firm is reasonably satisfactory to Helix.

     (ii) Audit Timing. Cal Dive will use commercially reasonable efforts to enable
Cal Dive Auditors to complete their audit such that they will be able to date their opinion
on the Annual Financial Statements on the same date that Helix’s independent certified
public accountants (“Helix Auditors”) date their opinion on Helix’s audited annual
financial statements (the “Helix Annual Statements”), and to enable Helix to meet
its schedule for the printing, filing and public dissemination of the Helix Annual
Statements, all in accordance with Section 4.1(a) hereof and as required by
applicable law.

     (iii) Information Needed by Helix. Cal Dive will provide to Helix on a timely
basis all information that Helix reasonably requires to meet its schedule for the
preparation, printing, filing, and public dissemination of the Helix Annual Statements in
accordance with Section 4.1(a) hereof and as required by applicable law. Without
limiting the generality of the foregoing, Cal Dive will provide all required financial
information with respect to the Cal Dive Group to Cal Dive Auditors in a sufficient and
reasonable time and in sufficient detail to permit Cal Dive Auditors to take all steps and
perform all reviews necessary to provide sufficient assistance to Helix Auditors with
respect to information to be included or contained in the Helix Annual Statements.

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     (iv) Access to Cal Dive Auditors. Cal Dive will authorize Cal Dive Auditors to
make available to Helix Auditors the personnel who performed, or are performing, the annual
audit of Cal Dive as well as the work papers related to the annual audit of Cal Dive, in all
cases within a reasonable time prior to the date of the Cal Dive Auditors’ opinion on the
Annual Financial Statements, so that Helix Auditors are able to perform the procedures they
consider necessary to take responsibility for the work of Cal Dive Auditors as it relates to
Helix Auditors’ report on the Helix Annual Statements, all within sufficient time to enable
Helix to meet its schedule for the preparation, printing, filing and public dissemination of
the Helix Annual Statements.

     (v) Access to Records. If Helix determines in good faith that there may be any
inaccuracy in a Cal Dive Group member’s financial statements or deficiency in a Cal Dive
Group member’s internal accounting controls or operations that could materially impact
Helix’s financial statements, at Helix’s request, Cal Dive will provide Helix’s internal
auditors with access to the Cal Dive Group’s books and records so that Helix may conduct
reasonable audits relating to the financial statements provided by Cal Dive under this
Agreement as well as to the internal accounting controls and operations of the Cal Dive
Group.

     (vi) Notice of Changes. Subject to Section 4.1(a)(vii), Cal Dive will
give Helix as much prior notice as reasonably practicable of any proposed determination of,
or any significant changes in, Cal Dive’s accounting estimates or accounting principles from
those in effect on the Closing Date. Cal Dive will consult with Helix and, if requested by
Helix, Cal Dive will consult with Helix Auditors with respect thereto. Cal Dive will not
make any such determination or changes without Helix’s prior written consent if such a
determination or a change would be sufficiently material to be required to be disclosed in
Cal Dive’s or Helix’s financial statements as filed with the SEC or otherwise publicly
disclosed therein.

     (vii) Accounting Changes Requested by Helix. Notwithstanding Section
4(a)(vi), Cal Dive will make any changes in its accounting estimates or accounting
principles that are requested by Helix in order for Cal Dive’s accounting practices and
principles to be consistent with those of Helix.

     (viii) Special Reports of Deficiencies or Violations. Cal Dive will report in
reasonable detail to Helix the following events or circumstances promptly after any
executive officer of Cal Dive or any member of the Cal Dive board of directors becomes aware
of such matter: (A) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably likely to
adversely affect Cal Dive’s ability to record, process, summarize and report financial
information; (B) any fraud, whether or not material, that involves management or other
employees who have a significant role in Cal Dive’s internal control over financial
reporting; (C) any illegal act within the meaning of Section 10A(b) and (f) of the Exchange
Act; and (D) any report of a material violation of law that an attorney representing any Cal
Dive Group member has formally made to any officers or directors of Cal Dive pursuant to the
SEC’s attorney conduct rules (17 C.F.R. Part 205).

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     4.2 Agreement for Exchange of Information; Archives.

     (a) Each of Helix and Cal Dive, on behalf of its respective Group, agrees to provide, or cause
to be provided, to the other Group, at any time before or after the Closing Date, as soon as
reasonably practicable after written request therefor, any Information in the possession or under
the control of such respective Group which the requesting party reasonably needs (i) to comply with
reporting, disclosure, filing or other requirements imposed on the requesting party (including
under applicable securities or tax Laws) by a Governmental Authority having jurisdiction over the
requesting party, (ii) for use in any other judicial, regulatory, administrative, tax or other
proceeding or in order to satisfy audit, accounting, claim, regulatory, litigation, tax or other
similar requirements, in each case other than claims or allegations that one party to this
Agreement has against the other, or (iii) subject to the foregoing clause (ii), to comply with its
obligations under this Agreement or any Transaction Document; provided, however,
that in the event that any party reasonably determines that any such provision of Information could
be commercially detrimental, violate any Law or agreement, or waive any attorney-client privilege,
the parties shall take all commercially reasonable measures to permit the compliance with such
obligations in a manner that avoids any such harm or consequence.

     (b) After the Closing Date, Cal Dive shall have access during regular business hours (as in
effect from time to time) to the documents and objects of historic significance that relate to the
Cal Dive Business that are located in archives retained or maintained by any member of the Helix
Group. Cal Dive may obtain copies (but not originals unless it is a Cal Dive Asset) of documents
for bona fide business purposes and may obtain objects for exhibition purposes for commercially
reasonable periods of time if required for bona fide business purposes; provided
that, Cal Dive shall cause any such objects to be returned promptly in the same condition
in which they were delivered to Cal Dive, and Cal Dive shall comply with any rules, procedures or
other requirements, and shall be subject to any restrictions (including prohibitions on removal of
specified objects), that are then applicable to Helix. Cal Dive shall pay the applicable fee or
rate per hour for archive research services (subject to increase from time to time to reflect rates
then in effect for Helix generally). Nothing herein shall be deemed to restrict the access of any
member of the Helix Group to any such documents or objects or to impose any liability on any member
of the Helix Group if any such documents or objects are not maintained or preserved by Helix.

     (c) After the Closing Date, Helix shall have access during regular business hours (as in
effect from time to time) to the documents and objects of historic significance that relate to the
businesses of any member of the Helix Group that are located in archives retained or maintained by
any member of the Cal Dive Group. Helix may obtain copies (but not originals unless it is not a
Cal Dive Asset) of documents for bona fide business purposes and may obtain objects for exhibition
purposes for commercially reasonable periods of time if required for bona fide business purposes;
provided that, Helix shall cause any such objects to be returned promptly in the
same condition in which they were delivered to Helix, and Helix shall comply with any rules,
procedures or other requirements, and shall be subject to any restrictions (including prohibitions
on removal of specified objects), that are then applicable to Cal Dive. Helix shall pay the
applicable fee or rate per hour for archive research services (subject to increase from time to
time to reflect rates then in effect for Cal Dive generally). Nothing herein shall be deemed to
restrict the access of any member of the Cal Dive Group to any such documents or objects or to
impose

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any liability on any member of the Cal Dive Group if any such documents or objects are not
maintained or preserved by Cal Dive.

     (d) The obligations of the parties under this Section 4.2 shall terminate on the fifth
(5th) anniversary of the Trigger Date.

     4.3 Ownership of Information.

     Any Information owned by a member of a Group that is provided to a requesting party pursuant
to Section 4.2 shall be deemed to remain the property of the providing party. Unless
specifically set forth herein, nothing contained in this Agreement shall be construed as granting
or conferring rights of license or otherwise in any such Information.

     4.4 Compensation for Providing Information.

     The party requesting Information agrees to reimburse the party providing Information for the
reasonable out-of-pocket costs, if any, of creating, gathering and copying such Information, to the
extent that such costs are incurred for the benefit of the requesting party. Except as may be
otherwise specifically provided elsewhere in this Agreement, the Transaction Documents or in any
other agreement between the parties, such costs shall be computed in accordance with the providing
party’s standard methodology and procedures.

     4.5 Record Retention.

     To facilitate the possible exchange of Information pursuant to this Article IV and other
provisions of this Agreement and the Transaction Documents, after the Closing Date, the parties
agree to use commercially reasonable efforts to retain all Information in their respective
possession or control in accordance with the policies of Helix as in effect on the Closing Date or
such other policies as may be reasonably adopted by the appropriate party after the Closing Date.
No party will destroy, or permit any of its Subsidiaries to destroy, any Information which the
other party may have the right to obtain pursuant to this Agreement prior to the fifth
(5th) anniversary of the Trigger Date without first notifying the other party of the
proposed destruction and giving the other party the opportunity to take possession of such
Information prior to such destruction; provided, however, that in the case of any Information
relating to Taxes or employee benefits, such period shall be extended to the expiration of the
applicable statute of limitations (giving effect to any extensions thereof); provided, further,
however, no party will destroy, or permit any of its Subsidiaries to destroy, any Information
required to be retained by applicable Law.

     4.6 Liability.

     No party shall have any liability to any other party in the event that any Information
exchanged or provided pursuant to this Agreement which is an estimate or forecast, or which is
based on an estimate or forecast, is found to be inaccurate in the absence of willful misconduct by
the party providing such Information. No party shall have any liability to any other party if any
Information is destroyed after commercially reasonable efforts by such party to comply with the
provisions of Section 4.5.

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     4.7 Other Agreements Providing for Exchange of Information.

     (a) The rights and obligations granted under this Article IV are subject to any
specific limitations, qualifications or additional provisions on the sharing, exchange, retention
or confidential treatment of Information set forth in any Transaction Document.

     (b) When any Information provided by one Group to the other Group (other than Information
provided pursuant to Section 4.5) is no longer needed for the purposes contemplated by this
Agreement or any other Transaction Document or is no longer required to be retained by applicable
Law, the receiving party will promptly after request of the other party either return to the other
party all Information in a tangible form (including all copies thereof and all notes, extracts or
summaries based thereon) or certify to the other party that it has destroyed such Information (and
such copies thereof and such notes, extracts or summaries based thereon).

     4.8 Production of Witnesses; Records; Cooperation.

     (a) After the Closing Date, except in the case of an adversarial Action by one or more members
of one Group against one or more members of the other Group, each party hereto shall use
commercially reasonable efforts to make available to each other party, upon written request, the
former, current and future directors, officers, employees, other personnel and agents of the
members of its respective Group as witnesses and any books, records or other documents within its
control or which it otherwise has the ability to make available, to the extent that any such person
(giving consideration to business demands of such directors, officers, employees, other personnel
and agents) or books, records or other documents may reasonably be required in connection with any
Action in which the requesting party may from time to time be involved, regardless of whether such
Action is a matter with respect to which indemnification may be sought hereunder. The requesting
party shall bear all costs and expenses in connection therewith.

     (b) If an Indemnifying Party chooses to defend or to seek to compromise or settle any Third
Party Claim, the parties shall make available to such Indemnifying Party, upon written request, the
former, current and future directors, officers, employees, other personnel and agents of the
members of its respective Group as witnesses and any books, records or other documents within its
control or which it otherwise has the ability to make available, to the extent that any such person
(giving consideration to business demands of such directors, officers, employees, other personnel
and agents) or books, records or other documents may reasonably be required in connection with such
defense, settlement or compromise, or the prosecution, evaluation or pursuit thereof, as the case
may be, and shall otherwise cooperate in such defense, settlement or compromise, or such
prosecution, evaluation or pursuit, as the case may be.

     (c) Without limiting the foregoing, the parties shall cooperate and consult to the extent
reasonably necessary with respect to any Actions, except in the case of an adversarial Action by
one or more members of one Group against one or more members of the other Group.

     (d) Without limiting any provision of this Section, each of the parties agrees to cooperate,
and to cause each member of its respective Group to cooperate, with each other in the defense of
any infringement or similar claim with respect to any intellectual property and shall

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not claim to acknowledge, or permit any member of its respective Group to claim to
acknowledge, the validity or infringing use of any intellectual property of a third Person in a
manner that would hamper or undermine the defense of such infringement or similar claim except as
required by Law.

     (e) The obligation of the parties to provide witnesses pursuant to this Section 4.8 is
intended to be interpreted in a manner so as to facilitate cooperation and shall include the
obligation to provide as witnesses inventors and other officers without regard to whether the
witness or the employer of the witness could assert a possible business conflict (subject to the
exception set forth in the first sentence of Section 4.8(a)).

     (f) In connection with any matter contemplated by this Section 4.8, the parties will
enter into a mutually acceptable joint defense agreement so as to maintain to the extent
practicable any applicable attorney-client privilege, work product immunity or other applicable
privileges or immunities of any member of any Group.

     (g) The obligations of the parties under this Section 4.8 shall terminate on the fifth
(5th) anniversary of the Trigger Date.

     4.9 Privilege.

     The provision of any information pursuant to this Article IV shall not be deemed a
waiver of any privilege, including privileges arising under or related to the attorney-client
privilege or any other applicable privileges (a “Privilege”). Following the Closing Date,
neither Cal Dive or its Subsidiaries nor Helix or its Subsidiaries will be required to provide any
information pursuant to this Article IV if the provision of such information would serve as
a waiver of any Privilege afforded such information.

ARTICLE V

RELEASE; INDEMNIFICATION

     5.1 Release of Pre-Closing Claims.

     (a) Except (i) as provided in Section 5.1(c), (ii) as may provided in any Transaction
Document and (iii) for any matter for which a Cal Dive Indemnified Party is entitled to
indemnification or contribution pursuant to Section 5.3, 5.4 or 5.5,
effective as of the Closing Date, Cal Dive, for itself and each other member of the Cal Dive Group,
their respective Affiliates and all Persons who at any time prior to the Closing Date were
directors, officers, agents or employees of any member of the Cal Dive Group (in their respective
capacities as such), in each case, together with their respective heirs, executors, administrators,
successors and assigns, does hereby remise, release and forever discharge Helix and the other
members of the Helix Group, their respective Affiliates and all Persons who at any time prior to
the Closing Date were shareholders, directors, officers, agents or employees of any member of the
Helix Group (in their respective capacities as such), in each case, together with their respective
heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever,
whether at Law or in equity (including any right of contribution), whether arising under any
contract or agreement, by operation of Law or otherwise, existing or arising from any acts or
events occurring or failing to occur or alleged to have occurred or to have failed to occur or any

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conditions existing or alleged to have existed on or before the Closing Date, including in
connection with the transactions and all other activities to implement the Separation, the Initial
Public Offering and any of the other transactions contemplated hereunder and under the Transaction
Documents.

     (b) Except (i) as provided in Section 5.1(c), (ii) as may be provided in any
Transaction Document and (iii) for any matter for which a Helix Indemnified Party is entitled to
indemnification or contribution pursuant to Section 5.2, 5.4 or 5.5,
effective as of the Closing Date, Helix, for itself and each other member of the Helix Group, their
respective Affiliates and all Persons who at any time prior to the Closing Date were directors,
officers, agents or employees of any member of the Helix Group (in their respective capacities as
such), in each case, together with their respective heirs, executors, administrators, successors
and assigns, does hereby remise, release and forever discharge Cal Dive and the other members of
the Cal Dive Group, their respective Affiliates and all Persons who at any time prior to the
Closing Date were shareholders, directors, officers, agents or employees of any member of the Cal
Dive Group (in their respective capacities as such), in each case, together with their respective
heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever,
whether at Law or in equity (including any right of contribution), whether arising under any
contract or agreement, by operation of Law or otherwise, existing or arising from any acts or
events occurring or failing to occur or alleged to have occurred or to have failed to occur or any
conditions existing or alleged to have existed on or before the Closing Date, including in
connection with the transactions and all other activities to implement the Separation, the Initial
Public Offering and any of the other transactions contemplated hereunder and under the Transaction
Documents.

     (c) Nothing contained in Section 5.1(a) or Section 5.1(b) shall impair any
right of any Person to enforce this Agreement, any Transaction Document or any agreements,
arrangements, commitments or understandings to continue in effect after the Closing Date in
accordance with Section 2.4(b), in each case in accordance with its terms. Nothing
contained in Section 5.1(a) or Section 5.1(b) shall release any Person from:

     (i) any Liability provided in or resulting from any agreement among any members of the Helix
Group or the Cal Dive Group that is to continue in effect after the Closing Date in accordance with
Section 2.4(b), or any other Liability specified in such Section 2.4(b) not to
terminate as of the Closing Date;

     (ii) any Liability, contingent or otherwise, assumed, transferred, assigned or allocated to
the Group of which such Person is a member in accordance with, or any other Liability of any member
of such Group under, this Agreement or any Transaction Document;

     (iii) any Liability for the sale, lease, construction or receipt of goods, property or
services purchased, obtained or used in the ordinary course of business by a member of one Group
from a member of the other Group prior to the Closing Date;

     (iv) any Liability for unpaid amounts for products or services or refunds owing on products or
services due on a value-received basis for work done by a member of one Group at the request or on
behalf of a member of the other Group; or

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     (v) any Liability that the parties may have with respect to indemnification or contribution
pursuant to this Agreement or otherwise for claims brought against the parties by third Persons,
which Liability shall be governed by the provisions of this Article V and, if applicable,
the appropriate provisions of the Transaction Documents.

     In addition, nothing contained in Section 5.1(a) shall release Helix from indemnifying
any director, officer or employee of Cal Dive who was a director, officer or employee of Helix or
any of its Affiliates on or prior to the Closing Date, to the extent such director, officer or
employee is or becomes a named defendant in any Action with respect to which he or she was entitled
to such indemnification pursuant to then existing obligations.

     (d) Cal Dive shall not make, and shall not permit any member of the Cal Dive Group to make,
any claim or demand, or commence any Action asserting any claim or demand, including any claim of
contribution or any indemnification, against Helix or any member of the Helix Group, or any other
Person released pursuant to Section 5.1(a), with respect to any Liabilities released
pursuant to Section 5.1(a). Helix shall not, and shall not permit any member of the Helix
Group, to make any claim or demand, or commence any Action asserting any claim or demand, including
any claim of contribution or any indemnification against Cal Dive or any member of the Cal Dive
Group, or any other Person released pursuant to Section 5.1(b), with respect to any
Liabilities released pursuant to Section 5.1(b).

     (e) It is the intent of each of Helix and Cal Dive, by virtue of the provisions of this
Section 5.1, to provide for a full and complete release and discharge of all Liabilities
existing or arising from all acts and events occurring or failing to occur or alleged to have
occurred or to have failed to occur and all conditions existing or alleged to have existed on or
before the Closing Date, whether known or unknown, between or among Cal Dive or any member of the
Cal Dive Group, on the one hand, and Helix or any member of the Helix Group, on the other hand
(including any contractual agreements or arrangements existing or alleged to exist between or among
any such members on or before the Closing Date), except as expressly set forth in Sections 5.1
(a), (b) and (c). At any time, at the request of any other party, each party shall
cause each member of its respective Group and each other Person on whose behalf it released
Liabilities pursuant to this Section 5.1 to execute and deliver releases reflecting the
provisions hereof.

     5.2 General Indemnification by Cal Dive.

     Except as provided in Section 5.5, Cal Dive shall, and shall cause the other members
of the Cal Dive Group to, jointly and severally, indemnify, defend and hold harmless on an
After-Tax Basis each member of the Helix Group and each of their respective directors, officers and
employees, and each of the heirs, executors, successors and assigns of any of the foregoing
(collectively, the “Helix Indemnified Parties”), from and against any and all Liabilities
of the Helix Indemnified Parties relating to, arising out of or resulting from any of the following
items (without duplication):

     (a) the failure of Cal Dive or any other member of the Cal Dive Group or any other Person to
pay, perform or otherwise promptly discharge any Cal Dive Liabilities or Cal Dive Contract in
accordance with its respective terms, whether prior to or after the Closing Date;

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     (b) any Cal Dive Liability or any Cal Dive Contract;

     (c) except to the extent it relates to an Excluded Liability, any guarantee, indemnification
obligation, surety bond or other credit support agreement, arrangement, commitment or understanding
by any member of the Helix Group for the benefit of any member of the Cal Dive Group that survives
the Closing;

     (d) any breach by any member of the Cal Dive Group of this Agreement or any of the Transaction
Documents or any action by Cal Dive in contravention of the Charter or Bylaws; and

     (e) any untrue statement or alleged untrue statement of a material fact contained in any Helix
Public Filing or any other document filed with the SEC by any member of the Helix Group pursuant to
the Securities Act or the Exchange Act, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, in each case to the extent, but
only to the extent, that those Liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information that is either furnished to any member
of the Helix Group by any member of the Cal Dive Group or incorporated by reference by any member
of the Helix Group from any filings made by any member of the Cal Dive Group with the SEC pursuant
to the Securities Act or the Exchange Act, and then only if that statement or omission was made or
occurred after the Closing Date.

     5.3 General Indemnification by Helix.

     Except as provided in Section 5.5, Helix shall indemnify, defend and hold harmless on
an After-Tax Basis each member of the Cal Dive Group and each of their respective directors,
officers and employees, and each of the heirs, executors, successors and assigns of any of the
foregoing (collectively, the “Cal Dive Indemnified Parties”), from and against any and all
Liabilities of the Cal Dive Indemnified Parties relating to, arising out of or resulting from any
of the following items (without duplication):

     (a) the failure of any member of the Helix Group or any other Person to pay, perform or
otherwise promptly discharge any Liabilities of the Helix Group other than the Cal Dive
Liabilities, whether prior to or after the Closing Date or the date hereof;

     (b) any Excluded Liability or any Liability of a member of the Helix Group other than the Cal
Dive Liabilities;

     (c) any breach by any member of the Helix Group of this Agreement or any of the Transaction
Documents; and

     (d) any untrue statement or alleged untrue statement of a material fact contained in any
document filed with the SEC by any member of the Cal Dive Group pursuant to the Securities Act or
the Exchange Act other than the IPO Registration Statement or Prospectus, or any omission or
alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that those Liabilities are caused
by any such untrue statement or omission or alleged untrue statement or omission based

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upon information that is either furnished to any member of the Cal Dive Group by any member of
the Helix Group or incorporated by reference by any member of the Cal Dive Group from any Helix
Public Filings or any other document filed with the SEC by any member of the Helix Group pursuant
to the Securities Act or the Exchange Act, and then only if that statement or omission was made or
occurred after the Closing Date.

     5.4 Registration Statement Indemnification.

     (a) Cal Dive agrees to indemnify and hold harmless on an After-Tax Basis the Helix Indemnified
Parties and each Person, if any, who controls any member of the Helix Group within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all
Liabilities arising out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in the IPO Registration Statement or Prospectus, or arising out of or based
upon any omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except to the extent such
Liabilities arise out of or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in reliance upon and in
conformity with information provided by a member of the Helix Group expressly for use in the IPO
Registration Statement or Prospectus or information relating to any underwriter furnished to Cal
Dive by or on behalf of such underwriter expressly for use in the IPO Registration Statement or
Prospectus.

     (b) Helix agrees to indemnify and hold harmless on an After-Tax Basis Cal Dive and its
Subsidiaries and any of their respective directors or officers who sign the IPO Registration
Statement, and any person who controls Cal Dive within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any and all Liabilities arising out of or
based upon any untrue statement or alleged untrue statement of a material fact contained in the IPO
Registration Statement or Prospectus, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such Liabilities arise out of or are
based upon any untrue statement or omission or alleged untrue statement or omission with respect to
information provided by a Helix Group member expressly for use in the IPO Registration Statement or
Prospectus.

     5.5 Contribution.

     (a) If the indemnification provided for in this Article V is unavailable to, or
insufficient to hold harmless on an After-Tax Basis, an Indemnified Party under Section
5.2(e), Section 5.3(d) or Section 5.4 in respect of any Liabilities referred to
therein, then each Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Liabilities in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Party and the Indemnified Party in connection with the
actions or omissions that resulted in Liabilities as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates to information
supplied by such Indemnifying Party or

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Indemnified Party, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

     (b) The parties agree that it would not be just and equitable if contribution pursuant to this
Section 5.5 were determined by a pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in Section 5.5(a).
The amount paid or payable by an Indemnified Party as a result of the Liabilities referred to in
Section 5.5(a) shall be deemed to include, subject to the limitations set forth above, any
legal or other fees or expenses reasonably incurred by such Indemnified Party in connection with
investigating any claim or defending any Action. Notwithstanding the provisions of this
Section 5.5, Helix shall not be required to contribute any amount that, together with the
amount of any damages that Helix has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, exceeds the benefits received solely by
Helix from the Initial Public Offering (excluding benefits received by the Company and all other
parties). No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.

     5.6 Indemnification Obligations Net of Insurance Proceeds and Other Amounts on an
After-Tax Basis.

     (a) Any Liability subject to indemnification or contribution pursuant to this Article
V will be net of Insurance Proceeds that actually reduce the amount of the Liability and will
be determined on an After-Tax Basis. Accordingly, the amount which any Person is required to pay
pursuant to this Article V (an “Indemnifying Party”) to any Person entitled to
indemnification or contribution pursuant to this Article V (an “Indemnified Party”)
will be reduced by any Insurance Proceeds theretofore actually recovered by or on behalf of the
Indemnified Party in respect of the related Liability. If an Indemnified Party receives a payment
required by this Agreement from an Indemnifying Party in respect of any Liability (an
“Indemnity Payment”) and subsequently receives Insurance Proceeds, then the Indemnified
Party will pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment
received over the amount of the Indemnity Payment that would have been due if the Insurance
Proceeds had been received, realized or recovered before the Indemnity Payment was made.

     (b) An insurer who would otherwise be obligated to pay any claim shall not be relieved of the
responsibility with respect thereto or, solely by virtue of the indemnification and contribution
provisions hereof, have any subrogation rights with respect thereto. The Indemnified Party shall
use commercially reasonable efforts to seek to collect or recover any third-party Insurance
Proceeds (other than Insurance Proceeds under an arrangement where future premiums are adjusted to
reflect prior claims in excess of prior premiums) to which the Indemnified Party is entitled in
connection with any Liability for which the Indemnified Party seeks contribution or indemnification
pursuant to this Article V; provided that, the Indemnified Party’s
inability to collect or recover any such Insurance Proceeds shall not limit the Indemnifying
Party’s obligations hereunder.

     (c) The term “After-Tax Basis” as used in this Article V means that, in
determining the amount of the payment necessary to indemnify any party against, or reimburse any
party for,

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Liabilities, the amount of such Liabilities will be determined net of any reduction in Tax
derived by the Indemnified Party as the result of sustaining or paying such Liabilities, and the
amount of such Indemnity Payment will be increased (i.e., “grossed up”) by the amount necessary to
satisfy any income or franchise Tax liabilities incurred by the Indemnified Party as a result of
its receipt of, or right to receive, such Indemnity Payment (as so increased), so that the
Indemnified Party is put in the same net after-Tax economic position as if it had not incurred such
Liabilities, in each case without taking into account any impact on the tax basis that an
Indemnified Party has in its assets.

     5.7 Procedures for Indemnification of Third Party Claims.

     (a) If an Indemnified Party shall receive notice or otherwise learn of the assertion by a
Person (including any Governmental Authority) who is not a member of the Helix Group or the Cal
Dive Group of any claim or of the commencement by any such Person of any Action (collectively, a
“Third Party Claim”) with respect to which an Indemnifying Party may be obligated to
provide indemnification to such Indemnified Party pursuant to Section 5.2, Section
5.3 or Section 5.4, or any other Section of this Agreement or any Transaction Document,
such Indemnified Party shall give such Indemnifying Party written notice thereof within 20 days
after becoming aware of such Third Party Claim. Any such notice shall describe the Third Party
Claim in reasonable detail. Notwithstanding the foregoing, the failure of any Indemnified Party or
other Person to give notice as provided in this Section 5.7(a) shall not relieve the
Indemnifying Party of its obligations under this Article V, except to the extent that such
Indemnifying Party is actually prejudiced by such failure to give notice.

     (b) An Indemnifying Party may elect to defend (and to seek to settle or compromise), at such
Indemnifying Party’s own expense and by such Indemnifying Party’s own counsel, any Third Party
Claim. Within 30 days after receipt of notice from an Indemnified Party in accordance with
Section 5.7(a) (or sooner, if the nature of such Third Party Claim so requires), an
Indemnifying Party electing to defend a Third Party Claim shall notify the Indemnified Party of its
election to assume responsibility for defending such Third Party Claim and shall acknowledge and
agree in writing that if such Third Party Claim is adversely determined, such Indemnifying Party
will have the obligation to indemnify the Indemnified Party in respect of all liabilities relating
to, arising out of or resulting from such Third Party Claim and that such Indemnifying Party
irrevocably waives in full all defenses it may have to contest such obligation. After such notice
and acknowledgment from an Indemnifying Party to an Indemnified Party of its election to assume the
defense of a Third Party Claim, such Indemnified Party shall have the right to employ separate
counsel and to participate in (but not control) the defense, compromise, or settlement thereof, but
the fees and expenses of such counsel shall be the expense of such Indemnified Party.

     (c) If an Indemnifying Party elects not to assume responsibility for defending a Third Party
Claim, or fails to notify an Indemnified Party of its election as provided in Section
5.7(b), such Indemnified Party may defend such Third Party Claim at the cost and expense of the
Indemnifying Party.

     (d) Unless the Indemnifying Party has failed to assume the defense of the Third Party Claim in
accordance with the terms of this Agreement, no Indemnified Party may settle or

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compromise any Third Party Claim without the consent of the Indemnifying Party. No
Indemnifying Party shall consent to entry of any judgment or enter into any settlement of any
pending or threatened Third Party Claim in respect of which any Indemnified Party is or could have
been a party and indemnity could have been sought hereunder by such Indemnified Party without the
consent of the Indemnified Party if (i) the effect thereof is to permit any injunction, declaratory
judgment, other order or other nonmonetary relief to be entered, directly or indirectly against
such Indemnified Party and (ii) such settlement does not include a full, complete and unconditional
release of such Indemnified Party from all liability on claims that are the subject matter of such
Third Party Claim.

     5.8 Additional Matters.

     (a) Indemnification or contribution payments in respect of any Liabilities for which an
Indemnified Party is entitled to indemnification or contribution under this Article V shall
be paid by the Indemnifying Party to the Indemnified Party as such Liabilities are incurred upon
demand by the Indemnified Party, including reasonably satisfactory documentation setting forth the
basis for the amount of such indemnification or contribution payment, including documentation with
respect to calculations made on an After-Tax Basis and consideration of any Insurance Proceeds that
actually reduce the amount of such Liabilities. The indemnity and contribution agreements
contained in this Article V shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of any Indemnified Party; (ii) the knowledge by the
Indemnified Party of Liabilities for which it might be entitled to indemnification or contribution
hereunder; and (iii) any termination of this Agreement.

     (b) Any claim on account of a Liability which does not result from a Third Party Claim shall
be asserted by written notice given by the Indemnified Party to the applicable Indemnifying Party.
Such Indemnifying Party shall have a period of 30 days after the receipt of such notice within
which to respond thereto. If such Indemnifying Party does not respond within such 30-day period,
such Indemnifying Party shall be deemed to have refused to accept responsibility to make payment.
If such Indemnifying Party does not respond within such 30-day period or rejects such claim in
whole or in part, such Indemnified Party shall be free to pursue such remedies as may be available
to such party as contemplated by this Agreement and the Transaction Documents without prejudice to
its continuing rights to pursue indemnification or contribution hereunder.

     (c) If payment is made by or on behalf of any Indemnifying Party to any Indemnified Party in
connection with any Third Party Claim, such Indemnifying Party shall be subrogated to and shall
stand in the place of such Indemnified Party as to any events or circumstances in respect of which
such Indemnified Party may have any right, defense or claim relating to such Third Party Claim
against any claimant or plaintiff asserting such Third Party Claim or against any other Person.
Such Indemnified Party shall cooperate with such Indemnifying Party in a reasonable manner, and at
the cost and expense of such Indemnifying Party, in prosecuting any subrogated right, defense or
claim.

     (d) In an Action in which the Indemnifying Party is not a named defendant, if either the
Indemnified Party or Indemnifying Party shall so request, the parties shall endeavor to substitute
the Indemnifying Party for the named defendant if they conclude that substitution is

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desirable and practical. If such substitution or addition cannot be achieved for any reason
or is not requested, the named defendant shall allow the Indemnifying Party to manage the Action as
set forth in this Article V, and the Indemnifying Party shall fully indemnify the named defendant
against all costs of defending the Action (including court costs, sanctions imposed by a court,
attorneys’ fees, experts fees and all other external expenses), the costs of any judgment or
settlement, and the costs of any interest or penalties relating to any judgment or settlement.

     5.9 Remedies Cumulative; Limitations of Liability.

     The rights provided in this Article V shall be cumulative and, subject to the
provisions of Article VII, shall not preclude assertion by any Indemnified Party of any
other rights or the seeking of any and all other remedies against any Indemnifying Party.
NOTWITHSTANDING THE FOREGOING, NO INDEMNIFYING PARTY, SHALL BE LIABLE TO AN INDEMNIFIED PARTY FOR
ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, CONSEQUENTIAL, EXEMPLARY, STATUTORILY-ENHANCED OR
SIMILAR DAMAGES IN EXCESS OF COMPENSATORY DAMAGES (PROVIDED THAT ANY SUCH LIABILITY WITH RESPECT TO
A THIRD PARTY CLAIM SHALL BE CONSIDERED DIRECT DAMAGES) ARISING IN CONNECTION WITH THE
TRANSACTIONS.

