Document:

exv10w2

 

Exhibit 10.2

Contract Amendment for Medicaid and BadgerCare Services

Managed Health Services

The agreement entered into for the period of February 1, 2006 through December 31, 2007, between
the State of Wisconsin acting by or through the Department of Health and Family Services,
hereinafter referred to as the “Department” and Managed Health Services, an insurer with a
certificate of authority to do business in Wisconsin for the Medicaid and BadgerCare Managed Care
Program is hereby amended as follows:

	1.	 	Article III, B. Compliance with Applicable Federal Law
	 
	 	 	After the first paragraph, add the following paragraph:

“Federal funds cannot be used for lobbying. Specifically and as applicable, the Contractor
agrees to abide by the Copeland Anti-Kickback Act, the Davis-Bacon Act, federal contract work
hours and safety standards requirements, the Federal Clean Air Act and the Federal Water
Pollution Control Act.
	 
	2.	 	Article VI, K, Incentive for Expansion
	 
	 	 	Change “compared to enrollment numbers shown on the January 2006 MMIS” to “compared to the
average BadgerCare enrollment shown on the February through April 2006 MMIS”
	 
	 	 	Delete the last sentence. Add the following:

	 	a.	 	An incentive payment is available to all plans that remove or
increase current enrollment caps in the following service areas and/or
enter the following service areas resulting in increased BadgerCare
enrollment.

1 — Duluth-Superior

2 — Wausau-Rhinelander

3 — Green Bay

4 — Twin Cities

5 — Stevens Point – Marshfield

7 — LaCrosse

8 — South Central WI/Madison

11 — Dane County

	 	b.	 	The incentive payment will not become part of the base rate.
	 
	 	c.	 	An HMO that accepts the incentive proposal cannot lower the
enrollment limit or entirely leave a rate region prior to July 1, 2008
without prior approval from the Department. An HMO that chooses to

 

 

	 	 	 	impose lower enrollment caps or leave a rate region is not eligible for an incentive
payment and any previous incentive payments will be recouped.
	 
	 	d.	 	The incentive payment will be made for BadgerCare enrollment for
State Fiscal Year 2007 only. BadgerCare enrollment is defined as
recipients in medical status codes Bl, B2, B3, B4, B5, B6 and GP and
enrolled in a Health Maintenance Organization.
	 
	 	e.	 	An average BadgerCare capitation rate, specific to each HMO, will
be calculated using the actual payments made during the enrollment
period February 2006 to April 2006.
	 
	 	f.	 	The amount of the incentive payment per enrollment month will be
7.0% of the average BadgerCare capitation payment as described in # 5.
	 
	 	g.	 	The percentage growth in eligibility will be determined by dividing
the average monthly enrollment for the entire HMO rate region in
BadgerCare medical status codes (B1, B2, B3, B4, B5, B6 and GP)
during the incentive period by the average monthly BadgerCare
enrollment for the entire rate region in the base period (February 2006
through April 2006). There will be two incentive periods: One from
July, 2006 through December, 2006 and the other from January, 2007
through June, 2007.
	 
	 	h.	 	The total incentive payment, for each incentive period, will be calculated
by the following method:

	 	i.	 	First by determining the adjusted enrollment during the base
period. This is calculated by using the HMO’s average monthly enrollment during
the base period and multiplying this by the growth in eligibility (see “g”).
	 
	 	ii.	 	Next, this amount will be subtracted from the HMO’s average monthly
enrollment during the incentive period.
	 
	 	ii.	 	If this number is greater than zero, it will be multiplied by the
number of months in the incentive period (six months) and then multiplied by
the incentive payment amount (see “e”).

	 	i.	 	The payment will be made by March 1, 2007 for the July through December 2006
incentive period and prior to July 31, 2007 for the January through June 2007 incentive
period.
	 
	 	j.	 	Should an HMO cease doing business in the state, the HMO will be paid for that
portion of the incentive period that they were doing business in the targeted rate region(s).