     5.10 Survival of Indemnities.

     The rights and obligations of each of Helix and Cal Dive and their respective Indemnified
Parties under this Article V shall survive the sale or other transfer by any party of any
Assets or businesses or the assignment by it of any Liabilities.

ARTICLE VI

OTHER AGREEMENTS

     6.1 Further Assurances.

     (a) In addition to the actions specifically provided for elsewhere in this Agreement, each of
the parties will cooperate with each other and use (and will cause their respective Subsidiaries
and Affiliates to use) commercially reasonable efforts, prior to, on and after the Closing Date, to
take, or to cause to be taken, all actions, and to do, or to cause to be done, all things
reasonably necessary on its part under applicable Law or contractual obligations to consummate and
make effective the transactions contemplated by this Agreement and the Transaction Documents.

     (b) Without limiting the foregoing, prior to, on and after the Closing Date, each party hereto
shall cooperate with the other parties, and without any further consideration, but at the expense
of the requesting party from and after the Closing Date, to execute and deliver, or use
commercially reasonable efforts to cause to be executed and delivered, all instruments, including
instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain all
consents, approvals or authorizations of, any Governmental Authority or any other Person under any
permit, license, agreement, indenture or other instrument (including any Consents or Governmental
Approvals), and to take all such other actions as such party may reasonably be requested to take by
any other party hereto from time to time, consistent with the terms of this

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Agreement and the Transaction Documents, in order to effectuate the provisions and purposes of
this Agreement and the Transaction Documents and the transfers of the Cal Dive Assets and the
assignment and assumption of the Cal Dive Liabilities and the other transactions contemplated
hereby and thereby. Without limiting the foregoing, each party will, at the reasonable request,
cost and expense of any other party, take such other actions as may be reasonably necessary to vest
in such other party good and marketable title to the Assets allocated to such party under this
Agreement or any of the Transaction Documents, free and clear of any Security Interest, if and to
the extent it is practicable to do so.

     (c) On or prior to the Closing Date, Helix and Cal Dive in their respective capacities as
direct and indirect shareholders of their respective Subsidiaries, shall each ratify any actions
that are reasonably necessary or desirable to be taken by Helix, Cal Dive or any other Subsidiary
of Helix or Cal Dive, as the case may be, to effectuate the transactions contemplated by this
Agreement.

     (d) On or prior to the Closing Date, Helix and Cal Dive shall take all actions as may be
necessary to approve the stock-based employee benefit plans of Cal Dive in order to satisfy the
requirements of Rule 16b-3 under the Exchange Act and the applicable rules and regulations of the
New York Stock Exchange.

     6.2 Confidentiality.

     (a) From and after the Closing, subject to Section 6.2(c) and except as contemplated
by this Agreement or any Transaction Document, Helix shall not, and shall cause the other members
of the Helix Group and all of such parties’ respective officers, directors, employees, and other
agents and representatives, including attorneys, agents, customers, suppliers, contractors,
consultants and other representatives of any Person providing financing (collectively,
“Representatives”), not to, directly or indirectly, disclose, reveal, divulge or
communicate to any Person (other than Representatives of such party or of its Affiliates who
reasonably need to know such information in providing services to any member of the Helix Group) or
use or otherwise exploit for its own benefit or for the benefit of any third party, any Cal Dive
Confidential Information. If any disclosures are made by a member of the Helix Group to its
Representatives in connection with such Representatives providing services to any member of the
Helix Group under this Agreement or any Transaction Document, then the Cal Dive Confidential
Information so disclosed shall be used only as required to perform the services. Helix shall, and
shall cause the other members of the Helix Group to, use the same degree of care to prevent and
restrain the unauthorized use or disclosure of the Cal Dive Confidential Information by any of
their Representatives as they currently use for their own confidential information of a like
nature, but in no event less than a reasonable standard of care. Any information, material or
documents relating to the Cal Dive Business currently or formerly conducted, or proposed to be
conducted, by any member of the Cal Dive Group furnished to or in possession of any member of the
Helix Group, irrespective of the form of communication, and all notes, analyses, compilations,
forecasts, data, translations, studies, memoranda or other documents prepared by or on behalf of
any member of the Helix Group that contain or otherwise reflect such information, material or
documents is referred to herein as “Cal Dive Confidential Information.” “Cal Dive
Confidential Information” does not include, and there shall be no obligation hereunder with respect
to, information that (i) is or becomes generally available to the

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public, other than as a result of a disclosure by any member of the Helix Group or any of
their Representatives not otherwise permissible hereunder, (ii) such member of the Helix Group can
demonstrate was or became available to such member of the Helix Group from a source other than Cal
Dive or its Affiliates, or (iii) is developed independently by such member of the Helix Group
without reference to the Cal Dive Confidential Information; provided, however,
that, in the case of clause (ii), the source of such information was not known by such
member of the Helix Group to be bound by a confidentiality agreement with, or other contractual,
legal or fiduciary obligation of confidentiality to, Cal Dive or any member of the Cal Dive Group
with respect to such information.

     (b) From and after the Closing, subject to Section 6.2(c) and except as contemplated
by this Agreement or any Transaction Document, Cal Dive shall not, and shall cause the other
members of the Cal Dive Group and all of such parties’ respective Representatives not to, directly
or indirectly, disclose, reveal, divulge or communicate to any Person (other than Representatives
of such party or of its Affiliates who reasonably need to know such information in providing
services to any member of the Cal Dive Group), or use or otherwise exploit for its own benefit or
for the benefit of any third party, any Helix Confidential Information. If any disclosures are
made by a member of the Cal Dive Group to its Representatives in connection with such
Representatives providing services to any member of the Cal Dive Group under this Agreement or any
Transaction Document, then the Helix Confidential Information so disclosed shall be used only as
required to perform the services. Cal Dive shall, and shall cause other members of the Cal Dive
Group to, use the same degree of care to prevent and restrain the unauthorized use or disclosure of
the Helix Confidential Information by any of their Representatives as they currently use for their
own confidential information of a like nature, but in no event less than a reasonable standard of
care. Any information, material or documents relating to the businesses currently or formerly
conducted, or proposed to be conducted, by any member of the Helix Group furnished to or in
possession of any member of the Cal Dive Group, irrespective of the form of communication, and all
notes, analyses, compilations, forecasts, data, translations, studies, memoranda or other documents
prepared by or on behalf of any member of the Cal Dive Group that contain or otherwise reflect such
information, material or documents is referred to herein as “Helix Confidential
Information.” “Helix Confidential Information” does not include, and there shall be no
obligation hereunder with respect to, information that (i) is or becomes generally available to the
public, other than as a result of a disclosure by any member of the Cal Dive Group or any of their
Representatives not otherwise permissible hereunder, (ii) such member of the Cal Dive Group can
demonstrate was or became available to such member of the Cal Dive Group from a source other than
Helix or its Affiliates, or (iii) is developed independently by such member of the Cal Dive Group
without reference to the Helix Confidential Information; provided, however, that,
in the case of clause (ii), the source of such information was not known by such member of
the Cal Dive Group to be bound by a confidentiality agreement with, or other contractual, legal or
fiduciary obligation of confidentiality to, Helix or any other member of the Helix Group with
respect to such information.

     (c) If any member of the Helix Group or their respective Representatives, on the one hand, or
any member of the Cal Dive Group or their respective Representatives, on the other hand, are
requested or required (by oral question, interrogatories, requests for information or documents,
subpoena, civil investigative demand or similar process) by any Governmental

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Authority or pursuant to applicable Law to disclose or provide any Cal Dive Confidential
Information or Helix Confidential Information (other than with respect to any such information
furnished pursuant to the provisions of Article IV of this Agreement), as applicable, the
entity or person receiving such request or demand shall use all commercially reasonable efforts to
provide the other party with written notice of such request or demand as promptly as practicable
under the circumstances so that such other party shall have an opportunity to seek an appropriate
protective order. The party receiving such request or demand agrees to take, and cause its
representatives to take, at the requesting party’s expense, all other commercially reasonable steps
necessary to obtain confidential treatment by the recipient. Subject to the foregoing, the party
that received such request or demand may thereafter disclose or provide any Cal Dive Confidential
Information or Helix Confidential Information, as the case may be, to the extent required by such
Law (as so advised by counsel) or by lawful process of such Governmental Authority.

     6.3 Insurance Matters.

     (a) Members of the Cal Dive Group will continue to have coverage under Helix’s insurance
program until the Trigger Date. Members of the Cal Dive Group will be subject to retrospective
premium adjustments under each such Insurance Policy based on their loss experience under the
Insurance Policy and in accordance with Helix’s pricing methodologies. The members of the Cal Dive
Group will have coverage under all Insurance Policies with respect to periods prior to the Trigger
Date in accordance with the terms of each such Insurance Policy. Helix and Cal Dive agree to
cooperate in good faith to provide for an orderly transition of insurance coverage leading up to
the Trigger Date, and for the treatment of any Insurance Policies that will remain in effect
following the Trigger Date on a mutually agreeable basis. Cal Dive may elect to decline or
withdraw from coverage under any Insurance Policy by written notice to Helix at least sixty (60)
days prior to such cancellation. In no event shall Helix, any other member of the Helix Group or
any Helix Indemnified Party have liability or obligation whatsoever to any member of the Cal Dive
Group if any Insurance Policy or other contract or policy of insurance shall be terminated or
otherwise cease to be in effect or for any reason shall be unavailable or inadequate to cover any
Liability of any member of the Cal Dive Group for any reason whatsoever or shall not be renewed or
extended beyond the current expiration date. Helix shall provide notice to Cal Dive promptly upon
its becoming aware that any Insurance Policy has been terminated or is otherwise no longer in
effect or is reasonably likely to be terminated or otherwise cease to be in effect.

     (b) (i) Except as otherwise provided in any Transaction Document, the parties intend by this
Agreement that Cal Dive and each other member of the Cal Dive Group be successors-in-interest to
all rights that any member of the Cal Dive Group may have as of the Closing Date as a subsidiary,
affiliate, division or department of Helix prior to the Closing Date under any policy of insurance
issued to Helix by any insurance carrier or under any agreements related to such policies executed
and delivered prior to the Closing Date, including any rights such member of the Cal Dive Group may
have, as an insured or additional named insured, subsidiary, affiliate, division or department, to
avail itself of any such policy of insurance or any such agreements related to such policies as in
effect prior to the Closing Date. At the request of Cal Dive, Helix shall take all commercially
reasonable steps, including the execution and

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delivery of any instruments, to effect the foregoing; provided, however, that
Helix shall not be required to pay any amounts, waive any rights or incur any Liabilities in
connection therewith.

     (i) Except as otherwise contemplated by any Transaction Document, after the Closing Date, none
of Helix or Cal Dive or any member of their respective Groups shall, without the consent of the
other, provide any such insurance carrier with a release, or amend, modify or waive any rights
under any such policy or agreement, if such release, amendment, modification or waiver would
adversely affect any rights or potential rights of any member of the other Group thereunder;
provided, however, that the foregoing shall not (A) preclude any member of any
Group from presenting any claim or from exhausting any policy limit, (B) require any member of any
Group to pay any premium or other amount or to incur any Liability, or (C) require any member of
any Group to renew, extend or continue any policy in force. Each of Cal Dive and Helix will share
such information as is reasonably necessary in order to permit the other to manage and conduct its
insurance matters in an orderly fashion.

     (c) This Agreement shall not be considered as an attempted assignment of any policy of
insurance or as a contract of insurance and shall not be construed to waive any right or remedy of
any member of the Helix Group in respect of any Insurance Policy or any other contract or policy of
insurance.

     (d) Cal Dive does hereby, for itself and each other member of the Cal Dive Group, agree that
no member of the Helix Group or any Helix Indemnified Party shall have any Liability whatsoever to
Cal Dive or any other member of the Cal Dive Group as a result of the insurance policies and
practices of Helix and its Affiliates as in effect at any time prior to the Closing Date, including
as a result of the level or scope of any such insurance, the creditworthiness of any insurance
carrier, the terms and conditions of any policy, the adequacy or timeliness of any notice to any
insurance carrier with respect to any claim or potential claim or otherwise.

     (e) Nothing in this Agreement shall be deemed to restrict any member of the Cal Dive Group
from acquiring at its own expense any other insurance policy in respect of any Liabilities or
covering any period; provided that, Cal Dive shall give Helix prompt written notice
of any such insurance policy acquired prior to the Trigger Date.

     6.4 Allocation of Costs and Expenses.

     (a) Helix shall pay (or, to the extent incurred by and paid for by any member of the Cal Dive
Group, will promptly reimburse such party for any and all amounts so paid) for all out-of-pocket
fees, costs and expenses incurred by Helix or Cal Dive, or any member of their respective Groups,
on or prior to the Closing Date in connection with the Separation, including (i) the preparation
and negotiation of this Agreement, each Transfer Document (unless otherwise expressly provided
therein), and all other documentation related to the Separation, (ii) accounting and legal costs
incurred in association with all domestic and international internal restructuring undertaken as
part of the Separation, (iii) the preparation and execution or filing of any and all other
documents, certificates, deeds, titles, agreements, forms, applications or contracts associated
with the Separation, and (iv) the preparation and filing of Cal Dive’s and its Subsidiaries’
organizational documents.

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     (b) Cal Dive shall pay (or, to the extent incurred by and paid or by any member of the Helix
Group, will promptly reimburse such party for any and all amounts so paid) for all out-of-pocket
fees, costs and expenses incurred by Helix or Cal Dive, or any member of their respective Groups,
in connection with the Initial Public Offering and the other Transactions, except as otherwise
provided in Section 6.4(a), including (i) the preparation, printing and filing of the IPO
Registration Statement, (ii) compliance with applicable federal, state or foreign securities Laws
and domestic or foreign securities exchange rules and regulations, together with fees and expenses
of counsel retained to effect such compliance, (iii) the preparation, printing and distribution of
the Prospectus, (iv) the initial listing of the Common Stock on the New York Stock Exchange, (v)
the fees and expenses of Ernst & Young LLP incurred in connection with the IPO Registration
Statement and the Initial Public Offering, and (vi) the preparation (including, but not limited to,
the printing of documents) and implementation of Cal Dive’s and its Subsidiaries’ employee benefit
plans, retirement plans and equity-based plans, and (vii) the preparation and implementation of Cal
Dive’s and its Subsidiaries corporate governance programs and policies, financial reporting and
internal controls and all other reporting requirements, programs, policies and functions required
to be implemented by the Cal Dive Group as a result of being a public company reporting to the SEC
with equity securities listed on a national stock exchange.

     (c) Notwithstanding the foregoing, Helix and Cal Dive agree that all costs and expenses
described in Sections 6.4(a) and (b) may be paid from the proceeds of the Initial
Public Offering.

     6.5 Covenants Against Taking Certain Actions Affecting Helix.

     (a) Cal Dive hereby acknowledges and agrees that it shall not, without the prior written
consent of Helix (which it may withhold in its sole and absolute discretion), take, or cause to be
taken, directly or indirectly, any action, including making or failing to make any election under
the Law of any state, which has the effect, directly or indirectly, of restricting or limiting the
ability of Helix or any of its Affiliates to freely sell, transfer, assign, pledge or otherwise
dispose of Cal Dive Capital Stock. Without limiting the generality of the foregoing, Cal Dive
shall not, without the prior written consent of Helix (which it may withhold in its sole and
absolute discretion), take any action, or recommend to its stockholders any action, which would
among other things, limit the legal rights of, or deny any benefit to, Helix as a Cal Dive
stockholder in a manner not applicable to Cal Dive stockholders generally.

     (b) Prior to the Trigger Date, to the extent that any member of the Helix Group is a party to
any contract or agreement with a third party (i) that provides that certain actions of Helix’s
Subsidiaries may result in Helix being in breach of or in default under such agreement and Helix
has advised Cal Dive, or Cal Dive is otherwise aware, of the existence of such contract or
agreement (or the relevant portions thereof), (ii) to which any member of the Cal Dive Group is a
party or (iii) under which any member of the Cal Dive Group has performed any obligations on or
before the date hereof, Cal Dive shall not take, and shall cause each other member of the Cal Dive
Group not to take, any actions that reasonably could result in any member of the Helix Group being
in breach of or in default under any such contract or agreement. Cal Dive hereby acknowledges and
agrees that Helix has made available to Cal Dive copies of each such contract or agreement (or the
relevant portion thereof) in effect on the date hereof. The parties

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acknowledge and agree that, after the date hereof, Helix may in good faith (and not solely
with the intention of imposing restrictions on Cal Dive pursuant to this covenant) amend the
referenced agreements or enter into additional contracts or agreements that provide that certain
actions of any member of the Cal Dive Group may result in Helix being in breach of or in default
under such agreements; provided that, Helix shall notify and consult with Cal Dive
prior to entering into any such amendments or additional contracts or agreements to the extent that
compliance therewith (x) could reasonably be expected to have a material adverse effect on any
member of the Cal Dive Group or (y) would discriminate in an adverse way in the treatment of
members of the Cal Dive Group as compared with Helix and its other Affiliates, and shall make
available to Cal Dive copies of such amendments or additional contracts or agreements.

     (c) Prior to the Trigger Date, without the prior written consent or affirmative vote of Helix
(either of which it may withhold in its sole and absolute discretion), Cal Dive shall not, and
shall cause the other members of the Cal Dive Group not to:

     (i) take any actions that would result in the occurrence of a Default or Event of Default, as
those terms are defined in the under the Credit Agreement dated as of July 3, 2006, by and among
Helix Energy Solutions Group, Inc., as the Borrower, Bank of America, N.A., as Administrative
Agent, Swing Line Lender and L/C Issuer, and the other Lenders and Agents party thereto;

     (ii) issue any shares of capital stock or any rights, warrants, options or other rights or
securities convertible into or exercisable for capital stock; except for (A) pursuant to the IPO,
and (B) the issuance of shares of Common Stock or options to purchase Common Stock pursuant to
employee benefit plans or dividend reinvestment plans approved by the Board of Directors of Cal
Dive;

     (iii) consolidate or merge with or into any Person, except for (A) a consolidation or merger
of a wholly-owned Subsidiary of Cal Dive into Cal Dive or with or into another wholly-owned
Subsidiary of Cal Dive, or (B) in connection with an acquisition permitted by the Credit Agreement
referred to in Section 6.5(c)(i) above;

     (iv) alter, amend, terminate or repeal, or adopt any provision inconsistent with, in each case
whether directly or indirectly, or by merger, consolidation or otherwise, the provisions of the
Charter or Bylaws relating to any of (A) authorized capital stock, (B) rights granted to the
holders of the Common Stock, (C) amendments to the Bylaws, (D) shareholder action by written
consent, (E) shareholder proposals and meetings, (F) limitation of liability of and indemnification
of officers and directors, (G) corporate opportunities and conflicts of interest between the Cal
Dive Group and the Helix Group, and (H) the business combination statute set forth in Section 203
of the Delaware General Corporation Law;

     (v) purchase, redeem or otherwise acquire or retire for value any shares of Common Stock or
any warrants, options or other rights or securities convertible into or exercisable for to acquire
Common Stock, except for (A) the repurchase of Common Stock deemed to occur upon exercise of stock
options to the extent shares of Common Stock represent a portion of the exercise price of the stock
options or are withheld by Cal Dive to pay applicable withholding taxes; (B) the repurchase of
Common Stock deemed to occur to the extent shares of Common

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Stock are withheld by Cal Dive to pay applicable withholding taxes in connection with any
grant or vesting of restricted stock; and (C) the repurchase of stock of terminated employees as
provided in any employee benefits plan or in a stock purchase or other agreement;

     (vi) adopt a shareholder rights agreement; or

     (vii) dissolve, liquidate or wind up.

     6.6 No Violations.

     (a) Cal Dive acknowledges and agrees that it shall not, and shall cause the other members of
the Cal Dive Group not to, take any action or enter into any commitment or agreement that may
reasonably be anticipated to result, with or without notice and with or without lapse of time or
otherwise, in a contravention or event of default by any member of the Helix Group of: (i) any
provisions of applicable Law; (ii) any provision of the organizational documents of any member of
the Helix Group; (iii) any credit agreement or other material instrument binding upon any member of
the Helix Group; or (iv) any judgment, order or decree of any Governmental Authority having
jurisdiction over any member of the Helix Group or any of its respective assets.

     (b) Helix acknowledges and agrees that it shall not, and shall cause the other members of the
Helix Group not to, take any action or enter into any commitment or agreement that may reasonably
be anticipated to result, with or without notice and with or without lapse of time or otherwise, in
a contravention or event of default by any member of the Cal Dive Group of: (i) any provisions of
applicable Law; (ii) any provision of the organizational documents of Cal Dive; (iii) the Existing
Helix Indebtedness, any credit agreement or any other material instrument binding upon Cal Dive; or
(iv) any judgment, order or decree of any Governmental Authority having jurisdiction over any
member of the Cal Dive Group or any of the Cal Dive Assets.

     (c) Nothing in this Agreement is intended to limit or restrict in any way Helix’s or its
Affiliates’ rights as stockholders of Cal Dive.

     6.7 Registration Statements.

     To the extent necessary to enable the unrestricted transfer of the applicable shares of Cal
Dive Common Stock, upon consummation of the Initial Public Offering, Cal Dive shall file and cause
to remain effective a registration statement with the SEC to register Cal Dive Common Stock that
may be acquired by employees of any member of the Cal Dive Group as contemplated by Helix’s or any
other member of the Helix Group’s employee stock or option plans.

     6.8 Compliance with Charter Provisions.

     Cal Dive shall, and shall cause each of its Subsidiaries to, take any and all actions
necessary to ensure continued compliance by Cal Dive and its Subsidiaries with the provisions of
their certificate or articles of incorporation, bylaws, limited liability company agreement,
partnership agreement or other applicable organizational documents. Cal Dive shall notify Helix in
writing promptly after becoming aware of any act or activity taken or proposed to be taken by

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Cal Dive or any of its Subsidiaries or any of their equity holders which resulted or would result
in non-compliance with any such organizational document provisions and, so long as any member of
the Helix Group owns any Cal Dive Capital Stock, Cal Dive shall take or refrain from taking all
such actions as Helix shall in its sole discretion determine necessary or desirable to prevent or
remedy any such non-compliance.

     6.9 Future Intercompany Transactions.

     All proposed intercompany transactions between Cal Dive and Helix after the Closing Date,
including any material amendments to the Transaction Documents, and any consent or approval
proposed to be granted by Cal Dive for Helix’s benefit, in each case that would ordinarily be
submitted for approval by the board of directors of Cal Dive, will be subject to the approval of a
majority of the independent directors (as defined under the applicable rules of any securities
exchange on which shares of Cal Dive Common Stock are listed) of the board of directors of Cal
Dive.

     6.10 [Intentionally Omitted].

     6.11 Helix Policies.

     If a provision of Cal Dive’s Charter or Amended and Restated Bylaws or of any Transaction
Document contradicts a policy of Helix or a member of the Helix Group, (the “Helix
Policies”) that applies to Subsidiaries of Helix, such provision in Cal Dive’s Charter or
Bylaws or Transaction Document shall control. In any other case, and except as otherwise agreed or
unless superseded by any policies adopted by the board of directors of Cal Dive, the Helix Policies
that apply to Subsidiaries of Helix shall apply to Cal Dive and its Subsidiaries until the Trigger
Date.

     6.12 Operations.

     If at any time (a) the number of Vessels utilized by or on behalf of Helix, whether on a
day-rate or otherwise, is below the Utilization Limit, (b) Helix notifies Cal Dive that Helix
wishes to utilize a Vessel, (c) such Vessel is available for the time period requested by Helix and
(d) Helix agrees to pay for the utilization of such Vessel at then prevailing market rates, Cal
Dive shall provide the Vessel to Helix. To exercise such preferential right, Helix must notify Cal
Dive of its need for a Vessel and, if the Vessel is available upon such notice, Cal Dive shall
inform Helix of the corresponding day-rate for such Vessel. Helix shall then have two (2) business
days to accept the Vessel (the “Notification Period”). If Helix does not notify Cal Dive
of its decision to utilize the Vessel prior to the expiration of the Notification Period, Helix
shall be deemed to have declined the use of such Vessel for such time, and Cal Dive shall be free
to contract the Vessel to other parties. Such waiver shall not compromise Helix’s ability to
exercise its preferential rights in the future with regard to the utilization of Vessels. As used
herein, “Utilization Limit” means the multiple of the total number of Vessels in Cal Dive’s
fleet and .2, rounded down to the nearest whole number. If the number of Vessels utilized by or on
behalf of Helix, whether on a day-rate or otherwise, is equal to or exceeds the Utilization Limit,
then Helix shall not have the preferential right to utilize any other Vessels, unless and until
such number falls below the Utilization Limit.

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     6.13 [Intentionally Omitted].

     6.14 Tax Matters.

     Notwithstanding any provision in this Agreement to the contrary, to the extent that any
representations, warranties, covenants and agreements between Helix and Cal Dive, and their
respective Groups, with respect to Tax matters are set forth in the Tax Matters Agreement,
including indemnification agreements and any tax sharing agreements and arrangements specifically
identified in such agreements, such Tax matters shall be governed exclusively by such Tax
agreements and not by this Agreement.

     6.15 Litigation.

     (a) Subject to Section 3.6, immediately following the execution and delivery of the
Underwriting Agreement by each of the parties thereto, Cal Dive shall, and shall cause the other
members of the Cal Dive Group to assume those Actions relating in any material respect to the Cal
Dive Business in which one or more members of the Helix Group is a defendant or the party against
whom any claim or investigation is directed (collectively, the “Assumed Actions”).

     (b) Subject to Section 3.6, immediately following the execution and delivery of the
Underwriting Agreement by each of the parties thereto, Cal Dive shall, and shall cause the other
members of the Cal Dive Group to, (i) diligently conduct, at its sole cost and expense, the defense
of all Assumed Actions and all Existing Actions, (ii) except as may be provided in Section
6.3, pay all Liabilities that may result from the Assumed Actions and the Existing Actions, and
(iii) pay all fees and costs relating to the defense of the Assumed Actions and the Existing
Actions, including attorneys’ fees and costs incurred after the Closing Date. “Existing
Actions” means those Actions (other than Assumed Actions) in which Cal Dive or any other member
of the Cal Dive Group has been named as a defendant or is the party against whom any claim or
investigation is directed, including those listed on Schedule 6.15(b).

     (c) Notwithstanding anything in this Section 6.15 to the contrary, Helix shall have
the right to participate in the defense of any Assumed Action and to be represented by attorneys of
its own choosing and at its sole cost and expense. In no event shall Cal Dive (or any other member
of the Cal Dive Group) settle or compromise any Assumed Action without the express prior written
consent of Helix unless (i) there is no finding or admission of any violation of any law or any
violation of the rights of any Person by Helix or any other member of the Helix Group, (ii) there
is no relief (either monetary or non-monetary) binding upon Helix or any other member of the Helix
Group, and (iii) neither Helix nor any other member of the Helix Group has any Liability with
respect to any such settlement or compromise.

     (d) Subject to Section 3.6, each of Helix and Cal Dive agrees that at all times from
and after the execution and delivery of the Underwriting Agreement by each of the parties thereto,
if an Action is commenced by a third party naming both parties (or any member of its respective
Group) as defendants thereto and with respect to which one party (or any member of

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its respective Group) is a nominal defendant, then the other party shall use commercially
reasonable efforts to cause such nominal defendant to be removed from such Action.

ARTICLE VII

DISPUTE RESOLUTION

     7.1 General Provisions.

     (a) Any dispute, controversy or claim arising out of or relating to this Agreement or the
Transaction Documents, or the validity, interpretation, breach or termination thereof (a
“Dispute”), shall be resolved in accordance with the procedures set forth in this
Article VII, which shall be the sole and exclusive procedures for the resolution of any
such Dispute unless otherwise specified below.

     (b) All communications between the parties or their representatives in connection with the
attempted resolution of any Dispute, shall be deemed to have been delivered in furtherance of a
Dispute settlement and shall be exempt from discovery and production, and shall not be admissible
in evidence for any reason (whether as an admission or otherwise), in any arbitral or other
proceeding for the resolution of the Dispute.

     (c) IN CONNECTION WITH ANY DISPUTE, THE PARTIES EXPRESSLY WAIVE AND FORGO ANY RIGHT TO (I)
SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, CONSEQUENTIAL, EXEMPLARY, STATUTORILY ENHANCED OR SIMILAR
DAMAGES IN EXCESS OF COMPENSATORY DAMAGES (PROVIDED THAT LIABILITY FOR ANY SUCH DAMAGES WITH
RESPECT TO A THIRD PARTY CLAIM SHALL BE CONSIDERED DIRECT DAMAGES), AND (II) TRIAL BY JURY.

     (d) The specific procedures set forth below, including but not limited to the time limits
referenced therein, may be modified by agreement of the parties in writing.

     (e) All applicable statutes of limitations and defenses based upon the passage of time shall
be tolled while the procedures specified in this Article VII are pending. The parties will
take such action, if any, required to effectuate such tolling.

     (f) THE PARTIES HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY STATE COURT
LOCATED WITHIN THE STATE OF TEXAS OVER ANY SUCH DISPUTE AND EACH PARTY HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUCH DISPUTE OR ANY ACTION RELATED THERETO MAY BE HEARD AND
DETERMINED IN SUCH COURTS. THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUCH DISPUTE BROUGHT IN SUCH COURT OR ANY DEFENSE OF INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH
DISPUTE. EACH OF THE PARTIES AGREES THAT A JUDGMENT IN ANY SUCH DISPUTE MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

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     (g) Notwithstanding anything to the contrary contained in this Article VII, any
Dispute relating to Helix’s rights as a stockholder of Cal Dive pursuant to applicable Law or the
organizational documents of Cal Dive will not be governed by or subject to the procedures set forth
in this Article VII.

ARTICLE VIII

MISCELLANEOUS

     8.1 Corporate Power; Fiduciary Duty.

     (a) Each of Helix and Cal Dive represents as follows:

     (i) each such Person has the requisite corporate or other power and authority and has taken
all corporate or other action necessary in order to execute, deliver and perform each of this
Agreement and each other Transaction Document to which it is a party and to consummate the
transactions contemplated hereby and thereby; and

     (ii) this Agreement has been duly executed and delivered by each such Person and each
Transaction Document to which such Person is a party has been, or will be on or prior to the
Closing Date, duly executed and delivered by it and upon execution and delivery, this Agreement and
the other Transaction Documents will constitute a valid and binding agreement of such Person
enforceable in accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance or similar laws affecting the enforcement
of creditors’ rights generally and subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding of law or in equity).

     (b) Notwithstanding any provision of this Agreement or any Transaction Document, no member of
the Helix Group and no member of the Cal Dive Group shall be required to take or omit to take any
act that would violate its fiduciary duties to any minority shareholders of Cal Dive or any
non-wholly owned Subsidiary of Helix or Cal Dive, as the case may be (it being understood that
directors’ qualifying shares or similar interests will be disregarded for purposes of determining
whether a Subsidiary is wholly owned).

     8.2 Governing Law.

     This Agreement (other than the provisions relating to Helix’s rights as a stockholder, which
shall be governed by the laws of the State of Delaware) and, unless expressly provided therein,
each other Transaction Document, shall be governed by, and construed and interpreted in accordance
with, the laws of the State of Texas, without giving effect to any conflicts of law rule or
principle that might require the application of the laws of another jurisdiction.

     8.3 Survival of Covenants.

     Except as expressly set forth in any Transaction Document, the covenants and other agreements
contained in this Agreement and each Transaction Document, and liability for the breach of any
obligations contained herein or therein, shall survive each of the Separation and the Initial
Public Offering and shall remain in full force and effect.

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     8.4 Force Majeure.

     No party hereto (or any Person acting on its behalf) shall have any liability or
responsibility for failure to fulfill any obligation (other than a payment obligation) under this
Agreement or, unless otherwise expressly provided therein, any Transaction Document, so long as and
to the extent to which the fulfillment of such obligation is prevented, frustrated, hindered or
delayed as a consequence of circumstances of Force Majeure. A party claiming the benefit of this
provision shall, as soon as reasonably practicable after the occurrence of any such event: (i)
notify the other parties of the nature and extent of any such Force Majeure condition and (ii) use
due diligence to remove any such causes and resume performance under this Agreement as soon as
feasible.

     8.5 Notices.

     All notices, requests, claims, demands and other communications under this Agreement and, to
the extent applicable and unless otherwise provided therein, under each of the Transaction
Documents shall be in writing and shall be given or made (and shall be deemed to have been duly
given or made upon receipt) by delivery in person, by overnight courier service, by facsimile with
receipt confirmed (followed by delivery of an original via overnight courier service) or by
registered or certified mail (postage prepaid, return receipt requested) to the respective parties
at the following addresses (or at such other address for a party as shall be specified in a notice
given in accordance with this Section 8.5):

If to any member of the Helix Group, to:

Helix Energy Solutions Group, Inc.

400 N. Sam Houston Parkway East, Suite 400

Houston, Texas 77060

Attn: General Counsel

Fax: (281) 618-0505

If to any member of the Cal Dive Group, to:

Cal Dive International, Inc.

400 N. Sam Houston Parkway East, Suite 1000

Houston, Texas 77060

Attn: General Counsel

Fax: (281) 618-0503

     8.6 Severability.

     If any term or other provision of this Agreement is invalid, illegal or incapable of being
enforced under any Law or as a matter of public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the parties to this
Agreement shall negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in order that the

-52-

 

     transactions contemplated by this Agreement be consummated as originally contemplated to the
greatest extent possible.

     8.7 Entire Agreement.

     Except as otherwise expressly provided in this Agreement, this Agreement (including the
Schedules and Exhibits hereto) constitutes the entire agreement of the parties with respect to the
subject matter of this Agreement and supersedes all prior agreements and undertakings, both written
and oral, between or on behalf of the parties with respect to the subject matter of this Agreement.

     8.8 Assignment; No Third-Party Beneficiaries.

     This Agreement shall not be assigned by any party hereto without the prior written consent of
the other party hereto. Except as provided in Article V with respect to Indemnified
Parties, this Agreement is for the sole benefit of the parties to this Agreement and members of
their respective Group and their permitted successors and assigns and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other Person or entity any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

     Notwithstanding the foregoing, Helix may assign, collaterally assign, or grant security
interests in all of Helix’s right, title and interest in and to this Agreement, without the
consent of Cal Dive, to one or more financial institutions or other lenders or to any designees,
successors or permitted assigns of such financial institutions or other lenders that are, from time
to time, parties to the following Credit Agreement, as the same may be amended, restated, amended
and restated, renewed, extended, supplemented, replaced, or refinanced from time to time: that
certain Credit Agreement dated as of July 3, 2006, by and among Helix Energy Solutions Group, Inc.,
as the Borrower, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer,
and the other Lenders and Agents party thereto. In connection with the foregoing, Cal Dive hereby
(a) consents to the exercise by the Secured Parties (as defined in the Credit Agreement) of the
rights provided in the security documents granting such assignment, collateral assignment, or
security interest, including any foreclosure pursuant thereto and any subsequent assignments by the
Administrative Agent on behalf of the Secured Parties, (b) agrees to provide the Administrative
Agent with written notice of any default by Helix under the Agreement which is not cured within any
applicable grace or cure period, and (c) agrees that prior to terminating the Agreement due to a
default by Helix, it shall provide the Administrative Agent with notice of such intended
termination (including a detailed description of the reasons therefor) and a reasonable opportunity
to cure any underlying default (provided that the Administrative Agent shall have no obligation to
cure any default).

     8.9 Public Announcements.

     Helix and Cal Dive shall consult with each other before issuing, and give each other the
opportunity to review and comment upon, any press release or other public statements with respect
to the transactions contemplated by this Agreement and the Transaction Documents, and shall not
issue any such press release or make any such public statement prior to such

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consultation, except as may be required by applicable Law, court process or by obligations
pursuant to any listing agreement with any national securities exchange or national securities
quotation system.

     8.10 Amendment.

     No provision of this Agreement may be amended or modified except by a written instrument
signed by both parties. No waiver by any party of any provision hereof shall be effective unless
explicitly set forth in writing and executed by the party so waiving. The waiver by either party
of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any
other subsequent breach.

     8.11 Rules of Construction.

     Interpretation of this Agreement shall be governed by the following rules of construction:
(a) words in the singular shall be held to include the plural and vice versa and words of one
gender shall be held to include the other gender as the context requires, (b) references to the
terms Article, Section, paragraph, and Schedule are references to the Articles, Sections,
paragraphs, and Schedules to this Agreement unless otherwise specified, (c) the word “including”
and words of similar import shall mean “including, without limitation,” (d) provisions shall apply,
when appropriate, to successive events and transactions, (e) the table of contents and headings
contained herein are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement, and (f) this Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party drafting or causing
any instrument to be drafted.

     8.12 Counterparts.

     This Agreement may be executed in one or more counterparts, and by each party in separate
counterparts, each of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by facsimile or electronic mail shall be as effective as delivery
of a manually executed counterpart of any such Agreement.

[Signature Page Follows]

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     IN WITNESS WHEREOF, the parties have caused this Master Agreement to be executed on the date
first written above by their respective duly authorized officers.

	 	 	 	 	 
	 	HELIX ENERGY SOLUTIONS GROUP, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 
CAL DIVE INTERNATIONAL, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-1exv10w6w11

 

Exhibit 10.6.11

STATE OF NEW JERSEY

DEPARTMENT OF HUMAN SERVICES

DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

AND

AMERIGROUP NEW JERSEY, INC.

AGREEMENT TO PROVIDE HMO SERVICES

In accordance with Article 7, section 7.11.2A and 7.11.2B of the contract between AMERIGROUP New
Jersey, Inc. and the State of New Jersey, Department of Human Services, Division of Medical
Assistance and Health Services (DMAHS), effective date October 1, 2000, all parties agree that the
contract shall be amended, effective July 1, 2006, as follows:

 

 

	1.	 	Preface/Preamble — Page ii, iii — revised
	 
	2.	 	Article 1, “Definitions” section — for the following definition:

	 	•	 	Certificate of Authority (revised)
	 
	 	•	 	Children’s Health Care Coverage Program (deleted)
	 
	 	•	 	Comprehensive Orthodontic Treatment (revised)
	 
	 	•	 	DHSS (revised)
	 
	 	•	 	Dual Eligible (new)
	 
	 	•	 	HCFA (deleted)
	 
	 	•	 	Health Maintenance Organization (revised)
	 
	 	•	 	New Jersey State Plan or State Plan (revised)
	 
	 	•	 	NJ FamilyCare Plan H (revised)

	 	 	shall be amended as reflected in the relevant pages of Article 1 attached hereto and
incorporated herein.
	 
	3.	 	Article 2, “Conditions Precedent” Sections A, G, G(1) and H shall be amended as reflected in
Article 2, Sections A, G, G(1) , and H attached hereto and incorporated herein.
	 
	4.	 	Article 4, “Provision of Health Care Services” Sections 4.1.1(L); 4.1.1(R) (new); 4.1.2(A)9;
4.1.2(A)24; 4.1.2(A)27; 4.1.3(A)4; 4.1.3(A)7; 4.1.3(A)10; 4.1.6(A)14; 4.1.6(B)1; 4.1.7(B)2;
4.2.4(B)9 (new); 4.6.2(P); 4.6.2(Q)2; 4.6.4(C)4; 4.7.2(A)2; 4.7.2(A)8 (new); 4.7.2(A)9 (new);
4.7.4(B)9; 4.8.8(A)1(a); 4.8.8(A)2(a); 4.8.8(E)7; 4.8.8(1); 4.8.8(J)6; 4.8.8(K); 4.8.8(K)2,
3, 4; 4.8.8(L); 4.8.8(L)2, 3, 4; 4.8.8(M)3; 4.9.1(A); 4.9.1(B); 4.9.1(G)2; 4.9.1(M) (new);
4.9.2; 4.9.2(E) (deleted); and 4.9.3(B)3 (new) shall be amended as reflected in Article 4,
Sections 4.1.1(L); 4.1.1(R); 4.1.2(A)9; 4.1.2(A)24; 4.1.2(A)27; 4.1.3(A)4; 4.1.3(A)7;
4.1.3(A)10; 4.1.6(A)14;

 

 

	 	 	4.1.6(B)1; 4.1.7(B)2; 4.2.4(B)9; 4.6.2(P); 4.6.2(Q)2; 4.6.4(C)4; 4.7.2(A)2; 4.7.2(A)8;
4.7.2(A)9; 4.7.4(B)9; 4.8.8(A)1(a); 4.8.8(A)2(a); 4.8.8(E)7; 4.8.8(1); 4.8.8(J)6; 4.8.8(K);
4.8.8(K)2, 3, 4; 4.8.8(L); 4.8.8(L)2, 3, 4;
4.8.8(M)3; 4.9.1(A); 4.9.1(B); 4.9.1(G)2; 4.9.1(M); 4.9.2; 4.9.2(E); and
4.9.3(B)3 attached hereto and incorporated herein.
	 
	5.	 	Article 5, “Enrollee Services” Sections 5.3.1(A)3; 5.3.2(G) (new); 5.5(G)1(b); 5.5(H);
5.5(J); 5.6(B) (deleted); 5.8.2(S); 5.10.2(D); 5.15.1(A), 5.15.2(B)9; 5.15.2(C)4; 5.16.2(A)1
and 5.16.2(A)12 shall be amended as reflected in Article 5, Sections 5.3.1(A)3; 5.3.2(G);
5.5(G)1(b); 5.5(H); 5.5(J); 5.6(B); 5.8.2(S); 5.10.2(D); 5.15.1(A); 5.15.2(B)9; 5.15.2(C)4;
5.16.2(A)1 and 5.16.2(A)12 attached hereto and incorporated herein.
	 
	6.	 	Article 6, “Provider Information” Sections 6.2(A)13 and 6.5(E) shall be amended as reflected
in Article 6, Sections 6.2(A)13 and 6.5(E) attached hereto and incorporated herein.
	 
	7.	 	Article 7, “Terms and Conditions” Sections 7.2(B)7, 8, 11; 7.12(C)3; 7.14(A); 7.14(A)5, 7;
7.14(G)2; 7.16.2; 7.16.7(A)3; 7.20.8 (new); 7.21; 7.26(F); 7.30(A); 7.30(A)1; 7.30(A)3 (new);
7.37(A); 7.38.2(A)5 and 7.38.2(1) (new) shall be amended as reflected in Article 7, Sections
7.2(B)7, 8, 11; 7.12(C)3; 7.14(A); 7.14(A)5, 7; 7.14(G)2; 7.16.2; 7.16.7(A)3; 7.20.8; 7.21;
7.26(F); 7.30(A); 7.30(A)1; 7.30(A)3; 7.37(A); 7.38.2(A)5 and 7.38.2(1) attached hereto and
incorporated herein.
	 
	8.	 	Article 8, “Financial Provisions,” Sections 8.2.1; 8.2.1(C); 8.3.2; 8.4.1; 8.4.1(A);
8.5.2.7; 8.5.4; 8.6; 8.7(C); 8.8(C) and 8.8(D) shall be amended as reflected in Article 8,
Sections 8.2.1; 8.2.1(C); 8.3.2; 8.4.1; 8.4.1(A); 8.5.2.7; 8.5.4; 8.6; 8.7(C); 8.8(C) and
8.8(D) attached hereto and incorporated herein.

 

 

	9.	 	Appendix, Section A, “Reports”

	 	•	 	A.4.1 — Provider Network File, Attachment A;
	 
	 	•	 	A.4.3 — Network Accessibility Analysis — A.5, B;
	 
	 	•	 	A.7.2 — Fraud and Abuse — added Section C to table;
	 
	 	•	 	A.7.3 — Table 1 — Medicaid Enrollment by Primary Care Provider — revised
	 
	 	•	 	A.7.11 — Table 9 — Semi Annual Utilization and Medical Expenditures Summary;
	 
	 	•	 	A.7.18 — Table 16 — Ratio of Prior Authorizations Denied to Requested;
	 
	 	•	 	A.7.21 — Contractor Financial Reporting Manual for Medicaid/NJ FamilyCare Rate Cell Grouping Costs — revised;

shall be amended as reflected in Appendix, Section A, A.4.1; A.4.3; A.7.2, A.7.3; A.7.11; A.7.18
and A.7.21 attached hereto and incorporated herein.

	10.	 	Appendix, Section B, “Reference Materials”

	 	•	 	B.3.2 — Data File Resource Guide;
	 
	 	•	 	B.4.15 — Hysterectomy and Sterilization Procedures and
Consent Forms 
	 
	 	shall be amended
as reflected in Appendix, Section B, B.3.2 and B.4.15 attached hereto and incorporated
herein.

	11.	 	Appendix, Section C, “Capitation Rates” shall be revised as reflected in SFY 2006 Capitation
Rates attached hereto and incorporated herein.

 

 

All other terms and conditions of the October 1, 2000 contract and subsequent amendments remain
unchanged except as noted above.

The contracting parties indicate their agreement by their signatures.

	 	 	 	 	 	 	 
	AMERIGROUP
	 	 	 	State of New Jersey Department
	New Jersey, Inc.
	 	 	 	of
Human Services

	 
	 	 	 	 	 	 
	BY:

	 	 	 	 	 	BY: Ann Clemency Kohler
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	TITLE:
President & CEO	 	 	 	TITLE: Director, DMAHS
	 
	 	 	 	 	 	 
	DATE: 5/26/06	 	 	 	DATE:
	 
	 	 	 	 	 	 
	APPROVED AS TO FORM ONLY	 	 	 	 
	 
	 	 	 	 	 	 
	Attorney General	 	 	 	 
	 
	 	 	 	 	 	 
	State of New Jersey	 	 	 	 
	 
	 	 	 	 	 	 
	BY:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	          Deputy Attorney General	 	 	 	 
	 
	 	 	 	 	 	 
	DATE:	 	 	 	 

 

 

CONTRACT

BETWEEN

STATE OF NEW JERSEY

DEPARTMENT OF HUMAN SERVICES

DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

AND

                                                                       
         , CONTRACTOR

Amended 7/1/2006

 

 

STATE OF NEW JERSEY

DEPARTMENT OF HUMAN SERVICES

DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

AND

                                                            

CONTRACT TO PROVIDE SERVICES

This comprehensive risk and non-risk contract is entered into this                      day of                     , and is
effective on the                      day of                      between the Department of Human Services, which is
in the executive branch of state government, the state agency designated to administer the
Medicaid program under Title XIX of the Social Security Act, 42 U.S.C. 1396 et seq. pursuant to
the New Jersey Medical Assistance Act, N.J.S.A. 30:4D-l et seq. and the State Child Health
Insurance Program under Title XXI of the Social Security Act, 42 U.S.C. 1397aa et seq., pursuant
to the Children’s Health Care Coverage Act, PL 1997, c.272 (also known as ‘NJ KidCare”), pursuant
to Family Care Health Coverage Act, P.L. 2005, c.156 (also known as “NJ FamilyCare”) whose
principal office is located at P.O. Box 712, in the City of Trenton, New Jersey hereinafter
referred to as the “Department” and
                                                                                , a federally
qualified/ state defined health maintenance organization (HMO) which is a New Jersey,
profit/nonprofit corporation, certified to operate as an HMO by the State of New Jersey Department
of Banking
and Insurance and whose principal corporate office is located at
                                        , in the City of                                                                                 ,
County of                     , New
Jersey,
hereinafter referred to as the “contractor”.

WHEREAS, the contractor is engaged in the business of providing prepaid, capitated comprehensive
health care services pursuant to N.J.S.A. 26:2J-1 et seq. as well as non-risk administrative
services for certain beneficiary groups; and

WHEREAS, the Department, as the state agency designated to administer a program of medical
assistance for eligible persons under Title XIX of the Social Security Act (42 U.S.C. Sec. 1396, et
seq., also known as “Medicaid”), for eligible persons under the Family Care Health Coverage Act
(P.L. 2005, c.156) and for children under Title XXI of the Social Security Act (42 U.S.C. Sec.
1397aa, et seq., also known as “State Child Health Insurance Program”), is authorized pursuant to
the federal regulations at 42 C.F.R. 434 to provide such a program through an HMO and is desirous
of obtaining the contractor’s services for the benefit of persons eligible for Medicaid/NJ
FamilyCare; and

WHEREAS, the Division of Medical Assistance and Health Services (DMAHS), is the Division within the
Department designated to administer the medical assistance program, and the Department’s functions
as regards all Medicaid/NJ FamilyCare program benefits provided through the contractor for
Medicaid/NJ FamilyCare eligible enrolled in the contractor’s plan.

 

 

NOW THEREFORE, in consideration of the contracts and mutual covenants herein contained, the
Parties hereto agree as follows:

	1.	 	PREAMBLE

Governing Statutory and Regulatory Provisions: This contract and all renewals and modifications
are subject to the following laws and all amendments thereof: Title XIX and Title XXI of the
Social Security Act, 42 U.S.C. 1396 et. seq., 42 U.S.C. 1397aa et seq., the New Jersey Medical
Assistance Act and the Medicaid, and NJ KidCare and NJ FamilyCare State Plans approved by CMS
(N.J.S.A. 30:4D- 1 et seq.; 8 et seq.); federal and state Medicaid and State Child Health
Insurance, and NJ FamilyCare regulations, other applicable federal and state statutes, and all
applicable local laws and ordinances.

 

 

Care Management—a set of enrollee-centered, goal-oriented, culturally relevant, and logical
steps to assure that an enrollee receives needed services in a supportive, effective, efficient,
timely, and cost-effective manner. Care management emphasizes prevention, continuity of care, and
coordination of care, which advocates for, and links enrollees to, services as necessary across
providers and settings. Care management functions include 1) early identification of enrollees
who have or may have special needs, 2) assessment of an enrollee’s risk factors, 3) development
of a plan of care, 4) referrals and assistance to ensure timely access to providers, 5)
coordination of care actively linking the enrollee to providers, medical services, residential,
social, and other support services where needed, 6) monitoring, 7) continuity of care, and 8)
follow-up and documentation.

Centers for Medicare and Medicaid Services (CMS)—formerly the Health Care Financing
Administration (HCFA) within the U.S. Department of Health and Human Services.

Certificate of Authority—a license granted by the New Jersey Department of Banking and Insurance
to operate an HMO in compliance with N.J.S.A. 26:2J-l et. seq.

Children with Special Health Care Needs—those children who have or are at increased risk for
chronic physical, developmental, behavioral, or emotional conditions and who also require health
and related services of a type and amount beyond that required by children generally.

Chronic Illness—a disease or condition of long duration (repeated inpatient hospitalizations, out
of work or school at least three months within a twelve-month period, or the necessity for
continuous health care on an ongoing basis), sometimes involving very slow progression and long
continuance. Onset is often gradual and the process may include periods of acute exacerbation
alternating with periods of remission.

Clinical Peer—a physician or other health care professional who holds a non-restricted license in
New Jersey and is in the same or similar specialty as typically manages the medical condition,
procedure, or treatment under review.

CNM or Certified Nurse Midwife—a registered professional nurse who is legally authorized under
State law to practice as a nurse-midwife, and has completed a program of study and clinical
experience for nurse-midwives or equivalent.

CNP or Certified Nurse Practitioner—a registered professional nurse who is licensed by the New
Jersey Board of Nursing and meets the advanced educational and clinical practice requirements
beyond the two to four years of basic nursing education required of all registered nurses.

 

 

CNS or Clinical Nurse Specialist—a person licensed to practice as a registered professional nurse
who is licensed by the New Jersey State Board of Nursing or similarly licensed and certified by a
comparable agency of the state in which he/she practices.

Cold Call Marketing—any unsolicited personal contact with a potential enrollee by an employee or
agent of the contractor for the purpose of influencing the individual to enroll with the
contractor. Marketing by an employee of the contractor is considered direct; marketing by an agent
is considered indirect.

Commissioner—the Commissioner of the New Jersey Department of Human Services or a duly authorized
representative.

Complaint—a protest by an enrollee as to the conduct by the contractor or any agent of the
contractor, or an act or failure to act by the contractor or any agent of the contractor, or any
other matter in which an enrollee feels aggrieved by the contractor, that is communicated to the
contractor and that could be resolved by the contractor within five (5) business days, except for
urgent situations, and as required by the exigencies of the situation.

Complaint Resolution—completed actions taken to fully settle a complaint to the DMAHS’
satisfaction.

Comprehensive Orthodontic Treatment—the utilization of fixed orthodontic appliances
(bands/brackets and arch wires) to improve the craniofacial dysfunction and/or dentofacial
deformity of the patient. Active orthodontic treatment begins when tooth extractions are initiated
as the result of and in conjunction with an authorized orthodontic treatment plan.

Comprehensive Risk Contract—a risk contract that covers comprehensive services, that is, inpatient
hospital services and any of the following services, or any three or more of the following
services:

	1.	 	Outpatient hospital services.
	 
	2.	 	Rural health clinic services.
	 
	3.	 	FQHC services.
	 
	4.	 	Other laboratory and X-ray services.
	 
	5.	 	Nursing facility (NF) services.
	 
	6.	 	Early and periodic screening, diagnosis and treatment (EPSDT) services.
	 
	7.	 	Family planning services.
	 
	8.	 	Physician services.
	 
	9.	 	Home health services.

Condition—a disease, illness, injury, disorder, or biological or psychological condition or status
for which treatment is indicated.

 

 

DFD—the Division of Family Development, within the New Jersey Department of Human Services that
administers programs of financial and administrative support for certain qualified individuals and
families.

DHHS or HHS—United States Department of Health and Human Services of the executive branch of the
federal government, which administers the Medicaid program through the Centers for Medicare and
Medicaid Services (CMS).

DHSS—the
New Jersey Department of Health and Senior Services in the executive branch of New Jersey State government. Its role and functions are delineated throughout the
contract.

Diagnostic Services—any medical procedures or supplies recommended by a physician or other
licensed practitioner of the healing arts, within the scope of his or her practice under State
law, to enable him or her to identify the existence, nature, or extent of illness, injury, or
other health deviation in an enrollee.

Director—the Director of the Division of Medical Assistance and Health Services or a duly
authorized representative.

Disability—a physical or mental impairment that substantially limits one or more of the major
life activities for more than three months a year.

Disability in Adults—for adults applying under New Jersey Care Special Medicaid Programs and
Title II (Social Security Disability Insurance Program) and for adults applying under Title XVI
(the Supplemental Security Income [SS] program), disability is defined as the inability to engage
in any substantial gainful activity by reason of any medically determinable physical or mental
impairment(s) which can be expected to result in death or which has lasted or can be expected to
last for a continuous period of not less than 12 months.

Disability in Children—a child under age 18 is considered disabled if he or she has a medically
determinable physical or mental impairment(s) which results in marked and severe functional
limitations that limit the child’s ability to function independently, appropriately, and
effectively in an age-appropriate manner, and can be expected to result in death or which can be
expected to last for 12 months or longer.

Disenrollment—the removal of an enrollee from participation in the contractor’s plan, but not
from the Medicaid program.

Division of Developmental Disabilities (DDD)—a Division within the New Jersey Department of Human
Services that provides evaluation, functional and guardianship services to eligible persons.
Services include residential services, family support, contracted day programs, work
opportunities, social supervision, guardianship, and referral services.

Division of Disability Services (DDS)—a Division within the Department of Human Services that
promotes the maximum independence and participation of people with disabilities in community life.
The DDS administers seven Medicaid waiver programs, the work incentives Medicaid buy-in program,
the New Jersey personal assistance services

 

 

program (PASP) and the New Jersey cash and counseling demonstration program.

Division
or DMAHS—the New Jersey Division of Medical Assistance and Health Services within the
Department of Human Services which administers the contract on behalf of the Department.

Drug Utilization Review (DUR)—the process whereby the medical necessity is determined for a drug
that exceeds a DUR standard prospectively (prior to a drug being dispensed) or retrospectively
(after a drug has been dispensed). Prospective DUR shall utilize established prior authorization
procedures as described in Article 4. Retrospective DUR shall utilize telephonic or written
interventions with prescribers to determine medical necessity for prescribed medications.

Dual Eligible—individual covered by both Medicaid and Medicare.

Durable
Medical Equipment (DME)—equipment, including assistive technology, which: a) can withstand
repeated use; b) is used to service a health or functional purpose; c) is ordered by a qualified
practitioner to address an illness, injury or disability; and d) is appropriate for use in the home
or work place/school.

DYFS—the Division of Youth and Family Services, within the New Jersey Department of Human
Services, whose responsibility is to ensure the safety of children and to provide social services
to children and their families. DYFS enrolls into Medicaid financially eligible children under its
supervision who reside in DYFS-supported substitute living arrangements such as foster care and
certain subsidized adoption placements.

DYFS Residential Facilities—include Residential Facilities, Teaching Family Homes, Juvenile Family
In-Crisis Shelters, Children’s Shelters, Transitional Living Homes, Treatment Homes Programs,
Alternative Home Care Program, and Group Homes.

Early and Periodic Screening, Diagnosis and Treatment (EPSDT)—a Title XIX mandated program that
covers screening and diagnostic services to determine physical and mental defects in enrollees
under the age of 21, and health care, treatment, and other measures to correct or ameliorate any
defects and chronic conditions discovered, pursuant to Federal Regulations found in Title XIX of
the Social Security Act.

Early and Periodic Screening, Diagnosis and Treatment/Private Duty Nursing (EPSDT/PDN)
Services—the private duty nursing services provided to all eligible EPSDT beneficiaries under 21
years of age who live in the community and whose medical condition and treatment plan justify the
need. Private duty nursing services are provided in the community only, and not in hospital
inpatient or nursing facility settings. See Appendix B 4.1 for eligibility requirements.

Effective Date of Contract—shall be October 1, 2000.

 

 

some other person. It includes any act that constitutes fraud under applicable federal or State
law. (See 42 C.F.R. § 455.2)

Full Time Equivalent—the number of personnel with the same job title and responsibilities who, in
the aggregate, perform work equivalent to a singular individual working a 40-hour work week.

Good Cause—reasons for disenrollmment or transfer that include failure of the contractor to
provide services including physical access to the enrollee in accordance with contract terms,
enrollee has filed a grievance and has not received a response within the specified time period or
enrollee has filed a grievance and has not received satisfaction. See Article 5.10.2 for more
detail.

Governing Body—a managed care organization’s Board of Directors or, where the Board’s
participation with quality improvement issues is not direct, a designated committee of
the senior management of the managed care organization.

Grievance—means an expression of dissatisfaction about any matter or a complaint that is
submitted in writing, or that is orally communicated and could not be resolved within five (5)
business days of receipt.

Grievance
System—means the overall system that includes grievances and appeals at the contractor
level and access to the State fair hearing process.

Group Model—a type of HMO operation similar to a group practice except that the group model must
meet the following criteria: (a) the group is a separate legal entity, (i.e. administrative entity)
apart from the HMO; (b) the group is usually a corporation or partnership; (c) members of the group
must pool their income; (d) members of the group must share medical equipment, as well as technical
and administrative staff; (e) members of the group must devote at least 50 percent of their time to
the group; and (f) members of the group must have “substantial responsibility” for delivery of
health services to HMO members, within four years of qualification. After that period, the group
may request additional time or a waiver in accordance with federal regulations at 42 C.F.R. Section
110.104(2), Subpart A.

Health
Benefits Coordinator (HBC)—the external organization under contract with the Department
whose primary responsibility is to assist Medicaid eligible individuals in contractor selection and
enrollment.

 

 

Health Care Professional—a physician or other health care professional if coverage for the
professional’s services is provided under the contractor’s contract for the services. It includes
podiatrists, optometrists, chiropractors, psychologists, dentists, physician assistants, physical
or occupational therapists and therapist assistants, speech-language pathologists, audiologists,
registered or licensed practical nurses (including nurse practitioners, clinical nurse specialists,
certified registered nurse anesthetists, and certified nurse midwives), licensed certified social
workers, registered respiratory therapists, and certified respiratory therapy technicians.

Health Care Services—are all preventive and therapeutic medical, dental, surgical, ancillary
(medical and non-medical) and supplemental benefits provided to enrollees to diagnose, treat,
and maintain the optimal well-being of enrollees provided by physicians, other health care
professionals, institutional, and ancillary service providers.

Health Insurance—private insurance available through an individual or group plan that covers
health services. It is also referred to as Third Party Liability.

Health
Maintenance Organization (HMO)—any entity which contracts with providers and furnishes
at least basic comprehensive health care services on a prepaid basis to enrollees in a
designated geographic area pursuant to N.J.S.A. 26:2J-l et seq., and with regard to this
contract is either:

	 	A.	 	A Federally Qualified HMO; or
	 
	 	B.	 	Meets the State Plan’s definition of an HMO which includes, at a minimum,
the following requirements:

	 	1.	 	It is organized primarily for the purpose of providing
health care services;
	 
	 	2.	 	It makes the services it provides to its Medicaid enrollees
as accessible to them (in terms of timeliness, amount, duration, and scope) as
the services are to non-enrolled Medicaid eligible individuals within the area
served by the HMO;
	 
	 	3.	 	It makes provision, satisfactory to the Division and
Departments of Banking and Insurance, against the risk of insolvency, and
assures that Medicaid enrollees will not be liable for any of the HMO’s
debts if it does become insolvent; and
	 
	 	4.	 	It has a Certificate of Authority granted by the State of New
Jersey to operate in all or selected counties in New Jersey.

HEDIS—Health Plan Employer Data and Information Set.

HIPAA—Health Insurance Portability and Accountability Act.

Incurred-But-Not-Reported (IBNR)—estimate of unpaid claims liability, includes

 

 

received but unpaid claims.

Indicators—the objective and measurable means, based on current knowledge and clinical
experience, used to monitor and evaluate each important aspect of care and service identified.

Individual Health Care Plan (IHCP)—a multi-disciplinary plan of care for enrollees with special
needs who qualify for a higher level of care management based on a ordinarily covered services for
all other Medicaid enrollees, are appropriate for the age and health status of the individual and
that the service will aid the overall physical and mental growth and development of the individual
and the service will assist in achieving or maintaining functional capacity.

Medically Needy (MN) Person or Family—a person or family receiving services under the Medically
Needy Program.

Medicare—the program authorized by Title XVIII of the Social Security Act to provide payment for
health services to federally defined populations.

Medicare+Choice Organization—an entity that contracts with CMS to offer a Medicare+Choice plan
pursuant to 42 U.S.C. §1395w-27.

Member—an enrolled participant in the contractor’s plan; also means enrollee.

Minority Populations—Asian/Pacific Islanders, African-American/Black, Hispanic/ Latino, and
American Indians/Alaska Natives.

MIS—management information system.

Multilingual—at a minimum, English and Spanish and any other language which is spoken by 200
enrollees or five percent of the enrolled Medicaid population of the contractor’s plan, whichever
is greater.

NCQA—the National Committee for Quality Assurance.

Newborn—an infant born to a mother enrolled in a contractor’s plan at the time of birth.

New Jersey State Plan or State Plan—the DHS/DMAHS document, filed with and approved by CMS, that
describes the New Jersey Medicaid/NJ FamilyCare program.

N.J.A.C.—New Jersey Administrative Code.

NJ FamilyCare Plan A—means the State-operated program which provides comprehensive managed care
coverage to:

	•	 	Uninsured children below the age of 19 with family incomes up to
and including 133 percent of the federal poverty level;
	 
	•	 	Children under the age of one year and pregnant women eligible
under the New Jersey Care... Special Medicaid Programs;

 

 

	•	 	Pregnant women up to 200 percent of the federal poverty level;
	 
	•	 	AFDC eligibles who are in work-related extensions.

In addition to covered managed care services, eligibles under this program may access certain other
services which are paid fee-for-service by the State and not covered under this contract.

 

 

In addition to covered managed care services, eligibles under these programs may access certain
services which are paid fee-for-service and not covered under this contract.

NJ FamilyCare Plan H—means the State-operated program which provides managed care administrative
services coverage to uninsured:

	•	 	Adults and couples without dependent children under the age of 19 with family incomes up to and including 100 percent
of the federal poverty level;
	 
	•	 	Adults and couples without dependent children under the age of 23 years, who do not qualify for AFDC Medicaid, with
family incomes up to and including 250 percent of the federal poverty level.
	 
	•	 	Restricted alien parents over 21 years of age not including pregnant women.

Plan H eligibles will be identified by a capitation code. Capitation codes drive the service
package. The Program Status Code drives the cost-sharing requirements.

Any of the Program Status Codes listed below can include restricted alien parents. Therefore, it
is necessary to rely on the capitation code to identify Plan H eligibles. Eligibles with incomes
above 150 percent of the federal poverty level are required to participate in cost sharing in the
form of monthly premiums and copayments for most services. These groups are identified by the
program status code (PSC) indicated below. For clarity, the program status codes related to Plan H
non-cost sharing groups are also listed.

	 	 	 
	PSC	 	 
	Cost Sharing	 	No Cost Sharing
	498 (w/corresponding
	 	380, 310, 320, 330, 410, 420,
	cap code)
	 	430, 470, 497 (with
	701
	 	corresponding cap codes) 700 763

NJ FamilyCare Plan I—means the State-operated program that provides certain benefits on a
fee-for-service basis through the DMAHS for Plan D parents/caretakers with a program status code of
380.

N.J.S.A.—New Jersey Statutes Annotated.

Non-Covered Contractor Services—services that are not covered in the contractor’s benefits package
included under the terms of this contract.

Non-Covered Medicaid Services—all services that are not covered by the New Jersey Medicaid State
Plan.

Non-Participating Provider—a provider of service that does not have a contract with the
contractor.

 

 

ARTICLE TWO: CONDITIONS PRECEDENT

	 	A.	 	This contract shall be with qualified, established HMOs operating in New Jersey
through a Certificate of Authority for the Medicaid/NJ FamilyCare line of business
approved by the New Jersey Department of Banking and Insurance. The contractor shall
receive all necessary authorizations and approvals of governmental or regulatory
authorities to operate in the service/enrollment areas as of the effective date of
operations.
	 
	 	B.	 	The contractor shall ensure continuity of care and full access to primary,
specialty, and ancillary care as required under this contract and access to full
administrative programs and support services offered by the contractor for all its
lines of business and/or otherwise required under this contract.
	 
	 	C.	 	The contractor shall, by the effective date, have received all necessary
authorizations and approvals of governmental or regulatory authorities including an
approved Certificate of Authority (COA) to operate in all counties in a geographic
region as defined in Article 5.1 or shall have an approved (by DMAHS) county phase-in
plan defined in Section H. This Article does not and is not intended to require the
contractor to obtain COAs in all three geographic regions.
	 
	 	D.	 	Documentation. Subsequent to the signing date by the contractor but prior to
contract execution by the Department, the Department shall review and approve the
materials listed in a precontracting checklist issued by the DMAHS.
	 
	 	E.	 	Readiness Review. The Department will, prior to the signing date, conduct a
readiness review of the areas set forth in Section B.2,3 of the Appendices to generally
assess the contractor’s readiness to begin operations and issue a letter to the
contractor that conveys its findings and any changes required before contracting with
the Department.
	 
	 	F.	 	This contract, as well as any attachments or appendices hereto shall only be
effective, notwithstanding any provisions in such contract to the contrary, upon
the receipt of federal approval and approval as to form by the Office of
the Attorney General for the State of New Jersey.

	G.	 	The contractor shall remain in compliance with the following conditions which shall satisfy
the Departments of Banking and Insurance, and Human Services prior to this contract becoming
effective:

	 	1.	 	The contractor shall maintain an approved certificate of
authority to operate as a health maintenance organization in New Jersey from the
Department of Banking and Insurance for the Medicaid/NJ FamilyCare population.

 

 

	 	2.	 	The contractor shall comply with and remain in compliance
with minimum net worth and fiscal solvency and reporting requirements of the

Department of Banking and Insurance, the Department of Human Services, the
federal government, and this contract.
	 
	 	3.	 	The contractor shall provide written certification of
new written contracts for all providers other than FQHCs and shall
provide copies of fully executed contracts for new contracts with
FQHCs on a quarterly basis.
	 
	 	4.	 	If insolvency protection arrangements change, the
contractor shall notify the DMAHS sixty (60) days before such change
takes effect and provide written copy of DOBI approval.

	H.	 	County Expansion Phase-In Plan. If the contractor does not have an approved COA for
each of the counties in a designated region, the contractor shall submit to
DMAHS a county expansion phase-in plan for review and approval by DMAHS prior to the
execution of this contract. The plan shall include detailed information of:

	 	•	 	The region and names of the counties targeted for
expansion;
	 
	 	•	 	Anticipated dates of the submission of the COA modification to DOBI
(with copies to DMAHS);
	 
	 	•	 	Anticipated date of approval of the COA;
	 
	 	•	 	Anticipated date for full operations in the region;
	 
	 	•	 	Anticipated date for initial beneficiary enrollment in each county
	 
	 	The phase-in plan shall indicate when full expansion into a region
shall be completed. All expansions are subject to approval by
DMAHS, The contractor shall maintain full coverage for each county
in each region in which the contractor operates for the duration of
this contract.

	L.	 	No court order, administrative decision, or action by any other instrumentality of
the United States Government or the State of New Jersey or any other state is
outstanding which prevents implementation of this contract.
	 
	J.	 	Net Worth

 

 

	 	1.	 	The contractor shall maintain a
minimum not worth in accordance with N.J.A.C. Title
8:38.11 et seq.
	 
	 	2.	 	The Department shall have the right to conduct targeted financial audits of the contractor’s
Medicaid/NJ FamilyCare line of business. The contractor
shall provide the Department with
financial data, as requested by the Department, within a
timeframe specified by the Department.

	K.	 	The contractor shall comply with the following financial operations requirements:

	 	1.	 	A contractor shall establish and maintain:

	 
	 	a.	 	An office in New Jersey, and
	 
	 	b.	 	Premium and claims accounts in a New Jersey qualified bank as
approved by DOBI.

	 
	 	2.	 	The contractor shall have a fiscally sound operation as demonstrated by:

	 
	 	a.	 	Maintenance of a minimum net worth in accordance with DOBI
requirements (total line of business) and the requirements outlined in G and J
above and Article 8.2.
	 
	 	b.	 	Maintenance of a net operating surplus for Medicaid/NJ
FamilyCare line of business. If the contractor fails to earn a net operating
surplus during the most recent calendar year or does not maintain minimum net
worth requirements on a quarterly basis, it shall submit a plan of action to
DMAHS within the time frame specified by the Department. The plan is subject
to the approval of DMAHS. It shall demonstrate how and when minimum net worth
will be replenished and present marketing and financial projections. These
shall be supported by suitable back-up material. The discussion shall include
possible alternate funding sources, including invoking of corporate parental
guarantee. The plan will include:

	 	i.	 	A detailed marketing plan with enrollment
projections for the next two years.
	 
	 	ii.	 	A projected balance sheet for the next two years.
	 
	 	iii.	 	A projected statement of revenues and expenses
on an accrual basis for the next two years.
	 
	 	iv.	 	A statement of cash flow projected for the next two years.
	 
	 	v.	 	A description of how to maintain capital
requirements and replenish net worth,
	 
	 	vi.	 	Sources and timing of capital shall be
specifically identified.

	 	3.	 	The contractor may be required to obtain prior to this contract and maintain
"Stop-Loss" insurance, pursuant to provisions in Article 8.3.2.

 

 

	 	4.	 	The contractor shall obtain prior to this contract and maintain for the
duration of this contract, any extension thereof or for any period of liability
exposure, protection against insolvency pursuant to provisions in G above and
Article 8.2.

	L.	 	Certifications- The contractor shall comply with required certifications, program
integrity and prohibited affiliation requirements of 42 CFR 438 subpart H as a
condition for receiving payment under this contract. Data that must be certified
include, but are not limited to, enrollment data, encounter data, and other
information specified in this contract.

 

 

years of age with a diagnosis of scoliosis or spina bifida), and laminectomy (except
for children under 18 years of age with a diagnosis of scoliosis). The Second Opinion
program shall be incorporated into the contractor’s medical procedures and submitted
to DMAHS for review and approval.

	K.	 	Unless otherwise required by this contract, the contractor shall make no
distinctions with regard to the provision of services to Medicaid and
NJ FamilyCare enrollees and the provision of services provided to the contractor’s
non-Medicaid/NJ FamilyCare enrollees.

	L.	 	DMAHS may intercede on an enrollee’s behalf when DMAHS deems it appropriate for the
provision of medically necessary services and to assist enrollees with the contractor’s
operations and procedures which may cause undue hardship for the enrollee. The contractor
shall respond (i.e. acknowledgement of Division request, status updates, and/or plan of
action) to DMAHS requests for information or documentation within three (3) business days
or earlier depending on the medical exigencies of the case. Failure to provide the
information or documentation may result in a notice of deficiency to the contractor and
potential imposition of sanctions. In the event of a difference in interpretation of
contractually required service provision between the Department and the contractor, the
Department’s interpretation shall prevail until a formal decision is reached, if necessary.

	M.	 	An enrollee who seeks self-initiated care from a non-participating provider without
referral/authorization shall be held responsible for the cost of care. The enrollee shall
be fully informed of the requirement to seek care when it is available within the network
and the consequences of obtaining unauthorized out-of-network care for covered services.

	N.	 	Protection of Enrollee — Provider Communications. Health care professionals may not be
prohibited from advising their patients about their health status or medical care
or treatment, regardless of whether this care is covered as a benefit under the contract,

	O.	 	Medical or Dental Procedures. For procedures that may be considered either medical or
dental such as surgical procedures for fractured jaw or removal of cysts, the contractor
shall establish written policies and procedures clearly and definitively delineated for all
providers and administrative staff, indicating that either a physician specialist or oral
surgeon may perform the procedure and when, where, and how authorization, if needed, shall
be promptly obtained.

	P.	 	Out-of-Network Services. If the contractor is unable to provide in-network necessary
services, covered under the contract to a particular enrollee, the contractor must
adequately and timely cover those services out-of-network for the enrollee, for as long as
the contractor is unable to provide them in-network.

	Q.	 	Termination of Benefits. For benefits terminated at the direction of the State, the
contractor shall be responsible for previously authorized services for a period of sixty (60)
days after the effective date of termination.

 

 

	 	R.	 	The contractor is not required to pay for non-HMO covered benefits. However, if the
contractor does pay for non-HMO covered benefits in error, the Division shall have the right
to not reimburse the contractor for those costs.

4.1.2 BENEFIT PACKAGE

	 	A.	 	The following categories of services shall be provided by the contractor for
all Medicaid and NJ FamilyCare Plans A, B, and C enrollees, except where indicated. See
Section B.4.1 of the Appendices for complete definitions of the covered services,

	 	1.	 	Primary and Specialty Care by physicians and, within the
scope of practice and in accordance with State certification/licensure
requirements, standards and practices, by Certified Nurse Midwives, Certified
Nurse Practitioners, Clinical Nurse Specialists, and Physician Assistants
	 
	 	2.	 	Preventive Health Care and Counseling and Health Promotion
	 
	 	3.	 	Early and Periodic Screening, Diagnosis, and Treatment (EPSDT)
Program Services
	 
	 	 	 	For NJ FamilyCare Plans B and C participants, coverage includes early and
periodic screening and diagnosis medical examinations, dental, vision,
hearing, and lead screening services. It includes only those treatment
services identified through the examination that are available
under the contractor’s benefit package or specified services under the FFS
program.
	 
	 	4.	 	Emergency Medical. Care
	 
	 	5.	 	Inpatient Hospital Services including acute care hospitals,
rehabilitation hospitals, and special hospitals.
	 
	 	6.	 	Outpatient Hospital Services
	 
	 	7.	 	Laboratory Services [Except routine testing related to
administration of Clozapine and the other psychotropic drugs listed in Article
4.1.4B for non-DDD clients.]
	 
	 	8.	 	Radiology Services — diagnostic and therapeutic
	 
	 	9.	 	Prescription Drugs (legend and non-legend covered by the
Medicaid program) — For payment method for Protease Inhibitors, certain other
anti-retrovirals, blood clotting factors VIII and IX, and coverage of protease
inhibitors and certain other anti-retrovirals under NJ FamilyCare, see Article
8. Exception: not a contractor-covered benefit for the ABD population: and
other dual eligible individuals Identified by cap codes pertaining to enrollees
with Medicare.

 

 

	 	10.	 	Family Planning Services and Supplies
	 
	 	11.	 	Audiology

	 
	 	12.	 	Inpatient Rehabilitation Services

	 
	 	13.	 	Podiatrist Services
	 
	 	14.	 	Chiropractor Services
	 
	 	15.	 	Optometrist Services
	 
	 	16.	 	Optical Appliances
	 
	 	17.	 	Hearing Aid Services
	 
	 	18.	 	Home Health Agency Services — Not a contractor-covered benefit for the ABD
population. All other services provided to an enrollee in the horn; including but not limited
to pharmacy (not applicable to the ABD population) and DME services, are the contractor’s
fiscal and medical management responsibility.
	 
	 	19.	 	Hospice Services-are covered in the community as well as in institutional settings. Room and
board services are included only when services are delivered in an institutional (non private
residence) setting.
	 
	 	20.	 	Durable Medical Equipment (DME)/Assistive Technology Devices in accordance with existing
Medicaid regulations.
	 
	 	21.	 	Medical Supplies
	 
	 	22.	 	Prosthetics and Orthotics including certified shoe provider.
	 
	 	23.	 	Dental Services
	 
	 	24.	 	Organ Transplants — includes donor and recipient costs. Exception: The
contractor will not be responsible for transplant-related donor and recipient inpatient
hospital costs for an individual placed on a transplant list while in the Medicaid FFS
program prior to initial enrollment into the contractor’s plan. The contractor
shall be responsible for transplant- related donor and recipient inpatient hospital costs
for an individual placed on a transplant list or becomes eligible for a transplant while
enrolled in managed care prior to disenrollment to the Medicaid FFS program within two
months of the transplant.
	 
	 	25.	 	Transportation Services for any contractor-covered service or non- contractor
covered service including ambulance, mobile intensive care units (MICUs) and invalid coach
(including lift equipped vehicles)

 

 

	 	27.	 	Mental Health/Substance Abuse Services for enrollees who are clients of the Division of
Developmental Disabilities. Exception — partial care services are not covered by the
contractor. Partial hospitalization is a contractor-covered service for DDD clients.
	 
	 	B.	 	Conditions Altering Mental Status. Those diagnoses which are categorized as altering the
mental status of an individual but are of organic origin shall be part of the contractor’s
medical, financial and care management responsibilities for all categories of enrollees. These
include the diagnoses in the following ICD-9-CM Series:

	 	 	 	 	 
	1.
	 	290.0	 	Senile dementia, simple type
	2.
	 	290.1	 	Presenile dementia
	3.
	 	290.10	 	Presenile dementia, uncomplicated
	4.
	 	290.11	 	Presenile dementia with delerium
	5.
	 	290.12	 	Presenile dementia with delusional features
	6.
	 	290.13	 	Presenile dementia with depressive features
	7.
	 	290.2	 	Senile dementia with delusional or depressive features
	8.
	 	290.20	 	Senile dementia with delusional features
	9.
	 	290.21	 	Senile dementia with depressive features
	10.
	 	290.3	 	Senile dementia with delerium
	11.
	 	290.4	 	Arteriosclerotic dementia
	12.
	 	290.40	 	Arteriosclerotic dementia, uncomplicated
	13.
	 	290.41	 	Arteriosclerotic dementia with delirium
	14.
	 	290.42	 	Arteriosclerotic dementia with delusional features
	15.
	 	290.43	 	Arteriosclerotic dementia with depressive features
	16.
	 	290.8	 	Other specific senile psychotic conditions
	17.
	 	290.9	 	Unspecified senile psychotic condition
	18.
	 	291.1	 	Alcohol amnestic syndrome
	19.
	 	291.2	 	Other alcoholic dementia
	20.
	 	292.82	 	Drug induced dementia
	21.
	 	292.83	 	Drug-induced amnestic syndrome
	22.
	 	292.9	 	Unspecified drug induced mental disorders
	23.
	 	293.0	 	Acute delirium
	24.
	 	293.1	 	Subacute delirium
	25.
	 	293.8	 	Other specific transient organic mental disorders
	26.
	 	293.81	 	Organic delusional syndrome
	27.
	 	293.82	 	Organic hallucinosis syndrome
	28.
	 	293.83	 	Organic affective syndrome
	29.
	 	293.84	 	Organic anxiety syndrome
	30.
	 	294.0	 	Amnestic syndrome
	31.
	 	294.1	 	Dementia in conditions classified elsewhere
	32.
	 	294.8	 	Other specified organic brain syndromes (chronic)
	33.
	 	294.9	 	Unspecified organic brain syndrome (chronic)
	34.
	 	305.1	 	Non-dependent abuse of drugs - tobacco
	35.
	 	310.0	 	Frontal lobe syndrome
	36.
	 	310.2	 	Postconcussion syndrome

 

 

	 	 	 	 	 
	37.
	 	310.8	 	Other specified nonpsychotic mental
disorder following organic brain damage
	38.
	 	310.9	 	Unspecified nonpsychotic mental
disorder following organic brain damage

In addition, the contractor shall retain responsibility for delivering all covered
Medicaid mental health/substance abuse services (except partial care services) to
enrollees who are clients of the Division of Developmental Disabilities (referred
to as “clients of DDD”). Articles Four and Five contain further information
regarding clients of DDD.

	4.1.3	 	SERVICES REMAINING IN FEE-FOR-SERVICE PROGRAM AND MAY NECESSITATE CONTRACTOR
ASSISTANCE TO THE ENROLLEE TO ACCESS THE SERVICES

	 	A.	 	The following services provided by the New Jersey Medicaid program under its
State plan shall remain in the fee-for-service program but may require medical orders
by the contractor’s PCPs/providers. These services shall not be included in the
contractor’s capitation.

	 	1.	 	Personal Care Assistant Services (not covered for NJ
FamilyCare Plans B and C)
	 
	 	2.	 	Medical Day Care (not covered for NJ FamilyCare Plans B and C)
	 
	 	3.	 	Outpatient Rehab — Physical therapy, occupational therapy,
and speech pathology services (For NJ FamilyCare Plans B & C enrollees,
limited to 60 days per therapy per year)
	 
	 	4.	 	Elective, induced abortions and related services including
surgical procedure, cervical dilation, insertion of cervical dilator,
anesthesia including para cervical block, history and physical examination on
day of surgery; lab tests including PT, PTT, OB Panel (includes hemogram,
platelet count, hepatitis B surface antigen, rubella antibody, VDRL, blood
typing ABO and Rh, CBC and differential), pregnancy test, urinalysis and
urine drug screen, glucose and electrolytes; routine venipuncture;
ultrasound, pathological examination of aborted fetus; Rhogam and its
administration.
	 
	 	 	 	Note: spontaneous abortions/miscarriages, such as those included under
ICD-9 diagnosis codes 632, 634.0-634.99, 637.0-637.99 are not
elective/induced abortions.
	 
	 	5.	 	Transportation — lower mode (not covered for NJ FamilyCare
Plans B and C)
	 
	 	6.	 	Sex Abuse Examinations

 

 

	 	7.	 	Services Provided by New Jersey MH/SA and DYFS Residential
Homes. For enrollees living in residential facilities group homes where
ongoing care is provided, contractor shall cooperate with the medical,
nursing, or administrative staff person designated by the facility to ensure
that the enrollees have timely and appropriate access to contractor providers
as needed and to coordinate care between those providers and the facility’s
employed or contracted providers of health services. Medical care required by
these residents remains the contractor’s responsibility providing the
contractor’s provider network and facilities are utilized.
	 
	 	8.	 	Family Planning Services and Supplies when furnished by a
non-participating provider.
	 
	 	9.	 	Home health agency services for the ABD population.
	 
	 	10.	 	Prescription drugs (legend and non-legend covered by the
Medicaid program) for the ABD population and other dual eligible individuals.

	 	B.	 	Dental Services. For those dental services specified below that are initiated by a Medicaid
non-managed care provider prior to first time managed care enrollment, an exemption from
contractor-covered services based on the initial managed care enrollment date will be
provided and the services paid by Medicaid FFS. The exemption shall only apply to those
beneficiaries who have initially received these services during the 60 or 120 day period
immediately prior to the initial managed care enrollment date.

	 	1.	 	Procedure Codes to be paid by
Medicaid FFS up to 60 days after
first time
managed care enrollment:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	02710	 	 	 	02792	 	 	 	03430	 
	 

	 	 	02720	 	 	 	02950	 	 	 	05110	 
	 

	 	 	02721	 	 	 	02952	 	 	 	05120	 
	 

	 	 	02722	 	 	 	02954	 	 	 	05211	 
	 

	 	 	02750	 	 	 	03310	 	 	 	05211-52	 
	 

	 	 	02751	 	 	 	03320	 	 	 	05212	 
	 

	 	 	02752	 	 	 	03330	 	 	 	05212-52	 
	 

	 	 	02790	 	 	 	03410-22	 	 	 	05213	 
	 

	 	 	02791	 	 	 	03411	 	 	 	05214	 

	 	2.	 	Procedure Codes to be paid by Medicaid FFS up to 120 days from date of last
preliminary extractions after patient enrolls in the MCO (applies to tooth codes 5 -
12 and 21 — 28 only):
	 
	 	 	 	05130

05130-22 
05140

05140-22

 

 

	 	13.	 	Prescription drugs, excluding over-the-counter drugs___Exception: See Article 8
regarding Protease Inhibitors and other anti-retrovirals.
	 
	 	14.	 	Dental Services — Limited to preventive dental services for children under the age of 12
years, including oral examinations, x-rays, oral prophylaxis, topical application of
fluorides, and sealants. Exception — comprehensive orthodontia treatment services shall be
provided, through completion of required services, for any enrollee under the age of 19
years whose orthodontia services were initiated while enrolled with the contractor as a
Medicaid, NJ FamilyCare Plan A, B, or C enrollee. The contractor shall not be responsible
for orthodontia services to a Plan D enrollee under the age of 19 years old that were
initiated while that individual was enrolled with another contractor. The enrollee must
continue enrollment in the HMO where services were initiated until those services were
completed or until the member loses Medicaid/NJ FamilyCare eligibility. Active treatment
begins with the placement of the orthodontic appliances (banding) or the extraction of teeth
as part of an authorized comprehensive orthodontic treatment plan. Cases that were
authorized before reassignment to Plan D but active treatment was not initiated until after
reassignment to Plan D do not qualify for continuation of care.
	 
	 	15.	 	Podiatrist Services — Excludes routine hygienic care of the feet, including the treatment
of corns and calluses, the trimming of nails, and other hygienic care such as cleaning or
soaking feet, in the absence of a pathological condition
	 
	 	16.	 	Prosthetic appliances — -Limited to the initial provision of a prosthetic device that
temporarily or permanently replaces all or part of an external body part lost or impaired as
a result of disease, injury, or congenital defect. Repair and replacement services are
covered when due to congenital growth.
	 
	 	17.	 	Private duty nursing — Only when authorized by the contractor
	 
	 	18.	 	Transportation Services — Limited to ambulance for medical emergency only
	 
	 	19.	 	Well child care including immunizations, lead screening and treatments
	 
	 	20.	 	Maternity and related newborn care
	 
	 	21.	 	Diabetic supplies and equipment

 

 

	 	B.	 	Services Available To NJ FamilyCare Plan D Under Fee-For-Service. The following
services are available to NJ FamilyCare Plan D enrollees under fee-for-service:

	 	1.	 	Elective, induced abortion services
	 
	 	2.	 	Outpatient Rehabilitation Services — Physical therapy, Occupational
therapy, and Speech therapy for non-chronic conditions and acute illnesses and
injuries. Limited to treatment for a 60-day (that is, 60 business days) consecutive
period per incident of illness or injury beginning with the first day of treatment
per contract year. Speech therapy services rendered for treatment of delays in speech
development, unless resulting from disease, injury or congenital defects are not
covered.
	 
	 	3.	 	Inpatient hospital services for mental health, including psychiatric
hospitals, limited to 35 days per year
	 
	 	4.	 	Outpatient benefits for short-term, outpatient evaluative and crisis
intervention, or home health mental health services, limited to 20 visits per year

	 	a.	 	When authorized by the Division of Medical Assistance and
Health Services, one (1) mental health inpatient day may be exchanged for up
to four (4) home health visits or four (4) outpatient services, including
partial care. This is limited to an exchange of up to a maximum of 10
inpatient days for a maximum of 40 additional outpatient visits.
	 
	 	b.	 	When authorized by the Division of Medical Assistance and
Health Services, one (1) mental health inpatient day may be exchanged for two
(2) days of treatment in partial hospitalization up to the maximum number of
covered inpatient days.

	 	5.	 	Inpatient and outpatient services for substance abuse are limited to
detoxification.

	 	C.	 	Exclusions. The following services are not covered for NJ FamilyCare Plan D participants
either by the contractor or the Department:

	 	1.	 	Non-medically necessary services
	 
	 	2.	 	Intermediate Care Facilities/Mental Retardation
	 
	 	3.	 	Private duty nursing unless authorized by the contractor
	 
	 	4.	 	Personal Care Assistant Services
	 
	 	5.	 	Medical Day Care Services
	 
	 	6.	 	Chiropractic Services
	 
	 	7.	 	Dental services except preventive dentistry for children under age
12

 

 

	 	8.	 	Prescription drugs, excluding over-the-counter drugs. Exception: See Article
8 regarding Protease Inhibitors and other anti-retrovirals.
	 
	 	9.	 	Transportation Services — Limited to ambulance for medical emergency only
	 
	 	10.	 	Diabetic supplies and equipment
	 
	 	11.	 	DME — limited benefit, only covered when medically necessary part of
inpatient hospital discharge plan — (see Appendix, Section B.4.1 for list of
covered items)
	 
	 	12.	 	Family Planning Services, including medical history and physical examination
(including pelvic and breast), diagnostic and laboratory tests, drugs and biologicals,
medical supplies and devices, counseling, continuing medical supervision, continuity
of care and genetic counseling.
	 
	 	 	 	Services provided primarily for the diagnosis and treatment of infertility,
including sterilization reversals, and related office (medical and clinic) visits,
drugs, laboratory services, radiological and diagnostic services and surgical
procedures are not covered by the NJ FamilyCare program. Obtaining family planning
services from providers outside the contractor’s provider network is not available
for NJ FamilyCare Plan H enrollees.

	 	B.	 	Services Available To NJ FamilyCare Plan H Under Fee-For-Service. The following services
are available to NJ FamilyCare Plan H enrollees under fee-for-service:

	 	1.	 	Outpatient mental health services, limited to 60 days per calendar year.

	 
	 	2.	 	Elective, induced abortion services

	 	C.	 	Exclusions. The following services not covered for NJ FamilyCare Plan H participants
either by the contractor or the Department include, but are not limited to:

	 	1.	 	Non-medically necessary services.
	 
	 	2.	 	Intermediate Care Facilities/Mental Retardation
	 
	 	3.	 	Private duty nursing
	 
	 	4.	 	Personal Care Assistant Services
	 
	 	5.	 	Medical Day Care Services
	 
	 	6.	 	Chiropractic Services
	 
	 	7.	 	Dental services
	 
	 	8.	 	Orthotic devices
	 
	 	9.	 	Targeted Case Management for the chronically ill
	 
	 	10.	 	Residential treatment center psychiatric programs
	 
	 	11.	 	Religious non-medical institutions care and services

 

 

	 	c.	 	It is strongly encouraged that
the contractor publish the formulary on its internet
website.

	 	7.	 	If the formulary includes generic
equivalents, the contractor shall provide for a brand name
exception process for prescribers to use when medically necessary.
For MCSA enrollees, the contractor should implement a mandatory
generic drug substitution program consistent with Medicaid program
requirements.
	 
	 	8.	 	The contractor shall establish and maintain
a procedure, approved by DMAHS, for internal review and resolution
of complaints, such as timely access and coverage issues, drug
utilization review, and claim management based on standards of
drug utilization review.
	 
	 	9.	 	The contractor shall limit negative changes to the formulary (e.g.,
remove a drug, impose step therapy, etc.) to four times annually,
unless urgent circumstances require more timely action, such as
drag manufacturer’s removal of a drug from the market due to
patient safety concerns.

	 	C.	 	Pharmacy Lock-In Program. The contractor shall implement for MCO
and MCSA enrollees a pharmacy lock-in program including policies,
procedures and criteria for establishing the need for the lock-in which
must be prior approved by DMAHS and must include the following components
to the program:

	 	1.	 	Enrollees shall be notified prior to the
lock-in and must be permitted to choose or change pharmacies for
good cause
	 
	 	2.	 	A seventy-two (72)-hour emergency supply of
medication at pharmacies other than the designated lock-in
pharmacy shall be permitted to assure the provision of necessary
medication required in an interim/urgent basis when the assigned
pharmacy does not immediately have the medication.
	 
	 	3.	 	Care management and education reinforcement
of appropriate medication/pharmacy use shall be provided. A plan
for an education program for enrollees shall be developed and
submitted for review and approval.
	 
	 	4.	 	The continued need for lock-in shall be
periodically (at least every two years) evaluated by the contractor for
each enrollee in the program.
	 
	 	5.	 	Prescriptions from all participating
prescribers shall be honored and may not be required to be written
by the PCP only.
	 
	 	6.	 	The contractor shall fill medications
prescribed by mental health/substance abuse providers, subject to
the limitations described in Article 4,4C.
	 
	 	7.	 	The contractor shall submit quarterly reports
on Pharmacy Lock-1n participants. See Section A.7.17 of the
Appendices (Table 15).

 

 

	 	 	(if these data are collected and reported to DOBI, a copy of the report should be
submitted also to DMAHS) the following clinical indicator measures:

	 	 	 
	HEDIS	 	Report Period
	Reporting Set Measures	 	by Contract Year
	Childhood Immunization Status

	 	annually
	Adolescent Immunization Status

	 	annually
	Well-Child Visits in first 15 months of life

	 	annually
	Well-Child Visits in the 3rd, 4th, 5th and 6th year of life

	 	annually
	Adolescent Well-Care Visits

	 	annually
	Prenatal and Postpartum Care

	 	annually
	Breast Cancer Screening

	 	annually
	Cervical Cancer Screening

	 	annually
	Use of Appropriate Medications for People with Asthma

	 	annually
	Comprehensive Diabetes Care

	 	annually

	 	Q.	 	Quality Improvement Projects (QIPs). The contractor shall participate in QIPs defined
annually by the State with input from the contractor. The State will, with input from the
contractor and possibly other MCEs, define measurable improvement goals and QIP-specific
measures which shall serve as the focus for each QIP. The contractor shall be responsible for
designing and implementing strategies for achieving each QIP’s objectives. At the beginning
of each contract year the contractor shall present a plan for designing and implementing such
strategies, which shall receive approval from the State prior to implementation. The
contractor shall then submit semiannual progress reports summarizing performance relative to
each of the objectives of each contract year.
	 
	 	 	 	The QIPs shall be completed annually and shall include the areas identified below, The
external review organization (ERO) under contract with DHS shall prepare a final report
for year one that will contain data, using State-approved sampling and measurement
methodologies, for each of the measures below, Changes in required QIPs shall be defined
by the DHS and incorporated into the contract by amendment.
	 
	 	 	 	For each measure the DHS will identify a baseline and a compliance standard. Baseline
data, target standards, and compliance standards shall be established or updated by the
State,
	 
	 	 	 	If DHS determines that the contractor is not in compliance with the requirements
of the annual QIP objectives, either based on the contractor’s progress report or the
ERO’s report, the contractor shall prepare and submit a corrective action plan for DHS
approval.

	 	1.	 	Well-Child Care (EPSDT)
	 
	 	 	 	The QIP for Well-Child Care shall focus upon achieving compliance with
the EPSDT periodicity schedule (See Article 42.6) in the following
priority areas:

 

 

	 	 	 	The QIP for Well-Child Care shall focus upon achieving compliance with the
EPSDT periodicity schedule (See Article 4.2.6) in the following priority areas:

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Minimum	 	 
	 	 	Performance	 	Compliance	 	Discretionary
	Clinical Area	 	Standard	 	Standard	 	Sanction
	Age-appropriate
	 	 	 	 	 	 	 	 	 	 
	Comprehensive exams
	 	 	 	 	 	 	 	 	 	 
	(CMS-specified age groups)
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	< 1 year old

	 	 	80	%	 	 	60	%	 	60 - 70%
	1 - 2 years old

	 	 	80	%	 	 	60	%	 	60 - 70%
	3 - 5 years old (at least I visit)

	 	 	80	%	 	 	65	%	 	60 - 70%
	6 - 9 years old (at least I visit)

	 	 	80	%	 	 	60	%	 	60 - 70%
	10 - 14 years old (at least 1 visit)

	 	 	80	%	 	 	60	%	 	60 - 70%
	15 - 18 years old (at least 1 visit)

	 	 	80	%	 	 	60	%	 	60 - 70%
	19 - 20 years old (at least 1 visit)

	 	 	80	%	 	 	60	%	 	60 - 70%
	 
	 	 	 	 	 	 	 	 	 	 
	Immunizations
	 	 	 	 	 	 	 	 	 	 
	2 year olds (HEDIS combined rate)

	 	 	80	%	 	 	60	%	 	60 - 70%
	 
	 	 	 	 	 	 	 	 	 	 
	Annual Dental Visit -
	 	 	 	 	 	 	 	 	 	 
	3 - 12 yr olds

	 	 	80	%	 	 	60	%	 	60 - 70%
	13 - 21 yr olds

	 	 	80	%	 	 	60	%	 	60 - 70%
	 
	 	 	 	 	 	 	 	 	 	 
	Lead screens (under age 3)

	 	 	80	%	 	 	60	%	 	60 - 70%
	 
	 	 	 	 	 	 	 	 	 	 

	 	2.	 	Prenatal Care Birth Outcome
	 
	 	 	 	The QIP for Prenatal Care and Birth Outcome shall focus upon improving birth outcomes and
health status of children. The contractor shall participate in a collaborative project with
DMAHS and the Center for Health Care Strategies (CHCS) to develop and implement this QIP.

 

 

	 	 	 	relocated and cannot be found), may appeal any UM decision resulting in a denial,
termination, or other limitation in the coverage of and access to health care services in
accordance with this contract and as defined in C.2 under the procedures described in
this Article. Such enrollees and providers shall be provided with a written explanation
of the appeal process upon the conclusion of each stage in the appeal process.
	 
	 	2.	 	Action means, at a minimum, any of the following:

	 	a.	 	An adverse determination under a utilization review program;
	 
	 	b.	 	Denial of access to specialty and other care;
	 
	 	c.	 	Denial of continuation of care;
	 
	 	d.	 	Denial of a choice of provider;
	 
	 	e.	 	Denial of coverage of routine patient costs in connection with an approved
clinical trial;
	 
	 	f.	 	Denial of access to needed drugs;
	 
	 	g.	 	The imposition of arbitrary limitation on medically necessary services;
	 
	 	h.	 	Denial in whole or in part, of payment for a benefit.
	 
	 	i.	 	Denial or limited authorization of a requested service, including the type
or level of services;
	 
	 	j.	 	The reduction, suspension, or termination of a previously authorized
service;
	 
	 	k.	 	Failure to provide services in a timely manner (See Article 5.12);

	 
	 	1.	 	Denial of a service based on lack of medical necessity.

	 	3.	 	Hearings. If the contractor provides a hearing to the enrollee on the appeal, the enrollee
shall have the right to representation. The contractor shall permit the enrollee to be
accompanied by a representative of the enrollee’s choice to any proceedings and grievances.
Such hearing must take place in community locations convenient and accessible to the
enrollee.
	 
	 	4.	 	The appeal process shall consist of an informal internal review by the contractor (stage I
appeal), a formal internal review by the contractor (stage 2 appeal), and a formal external
review (stage 3 appeal) by an independent utilization review organization under the DOBI
and/or the Medicaid Fair Hearing process that shall be in accordance with N.J.A.C 10:49 et
seq. Stages 1-3 appeals shall be in accordance with N.J.A.C. 8:38-8 with the exception of
time frames stated for stage 2 appeals where, for purposes of this contract, the contractor
may extend the timeframes by up to 14 calendar days if the enrollee requests the extension or
the contractor shows (to the DMAHS’ satisfaction upon its request) that there is need for
additional information and how the delay is in the enrollee’s interest.
	 
	 	5.	 	Utilization Management Appeals. Appropriate clinical personnel shall be involved in the
investigation and resolution of all UM appeals. The processing of all such appeals shall be
incorporated in the contractor’s

 

 

	 	1.	 	Encounter Data: The contractor shall prepare and submit encounter data to DMAHS in
accordance with Article 3.9.
	 
	 	2.	 	Grievance Reports: The contractor shall provide to DMAHS monthly reports of all grievances
in accordance with Articles 5.15 and the contractor’s approved grievance process included in
this contract. See Section A.7.5 of the Appendices (Table 3).
	 
	 	3.	 	Appointment Availability Studies: The contractor shall conduct a review of appointment
availability and submit a report to DMAHS annually. The report must list the average time
that enrollees wait for appointments to be scheduled in each of the following categories:
baseline physical, routine, specialty, and urgent care appointments. DMAHS must approve the
methodology for this review in advance in writing. The contractor shall assess the impact of
appointment waiting times on the health status of enrollees with special needs.
	 
	 	4.	 	Twenty-four (24) Hour Access Report: The contractor shall submit to DMAHS an annual report
describing its twenty-four (24) hour access procedures for enrollees. The report must
include the names and addresses of any answering services that the contractor uses to
provide twenty-four (24) hour access.
	 
	 	5.	 	The contractor shall monitor, evaluate, and submit an annual report to DMAHS on the
incidence of HIV/AIDS patients, the impact of the contractor’s program to promote HIV
prevention (Article 4.5.7), counseling, treatment and quality of life outcomes, mortality
rates.
	 
	 	6.	 	Additional Reports: The contractor shall prepare and submit such other reports as DMAHS may
request. Unless otherwise required by law or regulation, DMAHS shall determine the timeframe
for submission based on the nature of the report and give the contractor the opportunity to
discuss and comment on the proposed requirements before the contractor is required to submit
such additional reports.
	 
	 	7.	 	The contractor shall submit to the Division, on a quarterly basis, documentation of its
ongoing internal quality assurance activities. Such documentation shall include at a minimum:

	 	a.	 	Agenda of quality assurance meetings of its medical professionals; and
	 
	 	b.	 	Attendance sheets with attendee signatures.

	 	8.	 	Provider Participation Monitoring. The contractor shall ensure that it monitors its network
for bonafide provider participation with the following minimum, but not limited to,
activities:

 

 

	 	a.	 	Claims Inactivity The contractor shall review and investigate claims
inactivity of ail PCPs and PCDs for whom there were less than 5600.00 or
10 claims paid (whichever is less) by the contractor in a year to
determine actual participation status,
	 
	 	b.	 	Monthly Provider Network Spot Checks. The
contractor shall conduct monthly provider network spot checks to verify
the accuracy of its provider network file. The contractor shall survey,
at a minimum, 50% of its specialty provider network (excluding hospital
based specialties) per county. Each monthly survey should be county
specific with all counties in which the contractor operates surveyed at
least annually.
	 
	 	 	 	Survey questionnaire shall be designed to verify provider name,
including correct spelling, practice type/specialty, address, phone
number, HMO participation status, office hours, open/closed panel,
availability of other participating physicians/dentists at practice
location, and availability of clinical support staff such as physician
assistants, nurse practitioners, registered nurses, registered dental
hygienists, certified dental assistants, etc. The survey shall also
query the ability to accommodate special needs members.
	 
	 	 	 	The contractor shall document corrective actions taken as a result of
spot check responses.

	 	9.	 	Annual PCP After-Hour Availability Study. The contractor shall conduct an annual PCP
After-Hour Availability study in order to monitor availability and accessibility to primary
care providers (PCPs). The study shall be designed to determine a provider’s availability for
telephone consultation after regular business hours.
	 
	 	 	 	The contractor shall survey, at a minimum, no less than 25% of its PCP network. The PCPs
are to be randomly selected from the contractor’s provider network file. Providers shall be
contacted after business hours or on weekends. Providers and staff should be asked to
identify the system the office uses for telephone coverage after regular business hours.
	 
	 	 	 	A telephone response should be considered acceptable/unacceptable based on the following
criteria:

	 	 	 	Acceptable — An active provider response, such as:

	 	1.	 	Telephone is answered by PCP,
office staff, answering service or voice mail.
	 
	 	2.	 	The answering service either:

	 	•	 	Connects the caller directly to the provider;

 

 

	 	•	 	Contacts the PCP on behalf of the caller and
the provider returns the call; or
	 
	 	•	 	Provides a telephone number where the
PCP/covering provider can be reached.

	 	3.	 	The provider’s
answering machine message provides a telephone number
to contact the PCP/covering provider.

	 	 	 	Unacceptable:

	 	1.	 	The answering service:

	 	•	 	Leaves a message for the provider on the
PCP/covering provider’s answering
machine; or
	 
	 	•	 	Responds in an unprofessional manner.

	 	2.	 	The provider’s answering machine message:

	 	•	 	Instructs the caller to go to the emergency
room, regardless of the exigencies of the
situation, for care without enabling the caller
to speak with the provider for non-emergent
situations.
	 
	 	•	 	Instructs the caller to leave a message for
the provider.

	 	3.	 	No answer;
	 
	 	4.	 	Listed number no longer in service;
	 
	 	5.	 	Provider no longer
participating in the contractor’s network;
	 
	 	6.	 	On hold for longer than five (5) minutes;
	 
	 	7.	 	Answering Service
refuses to provide information for survey;
	 
	 	8.	 	Telephone lines
persistently busy despite multiple attempts to contact
the provider.

	 	 	 	The contractor shall submit a report of the results of the survey
and its corrective action plan to the DMAHS semiannually. The
report shall also include the methodology and sample size used
for the survey.

	 	B.	 	Clinical areas requiring improvement shall be identified
and documented with a corrective action plan developed and monitored by the State.

	 	1.	 	Implementation of remedial/corrective
action. The QAPI shall include written procedures for taking
appropriate remedial action whenever, as determined under the
QAPI, inappropriate or substandard services are furnished, or
services that should have been furnished were not. Quality
assurance actions which result in the termination of a medical
provider shall be immediately forwarded by the contractor to
DMAHS. Written remedial/corrective action procedures shall
include;

	 	a.	 	Specification of the types of
problems requiring remedial/corrective action;

 

 

	 	j.	 	American Medical Association;
	 
	 	k.	 	U.S. Public Health Service;
	 
	 	l.	 	World Health Organization; and
	 
	 	m.	 	Interdisciplinary Council on Developmental and
Learning Disorders.

	 	 	 	For each focused study, the contractor will be notified as to which
standards will be applied.
	 
	 	6.	 	Validation review of the contractor’s QM/HEDIS studies required
in this contract.
	 
	 	7.	 	Validation and evaluation of encounter data.
	 
	 	8.	 	Health care data analysis.
	 
	 	9.	 	Monitoring to ensure enrollees are issued written
determinations, including appeal rights and notification of their right to a
Medicaid Fair Hearing as well as a review by the DOBI IURO.
	 
	 	10.	 	Ad hoc studies and reviews.
	 
	 	11.	 	ERO reviews for dental services include but are not limited to:

	 	a.	 	New Jersey licensed Dental Consultants of the ERO
will review a random sample of patient charts and conduct provider
interviews. A random number of patients will receive screening
examinations.
	 
	 	b.	 	Auditors will review appointment logs, referral
logs, health education material, and conduct staff interviews.
	 
	 	c.	 	Audit documents will be completed by appropriate
consultant/auditor.

4.8 PROVIDER NETWORK

4.8.1 GENERAL PROVISIONS

	 	A.	 	The contractor shall establish and maintain at all ‘times a complete provider
network consisting of traditional providers for primary and specialty care, including
primary care physicians, other approved non-physician primary care providers,
physician specialists, non-physician practitioners, hospitals (including teaching
hospitals), Federally Qualified Health Centers and other essential community
providers/safety-net providers, and ancillary providers. The provider network shall be
reviewed and approved by DMAHS and the sufficiency of the number of participating
providers shall be determined by DMAHS in accordance with the standards found in
Article 4.8.8 “Provider Network Requirements.”
	 
	 	B.	 	The contractor shall ensure that its provider network includes, at a minimum:

	 	1.	 	Sufficient number, available and physically accessible, of
physician and non-physician providers of health care to cover all services in
the amount,

 

 

	 	 	 	duration, and scope included in the-benefits package under this contract. The
number of enrollees assigned to a PCP shall be decreased by the

 

 

4.8.8 PROVIDER NETWORK REQUIREMENTS

	 	 	 	Provider networks and all provider types within the network shall be reviewed on a
county basis, i.e., must be located within the county except where indicated. (See
also Section 4.8.8.M.) The contractor shall monitor the capacity of each of its
providers and decrease ratio limits as needed to maintain appointment availability
standards.
	 
	 	A.	 	Primary Care Provider Ratios
	 
	 	 	 	PCP ratios shall be reviewed and calculated by provider specialty on a county basis
and on an index city basis, i.e., the major city of each county where the majority
of the Medicaid and NJ FamilyCare beneficiaries reside.

	 	1.	 	Physician
	 
	 	 	 	A primary care physician shall be a General Practitioner or Family
Practitioner, Pediatrician, or Internist. Obstetricians/Gynecologists and
other physician specialists may also participate as primary care providers
providing they participate on the same contractual basis as all other PCPs
and contractor enrollees are enrolled with the specialists in the same
manner and with the same PCP/enrollee ratio requirements applied.

	 	a.	 	1 FTE PCP per 2000 enrollees per contractor; 1
FTE per 3000 enrollees, cumulative across all contractors.
	 
	 	b.	 	I FTE PCP per 1000 DD enrollees per contractor;
1 FTE per 1500 DD enrollees cumulative across all contractors.

	 	2.	 	Dentist
	 
	 	 	 	The contractor shall include and make available sufficient number of primary
care dentists from the time of initial enrollment in the contractor’s plan.
Pediatric dentists shall be included in the network and may be both primary
care and specialty care providing primary care ratio limits are maintained.

	 	a.	 	1 FTE primary care dentist per 2000 enrollees
per contractor; I FTE primary care dentist per 3500 enrollees,
cumulative across all contractors.

	 	3.	 	Certified Nurse Midwife (CNM)
	 
	 	 	 	If the contractor includes CNMs in its provider network as PCPs, it shall
utilize the following ratios for CNMs as PCPs.

	 	a.	 	1 FTE CNM per 1000 enrollees per contractor; 1 FTE
CNM per 1500 enrollees across all contractors.

 

 

	 	16.	 	Neurology — adult
	 
	 	17.	 	Neurological surgery
	 
	 	18.	 	Obstetrics/gynecology
	 
	 	19.	 	Oncology — adult and pediatric
	 
	 	20.	 	Ophthalmology
	 
	 	21.	 	Orthopedic Surgery
	 
	 	22.	 	Otolaryngology
	 
	 	23.	 	Plastic Surgery
	 
	 	24.	 	Psychiatry (for clients of DDD)
	 
	 	25.	 	Pulmonary Disease — adult and pediatric
	 
	 	26.	 	Radiation Oncology
	 
	 	27.	 	Radiology
	 
	 	28.	 	Rheumatology — adult and pediatric
	 
	 	29.	 	Thoracic surgery
	 
	 	30.	 	Urology

	 	D.	 	Non-Physician Providers [Non-Institutional File]
	 
	 	 	 	The contractor shall include contracted providers for:

	 	1.	 	Chiropractor
	 
	 	2.	 	Dentists — Required Contracted Providers

	 	a.	 	Primary care
	 
	 	b.	 	Orthodontist
	 
	 	c.	 	Oral Maxillofacial surgeon

	 	3.	 	Optometrist
	 
	 	4.	 	Podiatrist
	 
	 	5.	 	Audiologist

	 	E.	 	Ancillary Providers [Institutional File]
	 
	 	 	 	The contractor shall include the following contracted providers:

	 	1.	 	Durable Medical Equipment
	 
	 	2.	 	Federally Qualified Health Centers
	 
	 	3.	 	School-Based Health Service Programs
	 
	 	4.	 	Hearing Aid Providers
	 
	 	5.	 	Home Health Agency — must be approved on a county-specific basis
	 
	 	6.	 	Hospice Agency
	 
	 	7.	 	Hospitals — inpatient and outpatient services; at least one
licensed, full service acute care hospital, including at least licensed
medical-surgical, pediatric, obstetrical, and critical care services in any
county or service area no greater than 15 miles or 30 minutes driving time,
whichever is less, from 90 percent of enrollees within the county or service
area.
	 
	 	8.	 	Laboratory with one drawing station per every five mile
radius within a county
	 
	 	9.	 	Medical Supplier
	 
	 	10.	 	Optical appliance providers
	 
	 	11.	 	Organ Transplant Providers/Centers

 

 

	 	I.	 	Provider Network Access Standards and Ratios

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	A - Miles per 2	 	13 - Miles per 1	 	Min. No. Per County ’	 	Capacity Limit
	Specialty	 	Urban	 	Non-Urban	 	Urban	 	Non-urban	 	Except Where Noted	 	Per Provider
	PCP Children GP

	 	 	6	 	 	 	15	 	 	 	2	 	 	 	10	 	 	 	2	 	 	 
	 	 	1: 2,000
	FP

	 	 	6	 	 	 	15	 	 	 	2	 	 	 	10	 	 	 	2	 	 	 
	 	 	1: 2,000
	Peds

	 	 	6	 	 	 	15	 	 	 	2	 	 	 	10	 	 	 	2	 	 	 
	 	 	1: 2,000
	Adults            GP

	 	 	6	 	 	 	15	 	 	 	2	 	 	 	10	 	 	 	2	 	 	 
	 	 	1: 2,000
	FP

	 	 	6	 	 	 	15	 	 	 	2	 	 	 	10	 	 	 	2	 	 	 
	 	 	1: 2,000
	IM

	 	 	6	 	 	 	15	 	 	 	2	 	 	 	10	 	 	 	2	 	 	 
	 	 	1: 2,000
	CNP/CNS

	 	 	6	 	 	 	15	 	 	 	2	 	 	 	10	 	 	 	2	 	 	 
	 	 	1: 1,000
	CNM

	 	 	12	 	 	 	25	 	 	 	6	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 1;500
	Dentist, Primary Care

	 	 	6	 	 	 	15	 	 	 	2	 	 	 	10	 	 	 	2	 	 	 
	 	 	1: 2,000
	Allergy

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 75,000
	Anesthesiology

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 17,250
	Cardiology

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 100,000
	Cardiovascular Disease

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 166,000
	Chiropractor

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	1	 	 	 
	 	 	1: 20,000
	Colorectal surgery

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 30,000
	Dermatology

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 75,000
	Emergency Medicine

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 19,000
	Endocrinology

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 143,000
	Endodontia

	 	 	15	 	 	 	25	 	 	 	I0	 	 	 	15	 	 	 	1	 (where available)
	 	 
	 	 	1: 30,000
	Gastroenterology

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 100,000
	General Surgery

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 30,000
	Geriatric Medicine

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	1	 	 	 
	 	 	1: 10,000
	Hematology

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 100,000
	Infectious Disease

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 125,000
	Neonatology

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 100,000
	Nephrology

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	21	 	 	 
	 	 	1: 125,000
	Neurology

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 100,000
	Neurological Surgery

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	21	 	 	 
	 	 	1: 166,000
	Obstetrics/Gynecology

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 7,100
	Oncology

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 100,000
	Opthalmology

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 60,000
	Optometrist

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 8,000
	Oral Surgery

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 20,000
	Orthodontia

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	1	 	 	 
	 	 	1: 20,000
	Orthopedic Surgery

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 28,000
	Otolaryngology (ENT)

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 53,000
	Periodontia

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	1	 (where available)
	 	 
	 	 	1: 30,000
	Physical Medicine

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	 	(where applicable)
	 	 
	 	 	1: 75,000
	Plastic Surgery

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	1	 	 	 
	 	 	1: 250,000
	Podiatrist

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 20,000
	Prosthodontia

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	1	 (where available)
	 	 
	 	 	1: 30,000
	Psychiatrist

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 30,000
	Psychologist

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	—	 	 	 
	 	 	1: 30,000
	Pulmonary Disease

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 100,000
	Radiation Oncology

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 100,000
	Radiology

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 25,000
	Rheumatology

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 150,000
	Audiology

	 	 	12	 	 	 	25	 	 	 	6	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 100,000
	Thoracic Surgery

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	1	 	 	 
	 	 	1: 150,000
	Urology

	 	 	15	 	 	 	25	 	 	 	10	 	 	 	15	 	 	 	2	 	 	 
	 	 	1: 60,000
	Fed Qual Health Ctr

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1	 	 	 	 	1/county if available

	Hospital

	 	 	 	 	 	 	 	 	 	 	15	 	 	 	15	 	 	 	 	 	 	 	 	 	 
	Pharmacies

	 	 	10	 	 	 	15	 	 	 	5	 	 	 	12	 	 	 	 	 	 	 
	 	 	1: 1,000

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	A - Miles per 2	 	13 - Miles per 1	 	Min. No. Per County ’	 	Capacity Limit
	Specialty	 	Urban	 	Non-Urban	 	Urban	 	Non-urban	 	Except Where Noted	 	Per Provider
	Laboratory

	 	 	N/A	 	 	 	N/A	 	 	 	7	 	 	 	12	 	 	 	1	 	 	 	 	 	 
	DME/Med Supplies

	 	 	12	 	 	 	25	 	 	 	6	 	 	 	15	 	 	 	1	 	 	 
	 	1: 50,000	 
	Hearing Aid

	 	 	12	 	 	 	25	 	 	 	6	 	 	 	15	 	 	 	1	 	 	 
	 	1: 50,000	 
	Optical Appliance

	 	 	12	 	 	 	25	 	 	 	6	 	 	 	15	 	 	 	2	 	 	 
	 	1: 50,000	 

 

 

	 	J.	 	Geographic Access
	 
	 	 	 	The following lists guidelines for urban geographic access for the DMAHS population. (Standards for
non-urban areas are included in the table in I. above.) The State shall review (and approve)
exceptions on a case-by-case basis to determine appropriateness for each situation.
	 
	 	 	 	For each contractor and for each municipality in each county in which the contractor is
operational, the access shall be reviewed in accordance with the number and percentage of:

	 	1.	 	Beneficiary children who reside within 6 miles of 2 PCPs whose specialty is Family Practice,
General Practice or Pediatrics or 2 CNPs/CNSs; within 2 miles of 1 PCP whose specialty is
Family Practice, General Practice or Pediatrics or 1 CNP or 1 CNS
	 
	 	2.	 	Beneficiary adults who reside within 6 miles of 2 PCPs whose specialty is Family Practice,
General Practice or Internal Medicine or 2 CNPs or 2 CNSs; within 2 miles of 1 PCP whose
specialty is Family Practice, General Practice or Internal Medicine or 1 CNP or 1 CNS
	 
	 	3.	 	Beneficiaries who reside within 6 miles of 2 providers of general dentistry services; within
2 miles of 1 provider of general dentistry services
	 
	 	4.	 	Beneficiaries who reside within 10 miles of 2 pharmacies; within 5 miles of 1 pharmacy
	 
	 	5.	 	Beneficiaries who reside within 15 miles of at least 2 specialists in each of the following
specialties: all physician and dental specialists, Podiatry, Optometry, Chiropractic; within
10 miles of at least 1 provider in each type of specialty noted above
	 
	 	6.	 	Beneficiaries who reside within 20-15 miles of 1 full-service acute care hospital; or 30
minutes driving time.
	 
	 	7.	 	Beneficiaries who reside within 12 miles of 2 of each of the following provider types:
durable medical equipment, medical supplier, hearing aid supplier, optical appliance supplier,
certified nurse midwife; within 6 miles of one of each type of provider
	 
	 	8.	 	Beneficiaries who reside within 7 miles of a laboratory/drawing station.
	 
	 	9.	 	Beneficiaries with desired access and average distance to 1, 2 or more providers

 

 

	 	10.	 	Beneficiaries without desired access and average distance to 1, 2 or more
providers
	 
	 	 	 	Access Standards

	 	1.	 	90% of the enrollees must be within 6 miles of 2 PCPs in an urban setting
	 
	 	2.	 	85% of the enrollees must be within 15 miles of 2 PCPs in a non-urban setting
	 
	 	3.	 	Covering physicians must be within 15 miles in urban areas and 25 miles in
non-urban areas.

	 	 	 	Travel Time Standards
	 
	 	 	 	The contractor shall adhere to the 30 minute standard, i.e., enrollees will not live more
than 30 minutes away from their PCPs, PCDs or CNPs/CNSs. The following guidelines shall be
used in determining travel time.

	 	1.	 	Normal conditions/primary roads — 20 miles
	 
	 	2.	 	Rural or mountainous areas/secondary routes — 20 miles
	 
	 	3.	 	Flat areas or areas connected by interstate highways — 25 miles
	 
	 	4.	 	Metropolitan areas such as Newark, Camden, Trenton, Paterson, Jersey City — 30
minutes travel time by public transportation or no more than 6 miles from PCP
	 
	 	5.	 	Other medical service providers must also be geographically accessible to the
enrollees.
	 
	 	6.	 	Exception: SSI or New Jersey Care-ABD enrollees and clients of DDD may choose to
see network providers outside of their county of residence.

	 	K.	 	Conditions for Granting Exceptions to the 2000 Ratio Limit for Primary Care Physicians

	 	1.	 	A physician must demonstrate increased office hours and must maintain (and be
present for) a minimum of 20 hours per week in each office.
	 
	 	2.	 	In private practice settings where a physician employs or directly works with
nurse practitioners who can provide patient care within the scope of their practices,
the capacity may be increased to I PCP FTE to 3500 enrollees. The PCP must be
immediately available for consultation, supervision or to take over treatment as
needed. Under no circumstances will a PCP relinquish or be relieved of direct
responsibility for all aspects of care of the patients enrolled with the PCP.
	 
	 	3.	 	In private practice settings where a primary care physician employs or is
assisted by other licensed, but non-participating physicians, the capacity may be
increased to 1 PCP FTE to 3500 enrollees.
	 
	 	4.	 	In clinic practice settings where a PCP provides direct personal supervision of
medical residents with a New Jersey license to practice medicine in good standing with
State Board of Medical

 

 

	 	 	 	Examiners, the capacity may be increased with the following ratios: 1 PCP to 2000
enrollees; 1 licensed medical resident per 1100 enrollees. The PCP must be
immediately available for consultation, supervision or to take over treatment as
needed. Under no circumstances will a PCP relinquish or be relieved of direct
responsibility for all aspects of care of the patients enrolled with the PCP.
	 
	 	5.	 	Each provider (physician or nurse practitioner) must provide a minimum of 15
minutes of patient care per patient encounter and be able to provide four visits per
year per enrollee.
	 
	 	6.	 	The contractor shall submit for prior approval by DMAHS a detailed description
of the PCP’s delivery system to accommodate an increased patient load, work flow,
professional relationships, work schedules, coverage arrangements, 24 hour access
system.
	 
	 	7.	 	The contractor shall provide information on total patient load across all
plans, private patients, Medicaid fee-for-service patients, other.
	 
	 	8.	 	The contractor shall adhere to the access standards required in the
contractor’s contract with the Department.
	 
	 	9.	 	There will be no substantiated complaints or demonstrated evidence of access
barriers due to an increased patient load.
	 
	 	10.	 	The Department will make the final decision on the appropriateness of increasing
the ratio limits and what the limit will be.

	 	L.	 	Conditions for Granting Exceptions to the 2000 Ratio Limit for Primary Care Dentists.
	 
	 	1.	 	A PCD must provide a minimum of 20 hours per week per office.
	 
	 	2.	 	In clinic practice settings where a PCD provides direct personal supervision of dental
residents who have a temporary permit from the State Board of Dentistry in good standing and
also dental students, the capacity may be increased with the following ratios: 1 PCD to 2000
enrollees per contractor; 1 dental resident per 1000 enrollees per contractor; 1 FTE dental
student per 300 enrollees per contractor. The PCD shall be immediately available for
consultation, supervision or to take over treatment as needed. Under no circumstances shall a
PCD relinquish or be relieved of direct responsibility for all aspects of care of the patients
enrolled with the PCD.
	 
	 	3.	 	In private practice settings where a PCD employs or is assisted by other licensed, but
non-participating dentists, the capacity may be increased to 1 PCD FTE to 3500 enrollees.
	 
	 	4.	 	In private practice settings where a PCD employs dental hygienists or is assisted by dental
assistants, the capacity may be increased to 1 PCD to 3500 enrollees. The PCD shall be
immediately available for consultation, supervision or to take over treatment as needed.
Under no circumstances shall a PCD relinquish or be relieved of direct responsibility for all
aspects of care of the patients enrolled with the PCD.

 

 

	 	5.	 	Each PCD shall provide a minimum of 15 minutes of patient care per patient encounter.
	 
	 	6.	 	The contractor shall submit for prior approval by the DMAHS a detailed description of the
PCD’s delivery system to accommodate an increased patient load, work flow, professional
relationships, work schedules, coverage arrangements, 24 hour access system.
	 
	 	7.	 	The contractor shall provide information on total patient load across all plans, private
patients, Medicaid fee-for-service patients, other.
	 
	 	8.	 	The contractor shall adhere to the access/appointment availability standards required in the
contractor’s contract with the Department.
	 
	 	9.	 	There must be no substantiated complaints or demonstrated evidence of access barriers due to
an increased patient load.
	 
	 	10.	 	The contractor shall monitor the providers and practices granted an exception every other
month to assure the continued employment of an adequate number and type of auxiliary personnel
described in 4.8.8.L.4 above, to warrant continuation of the exception.
	 
	 	11.	 	The contractor shall submit reports to the DMAHS, bi-monthly, of the additions, deletions or
any other change of auxiliary personnel; and include the names, license numbers, functions and
work schedules of each currently employed auxiliary staff.

	 	a.	 	Cardiology, pediatric — In-county
alternative: adult cardiovascular disease; out of county
pediatric referral applies to: Cumberland, Gloucester,
Hunterdon, Salem, Somerset, Sussex, Warren.
	 
	 	b.	 	Colon & Rectal surgeon — A general
surgeon with privileges to perform this surgery may be
substituted for a certified subspecialist in this field of
medicine in the following counties: Cape May, Cumberland,
Gloucester, Hunterdon, Morris, Salem, Sussex, Union.
	 
	 	c.	 	Endocrinology, adult — In-county
alternative: none, refer out of county for Cape May,
Gloucester, Salem, Sussex, Warren.
	 
	 	d.	 	Endocrinology, pediatric — In-county
alternative: adult endocrinologist; out of county referral for
pediatric endocrinology applies to: Atlantic, Cape May,
Cumberland, Gloucester, Hunterdon, Mercer, Ocean, Salem,
Somerset, Sussex, Warren,
	 
	 	e.	 	Gastroenterology, pediatric —
In-county alternative: adult gastroenterologists; out of county
referral for pediatric gastroenterology applies to: Atlantic,
Burlington, Cape May, Cumberland, Gloucester, Hunterdon,
Mercer, Ocean, Salem, Sussex, Warren.

 

 

	 	f.	 	General Surgery, pediatric — In-county
alternative: adult general surgery; out of county referral for
pediatrics applies to: Burlington, Cape May, Cumberland,
Gloucester, Hunterdon, Mercer, Morris, Salem, Somerset, Sussex,
Union, Warren.
	 
	 	g.	 	Geriatrics — In-county alternative:
Family Practitioner or Internist; applies to: Cape May,
Cumberland, Gloucester, Mercer, Morris, Salem, Somerset,
Sussex, Warren.
	 
	 	h.	 	Hematology/Oncology, pediatric —
In-county alternative: none; out of county pediatrics referral
applies to: Burlington, Cape May, Cumberland, Gloucester,
Hudson, Hunterdon, Mercer, Ocean, Salem, Somerset, Sussex,
Warren.
	 
	 	i.	 	Infectious Disease — In-county
alternatives; none; out of county referral applies to: Warren.
	 
	 	j.	 	Infectious Disease, pediatric —
In-county alternative: Adult infectious disease; out of county
pediatric referral applies to: Atlantic, Burlington, Cape May,
Cumberland, Gloucester, Hunterdon, Ocean, Salem, Somerset,
Sussex, Warren.
	 
	 	k.	 	Nephrology, adult — In-county alternative:
none; refer out of county for
Cape May, Sussex, Warren.

 

 

	 	l.	 	Nephrology, pediatric — In-county alternative:
adult nephrologist; out of county pediatric referral applies
to: Atlantic, Burlington, Cape May, Cumberland, Gloucester,
Hunterdon, Mercer, Monmouth, Ocean, Passaic, Salem, Somerset,
Sussex, Union, Warren.
	 
	 	m.	 	Neonatal/Perinatal medicine —
Alternative: none, refer out of county.
	 
	 	n.	 	Neurological Surgery — In-county
alternative: none; out of county referral applies to: Bergen,
Burlington, Cape May, Cumberland, Gloucester, Hudson, Hunterdon,
Morris, Ocean, Passaic, Salem, Somerset, Sussex, Warren.
	 
	 	o.	 	 Pain Management — In-county
alternative: none; out of county referral applies to: Sussex,
Warren.
	 
	 	p.	 	Plastic Surgery — In-county
alternative: none; out of county referral applies to: Cape
May, Hunterdon, Ocean, Salem, Somerset, Sussex, Warren.
	 
	 	q.	 	Pulmonary Disease, pediatric —
In-county alternative: Adult pulmonary disease; out of county
pediatric referral applies to: Burlington, Cape May, Cumberland,
Gloucester, Hunterdon, Ocean, Salem, Warren.
	 
	 	r.	 	Radiation Oncology — In-county
alternative: none; out of county referral applies to: Cape May,
Salem, Sussex, Warren.
	 
	 	s.	 	Rheumatology — In-county
alternative: none; out of county referral applies to: Salem.
	 
	 	t.	 	Rheumatology, pediatric — In-county
alternative: adult rheumatology; out of county pediatric
referral applies to: all counties except Bergen and Essex.
	 
	 	u.	 	Thoracic surgery — In-county
alternative: none, refer out of county for Cape May, Hunterdon,
Morris, Somerset, Sussex, Warren.

4.8.9 DENTAL PROVIDER NETWORK REQUIREMENTS

	 	A.	 	The contractor shall establish and maintain a dental provider network,
including primary and specialty care dentists, which is adequate to provide the full
scope of benefits. The contractor shall include general dentists and pediatric
dentists as primary care dentists (PCDs). A system whereby the PCD initiates and
coordinates any consultations or referrals for specialty care deemed necessary for the
treatment and care of the enrollee is preferred.

 

 

	 	B.	 	The dental provider network shall include sufficient providers able to meet the
dental treatment requirements of patients with developmental disabilities. (See
Article 4.5.2E for details.)
	 
	 	C.	 	The contractor shall ensure the participation of traditional and safety-net providers
within an enrollment area. Traditional providers include private
practitioners/entities who provide treatment to the general population or have
participated in the regular Medicaid program. Safety-net providers include dental
education institutions, hospital-based dental programs, and dental clinics
sponsored by governmental agencies as well as dental clinics sponsored by private
organizations in urban/under-served areas.

4.8.10 GOOD FAITH NEGOTIATIONS

	 	 	The State shall, in its sole discretion, waive the contractor’s specific network
requirements in circumstances where the contractor has engaged, or attempted to engage in
good faith negotiations with applicable providers. If the contractor asks to be waived from
a specific networking requirement on this basis, it shall document to the State’s
satisfaction that good faith negotiations were offered and/or occurred. Nothing in this
Article will relieve the contractor of its responsibility to furnish the service in
question if it is medically necessary, using qualified providers.

4.8.11 PROVIDER NETWORK ANALYSIS

	 	 	The contractor shall submit prior to execution of this contract and annually thereafter a
provider network accessibility analysis, using geographic information system software, in
accordance with the specifications found in Section A.4.3 of the Appendices.

4.9 PROVIDER CONTRACTS AND SUBCONTRACTS

4.9.1 GENERAL PROVISIONS

	 	A.	 	Each generic type of provider contract form shall be submitted to the DMAHS
for review and prior approval to ensure required elements are included and shall have
regulatory approval prior to the effective date of the contract. Any proposed changes
to an approved contract form shall be reviewed and prior approved by the DMAHS and
shall have regulatory approval from DOBI prior to the effective date___The contractor
shall comply with all DMAHS procedures for contract review and approval submission.
Letters of Intent are not acceptable. Memoranda of Agreement (MOAs) shall be
permitted only if the MOA automatically converts to a contract within six (6) months
of the effective date and incorporates by reference all applicable contract
provisions contained herein, including but not limited to Appendix B.7.2, which shall
be attached to all MOAs.
	 
	 	B.	 	Each proposed subcontracting arrangement or substantial contractual relationship
including all contract documents and any subcontractor contracts including all

 

 

	 	 	 	provider contract forms shall be submitted to the DMAHS for review and prior approval to
ensure required elements are included and shall have regulatory approval prior to the
effective date. Any proposed change(s) to an approved subcontracting arrangement including
any proposed changes to approved contract forms shall be reviewed and prior approved by
the DMAHS and shall have regulatory approval from DOBI prior to the effective date. The
contractor shall comply with all DMAHS procedures for contract review and approval
submissions.
	 
	 	C.	 	The contractor shall at all times have satisfactory written contracts and subcontracts with
a sufficient number of providers in and adjacent to the enrollment area to ensure enrollee
access to all medically necessary services listed in Article 4.1. All provider contracts and
subcontracts shall meet established requirements, form and contents approved by DMAHS.
	 
	 	D.	 	The contractor, in performing its duties and obligations hereunder, shall have the right
either to employ its own employees and agents or, for the provision of health care services,
to utilize the services of persons, firms, and other entities by means of sub-contractual
relationships.
	 
	 	E.	 	No provider contract or subcontract shall terminate or in any way limit the legal
responsibility of the contractor to the Department to assure that all activities under this
contract are carried out. The contractor is not relieved of its contractual responsibilities
to the Department by delegating responsibility to a subcontractor.
	 
	 	F.	 	All provider contracts and subcontracts shall be in writing and shall fulfill the
requirements of 42 C.F.R. Part 434 and 42 C.F.R. Part 438.6 that are appropriate to the
service or activity delegated under the subcontract.

	 	1.	 	Provider contracts and subcontracts shall contain provisions allowing DMAHS
and HHS to evaluate through inspection or other means, the quality, appropriateness
and timeliness of services performed under a subcontract to provide medical services
(42 C.F.R. § 434.6(a)(5)).
	 
	 	2.	 	Provider contracts and subcontracts shall contain provisions pertaining to
the maintenance of an appropriate record system for services to enrollees. (42 C.F.R.
§ 434.6(a)(7))
	 
	 	3.	 	Each provider contract and subcontract shall contain sufficient provisions to
safeguard all rights of enrollees and to ensure that the subcontract complies with all
applicable State and federal laws, including confidentiality. See Section B.7.2 of the
Appendices.
	 
	 	4.	 	Provider contracts and subcontracts shall include the specific provisions and
verbatim language found in Appendix B.7.2. The verbatim language requirements shall be
used when entering into new provider contracts, new subcontracts, and when renewing,
renegotiating or recontracting with providers and subcontractors with existing
contracts.

 

 

	 	5.	 	The contractor shall submit to DMAHS for review and approval prior to
implementation any changes required to comply with HIPAA.

	 	G.	 	The contractor shall submit at least annually or 30 days prior to any changes, lists of
names, addresses, ownership/control information of participating providers and
subcontractors, and individuals or entities, which shall be incorporated in this contract.

	 	1.	 	The contractor shall obtain prior DMAHS review and written approval of any
proposed plan for merger, reorganization or change in ownership of the contractor and
approval by the appropriate State regulatory agencies.
	 
	 	2.	 	The contractor shall comply with Article 4.9.1.G. I to ensure uninterrupted
and undiminished services to enrollees, to evaluate the ability of the modified
entity to support the provider network, and to ensure that any such change has no
adverse effects on DMAHS’ managed care program and shall comply with the Departments
of Banking and Insurance statutes and regulations.

	 	H.	 	The contractor shall demonstrate its ability to provide all of the services included under
this contract through the approved network composition and accessibility.
	 
	 	I.	 	The contractor shall not oblige providers to violate their state licensure regulations.
	 
	 	J.	 	The contractor shall provide its providers and subcontractors with a schedule of fees and
relevant policies and procedures at least 30 days prior to implementation.
	 
	 	K.	 	The contractor shall arrange for the distribution of informational materials to all its
providers and subcontractors providing services to enrollees, outlining the nature, scope,
and requirements of this contract.
	 
	 	L.	 	Subcontractor Delegation. The contractor shall monitor any functions and responsibilities it
delegates to any subcontractor. The contractor shall be accountable for any and all functions
and responsibilities it delegates to a subcontractor. The contractor shall obtain the prior
approval of DMAHS for any such delegation and shall meet the requirements of 42 C.F.R. § 438.
	 
	 	M.	 	Outpatient Hospital Coding. The contractor shall utilize CPT codes for outpatient hospital
claims processing and reimbursement and shall map the codes to the reimbursement. The
contractor shall provide the information in writing/electronically to the hospitals thirty
(30) days prior to the hospital contract’s implementation and/or prior to any changes.

 

 

4.9.2 CONTRACT SUBMISSION

	 	 	The contractor shall submit to DMAHS one complete, fully executed contract for each type of
provider, i.e., primary care physician, physician specialist, non-physician practitioner,
hospital and other health care providers/services covered under the benefits package,
subcontract and the form contract of any subcontractor’s provider contracts. The use of a
signature stamp is not permitted and shall not be considered a fully executed contract.
Contracts shall be submitted with all attachments, appendices, referenced documents, and
with rate schedules, etc., upon request. A copy of the appropriate completed contract
checklist for DHS, and DOBI shall be attached to each

contract form. Regulatory approval and approval by the Department is required for each
provider contract form and subcontract prior to use. Submission of all other contracts
shall follow the format and procedures described below:

	 	A.	 	Copies of the complete fully executed contract with every FQHC. Certification
of the continued in force contracts previously submitted will be permitted.
	 
	 	B.	 	Hospital contracts shall list each specific service to be covered including
but not limited to:

	 	1.	 	Inpatient services;
	 
	 	2.	 	Anesthesia and whether professional services of anesthesiologists and
nurse anesthetists are included;
	 
	 	3.	 	Emergency room services

	 	a.	 	Triage fee — whether facility and professional fees are included;
	 
	 	b.	 	Medical screening fee — whether facility and professional fees are
included;
	 
	 	c.	 	Specific treatment rates for:

	 	(1)	 	Emergent services
	 
	 	(2)	 	Urgent services
	 
	 	(3)	 	Non-urgent services
	 
	 	(4)	 	Other

	 	d.	 	Other — must specify

	 	4.	 	Neonatology — facility and professional fees
5. Radiology

	 	a.	 	Diagnostic
	 
	 	b.	 	Therapeutic
	 
	 	c.	 	Facility fee
	 
	 	d.	 	Professional services

	 	6.	 	Laboratory — facility and professional services
	 
	 	7.	 	Outpatient/clinic services must be specific and address

	 	a.	 	School-based health service programs
	 
	 	b.	 	Audiology therapy and therapists

	 	8.	 	AIDS Centers
	 
	 	9.	 	Any other specialized service or center of excellence

 

 

	 	10.	 	Hospice services if the hospital has an approved hospice agency that is
Medicare certified.
	 
	 	11.	 	Home Health agency services if hospital has an approved home health
agency license from the Department of Health and Senior Services that
meets licensing and Medicare certification participation requirements.
	 
	 	12.	 	Any other service.

	 	C.	 	FQHC contracts:

	 	1.	 	Shall list each specific service to be covered.
	 
	 	2.	 	Shall include reimbursement schedule and methodology.
	 
	 	3.	 	Shall include the credentialing requirements for individual practitioners.
	 
	 	4.	 	Shall include assurance that continuation of the FQHC contract
is contingent on maintaining quality services and maintaining the Primary Care
Evaluation Review (PCER) review by the federal government at a good quality
level. FQHCs must make available to the contractor the PCER results annually
which shall be considered in the contractor’s QM reviews for assessing quality
of care.

	 	D.	 	School-based health service programs:

	 	1.	 	Shall list each specific service to be covered.
	 
	 	2.	 	Shall include reimbursement schedule and methodology.
	 
	 	3.	 	Shall include the credentialing requirements for individual practitioners.

4.9.3 PROVIDER CONTRACT AND SUBCONTRACT TERMINATION

	 	A.	 	The contractor shall comply with all the provisions of the New Jersey HMO regulations at
N.J.A.C. 8:38 et seq. regarding provider termination, including but not limited to the 30
business day prior written notice to enrollees regarding termination or withdrawal of PCPs and
any other physician or provider from which the member is receiving a course of treatment;
continuity of care requirements; and, in the case of a hospital termination/non-renewal,
written notification within the first fifteen (15) business days of the four month extension
to all contracted providers and members who reside in the county in which the hospital is
located or in an adjacent county within the contractor’s service area.

 

 

	 	B.	 	The contractor shall notify DMAHS at least 45 days prior to the effective date of
suspension, termination, or voluntary withdrawal of a provider or subcontractor from
participation in this program. If the termination was “for cause,” the contractor’s notice
to DMAHS shall include the reasons for the termination.

	 	1.	 	Provider resource consumption patterns shall not constitute “cause” unless
the contractor can demonstrate it has in place a risk adjustment system that takes
into account enrollee health-related differences when comparing across providers.
	 
	 	2.	 	The contractor shall assure immediate coverage by a provider of the same
specialty, expertise, or service provision and shall submit a new contract with a
replacement provider to DMAHS 45 days prior to the effective date.
	 
	 	3.	 	The contractor shall, on request, provide DMAHS with periodic updates and
information pertaining to specific potential provider terminations, including status
of renegotiation efforts.

	 	C.	 	If a primary care provider ceases participation in the contractor’s organization, the
contractor shall provide written notice at least thirty (30) days from the date that the
contractor becomes aware of such change in status to each enrollee who has chosen the
provider as their primary care provider. If an enrollee is in an ongoing course of treatment
with any other participating provider who becomes unavailable to continue to provide services
to such enrollee and contractor is aware of such ongoing course of treatment, the contractor
shall provide written notice within fifteen days from the date that the contractor becomes
aware of such unavailability to such enrollee. Each notice shall also describe the procedures
for continuing care and choice of other providers who can continue to care for the enrollee.
	 
	 	D.	 	All provider contracts shall contain a provision that states that the contractor shall not
terminate the contract with a provider because the provider expresses disagreement with a
contractor’s decision to deny or limit benefits to a covered person or because the provider
assists the covered person to seek reconsideration of the contractor’s decision; or because a
provider discusses with a current, former, or prospective patient any aspect of the patient’s
medical condition, any proposed treatments or treatment alternatives, whether covered by the
contractor or not, policy provisions of a plan, or a provider’s personal recommendation
regarding selection of a health plan based on the provider’s personal knowledge of the health
needs of such patients. Nothing in this Article shall be construed to prohibit the contractor
from:

	 	1.	 	Including in its provider contracts a provision that precludes a provider
from making, publishing, disseminating, or circulating directly or indirectly or
aiding, abetting, or encouraging the making, publishing, are eligible to enroll on a
voluntary basis. Persons falling into a category under Article 5.3.2 may be eligible
for enrollment exemption, subject to the Department’s review.

 

 

5.3.1 ENROLLMENT EXCLUSIONS

	 	A.	 	The following persons shall be excluded from enrollment in the managed care
program:

	 	1.	 	Individuals in the following Home and Community-based Waiver
programs: Model Waiver I, Model Waiver II, Model Waiver III, Enhanced Community
Options Waiver, Aids Community Care Alternative Program (ACCAP), Community Care
Program for Elderly and Disabled (CCPED), assisted living programs, ABC Waiver
for Children, Traumatic Brain Injury (TBI), and DYFS Code 65 children.
	 
	 	2.	 	Individuals in a Medicaid demonstration program.
	 
	 	3.	 	Individuals who are institutionalized in an inpatient
psychiatric institution, long term care nursing facility or in a residential
facility including Intermediate Care Facilities for the Mentally Retarded.
	 
	 	4.	 	Individuals in the Medically Needy, Presumptive Eligibility for
pregnant women, Presumptive Eligibility for NJ FamilyCare, Home Care Expansion
Program, or PACE program.
	 
	 	5.	 	Infants of inmates of a public institution living in a prison nursery.
	 
	 	6.	 	Individuals already enrolled in or covered by a Medicare or
private HMO that does not have a contract with the Department to provide
Medicaid services.
	 
	 	7.	 	Individuals in out-of-state placements.
	 
	 	8.	 	Full time students attending school and residing out of the
country will be excluded from managed care participation while in school.
	 
	 	9.	 	The following types of dual beneficiaries: Qualified Medicare
Beneficiaries (QMBs) not otherwise eligible for Medicaid; Special Low-Income
Medicare Beneficiaries (SLMBs); Qualified Disabled and Working Individuals
(QDWIs); and Qualifying Individuals I and 2.

 

 

	 	1.	 	In short-term placements (up to 2 months)
	 
	 	2.	 	In Special Home Service Provider (SHSP) homes
	 
	 	3.	 	Whose doctors do not participate in any
contractor’s plan
	 
	 	4.	 	Who use many doctors that are not part of the same MCO
	 
	 	5.	 	Without a HMO doctor in their area

	 	G.	 	ABD non-dually eligible individuals may be
exempt on request through a separate process.

5.4 ENROLLMENT OF MANAGED CARE ELIGIBLES

	 	A.	 	Enrollment. The health benefits coordinator
(HBC), an agent of DMAHS, shall enroll Medicaid and NJ FamilyCare
applicants. The HBC will explain the contractors’ programs, answer
any questions, and assist eligible individuals or, where
applicable, an authorized person in selecting a contractor. The
contractor may also enroll and directly market to individuals
eligible for Aged, Blind, and Disabled (ABD) benefits, The
contractor shall not enroll any other Medicaid-eligible beneficiary
except as described in Article 5.16.1.(A).2. Except as provided in
5.16, the contractor shall not directly market to or assist managed
care eligibles in completing enrollment forms. The duties of the
HBC will include, but are not limited to, education, enrollment,
disenrollment, transfers, assistance through the contractor’s
grievance/appeal process and other problem resolutions with the
contractor, and communications, The duties of the contractor, when
enrolling ABD beneficiaries will include education and enrollment,
as well as other activities required within this contract. The
contractor shall cooperate with the HBC in developing information
about its plan for dissemination to Medicaid/NJ FamilyCare
beneficiaries.

 

 

	 	B.	 	Individuals eligible under NJ FamilyCare may
request an application via a toll-free number operated under
contract for the State, through an outreach source, or from the
contractor, The applications, including ABD applications taken by
the contractor, may be mailed back to a State vendor. Individuals
eligible under Plan A also have the option of completing the
application either via a mail-in process or on site at the county
welfare agency. Individuals eligible under Plan B, Plan C, Plan D,
and Plan H have the option of requesting assistance from the State
vendor, the contractor or one of the registered servicing centers
in the community, Assistance will also be made available at State
field offices (e.g. the Medical Assistance Customer Centers) and
county offices (e.g. Offices on Aging for grandparent caretakers).
	 
	 	C.	 	Automatic Assignment. Medicaid eligible persons who
reside in enrollment areas that have been designated for mandatory
enrollment, who qualify for disenrollment or termination becomes effective
during a hospitalization, the contractor shall be liable for
hospitalization until the date such person is discharged from the hospital,
including any charges for readmission within forty-eight (48) hours of
discharge for the same diagnosis. The contractor shall notify DMAHS within
180 days of initial hospital admission.

	 	F.	 	Unless otherwise required by statute or regulation, the contractor shall not condition any
Medicaid/NJ FamilyCare eligible person’s enrollment upon the performance of any act or
suggest in any way that failure to enroll may result in a loss of Medicaid/NJ FamilyCare
benefits.
	 
	 	G.	 	There shall be no retroactive enrollment in Managed Care. Services for those beneficiaries
during any retroactive period will remain fee-for-service, except for individuals eligible
under NJ FamilyCare Plans B, C, D, and H who are not eligible until enrolled in an MCE.
Coverage shall continue indefinitely unless this contract expires or is terminated, or the
enrollee is no longer eligible or is deleted from the contractor’s list of eligible
enrollees.

	 	1.	 	Exceptions and Clarifications

	 	a.	 	The contractor shall be responsible for providing services to
an enrollee unless otherwise notified by DMAHS. In certain situations,
retroactive re-enrollments may be authorized by DMAHS.
	 
	 	b.	 	Deceased enrollees. If an enrollee is deceased and appears on
the recipient file as active, the contractor shall promptly notify DMAHS.
DMAHS shall recover capitation payments made on a prorated basis after the
date of death. The contractor shall require its providers to report to the
contractor enrollee deaths and dates of death.
	 
	 	c.	 	Newborn infants. Coverage of newborn infants shall be the
responsibility of the contractor that covered the mother on the date of birth
from the date of birth and for a minimum of 60 days after the birth, through
the period ending at the end of the month in which the 60th day
falls, unless the baby is determined eligible beyond that point.

 

 

	 	 	 	Any baby that is hospitalized during the first 60 days of life shall remain
the contractor’s responsibility until discharge as well as for any hospital
readmissions within forty-eight (48) hours of discharge for the same
diagnosis (other than “liveborn infant”). The contractor shall notify DMAHS
when a newborn who has been hospitalized and has not been accreted to its
enrollment roster after twelve (12) weeks from the date of birth. DMAHS will
take action with the appropriate CWA to have the infant accreted to the
eligibility file and subsequently the enrollment roster following this
notification___(See Section B.5.1 of

 

 

	 	 	 	who remain enrolled until the end of the month in which the
60th day after the request falls.

	 	H.	 	Enrollment Roster. The enrollment roster and weekly transaction register generated
by DMAHS shall serve as the official contractor enrollment list. However, enrollment changes
can occur between the time when the monthly roster is produced and capitation payment is
made. The contractor shall only be responsible for the provision and cost of care for an
enrollee during the months on which the enrollee’s name appears on the roster, except as
indicated in Article 8.8. DMAHS shall make available data on eligibility determinations to
the contractor to resolve discrepancies that may arise between the roster and contractor
enrollment files. If DMAHS notifies the contractor in writing of changes in the roster, the
contractor shall rely upon that written notification in the same manner as the roster.
Corrective action shall be limited to one (1) year from the date that the change was
effective.
	 
	 	 	 	Enrollment of Medicaid case. Enrollment shall be for the entire Medicaid case, i.e., all
individuals included under the ten-digit Medicaid identification number (or 12-digit ID
number in the case of DYFS population). The contractor shall not enroll a partial case
except at the DMAHS’ sole discretion.
	 
	 	J.	 	Daily Enrollment Transactions. In keeping with a schedule established by DMAHS, DMAHS will
process and forward enrollment transactions to the contractor on a daily basis.
	 
	 	K.	 	Capitation Recovery. Capitation payments for a full month coverage shall be recovered from
the contractor on a prorated basis when an enrollee is admitted to a nursing facility for
long term care services [Note: this does not pertain to nursing facility admissions solely
for hospice services or PT, OT, or speech], psychiatric care facility or other institution
including incarceration and the individual is disenrolled from the contractor’s plan on the
day prior to such admission.
	 
	 	L.	 	Adjustments to Capitation. The monthly capitation payments shall include all adjustments made
by DMAHS for reasons such as but not limited to retroactive validation as for newborns or
retroactive termination of eligibility as for death, incarceration or institutionalization.
These adjustments will be documented by DMAHS by means of a remittance tape. With the
exception of newborns, DMAHS shall be responsible for fee-for-service payments incurred by the
enrollee during the period prior to actual enrollment in the contractor’s plan.
	 
	 	M.	 	The contractor shall cooperate with established procedures whereby DMAHS and the HBC shall
monitor enrollment and disenrollment practices.
	 
	 	N.	 	Nothing in this Article or contract shall be construed to limit or in any way jeopardize a
Medicaid beneficiary’s eligibility for New Jersey Medicaid.

 

 

	 	O.	 	DMAHS shall arrange for the determination of eligibility of each potential enrollee for
covered services under this contract and to arrange for the provision of complete
information to the contractor with respect to such eligibility, including notification
whenever an enrollee’s Medicaid/NJ FamilyCare eligibility is discontinued.
	 
	 	P.	 	Automatic Re-enrollment. An individual may be automatically re-enrolled in the contractor’s
plan when he/she was disenrolled solely due to loss of Medicaid eligibility for a period of 2
months or less.

5.6 VERIFICATION OF ENROLLMENT

	 	A.	 	The contractor shall be responsible for keeping its network of providers
informed of the enrollment status of each enrollee. The contractor shall be able to
report and ensure enrollment to network providers through electronic means.
	 
	 	B.	 	Providers should not wait more than three (3) minutes to verify enrollment.

5.7 MEMBER SERVICES UNIT

	 	A.	 	Defined. The contractor shall have in place a Member Services Unit to
coordinate and provide services to Medicaid/NJ FamilyCare managed care enrollees. The
services as described in this Article include, but are not limited to enrollee
selection, changes, assignment, and/or reassignment of a PCP, explanation of benefits,
assistance with filing and resolving inquiries, billing problems, grievances and
appeals, referrals, appointment scheduling and cultural and/or linguistic needs. This
unit shall also provide orientation to contractor operations and assistance in
accessing medical and dental care.
	 
	 	B.	 	Staff Training. The contractor shall develop a system to ensure that new and
current Member Services staff receive basic and ongoing training and have expertise
necessary to provide accurate information to all Medicaid/NJ FamilyCare enrollees
regarding program benefits and contractor’s procedures.
	 
	 	C.	 	Communication-Affecting Conditions. The contractor shall ensure that Member
Services staff have training and experience needed to provide effective services to

 

 

	 	N.	 	A description of the process for referral to specialty and ancillary care providers
and second opinions;
	 
	 	O.	 	An explanation of the reasons for which an enrollee may request a change of PCP, the
process of effectuating that change, and the circumstances under which such a request may be
denied;
	 
	 	P.	 	The reasons and process by which a provider may request an enrollee to change to a
different PCP;
	 
	 	Q.	 	An explanation of an enrollee’s rights to disenroll or transfer at any time for cause;
disenroll or transfer in the first 90 days after the latter of the date the individual
enrolled or the date they receive notice of enrollment and at least every twelve (12) months
thereafter without cause and that the lock-in period does not apply to ABD, DDD or DYFS
individuals;
	 
	 	R.	 	Complaints and Grievances/Appeals

	 	1.	 	Procedures for resolving complaints, as approved by the DMAHS;
	 
	 	2.	 	A description of the grievance/appeal procedures to be used to resolve
disputes between a contractor and an enrollee, including: the name, title, or
department, address, and telephone number of the person(s) responsible for assisting
enrollees in grievance/appeal resolutions; the time frames and circumstances for
expedited and standard grievances; the right to appeal a grievance determination and
the procedures for filing such an appeal; the time frames and circumstances for
expedited and standard appeals; the right to designate a representative; a notice
that all disputes involving clinical decisions will be made by qualified clinical
personnel; and that all notices of determination will include information about the
basis of the decision and further appeal rights, if any;
	 
	 	3.	 	The contractor shall notify all enrollees in their primary language of their
rights to file grievances and appeal grievance decisions by the contractor;

	 	S.	 	An explanation that in addition to the HMO appeal process, Medicaid/NJ FamilyCare Plan A
enrollees, and Plans D and H enrollees with a program status code of 380, have the right to a
Medicaid Fair Hearing (which must be requested within 20 days of the date of the adverse
action) with DMAHS and the appeal process through the DOBI for Medicaid and NJ FamilyCare
enrollees, including instructions on the procedures involved in making such a request;
	 
	 	T.	 	Title, addresses, phone numbers and a brief description of the contractor’s plan for
contractor management/service personnel;

 

 

	 	B.	 	Voluntary Disenrollment. The contractor shall assure that enrollees who
disenroll voluntarily are provided with an opportunity to identify, in writing,
their reasons for disenrollment. The contractor shall further:

	 	1.	 	Require the return, or invalidate the use of the contractor’s
identification card; and
	 
	 	2.	 	Forward a copy of the disenrollment request or refer the
beneficiary to DMAHS/HBC by the eighth (8th) day of the month prior
to the month in which disenrollment is to become effective.

	 	C.	 	BBC Role. All enrollee requests to disenroll must be made through the Health
Benefits Coordinator. The contractor may not induce, discuss or accept disenrollments.
Any enrollee seeking to disenroll should be directed to contact the HBC. This applies
to both mandatory and voluntary enrollees. Disenrollment shall be completed by the HBC
at facilities and in a manner so designated by DMAHS.
	 
	 	D.	 	Effective Date. The effective date of disenrollment or transfer shall be no
later than the first day of the month immediately following the full calendar month the
disenrollment is initiated by DMAHS. Notwithstanding anything herein to the contrary,
the remittance tape, along with any changes reflected in the weekly register or agreed
upon by DMAHS and the contractor in writing, shall serve as official notice to the
contractor of disenrollment of an enrollee.

5.10.3 DISENROLLMENT FROM THE CONTRACTOR’S PLAN AT THE CONTRACTOR’S REQUEST

	 	A.	 	Criteria for Contractor Disenrollment Request. The contractor may recommend,
with written documentation to DMAHS, the disenrollment of an enrollee. In no event may
an enrollee be disenrolled due to health status, need for health services or a change
in health status. Enrollees may be disenrolled in any of the following circumstances:

	 	1.	 	The contractor determines that the willful actions of the
enrollee are inconsistent with membership in the contractor’s plan, and the
contractor has made and provides DMAHS with documentation of at least three
attempts to reconcile the situation. Examples of inconsistent actions include
but are not limited to: persistent refusal to cooperate with any participating
provider regarding procedures for consultations or obtaining appointments (this
does not preclude an enrollee’s right to refuse treatment), intentional
misconduct, willful refusal to receive prior approval for non-emergency care;
willful refusal to comply with reasonable administrative policies of the
contractor, fraud, or making a material misrepresentation to the contractor. In
no way can this provision be

 

 

	 	A.	 	DMAHS Approval. The contractor shall draft and disseminate to enrollees, providers, and
subcontractors, a system and procedure which has the prior written approval of DMAHS for
the receipt and adjudication of complaints and grievances/appeals by enrollees. The
grievance/appeal policies and procedures shall be in accordance with N.J.A.C. 8:38 et
seq., 42 C.F.R. 438, and with the modifications that are incorporated in the contract. The
contractor shall not modify the grievance/appeal procedure without the prior approval of
DMAHS, and shall provide DMAHS with a copy of the modification. The contractor’s
grievance/appeal procedures shall provide for expeditious resolution of grievances/appeals
by contractor personnel at a decision-making level with authority to require corrective
action, and will have separate tracks for administrative and utilization management
grievances/appeals. (For the utilization management complaints/grievance/appeal process,
see Article 4.6.4C.)
	 
	 	 	 	The contractor shall review the grievance/appeal procedure at reasonable intervals, but no
less than annually, for the purpose of amending same as needed, with the prior written
approval of the DMAHS, in order to improve said system and procedure.
	 
	 	 	 	The contractor’s system. and procedure shall be available to both Medicaid beneficiaries
and NJ FamilyCare beneficiaries. All enrollees have available the complaint and
grievance/appeal process under the contractor’s plan, the Department of Banking and
Insurance and, for Medicaid and certain NJ FamilyCare beneficiaries (i.e., Plan A
enrollees and beneficiaries with a PSC of 380 under Plan D), the Medicaid Fair Hearing
process. Individuals eligible solely through NJ FamilyCare Plans B, C, D, and H (except
for Plan D and H individuals with a program status code of 380), do not have the right to
a Medicaid Fair Hearing.
	 
	 	B.	 	Complaints. The contractor shall have procedures for receiving, responding to, and
documenting resolution of enrollee complaints that are received orally and are of a less
serious or formal nature. Complaints that are resolved to the enrollee’s satisfaction within
five (5) business days of receipt do not require a formal written response or notification.
The contractor shall call back an enrollee within twenty-four hours of the initial contact if
the contractor is unavailable for any reason or the matter cannot be readily resolved during
the initial contact. Any complaint that is not resolved within five business days shall be
treated as a grievance/appeal, in accordance with requirements defined in Article 5.15.3.
	 
	 	C.	 	HBC Coordination. The contractor shall coordinate its efforts with the health benefits
coordinator including referring the enrollee to the HBC for assistance as needed in the
management of the complaint/grievance/appeal procedures.
	 
	 	D.	 	DMAHS Intervention. DMAHS shall have the right to intercede on an enrollee‘s
behalf at any time during the contractor’s complaint/grievance/appeal process

 

 

	 	8.	 	Fair hearing procedures including the Medicaid enrollee’s right to also
file for a Medicaid Fair Hearing in addition to an HMO appeal to request
resolution of a grievance/appeal
	 
	 	9.	 	DOBI process for use of Independent Utilization Review
Organization (IURO)

	 	C.	 	A description of the process under which an enrollee may file an appeal shall
include at a minimum:

	 	1.	 	Title of person responsible for processing appeal
	 
	 	2.	 	Title of person(s) responsible for resolution of appeal
	 
	 	3.	 	Time deadlines for notifying enrollee of appeal resolution
	 
	 	4.	 	The right to request a Medicaid Fair Hearing/DOBI IURO processes
where applicable to specific enrollee eligibility categories

5.15.3 GRIEVANCE/APPEAL PROCEDURES

	 	A.	 	Availability. The contractor’s grievance/appeal procedure shall be available
to all enrollees or, where applicable, an authorized person, or permit a provider
acting on behalf of an enrollee and with the enrollee’s consent. The procedure shall
assure that grievances/appeals may be filed verbally directly with the contractor.
	 
	 	B.	 	The grievance/appeal procedure shall be in accordance with N.J.A.C. 8:38 et
seq and 42 CFR 438 subpart F.
	 
	 	C.	 	DMAHS shall have the right to submit comments to the contractor regarding the
merits or suggested resolution of any grievance/appeal.
	 
	 	 	 	By the fifteenth of every month the contractor shall submit electronically reports
of all UM and non-UM enrollee grievance/appeal requests and dispositions directly to
the DMAHS on the database format provided by DMAHS. The information submitted to
DMAHS shall include information for the reporting month and all open cases to date
and indicate the enrollee’s name, Medicaid/NJ FamilyCare number, date of birth, age,
eligibility category, as well as the date of the grievance/appeal, resolution and
date of resolution.
	 
	 	D.	 	Time Limits to File. The contractor may provide reasonable time limits within
which enrollees must file grievances/appeals, but such time period shall not be less
than sixty (60) days and not exceed 90 days from the date of the contractor’s notice
of action. In the case of a Medicaid Fair Hearing, the enrollee must file a request
within 20 days of the adverse action.

 

 

	 	 	 	the enrollees’ understanding of the contractor’s procedures and services
availability.
	 
	 	V.	 	All marketing materials, plans and activities shall be prior approved by DMAHS.

	5.16.2	 	STANDARDS FOR MARKETING REPRESENTATIVES

	 	A.	 	General Requirements

	 	1.	 	Only a trained marketing representative of the contractor’s plan who meets
the DHS, and DBI requirements shall be permitted to market and to enroll
prospective NJ FamilyCare and ABD enrollees. Delegation of enrollment
functions, such as to the office staff of a subcontracting provider of
service, shall not be permitted.
	 
	 	2.	 	The contractor shall submit to DMAHS a listing of the
contractor’s marketing representatives as updates and changes occur.
Marketing schedules shall be submitted at least five days in advance of
marketing activities. Information on each marketing representative shall
include the names, three digit Identification Numbers, and marketing
locations.
	 
	 	3.	 	All marketing representatives shall wear an identification
tag that has been prior approved by DMAHS with a photo identification that
must be prominently displayed when the marketing representative is performing
marketing activities. The tag shall be at least three inches (3”) by five
inches (5”) and shall display the marketing representative’s name, the name
of the contractor, and a three-digit identification number.
	 
	 	4.	 	In those counties where enrollment is in a
voluntary. stage, marketing representatives shall not state or
imply that enrollment may be made mandatory in the future in an attempt to
coerce enrollment.
	 
	 	5.	 	Canvassing shall not be permitted.
	 
	 	6.	 	Outbound telemarketing shall not be permitted. For NJ
FamilyCare (Plans B, C, D), telemarketing shall be permitted after review and
prior approval by DMAHS of the contractor’s marketing plan, script, and
methods to use this approach.

 

 

	 	7.	 	Marketing in or around a County Welfare Agency (CWA) office
shall not be permitted. The term “in and around the CWA” is defined as being
in an area where the marketing representative can be seen from the CWA office
and/or where the CWA facility can be seen. The fact that an obstructed view
prohibits the marketing activities from being seen shall not mitigate this
prohibition.
	 
	 	8.	 	No more than two (2) marketing representatives shall
approach a Medicaid/NJ FamilyCare beneficiary at any one time.
	 
	 	9.	 	Marketing representatives shall not encourage clients to
disenroll from another contractor’s plan or assist an enrollee of another MCE
in completing a disenrollment form from the other MCE.
	 
	 	10.	 	Marketing representatives shall ask the prospective enrollee
about existing relationships with physicians or other health care providers.
The prospective enrollees shall be clearly informed as to whether they will
be able to continue to go to those providers as enrollees of the contractor’s
plan and/or if the Medicaid program will pay for continued services with such
providers.
	 
	 	11.	 	Marketing representatives shall secure the signature of new
enrollees (head of household) on a statement indicating that an explanation
has been provided to them regarding the important points of the contractor’s
plan and have understood its procedures. A parent or, where applicable, an
authorized person, shall enroll minors and ABD beneficiaries, when
appropriate, and sign the statement of understanding. However, the contractor
may accept an application from pregnant minors and minors living totally on
their own who have their own Medicaid ID numbers as head of their own
household.
	 
	 	12.	 	Prior to approval of this contract by CMS, the contractor’s
staff or agents are prohibited from marketing to, contacting directly or
indirectly, or enrolling Medicaid beneficiaries.
	 
	 	13.	 	Marketing representatives shall not state or imply that
continuation of Medicaid benefits is contingent upon enrollment in the
contractor’s plan.
	 
	 	14.	 	Attendance by the contractor’s marketing representatives at
State-sponsored training sessions is required at the contractor’s own
expense.

	 	B.	 	Commissions/Incentive Payments

	 	1.	 	Commissions/incentive payments may not be based on enrollment numbers alone
but shall include other criteria, such as but not limited to, the retention period of
enrollees enrolled (at least three (3) months), member satisfaction, and education by
the marketing representative.

	 	a.	 	The contractor shall also review disenrollment
information/surveys and all complaints/grievances specifically referencing
marketing staff.

 

 

	 	 	 	provider performance. Practice guidelines may be included in a separate document.
	 
	 	9.	 	The contractor’s policies and procedures
	 
	 	10.	 	PCP responsibilities
	 
	 	11.	 	Other contractor responsibilities
	 
	 	12.	 	Prior authorization and referral procedures
	 
	 	13.	 	Description of the mechanism by which a provider can appeal a contractor’s
service decision through the DOBI Independent Utilization Review Organization process
	 
	 	14.	 	Protocol for encounter data element reporting/records
	 
	 	15.	 	Procedures for screening and referrals for the MH/SA services
	 
	 	16.	 	Medical records standards
	 
	 	17.	 	Payment policies
	 
	 	18.	 	Enrollee rights and responsibilities

	 	B.	 	Bulletins. The contractor shall develop and disseminate bulletins as needed to incorporate
any and all changes to the Provider Manual. All bulletins shall be mailed to the State at
least three (3) calendar days prior to publication or mailing to the providers or as soon as
feasible. The Department shall have the right to issue and/or modify the bulletins at any
time. If the DHS determines that there are factual errors or misleading information, the
contractor shall be required to issue corrected information in the manner determined by the
DHS.
	 
	 	C.	 	Timeframes. Within twenty (20) calendar days after the contractor places a newly enrolled
provider in an active status, the contractor shall furnish the provider with a current
Provider Manual, all related bulletins and the contractor’s methodology for supplying
encounter data.
	 
	 	D.	 	The contractor shall provide a current Provider Manual to the Department annually. All
updates of the manual shall also be provided to the Department within 30 days of the revision.
	 
	 	E.	 	The Provider Manual and all policies and procedures shall be reviewed at least annually to
ensure that the contractor’s current practices and contract requirements are reflected in the
written policies and procedures.

 

 

	 	D.	 	The contractor shall electronically submit quarterly a Provider Grievances/Complaints
Report on the database format provided by DMAHS. All provider grievances/appeals shall be
summarized, with actions and recommendations of the Medical or Dental Director and QA
Committee (if involved) clearly stated. The summary report shall include, but not be
limited to, the following data elements:

	 	1.	 	Information from the reporting month of all provider grievances/appeals and
complaints received
	 
	 	2.	 	Unresolved (pending) grievances/appeals and complaints
	 
	 	3.	 	Category of the grievance/appeal or complaint, including, but not limited to:

	 	a.	 	Denials of requested services prior authorizations
	 
	 	b.	 	Denials of specialty referrals
	 
	 	c.	 	Enrollee allocation inequities

	 	E.	 	The contractor shall notify providers of the mechanism to appeal a contractor service
decision on behalf of an enrollee, with the enrollee’s consent, through the DOBI Independent
Utilization Review Organization process and that the provider is not entitled to request a
Medicaid administrative law hearing.

 

 

ARTICLE SEVEN: TERMS AND CONDITIONS (ENTIRE CONTRACT)

7.1 CONTRACT COMPONENTS

The Contract, Attachments, Schedules, Appendices, Exhibits, and any amendments
determine the work required of the contractor and the terms and conditions
under which said work shall be performed.

No other contract, oral or otherwise, regarding the subject matter of this
contract shall be deemed to exist or to bind any of the parties or vary any of
the terms contained in this contract,

7.2 GENERAL PROVISIONS

	 	A.	 	CMS Approval. This contract is subject to approval by the
Centers for Medicare and Medicaid Services (CMS) and shall not be
effective absent such approval. In addition, this contract is subject to
CMS’ grant of a 1915(b) waiver to mandate enrollment of children with
special health care needs.
	 
	 	B.	 	General. The contractor agrees that it shall carry out
its obligations as herein provided in a manner prescribed under
applicable federal and State laws, regulations, codes, and guidelines
including New Jersey licensing regulations, the Medicaid, NJ KidCare and
NJ FamilyCare State Plans, and in accordance with procedures and
requirements as may from time to time be promulgated by the United
States Department of Health and Human Services, These include;

	 	1.	 	42 U.S.C § 1320a-7e
	 
	 	2.	 	42 U.S.C. § 1396 et seq.
	 
	 	3.	 	42 C.F.R., Parts 417, 430, 431, 434, 435. 438, 440, 447, 455, 1000
	 
	 	4.	 	45 C.F.R., Pert 74
	 
	 	5.	 	45 C.F.R.. Part 160, 164
	 
	 	6.	 	P.L. 2001, c. 267
	 
	 	7.	 	P.L. 2005, c.156
	 
	 	8.	 	N.J.S.A. 17B:30-48 et seq.
	 
	 	9.	 	N.J.S.A. 30;41D-1 et seq.
	 
	 	10.	 	N.J.S.A. 30:41-1 et seq.

 

 

	 	11.	 	N.J.S.A. 30:4J-1—8 et seq.
	 
	 	12.	 	N.J.S.A. 26:2J-1 et seq.
	 
	 	13.	 	N.J.A.C. 10:74 et seq.
	 
	 	14.	 	N.J.A.C. 10:49 et seq.
	 
	 	15.	 	N.J.A.C. 10:79 et seq.
	 
	 	16.	 	N.J.A.C. 10:78-11
	 
	 	17.	 	New Jersey Medicaid, NJ KidCare, and NJ FamilyCare State Plans
	 
	 	18.	 	1915(b) Waiver
	 
	 	19.	 	N.J.A.C. 8:38 et seq. and amendments thereof, and the contractor shall comply
with the higher standard contained in N.J.A.C. 8:38 et seq. or this contract.
	 
	 	20.	 	N.J.S.A. 59:13 et seq.
	 
	 	21.	 	The federal and State laws and regulations above have been cited for reader ease.
They are available for review at the New Jersey State Library, 185 West State Street,
Trenton, New Jersey 08625. However, whether cited or not, the contractor is obligated to
comply with all applicable laws and regulations and, in turn, is responsible for
ensuring that its providers and subcontractors comply with all laws and regulations.
	 
	 	22.	 	Neither the contractor nor its employees, providers, or subcontractors shall
violate, or induce others to violate, any federal or state laws or regulations, or
professional licensing board regulations.

	 	C.	 	Applicable Law and Venue. This contract and any and all litigation arising there from or
related thereto shall be governed by the applicable laws, regulations, and rules of evidence
of the State of New Jersey without reference to conflict of laws principles. The contractor
shall agree and submit to the jurisdiction of the courts of the State of New Jersey should
any dispute concerning this contract arise, and shall agree that venue for any legal
proceeding against the State shall be in Mercer County.
	 
	 	D.	 	Medicaid Provider. The contractor shall be a Medicaid provider and a health maintenance
organization with a Certificate of Authority to operate government programs in New Jersey
	 
	 	A.	 	Change of Circumstances. Where circumstances and/or the needs of the State significantly
change or the contract is otherwise deemed by the Director to no longer be in the public
interest, the DMAHS may terminate this contract upon no less than thirty (30) days notice to
the contractor.

 

 

	 	B.	 	Emergency Situations. In cases of emergency the Department may shorten the time periods of
notification.
	 
	 	C.	 	For Cause. DMAHS shall have the right to terminate this contract, without liability to the
State, in whole or in part if the contractor:

	 	1.	 	Takes any action or fails to prevent an action that threatens the health,
safety or welfare of any enrollee, including significant marketing abuses;
	 
	 	2.	 	Takes any action that threatens the fiscal integrity of the Medicaid
program;
	 
	 	3.	 	Has its certification suspended or revoked by DOBI, ___ DHSS, and/or
any federal agency or is federally debarred or excluded from federal procurement and
non-procurement contracts;
	 
	 	4.	 	Materially breaches this contract or fails to comply with any term or
condition of this contract that is not cured within twenty (20) working days of
DMAHS’ request for compliance;
	 
	 	5.	 	Violates state or federal law;
	 
	 	6.	 	Fails to carry out the substantive terms of this contract;
	 
	 	7.	 	Becomes insolvent;
	 
	 	8.	 	Fails to meet applicable requirements in sections 1932, 1903 (m) and 1905(t)
of the SSA; or
	 
	 	9.	 	Brings a proceeding voluntarily, or has a proceeding brought against it
involuntarily, under the Bankruptcy Act

	 	D.	 	Notice and Hearing. Except as provided in A and B above, DMAHS shall give the contractor
ninety (90) days advance, written notice of termination of this contract, with an opportunity
to protest said termination and/or request an informal hearing. This notice shall specify the
applicable provisions of this contract and the effective date of termination, which shall not
be less than will permit an orderly disenrollment of enrollees to the Medicaid
fee-for-service program or transfer to another managed care program.

 

 

this contract and for which contractor would otherwise be liable under this contract.

7.14 MERGER/ACQUISITION REQUIREMENTS

	 	A.	 	General Information. In addition to any other information otherwise required
by the State, a contractor that intends to merge with or be acquired by another entity
(“non-surviving contractor”) shall provide the following information and documents to
DHS, and copies to DOBI, one hundred-twenty (120) days prior to the effective date of
the merger/acquisition:

	 	1.	 	The basic details of the sale, including the name of the
acquiring legal entity, the date of the sale and a list of all owners with five
(5) percent or more ownership.
	 
	 	2.	 	The source of funds for the purchase.
	 
	 	3.	 	A Certificate of Authority modification.
	 
	 	4.	 	Any changes in the provider network, including but not limited
to a comparison of hospitals that no longer will be available under the new
network, and comparison of PCPs and specialists participating and not
participating in both HMOs. This shall also include an analysis of the impact
on members.
	 
	 	5.	 	Submit a draft of the asset purchase agreement to DHS, and DOBI
for prior approval prior to execution of the document.
	 
	 	6.	 	The closing date for the merger/acquisition, which shall occur
prior to the required notification to enrollees, i.e. no later than forty-five
(45) days prior to effective date of transition of enrollees.
	 
	 	7.	 	Submit a copy of all information, including all financials, sent
to/required by DOBI.

	 	B.	 	General Requirements. The non-surviving contractor shall:

	 	1.	 	Comply with the provisions of Article 7.13, Closeout; and
	 
	 	2.	 	Meet and complete all outstanding issues, reporting
requirements (including but not limited to encounter data reporting, quality
assurance studies, financial reports, etc.)

	 	C.	 	Beneficiary Notification. By no later than sixty (60) days, the non-surviving
contractor shall prepare and submit, in English and Spanish, to the DMAHS, letters and
other materials which shall be mailed to its enrollees no later than provider/enrollee
ratio limits will be maintained in the new entity. This network information shall be
furnished before the enrollee notification letters are to be sent. Such letters shall
not be mailed until there is a clear written notification by the

 

 

	 	 	 	DMAHS that the provider network information meets all of the DMAHS requirements. The
network submission shall include all required provider types listed in Article 4,
shall be formatted in accordance with specifications in Article 4 and Section A.4.1
of the Appendices, and shall include a list of all providers who decline
participation with the acquiring contractor and new providers who will participate
with the acquiring contractor. The acquiring contractor shall submit weekly updates
through the ninety (90) day period following the effective date of transfer.

	 	G.	 	Administrative.

	 	1.	 	The non-surviving contractor shall inform DMAHS of the corporate
structure it will assume once all enrollees are transitioned to the acquiring
contractor. Additionally, an indication of the time frame that this entity will
continue to exist shall be provided.
	 
	 	2.	 	The contract of the non-surviving contractor is not terminated
until the transaction (acquisition or merger) is approved, enrollees are
placed, and all outstanding issues with DOBI and DHS are resolved. Some
infrastructure shall exist for up to one year beyond the last date of services
to enrollees in order to fulfill remaining contractual requirements.
	 
	 	3.	 	The acquiring contractor and the non-surviving contractor shall
maintain their own separate administrative structure and staff until the
effective date of transfer.

7.15 SANCTIONS

In the event DMAHS finds the contractor to be out-of-compliance with program standards,
performance standards or the terms or conditions of this contract, the Department shall
issue a written notice of deficiency, request a corrective action plan and/or specify the
manner and timeframe in which the deficiency is to be cured. If the contractor fails to cure
the deficiency as ordered, the Department shall have the right to exercise any of the
administrative sanction options described below, in addition to any other rights and
remedies that may be available to the Department. The type of action taken shall be in
relation to the nature and severity of the deficiency:

	 	A.	 	Suspend enrollment of beneficiaries in contractor’s plan.
	 
	 	B.	 	Notify enrollees of contractor non-performance and permit enrollees to transfer
to another MCE without cause.
	 
	 	C.	 	Reduce or eliminate marketing and/or community event participation.

 

 

Liquidated Damages:

If the contractor does not provide or perform the requirement within fifteen (15) business
days of the written notice, or longer if allowed by the Department, or through an approved
corrective action plan, the Department may impose liquidated damages of $250 per
requirement per day for each day the requirement continues not to be provided or performed.
If after fifteen (15) additional days from the date the Department imposes liquidated
damages, the requirement still has not been provided or performed, the Department, after
written notice to the contractor, may increase the liquidated damages to $500 per
requirement per day for each day the requirement continues to be unprovided or unperformed.

Note: If the failure to provide required services or the contractor’s operations are
interrupted or compromised due to a natural disaster and/or Act of God and after diligent
efforts, the contractor cannot make other provisions for the delivery of services or
conduct of operations, the Department may determine, at its sole discretion, not to impose
liquidated damages. The contractor shall present a plan of correction to the Department for
approval within two (2) business days of the event or where possible, prior to the event
when known, such as advance warnings of an oncoming hurricane.

7.16.3 TIMELY REPORTING REQUIREMENTS

The contractor shall produce and deliver timely reports within the specified timeframes and
descriptions in the contract including information required by the ERO. Reports shall be
produced and delivered on both a scheduled and mutually agreed upon on-request basis
according to the schedule established by DMAHS.

Liquidated Damages:

For each late report, the Department shall have the right to impose liquidated damages of
$250 per day per report until the report is provided. For any late report that is not
delivered after thirty (30) days or such longer period as the Department shall allow, the
Department, after written notice, shall have the right to increase the liquidated damages
assessment to $500 per day per report until the report is provided.

7.16.4 ACCURATE REPORTING REQUIREMENTS

Every report due the State shall contain sufficient and accurate information and in the
approved media format to fulfill the State’s purpose for which the report was generated.

If the Department imposes liquidated damages, it shall give the contractor written notice
of a report that is either insufficient or inaccurate and that liquidated damages will be
assessed accordingly. After such notice, the contractor shall have fifteen (15) business
days, or such longer period as the Department may allow, to correct the report.

 

 

subsequent testing of the correction establishes that, indeed, the correction
has been made in the manner and at the time certified to by the
contractor.

	 	A.	 	The contractor shall provide the necessary system time to
system test any correction the Contracting Officer deems necessary.
	 
	 	B.	 	The Contracting Officer shall determine whether the
necessary level of documentation has been submitted to verify
corrections. The Contracting Officer shall be the sole judge of the
sufficiency and accuracy of any documentation.
	 
	 	C.	 	System corrections shall be sustained for a reasonable
period of at least ninety (90) days from State acceptance; otherwise,
liquidated damages may be reimposed without a succeeding grace period
within which to correct.
	 
	 	D.	 	Contractor use of resources to correct deficiencies shall
not be allowed to cause other system problems.

7.16.7 EPSDT & LEAD SCREENING PERFORMANCE STANDARDS

	 	A.	 	EPSDT Screening

	 	1.	 	The contractor shall ensure that it has
achieved an eighty (80) percent participation rate for the twelve
(12)-month contract period. “Participation” is defined as one
initial or periodicity visit and will be measured by procedure
codes specified in Appendix Section B.7.5 using encounter data. If
the contractor has not achieved the eighty (80) percent
participation rate by the end of the twelve-month period, it shall
submit a corrective action plan to DMAHS within thirty (30) days of
notification by DMAHS of its actual participation rate. DMAHS shall
have the right to conduct a follow-up onsite review and/or impose
financial damages for non-compliance.

	 	a.	 	Mandatory Sanction. Failure of the contractor to
achieve the minimum screening rate shall require the
following refund of capitation paid:

	 	i.	 	Achievement of a 50
percent to less than 60 percent EPSDT screening,
dental visit and immunization rate (the lowest
measured rate of each of the components of EPSDT
screening, i.e., periodic exam, immunization rate, and
dental screening rate, shall be considered to be the
rate for EPSDT participation and the basis for the
sanction): refund of $1 per enrollee for all enrollees
under age 21 not screened.

 

 

	 	ii.	 	Achievement of a 40 percent to less than 50 percent
EPSDT screening, dental visit, and immunization rate;
refund of $2 per enrollee for all enrollees
under age 21 not screened.
	 
	 	iii.	 	Achievement of 30
percent to less than 40 percent EPSDT screening,
dental visit and immunization rate: refund of $3 per
enrollee for all enrollees under age 21 not screened,
	 
	 	iv.	 	Achievement of less
than 30 percent: refund of $4 per enrollee for all
enrollees under age 21 not screened.

	 	b.	 	Discretionary Sanction, The
DMAHS shall have the right to impose a financial or
administrative sanction if the contractor’s performance
screening rate is between sixty (60) - seventy (70) percent.
The DMAHS, in its sole discretion, may impose a sanction
after review of the contractor’s corrective action plan and
ability to demonstrate good faith efforts to improve
compliance.

	 	2.	 	Failure to achieve and maintain the required
screening rate shall result in the Local Health Departments being
permitted to screen the contractor’s pediatric members. The cost of
these screenings shall be paid by the DMAHS to the LHD, and the
screening cost shall be deducted from the contractor’s capitation
rate in addition to the damages imposed as a result of failure to
achieve EPSDT performance standards.
	 
	 	3.	 	Mandatory sanctions may be offset when the contractor
demonstrates improved compliance. The Division, in its
sole discretion, may reduce the sanction amount by 10% for 10%-15%
improvement over prior reporting period performance rate 15%
reduction for a 16%-25% improvement, 20% reduction for a 26%-35%
improvement, and 25% reduction for a 36%-50% improvement. Offsets
shall not reduce the financial sanction amount to below $1 per
enrollee not screened.

	 	B.	 	Blood Lead Screening

	 	1.	 	The contractor shall ensure that it has
achieved an eighty (80) percent blood lead screening rate of its
enrollees under three years of age during a twelve (12)- month
contract period. Blood lead screening is described in Article 4 and
shall be measured using encounter data and the DHSS database, If
the contractor has not achieved the eighty (80) percent blood lead
screening rate by the end of the twelve (12)-month period, it shall
submit a corrective action plan to DMAHS within thirty (30) days of
notification by DMAHS of its actual blood lead level screening
rate. DMAHS shall have the right to conduct a follow-up onsite
review and/or impose financial damages for non-compliance,

 

 

	 	a.	 	Mandatory sanction. Failure of the
contractor to achieve sixty (60) percent screening rate shall
require the following refund of capitation paid:

	 	i.	 	Achievement of a 50
percent to less than 60 percent lead screening rate;
refund of $2 per enrollee for all enrollees under age
3 not screened,
	 
	 	ii.	 	Achievement of a 40
percent to less than 50 percent lead screening rate;
refund of $3 per enrollee for all enrollees under age
3 not screened.
	 
	 	iii.	 	Achievement of a 30
percent to less than 40 percent lead screening rate:
refund of $4 per enrollee for all enrollees under age
3 not screened.
	 
	 	iv.	 	Achievement of less
than 30 percent lead screening rate: refund of $5 per
enrollee for all enrollees under age 3 not screened.

	 	b.	 	Discretionary sanction. The DMAHS
shall have the right to impose a financial or administrative
sanction if the contractor’s performance screening rate is
between sixty (60) — seventy (70) percent. The DMAHS, in its
sole discretion, may impose a sanction after review of the
contractor’s corrective action plan and ability to
demonstrate good faith efforts to improve compliance.

	 	2.	 	Failure to achieve and maintain the required
screening rate shall result in the Local Health Departments being
permitted to screen the contractor’s pediatric members. The cost
of these screenings shall be paid by the DMAHS to the LHD, and the
screening cost shall be deducted from the contractor’s capitation
rate in addition to the damages imposed as a result of failure to
achieve lead screening performance standards.
	 
	 	3.	 	Mandatory sanctions may be offset when the
contractor demonstrates improved compliance. The Division, in its
sole discretion, may reduce the sanction amount by $1 for each
twelve (12) point improvement over prior reporting period
performance rate. Offsets shall not reduce the financial sanction
amount to below $1 per enrollee not screened.

	 	D.	 	The contractor must demonstrate continuous quality
improvement in achieving the performance standards for EPSDT and lead
screenings as stated in Article 4. The Division shall, in its sole
discretion, determine the appropriateness of contractor proposed
corrective action and the imposition of any other financial or
administrative sanctions in addition to those set out above.

 

 

	 	 	 	performance rate, the contractor must achieve an annual improvement, as specified below, over the
previous year’s dental visit rate. If the contractor has not achieved the eighty (80) percent
participation rate or the annual improvement by the end of the twelve-month period, it shall submit
a corrective action plan to DMAHS within thirty (30) days of notification by DMAHS of its actual
participation rate. DMAHS shall have the right to conduct a follow-up onsite review and/or impose
financial damages for non-compliance.

	 	a.	 	Mandatory Sanction. Failure of the contractor to achieve an annual improvement rate shall
require the following refund of capitation paid:

	 	i.	 	Achievement of a 35 percent to less than 50 percent improvement dental
screening rate over the previous year: refund of $1 per enrollee for all enrollees age
3 years to age 21 years who did not receive a dental visit.
	 
	 	ii.	 	Achievement of a 25 percent to less than 35 percent improvement dental visit
rate: refund of $2 per enrollee for all enrollees age 3 years to age 21 years who did
not receive a dental visit.
	 
	 	iii.	 	Achievement of a 15 percent to less than 25 percent improvement dental visit
rate: refund of $3 per enrollee for all enrollees age 3 years to age 21 years who did
not receive a dental visit.
	 
	 	iv.	 	Achievement of less than 15 percent: refund of $4 per enrollee for all
enrollees age 3 years to age 21 years who did not receive a dental visit.

	 	b.	 	If the dental visit rate drops below the previous year’s rate, the contractor shall be
sanctioned in accordance with the dental visit rate performance standard, i.e.

	 	i.	 	Achievement of a 50 percent to less than 60 percent dental visit rate: refund
of $1 per enrollee for all enrollees age 3 years to age 21 years who did not receive a
dental visit.
	 
	 	ii.	 	Achievement of a 40 percent to less than 50 percent dental visit rate: refund
of $2 per enrollee for all enrollees age 3 years to age 21 years who did. not receive a
dental visit.
	 
	 	iii.	 	Achievement of a 30 percent to less than 40 percent dental visit rate:
refund of $3 per enrollee for all enrollees age 3 years to age 21 years who did not
receive a dental visit.
	 
	 	iv.	 	Achievement of less than 30 percent: refund of $4 per enrollee for all
enrollees age 3 years to age 21 years who did not receive a dental visit.

 

 

	 	c.	 	Discretionary Sanction. The DMAHS shall have the right to impose
a financial or administrative sanction if the contractor’s performance screening
rate is between sixty (60) — seventy (70) percent. The DMAHS, in its sole
discretion, may impose a sanction after review of the contractor’s corrective
action plan and ability to demonstrate good faith efforts to improve compliance.

	 	D.	 	The contractor must demonstrate continuous quality improvement in achieving the
performance standards for EPSDT and lead screenings and dental visits as stated in
Article 4. The Division shall, in its sole discretion, determine the appropriateness of
contractor proposed corrective action and the imposition of any other financial or
administrative sanctions in addition to those set out above.

7.16.8 DEPARTMENT OF HEALTH AND HUMAN SERVICES CIVIL MONEY PENALTIES

7.16.8.1 FEDERAL STATUTES

Pursuant to 42 U.S.C. § 1396b(m)(5)(A), the Secretary of the Department of Health and Human
Services may impose substantial monetary and/or criminal penalties on the contractor when
the contractor:

	 	A.	 	Fails to substantially provide an enrollee with required medically necessary
items and services, required under law or under contract to be provided to an enrolled
beneficiary, and the failure has adversely affected the enrollee or has substantial
likelihood of adversely affecting the enrollees.
	 
	 	 	 	Imposes premiums or charges on enrollees in violation of this contract, which
provides that no premiums, deductibles, co-payments or fees of any kind may be
charged to Medicaid enrollees.
	 
	 	C.	 	Engages in any practice that discriminates among enrollees on the basis of
their health status or requirements for health care services by expulsion or refusal to
re-enroll an individual or engaging in any practice that would reasonably be expected
to have the effect of denying or discouraging enrollment by eligible persons whose
medical condition or history indicates a need for substantial future medical services.

 

 

7.20.7 PROHIBITION ON USE OF FEDERAL FUNDS FOR LOBBYING

	 	A.	 	The contractor agrees, pursuant to 31 U.S.C. § 1352 and 45 C.F.R. Part
93, that no federal appropriated funds have been paid or will be paid to any
person by or on behalf of the contractor for the purpose of influencing or
attempting to influence an officer or employee of any agency, a member of
Congress, an officer or employee of Congress, or an employee of a member of
Congress in connection with the award of any federal contract, the making of any
federal grant, the making of any federal loan, the entering into of any
cooperative contract, or the extension, continuation, renewal, amendment, or
modification of any federal contract, grant loan, or cooperative contract. The
contractor shall complete and submit the “Certification Regarding Lobbying”, as
attached in Section A.7.1 of the Appendices.
	 
	 	B.	 	If any funds other than federal appropriated funds have been paid or will
be paid by the contractor to any person for the purpose of influencing or
attempting to influence an officer or employee of any agency, a member of
Congress, an officer or employee of Congress, or an employee of a member of
Congress in connection with the award of any federal contract, the making of any
federal grant, the making of any federal loan, the entering into of any
cooperative contract, or the extension, continuation, renewal, amendment, or
modification of any federal contract, grant, loan, or cooperative contract, and
the contract exceeds $100,000, the contractor shall complete and submit Standard
Form LLL-“Disclosure of Lobbying Activities” in accordance with its instructions.
	 
	 	C.	 	The contractor shall include the provisions of this Article in all
provider and subcontractor contracts under this contract and require all
participating providers or subcontractors whose contracts exceed $100,000 to
certify and disclose accordingly to the contractor.

7.20.8 COMPLIANCE WITH N.J.S.A. 19:44-20.13 ET SEQ. ,

The contractor is required to comply with the “pay to play” disclosure requirements set
forth in the New Jersey statutes. Compliance requires the contractor to submit the Executive
Order 134 Certification and Disclosure (DDP134-C&D). In addition, the contractor is under a
continuing duty to disclose during the time of the contract all contributions made during
the term of the contract covered under the statute. Towards satisfying that duty, the
‘contractor shall submit the Continuing Disclosure of Political Contributions (DDP134 — CD)
when required under the statute. Failure to comply with any of the requirements of the
statute may result in the termination of the contract. All forms and instructions are
available on the New Jersey Division of Purchase and Property web-site:
http://www.state.nj.us/treasury/purchase/forms/htm.

 

 

7.21 REQUIRED CERTIFICATE OF AUTHORITY

During the term of the contract, the contractor shall maintain a Certificate of Authority
(COA) from the Department of Banking and Insurance and function as a Health Maintenance
Organization in each of the counties in the region(s) it is contracted to serve or for
each of the counties as approved in accordance with Article 2.1-1.

7.22 SUBCONTRACTS

In carrying out the terms of the contract, the contractor may elect to enter into
subcontracts with other entities for the provision of health care services and/or
administrative services as defined in Article 1. In doing so, the contractor shall, at a
minimum, be responsible for adhering to the following criteria and procedures.

	 	A.	 	All subcontracts shall be in writing and shall be submitted to DMAHS for prior
approval at least 90 days prior to the anticipated implementation date. DMAHS approval
shall also be contingent on regulatory agency review and approval.
	 
	 	B.	 	The Department shall prior approve all provider contracts and all subcontracts.
	 
	 	C.	 	All provider contracts and all subcontracts shall include the terms in Section
B.7.2 of the Appendices, Provider/Subcontractor Contract Provisions.
	 
	 	D.	 	The contractor shall monitor the performance of its subcontractors on an
ongoing basis and ensure that performance is consistent with the contract between the
contractor and the Department.
	 
	 	E.	 	Unless otherwise provided by law, contractor shall not cede or otherwise
transfer some or all financial risk of the contractor to a subcontractor.
	 
	 	F.	 	Every third party administrator engaged by the contractor shall be licensed or
registered by the Department of Banking and Insurance pursuant to P.L. 2001, c. 267

7.23 SET-OFF FOR STATE TAXES AND CHILD SUPPORT

Pursuant to N.J.S.A 54:49-19, if the contractor is entitled to payment under the contract
at the same time as it is indebted for any State tax (or is otherwise indebted to the
State) or child support, the State Treasurer may set off payment by the amount of the
indebtedness.

7.24 CLAIMS

The contractor shall have the right to request an informal hearing regarding disputes under
this contract by the Director, or the designee thereof. This shall not in any way limit the
contractor’s or State’s right to any remedy pursuant to New Jersey law.

 

 

	 	E.	 	The contractor shall collect and analyze data to implement effective quality
assurance, utilization review, and peer review programs in which physicians and
other health care practitioners participate. The contractor shall review and
assess data using statistically valid sampling techniques including, but not
limited to, the following:
	 
	 	 	 	Primary care practitioner audits; specialty audits; inpatient mortality audits;
quality of care and provider performance assessments; quality assurance
referrals; credentialing and recredentialing; verification of encounter
reporting rates; quality assurance committee and subcommittee meeting agendas
and minutes; enrollee complaints, grievances, and follow-up actions; providers
identified for trending and sanctioning, including providers with low blood lead
screening rates; special quality assurance studies or projects; prospective,
concurrent, and retrospective utilization reviews of inpatient hospital stays;
and denials of off-formulary drug requests.
	 
	 	F.	 	The contractor shall prepare and submit to DMAHS quarterly reports to
be submitted electronically (e.g., email) in report-ready form in a format and
software application system determined by DMAHS, containing summary information on
the contractor’s operations for each quarter of the program (See Section A.7 of
the Appendices, Tables 1 through 22. Exceptions — Tables 3A and 3B shall be
submitted monthly by the fifteenth (15th) of every month; Tables 5 and
7 shall be submitted annually, Table 9 shall be submitted semi-annually; Table 22
shall be submitted weekly). These reports shall be received by DMAHS no later than
forty-five (45) calendar days after the end of the quarter. Any contract-required
report submission may be electronic in the format specified by DMAHS staff
accompanied by the appropriate certification (where applicable) unless otherwise
noted in the contract.
	 
	 	 	 	The contractor shall be responsible for continued reporting beyond the term of
the contract because of lag time in submitting source documents by providers.
	 
	 	G.	 	The contractor may submit encounter reports daily but must submit
encounter reports at least quarterly. However, encounter reports will be processed
by DMAHS’ fiscal agent no more frequently than monthly. All encounters shall be
reported to DMAHS within seventy-five (75) days of the end of the quarter in which
they are received by the contractor and within one year plus seventy-five (75)
days from the date of service.
	 
	 	H.	 	The contractor shall annually and at the time changes are made report
its staffing positions including the names of supervisory personnel (Director
level and above and the QM/UR personnel), organizational chart, and any position
vacancies in these major areas.

 

 

	 	 	 	proposed relationship does not present the potential, actual or
appearance, of a conflict of interest.
	 
	 	D.	 	No contractor shall influence, or attempt to influence or
cause to be influenced, any State officer or employees or special State
officer or employee in his official capacity in any manner which might
tend to impair the objectivity or independence of judgment of said
officer or employee.
	 
	 	E.	 	No contractor shall cause or influence, or attempt to cause
or influence, any State officer or employee or special State
officer or employee to use, or attempt to use, his official position to
secure unwarranted privileges or advantages for the contractor or any
other person.
	 
	 	F.	 	The provisions cited above in this Article shall not be
construed to prohibit a State officer or employee or special State
officer or employee from receiving gifts from or contracting with the
contractor under the some terms and conditions as are offered or made
available to members of the general public subject to any guidelines the
Executive Commission on Ethical Standards may promulgate,

7.30 RECORDS RETENTION

	 	A.	 	The contractor hereby agrees to maintain an appropriate
recordkeeping system (See Section B.4.14 of the Appendices) for services
to enrollees and further require its providers and subcontractors to do
so. Such system shall collect all pertinent information relating to the
medical management of each enrolled beneficiary; and make that
information readily available to appropriate health professionals and the
Department. Records shall be retained, in accordance with the
later of:

	 	1.	 	Five (5) years from the date of service (N.J.S.A. 30:4D-12(d,-)); or
	 
	 	2.	 	Three (3) years after final payment is made
under the contract or subcontract and all pending matters are
closed; or:
	 
	 	3.	 	For medical records, ten (10) years following
the member’s most recent service or until the member reaches the
age of 23 years (N.J.A.C. 8:38-10.5).

	 	B.	 	If an audit, investigation, litigation, or other action
involving the records is started before the end of the retention period,
the records shall be retained until all issues arising out of the action
are resolved or until the end of the retention period, whichever
is later. Records shall be made accessible at a New Jersey site, and on
request to agencies of the State of New Jersey and the federal
government. For enrollees covered by the contractor’s plan who are
eligible through the Division of Youth and Family Services, records shall
be kept in accordance with the provisions under N.J.S.A. 9:6-8.10a and
9:6-8:40 and consistent with need to

 

 

	 	B.	 	The solicitation of any fee, commission, compensation, gift, gratuity or other
thing of value by any State officer or employee or special State officer or
employee from any State contractor shall be reported in writing forthwith by the
contractor to the Attorney General and the Executive Commission on Ethical
Standards.
	 
	 	C.	 	No contractor may, directly or indirectly, undertake any private business,
commercial or entrepreneurial relationship with, whether or not pursuant to
employment, contract or other agreement, express or implied, or sell any interest in
such contractor to any State officer or employee or special State officer or
employee having any duties or responsibilities in connection with the purchase,
acquisition or sale of any property or services by or to any State agency or any
instrumentality thereof, or with any person, firm or entity with which he is
employed or associated or in which he has an interest within the meaning of N.J.S.A.
52:13D-13g. Any relationships subject to this provision shall be reported in writing
forthwith to the Executive Commission on Ethical Standards which may grant a waiver
of this restriction upon application of the State officer or employee or special
State officer or employee upon a finding that the present or proposed relationship
does not present the potential, actual or appearance, of a conflict of interest.
	 
	 	D.	 	No contractor shall influence, or attempt to influence or cause to be
influenced, any State officer or employee or special State officer or employee in
his official capacity in any manner which might tend to impair the objectivity or
independence of judgment of said officer or employee.
	 
	 	E.	 	No contractor shall cause or influence, or attempt to cause or influence,
any State officer or employee or special State officer or employee to use, or
attempt to use, his official position to secure unwarranted privileges or advantages
for the contractor or any other person.
	 
	 	F.	 	The provisions cited above in this Article shall not be construed to
prohibit a State officer or employee or special State officer or employee from
receiving gifts from or contracting with the contractor under the same terms and
conditions as are offered or made available to members of the general public subject
to any guidelines the Executive Commission on Ethical Standards may promulgate.

7.30 RECORDS RETENTION

	 	A.	 	The contractor hereby agrees to maintain an appropriate recordkeeping system
(See Section B.4.14 of the Appendices) for services to enrollees and further require
its providers and subcontractors to do so. Such system shall collect all pertinent
information relating to the medical management of each enrolled beneficiary; and make
that information readily available to appropriate health professionals and the
Department. Records shall be retained, in accordance with for the later of:

 

 

	 	1.	 	Five (5) years from the date of service (N.J.S.A. 30:4D-12(d-)); or
	 
	 	2.	 	Three (3) years after final payment is made under the contract
or subcontract and all pending matters are closed; or,
	 
	 	3.	 	For medical records, ten (10) years following the members most
recent service or until the member reaches the age of 23 years (N.J.A.C.
8:38-10.5).

	 	B.	 	If an audit, investigation, litigation, or other action involving the records is
started before the end of the retention period, the records shall be retained until all
issues arising out of the action are resolved or until the end of the retention period,
whichever is later. Records shall be made accessible at a New Jersey site, and on
request to agencies of the State of New Jersey and the federal government. For
enrollees covered by the contractor’s plan who are eligible through the Division of
Youth and Family Services, records shall be kept in accordance with the provisions
under N.J.S.A. 9:6-8.10a and 9:6-8:40 and consistent with need . to protect the
enrollee’s confidentiality. All providers and subcontractors shall comply with, and all
provider contracts and subcontracts shall contain the requirements stated in this
paragraph. (See also Article 7.40, “Confidentiality”)
	 
	 	C.	 	If contractor’s enrollees disenroll from the contractor’s plan, the contractor
shall require participating providers to release medical records of enrollees as may be
directed by the enrollee, authorized representatives of the Department and appropriate
agencies of the State of New Jersey and of the federal government. Release of records
shall be consistent with the provision of confidentiality expressed in Article 7.40 and
at no cost to the enrollee.

7.31 WAIVERS

Nothing in the contract shall be construed to be a waiver by the State of any warranty,
expressed or implied, except as specifically and expressly stated in writing executed by the
Director. Further, nothing in the contract shall be construed to be a waiver by the State of
any remedy available to the State under the contract, at law or equity except as
specifically and expressly stated in writing executed by the Director. A waiver by the State
of any default or breach shall not constitute a waiver of any subsequent default or breach.

7.32 CHANGE BY THE CONTRACTOR

The contractor shall not make any enhancements, limitations, or changes in benefits or
benefits coverage; any changes in definition or interpretation of benefits; or any changes
in the administration of the managed care program related to the scope of benefits,
allowable coverage for those benefits, eligibility of enrollees or providers to participate
in the program, reimbursement methods and/or schedules to providers, or substantial

 

 

	 	5.	 	Indemnification includes but is not limited to, any claims or losses arising
from the promulgation or implementation of the contractor’s policies and
procedures, whether or not said policies and procedures have been approved by the
State, and any claims of the contractor’s wrong doing in implementing DHS
policies.

7.34 INVENTIONS

Inventions, discoveries, or improvements of computer programs developed pursuant to this
contract by the contractor, and paid for by DMAHS in whole or in part, shall be the
property of DMAHS.

7.35 USE OF CONCEPTS

The ideas, knowledge, or techniques developed and utilized through the course of this
contract by the contractor, or jointly by the contractor and DMAHS, for the performance
under the contract, may be used by either party in any way they may deem appropriate.
However, such use shall not extend to pre-existing intellectual property of the contractor
or DMAHS that is patented, copyrighted, trademarked or service marked, which shall not be
used by another party unless a license is granted.

7.36 PREVAILING WAGE

The New Jersey Prevailing Wage Act, PL 1963, Chapter 150, is hereby made a part of this
contract, unless it is not within the contemplation of the Act. The contractor’s signature
on the contract is a guarantee that neither the contractor nor any providers or
subcontractors it might employ to perform the work covered by this contract is listed or is
on record in the Office of the Commissioner of the New Jersey Department of Labor and
Industry as one who has failed to pay prevailing wages in accordance with the provisions of
this Act.

7.37 DISCLOSURE STATEMENT

The contractor shall report ownership and related information to DMAHS at the time of
initial contracting, and yearly thereafter, and upon request, to the Secretary of DHHS and
the Inspector General of the United States in accordance with federal and state law.

	 	A.	 	The contractor shall include full and complete information as to the name and
address of each person or corporation with a five (5) percent or more ownership or
controlling interest in the contractor’s plan, or any provider or subcontractor in
which the contractor has a five (5) percent or more ownership interest (Section
1903(m)(2)(A) of the Social Security Act and N.J.A.C. 10:49-19.2)
	 
	 	 	 	The contractor shall comply with this disclosure requirement through submission of
the CMS-1513 Form whether federally qualified or not.

 

 

	 	 	 	against fraud and abuse (as defined in 42 C.F.R. § 455.2) in the provision of health care
services. The policies and procedures will include, at a minimum:

	 	1.	 	Written notification must be sent by the contractor to DMAHS within five (5)
business days of the contractor’s intent to conduct an investigation, and approval
must be obtained by the contractor from DMAHS prior to conducting the investigation.
Details of potential investigations shall be provided to DMAHS and include the data
elements in Section A.7.2.B of the Appendices. Representatives of the contractor may
be required to present the case to DMAHS. DMAHS, in consultation with the contractor,
will then determine the appropriate course of action to be taken.
	 
	 	 	 	Written notification must be sent by the contractor to DMAHS within five (5) business
days of the contractor’s intent to recover funds, and approval must be obtained by the
contractor from DMAHS prior to collection of those funds.
	 
	 	2.	 	Incorporation of the use of claims and encounter data for detecting
potential fraud and abuse of services.
	 
	 	3.	 	A means to verify services were actually provided.
	 
	 	4.	 	Reporting investigation results within twenty (20) business days to DMAHS.
	 
	 	5.	 	Specifications of, and reports generated by, the contractor’s prepayment and
postpayment surveillance and utilization review systems, including prepayment and
postpayment edits and recovery actions.

	 	B.	 	Distinct Unit. The contractor shall establish a distinct fraud and abuse unit, solely
dedicated to the detection and investigation of fraud and abuse by its New Jersey Medicaid
and NJ FamilyCare beneficiaries and providers. It shall be separate from the contractor’s
utilization review and quality of care functions. The unit can either be part of the
contractor’s corporate structure, or operate under contract with the contractor.

	 	1.	 	The unit shall be staffed with investigators who shall have at least one of
the following: (1) a Bachelor’s degree; (2) an Associate’s degree plus a minimum of
two years experience with health care related employment; (3) a minimum of four years
of experience with health care related employment; or (4) a minimum of five years of
law enforcement experience. When approved by DMAHS, the contractor shall be permitted
to employ a limited number of specialists who shall possess unique qualifications by
way of training, technical skill, and/or experience to investigate and identify cases
of fraud, but who lack the specific educational requirements set forth above to be
investigators. The unit shall have an investigator-to-beneficiary ratio for the New
Jersey Medicaid/NJ FamilyCare enrollment of at least one investigator per

 

 

	 	 	 	exists relating to the contractor, its providers, subcontractors, enrollees,
employees, or anyone who can order or refer services, and related parties.

	 	F.	 	When DMAHS has withheld payment and/or initiated a recovery action against one
of the contractor’s providers or subcontractors or a withholding of payments action
pursuant to 42 C.F.R. § 455.23, DMAHS may require the contractor to withhold payments
to that provider or subcontractor and/or forward those payments to DMAHS.
	 
	 	G.	 	DMAHS may direct the contractor to monitor one of its providers or
subcontractors, or take such corrective action with respect to that provider or
subcontractor as DMAHS deems appropriate, when, in the opinion of DMAHS, good cause
exists.
	 
	 	H.	 	Sanctions. Failure of the contractor to investigate and correct fraud and abuse
problems relating to its enrollees, network providers or subcontractors, and to notify
DMAHS timely of same, may result in sanctions. Timely notification is defined as
within five (5) business days of identification of the fraud and/or abuse and within
twenty (20) business days of the completion of an investigation. For purposes of this
subsection, the term “investigation” shall include prepayment monitoring as described
above.
	 
	 	 	 	DMAHS shall have the right to also impose sanctions and/or withhold payments to the
contractor (in accordance with provisions of 42 C.F.R. § 455.23) if it has reliable
evidence of fraud or willful misrepresentation relating to the contractor’s
participation in the New Jersey Medicaid or NJ FamilyCare program or if the
contractor fails to initiate its investigation of an identified fraud and/or abuse
within one year of identification.
	 
	 	I.	 	Class Action Litigation and Settlements. The DMAHS shall have the right to
recoup and/or withhold monies, in whole or in part, from the contractor that are as a
result of a settlement or recovery from class action, qui tam or other
litigation that involves any of the programs administered and funded by DHS.

7.38.3 NOTIFICATION TO DMAHS

The contractor shall submit quarterly the report in Section A.7.2 of the Appendices, Fraud
& Abuse.

7.39 EQUALITY OF ACCESS AND TREATMENT/DUE PROCESS

	 	A.	 	Unless a higher standard is required by this contract, the contractor shall
provide and require its subcontractors and its providers to provide the same level of
medical care and health services to DMAHS enrollees as to enrollees in the

 

 

ARTICLE EIGHT: FINANCIAL PROVISIONS

8.1 GENERAL INFORMATION

This Article includes financial requirements (including solvency and insurance), medical
cost ratio requirements, information on rates set by the State, third party liability (TPL)
requirements, general capitation requirements, and provider payment requirements.

8.2 FINANCIAL REQUIREMENTS

8.2.1 COMPLIANCE WITH CERTAIN CONDITIONS

The contractor shall remain in compliance with the following conditions which shall
satisfy the Departments of Human Services, and Banking and Insurance (DOBI) prior to this
contract becoming effective:

	 	A.	 	Provider Contracts Executed. The contractor has entered into written
contracts with providers in accordance with Article Four of this contract.
	 
	 	B.	 	No Judgment Preventing Implementation. No court order, administrative
decision, or action by any other instrumentality of the United States government or
the State of New Jersey or any other state which prevents implementation of this
contract is outstanding.
	 
	 	C.	 	Approved Certificate of Authority. The contractor has and maintains an
approved certificate of authority to operate as a health maintenance organization in
New Jersey from the DOBI for the Medicaid population.
	 
	 	D.	 	Compliance with All Solvency Requirements. The contractor shall comply with
and remain in compliance with minimum net worth and fiscal solvency and reporting
requirements of the DOBI and the Department of Human Services, the federal government,
and this contract.

8.2.2 SOLVENCY REQUIREMENTS

The contractor shall maintain a minimum net worth in accordance with N.J.A.C. 8:38-11 et
seq.

The Department shall have the right to conduct targeted financial audits of the
contractor’s Medicaid line of business. The contractor shall provide the Department with
financial data, as requested by the Department, within a timeframe specified by the
Department.

 

 

reserves and where restricted funds will be held (See N.J.A.C. 8:38-11.3,
Reserve Requirements).

8.3 INSURANCE REQUIREMENTS

The contractor shall maintain general comprehensive liability insurance,
products/completed operations insurance, premises/operations insurance, unemployment
compensation coverage, workmen’s compensation insurance, reinsurance, and malpractice
insurance in such amounts as determined necessary in accordance with state and federal
statutes and regulations, insuring all claims which may arise out of contractor
operations under the terms of this contract. The DMAHS shall be an additional named
insured with sixty (60) days prior written notice in event of default and/or non-renewal
of the policy. Proof of such insurance shall be provided to and approved by DMAHS prior
to the provision of services under this contract and annually thereafter. No policy of
insurance provided or maintained under this Article shall provide for an exclusion for
the acts of officers.

8.3.1 INSURANCE CANCELLATION AND/OR CHANGES

In the event that any carrier of any insurance described in 8.3 or 8.3.2 exercises
cancellation and/or changes, or cancellation or change is initiated by the contractor,
notice of such cancellation and/or change shall be sent immediately to DMAHS for
approval. At State’s option upon cancellation and/or change or lapse of such
insurance(s), DMAHS may withhold all or part of payments for services under this contract
until such insurance is reinstated or comparable insurance purchased. The contractor is
obligated to provide any services during the period of such lapse or termination.

8.3.2 STOP-LOSS INSURANCE

At the discretion of the Departments of Banking and Insurance; and Human Services; and
notwithstanding the requirements of N.J.A.C. 8:38-11.5 (b), the contractor may be required
to obtain, prior to this contract, and maintain “stop-loss” insurance from a reinsurance
company authorized to do business in New Jersey that will cover medical costs that exceed a
threshold per case for the duration of the contract period. Any coverage other than
stipulated must be based on an actuarial review, taking into account geographic and
demographic factors, the nature of the clients, and state solvency safeguard requirements.

All “stop-loss” insurance arrangements, including modifications, shall be reviewed and
prior approved by the Departments of Banking and Insurance, and Human Services. The
“stop-loss” insurance underwriter must meet the standards of financial stability as set
forth by the DOBI.

Contractors with sufficient reserves may choose self-insurance, subject to approval by
the Department of Human Services and the DOBI where appropriate.

 

 

8.4 MEDICAL COST RATIO

8.4.1 MEDICAL COST RATIO STANDARD

The contractor including its subcontractors shall in the aggregate maintain direct
medical expenditures for enrollees equal to or greater than eighty (80) percent of
premiums paid in all forms from the State. This medical cost ratio (MCR) shall
apply to annual periods from the contract effective date (if the contract ends
before the completion
of an annual period, the MCR shall apply to that shorter period), The MCR
shall be based on reports completed by the contractor and acceptable to the
Department.

	 	A.	 	Direct Medical Expenditures. Direct medical expenditures are the
incurred costs of providing direct care to enrollees for covered health
care services as stated in Article 4.1 (Report on Table 19). Costs
related to information and materials for general education and outreach
and/or administration are not considered direct medical expenditures.
	 
	 	 	 	Personnel costs are generally considered to be administrative in nature
and must be reported as an administrative expense on Table 19 (Income
Statement by Rate Cell Grouping) on line for Compensation. However, a
portion of these costs may qualify as direct medical expenditures,
subject to prior review and approval by the State. Those activities
that the contractor including its subcontractors expects to
generate these costs must be specified and detailed in a Medical Cost Ratio -
Direct Medical Expenditures Plan which must be reviewed and approved by
the State. At the end of the reporting period, the contractor’s
reporting shall be based
only on the approved Medical Cost Ratio — Direct Medical Expenditures Plan. In
order to consider these costs as Direct Medical Expenditures, the
contractor must complete Table 6, entitled “Allowable Direct Medical
Expenditures,” which will be used by the State to determine the
allowable portion of costs. The allowable components of these personnel
costs include the following activities:

	 	1.	 	Care Management. Allowable direct medical
expenditures for care management include: 1) assessment(s) of an
enrollee’s risk factors; and 2) development of Individual Health
Care Plans. The costs of performing these two allowable
components may be considered a direct medical expenditure for
purposes of calculating MCR and must be reported on Table 6.
	 
	 	2.	 	The cost associated with the provision of a
face-to-face home visit by the contractor’s clinical personnel
for the purpose of medical education or anticipatory guidance can
be considered a direct medical expenditure (Report on Table 6).
	 
	 	3.	 	Costs for activities required to achieve
compliance standards for EPSDT participation, lead screening, and
prenatal care as specified in Article IV may be considered direct
medical expenditures. The contractor’s reporting shall be

 

 

8.5.2.5 DYFS AND AGING OUT FOSTER CHILDREN

This grouping includes capitation rates for Division of Youth and Family Services,
excluding individuals with AIDS and clients of DDD.

8.5.2.6 ABD WITHOUT MEDICARE

Compensation to the contractor for the ABD individuals without Medicare will be
risk-adjusted using the Health Based Payments System (HBPS), which is described in
Article 8.6. HBPS adjusts for the diagnosis of AIDS; therefore, separate AIDS rates are
not necessary for this population. Finally, the HBPS adjusts for age and sex so separate
rates for age and sex within this population are not necessary.

8.5.2.7 ABD WITH MEDICARE AND OTHER DUAL ELIGIBLES

This grouping includes capitation rates for all enrollees with Medicare population,
excluding dual eligible (Medicaid and Medicare) individuals with AIDS and clients of DDD.

8.5.2.8 CLIENTS OF DDD

This grouping includes all enrollees except ABD individuals without Medicare. The
contractor shall be paid separate, statewide rates for subgroups of the DDD population,
excluding individuals with AIDS. These rates include covered MH/SA services.

8.5.2.9 ENROLLEES WITH AIDS

This grouping includes all enrollees except ABD individuals without Medicare.

	 	A.	 	The contractor shall be paid special statewide capitation rates for
enrollees with AIDS.
	 
	 	B.	 	The contractor will be reimbursed double the AIDS rate, once in a member
lifetime, in the first month of payment for a recorded diagnosis of AIDS, prospective
and newly diagnosed. This is a one-time-only-per-member payment, regardless of MCE.

8.5.2.10 RESERVED

8.5.3 NEWBORN INFANTS

The contractor shall be reimbursed for newborns from the date of birth through the first
60 days after the birth through the period ending at the end of the month in which the
60th day falls by a supplemental payment as part of the supplemental maternity payment.
Thereafter, capitation payments will be made prospectively, i.e., only when the baby’s
name and ID number are accreted to the Medicaid eligibility file and formally enrolled in
the contractor’s plan.

 

 

8.5.4 SUPPLEMENTAL PAYMENT PER PREGNANCY OUTCOME (Not applicable to Plan H)

Costs for pregnancy outcomes are not included in the capitation rates. The contractor
shall be paid supplemental payments for pregnancy outcomes for all eligibility categories.

Payment for pregnancy outcome shall be a single, predetermined lump sum payment. This
amount shall supplement the existing capitation rate paid. The Department will make a
supplemental payment to contractors following pregnancy outcome. For purposes of this
Article, pregnancy outcome shall mean each live birth, still birth or miscarriage
occurring at the thirteenth (13th) or greater week of gestation. This
supplemental payment shall reimburse the contractor for its inpatient hospital/birthing
center, antepartum, and postpartum costs incurred in connection with delivery. Costs for
care of the baby for the first 60 days after the birth plus through the end of the month
in which the 60th day falls are included (See Section 8.5.3). Regional adjusted
payment shall be made by the State to the contractor based on an appropriate Diagnosis
Related Group (DRG) code pertaining to maternity outcomes (see Appendix, Financial
Reporting Manual for codes). The contractor shall submit encounter data of hospital
and/or birthing center claims paid for final pregnancy outcomes which will be assessed and
assigned to a DRG. No other services, inpatient hospital or otherwise, rendered prior to
final pregnancy outcome shall qualify or be payable for a maternity supplement.

8.5.5 PAYMENT FOR CERTAIN BLOOD CLOTTING FACTORS

The contractor shall be paid separately for factor VIII and IX blood clotting factors.
Payment will be made by DMAHS to the contractor based on: 1) submission of appropriate
encounter data; and 2) notification from the contractor to DMAHS within 12 months of the
date of service of identification of individuals with factor VIII or IX

 

 

and greater dispersion around the average than other DMAHS populations. The contractor
shall be reimbursed not only on the basis of the demographic cells into which individuals
fall, but also on the basis of individual health status.

The Chronic Disability Payment System (CDPS) (University of California, San Diego) is the
HBPS or the system of Risk Adjustment that shall be used in this contract. The methodology
for CDPS specific to New Jersey is provided in the Actuarial Certification Letter for Risk
Adjustment issued separately to the contractor. Two-A base capitation rates and a DDD
mental health/substance abuse add-on are developed for this population. These are:

	 	•	 	ABD without Medicare,
	 
	 	•	 	ABD — DDD without Medicare, Mental Health/Substance Abuse add-on-component

The Risk adjustment process has four major components.

	 	•	 	Development of the base rates for the risk adjusted populations.
	 
	 	•	 	Development of algebraic expressions that relate demographic and clinical
characteristics of beneficiaries to their expected, prospective covered health care
costs, relative to the cost of the average person in the populations. This measure of
cost relative to the average cost is known as the individual case score. By definition,
the average cost beneficiary will have a case score of 1.0, others with more or less
costly conditions and demographic characteristics will have scores that are greater or
less than 1.0.
	 
	 	•	 	Compilation of case scores for each beneficiary for whom requisite data are
available and establishment of criteria to assign case scores to those without claims
and eligibility data.
	 
	 	•	 	Calculation of an average case mix for each participating contractor. This average
case mix is normalized and used in conjunction with the base capitation rate to
determine the actual reimbursement to the contractor for the risk-adjusted population,
contemporaneous. with the monthly remittance.

8.7 THIRD PARTY LIABILITY

	 	A.	 	General. The contractor, and by extension its providers and subcontractors, hereby agree to:

	 	1.	 	Utilize, within sixty (60) days of learning of such sources, for
claims cost avoidance purposes, other available public or private sources of
payment for services rendered to enrollees in the contractor’s plan. “Third
party”, for the purposes of this Article, shall mean any person or entity who is
or may be liable to pay for the care and services rendered to a Medicaid
beneficiary

 

 

	 	 	 	(See N.J.S.A. 30:4D-3m). Examples of a third party include a beneficiary’s health
insurer, casualty insurer, a managed care organization, Medicare, or an employer
administered ERISA plan. Federal and State law requires that Medicaid payments be
last dollar coverage and should be utilized only after all other sources of third
party liability (TPL) are exhausted, subject to the exceptions in Section F below.
	 
	 	2.	 	Report such information to the State by no later than the fifteenth
(15th) day after the close of the month during which the contractor learns
of such information using the TPL-1 form (found in the Appendix, Section A.8.1) hard
copy or diskette using standard software (i.e. Microsoft Excel or Access) or a
delimited text file.

	 	B.	 	Third Party Coverage Unknown. If coverage through health or casualty insurance is not known
or is unavailable at the time the claim is filed, then the claim must be paid by the
contractor and postpayment recovery will be initiated by the State.
	 
	 	C.	 	Capitation Rates. Historic cost avoidance due to the existence of liable third parties is
embedded in the cost of medical services delivery and is reflected in the capitation rates.
The capitation rates do not include any reductions due to tort recoveries, or to recoveries
made by the State from the estates of deceased Medicaid beneficiaries. The State will initiate
TPL recoveries and retain all monies derived there from for claims not cost-avoided by the
contractor.
	 
	 	D.	 	Categories. Third party resources are categorized as 1) health insurance, 2) casualty
insurance, 3) legal causes of action for damages, and 4) estate recoveries.

Health Insurance. The State shall pursue and, collect payments from health
insurers when health insurance coverage is available. “Health insurance” shall
include, but not be limited to, coverage by any health care insurer, HMO,
Medicare, or an employer-administered ERISA plan. Funds so collected shall be
retained solely by the State. The contractor shall cooperate with the State in all
collection efforts, and shall also direct its providers and subcontractors to do
so. State collections resulting from such recovery actions will be retained by the
State.

	 	a.	 	The contractor shall submit, an electronic file of all paid,
pended, and denied claims for the previous two (2) years, including those of
its subcontractors to the State, or its designee, by no later than the
thirtieth (30th) day after the effective date of this amendment.
Thereafter, the contractor shall submit, an electronic file of all paid,
pended, and denied claims, including those of its subcontractors for

 

 

	 	 	 	commercial HMO’s network, the HMO’s rules apply. Failure to follow
the HMO’s rules relieves both the contractor and the State of any
liability forthe cost of the care and services rendered to the
beneficiary, subject to subarticle 4 below.

	 	4.	 	The only exception to subarticle 3 above is if
the HMO’s rules cannot be followed solely because emergency
services were provided by a nonparticipating provider,
practitioner, or subcontractor because the services were
immediately required due to sudden or unexpected onset of a medical
condition. In this circumstance, the contractor remains responsible
for the cost of the care and services rendered to the beneficiary.
	 
	 	5.	 	If a Medicaid beneficiary enrolled with the
contractor is also enrolled in or covered by a health or casualty
insurer other than a Medicare or commercial HMO, the contractor is
fully responsible for coordinating benefits so as to maximize the
utilization of third party coverage in accordance with the
provisions of this Article. The contractor shall be responsible for
payment of the enrollee’s coinsurance, deductibles copayments, and
other cost-sharing expenses, but the contractor’s total liability
shall not exceed what it would have paid in the absence of TPL. The
contractor shall coordinate benefits and payments with the health
or casualty insurer for services authorized by the contractor, but
provided outside the contractor’s plan. The contractor remains
responsible for the costs incurred by the beneficiary with respect
to care and services which are included in the contractor’s
capitation rate, but which are not covered or payable under the
health or casualty insurer’s plan.
	 
	 	6.	 	The State. will continue to pay Medicare Part A
and Part B premiums for Medicare/Medicaid dual eligibles and
Qualified Medicare Beneficiaries,
	 
	 	7.	 	Any references to Medicare coverage in this
Article shall apply to both Medicare/Medicaid dual eligibles and
Qualified Medicare Beneficiaries.

J. Other Protections for Medicaid Enrollees.

	 	1.	 	The contractor shall not impose, or allow its participating
providers or subcontractors to impose, cost-sharing charges of any kind
upon Medicaid beneficiaries enrolled in the contractor’s plan pursuant to
this contract, This Article does not apply to individuals eligible solely
through the NJ FamilyCare Program Plan C, D, or H for whom providers will
be required to collect cost-sharing for certain services.

 

 

	 	2.	 	The contractor’s obligations under this Article shall not be imposed
upon the enrollees, although the contractor shall require enrollees to
cooperate in the identification of any and all other potential sources of
payment for services. Instances of non-cooperation shall be referred to the
State.
	 
	 	3.	 	The contractor shall neither encourage nor require a Medicaid
enrollee to reduce or terminate TPL coverage.
	 
	 	4.	 	Unless otherwise permitted or required by federal and State
law, health care services cannot be denied to a Medicaid enrollee because of
a third party’s potential liability to pay for the services, and the
contractor shall ensure that its cost avoidance efforts do not prevent an
enrollee from receiving medically necessary services.

8.8 COMPENSATION/CAPITATION CONTRACTUAL REQUIREMENTS

	A.	 	Contractor Compensation. Compensation to the contractor is the gross amount payable to the
contractor and shall consist of monthly capitation payments, supplemental payments per
pregnancy outcome/delivery, certain blood products for hemophilia factors VIII & IX
disorders, payment for certain HIV/AIDS drugs, and payments for the non-risk Managed Care
Service Administrator product. Contractors must agree to enroll all non-exempt Aged, Blind
and Disabled and NJ FamilyCare beneficiaries to qualify to serve AFDC/TANF beneficiaries.
	 
	B.	 	Capitation Payment Schedule. DMAHS hereby agrees to pay the capitation by the fifteenth
(15th) day of any month during which health care services will be available to an
enrollee; provided that information pertaining to enrollment and eligibility, which is
necessary to determine the amount of said payment, is received by DMAHS within the time
limitation contained in Article 5 of this contract.
	 
	C.	 	Capitation Rates. The contractor shall receive monthly capitation payments, for a defined
scope of services to be furnished to a defined number of enrollees, for providing the
services contained in the Benefits Package described in Article 4.1 of this contract. Such
payments shall be in accordance with 42 CFR 438.6(c). The contractor shall receive a rate
certification letter demonstrating actuarial soundness.
	 
	D.	 	Adjustments-Calculation and Renegotiation of Capitation Rates. Capitation rates are
prospective in nature and will not be adjusted-recalculated retroactively or subject to
renegotiation during the contract period except as explicitly noted in the contract.
Capitation rates will be paid only for eligible beneficiaries enrolled during the period for
which the adjusted-capitation payments are being made. Payments provided for under the
contract will be denied for new enrollees when, and for so long as, payments for those
enrollees are denied by CMS under 42 C.F.R. 438.730. For enrollees with risk-adjusted
capitation rates, the base

 

 

	 	 	capitation rate is used to develop a risk-adjusted capitation payment for the enrollee,
derived from the population’s base capitation rate times the HMO average risk case mix
score for the month.
	 
	E.	 	Payment by State Fiscal Agent. The State fiscal agent will make payments to the contractor.
	 
	F.	 	Payment in Full. The monthly capitation payments plus supplemental payments for pregnancy
outcomes and payment for certain HIV/AIDS drugs and blood clotting factors VIII and IX to the
contractor shall constitute full and complete payment to the contractor and full discharge of
any and all responsibility by the Division for the costs of all services that the contractor
provides pursuant to this contract.
	 
	G.	 	Payments to Providers. Payments shall not be made on behalf of an enrollee to providers of
health care services other than the contractor for the benefits covered in Article Four and
rendered during the term of this contract.
	 
	H.	 	Time Period for Capitation- Payment per Enrollee. The monthly capitation payment per
enrollee is due to the contractor from the effective date of an enrollee’s enrollment until
the effective date of termination of enrollment or termination of this contract, whichever
occurs first.
	 
	I.	 	Payment If Enrollment Begins after First Day of Month. When DMAHS’ capitation payment
obligation is computed, if an enrollee’s coverage begins after the first day of a month,
DMAHS will pay the contractor a fractional capitation payment that is proportionate to the
part of the month during which the contractor provides coverage. Payments are calculated and
made to the last day of a calendar month except as noted in this Article.
	 
	J.	 	Risk Assumption. The capitation rates shall not include any amount for recoupment of any
losses suffered by the contractor for risks assumed under this contract or any prior contract
with the Department.
	 
	K.	 	Hospitalizations. For any eligible person who applies for participation in the contractor’s
plan, but who is hospitalized prior to the time coverage under the plan becomes effective,
such coverage shall not commence until the date after such person is discharged from the
hospital and DMAHS shall be liable for payment for the hospitalization, including any charges
for readmission within forty-eight (48) hours of discharge for the same diagnosis. If an
enrollee’s disenrollment or termination becomes effective during a hospitalization, the
contractor shall be liable for hospitalization until the date such person is discharged from
the hospital, including any charges for readmission within forty-eight (48) hours of discharge
for the same diagnosis. The contractor must notify DMAHS of these occurrences to facilitate
payment to appropriate providers.

 

 

STATE OF NEW JERSEY

SFY 2007

MANAGED CARE CAPITATION RATES

AND MANAGED CARE SERVICES ADMINISTRATOR FEES

******REDACTED*****.

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