 

 

	 	k.	 	An example of the incentive payment is shown below:
	 
	 	 	 	Determine Actual Enrollment:
	 
	 	 	 	Base period enrollment = 700 of the county’s 1,000 total eligibles are enrolled (70%):
	 
	 	 	 	HMO A = 20% of total county enrollment or 140 enrollees

HMO B = 45% of total county enrollment or 315 enrollees 

HMO C = 35% of total county enrollment or 245 enrollees

	 
	 	 	 	The average monthly enrollment for the incentive period = 960 of 1,200 eligibles (80%):
	 
	 	 	 	HMO A = 25% of total county enrollment or 240 enrollees 

HMO B = 40% of total county enrollment or 384 enrollees 

HMO C = 35% of total county enrollment or 336 enrollees
	 
	 	 	 	Factor out eligibility growth & determine average enrollment above base
enrollment:
	 
	 	 	 	Because eligibility growth is 20%, the average enrollment months for the incentive period
are:
	 
	 	 	 	HMO A = 240 – (120% x 140) = 72 enrollees

HMO B = 384 – (120% x 315) = 6 enrollees

HMO C = 336 - (120% x 245) = 42 enrollees

Totals       960 -          840     
  = 120 enrollees
	 
	 	 	 	Enrollment above base enrollment & adjusted for growth =120 enrollees.
	 
	 	 	 	Calculate incentive amount for the incentive period:
	 
	 	 	 	The incentive payment assuming 7% of the average cap rate is $11.00 would be:
	 
	 	 	 	Total Incentive pool = 960 - 840 = 120 x 6 months x $11 = $7,920.
	 
	 	 	 	HMO A = 72 enrollment months x 6 months x $11 = $4,752.00

HMO B = 6 enrollment months x 6 months x $11 = $396.00

HMO C = 42 enrollment months x 6 months x $11 = $2,772.00

Total Payout                
        
           
       
          
        $7,920.00

 

 

All terms and conditions of the February 1, 2006 through December 31, 2007 contract and any
prior amendments that are not affected by this amendment shall remain in full force and effect
through the extension period.

	 	 	 
	Managed
Health Services	 	Department
of Health and Family Services
	Official Signature
	 	Official Signature
	/s/ Linda McKnew	 	 
	 	 	 
	Printed Name
	 	Printed Name
	Linda McKnew
	 	Cheryl Mcllquham
	 	 	 
	Title
	 	Title
	President and CEO
	 	Interim Administrator
	 
	 	Division of Health Care Financing
	 	 	 
	Date 

8-22-06
	 	Dateexv10w3

 

Exhibit
10.3

	 	 	 	 	 
	Georgia
Department of
	 	 	 	 
	Community
Health

	 	 	 	2 Peachtree Street, NW
	 

	 	 	 	Atlanta, GA 30303-3159
	Rhonda M. Medows, MD, Commissioner

	 	Sonny Perdue, Governor
	 	www.dch.georgia.gov

July 10, 2006

Sent Via: Certified Mail / Return Receipt Requested

David McNichols

Peachstate Health Plan, Inc.

3200 Highland Pkwy., SE

Suite 300

Smyrna, GA 30082

	 	 	 	 	 
	 

	 	RE:
	 	NOTICE OF RENEWAL FOR FISCAL YEAR 2007
	 

	 	 	 	Contract# 0653

Dear Mr. McNichols:

This letter serves as written notice that the Department of Community Health (hereinafter
“DCH” or the “Department”) is exercising its option to renew the above-referenced contract for
an additional State fiscal year, subject to the terms and conditions of the underlying
contract (the “Contract”) and any applicable subsequent amendments. The Contract, as renewed,
shall terminate on June 30, 2007. All terms and conditions of the contract, including
reimbursement, shall remain as stated in the original contract and any amendments thereto.

In addition, below is a list of items necessary to update your contract information. It is
essential that this information is provided as soon as possible, but no later than September 1,
2006. If you are unable to respond in that time, please notify us by written correspondence (email
is acceptable). Please review your current contract and send the following documents if applicable:

	 	•	 	Certificate of Insurance;
	 
	 	•	 	Payment and/or Performance Bonds;
	 
	 	•	 	Top-level management names, titles, areas of responsibility and resumes;
	 
	 	•	 	Organizational Chart;
	 
	 	•	 	The names, titles, areas of responsibility, and resumes for all employees
assigned to perform work on the contract during fiscal year 2007;
	 
	 	•	 	The names, titles, areas of responsibility, and resumes for all employees
anticipated to perform work on the contract during fiscal year 2007;
	 
	 	•	 	The names and business addresses of all subcontractors performing work on the
Contract during fiscal year 2007;

Equal Opportunity Employer

 

 

	 	•	 	The names and business addresses of all subcontractors anticipated to
perform work on the Contract during fiscal year 2007;
	 
	 	•	 	A copy of your last audit report from an independent Certified Public Accountant
firm for the period covering Fiscal Year 2006, if available, or the last conducted
audit report; and
	 
	 	•	 	A copy of your business continuity plan or similar document (optional).

Enclosed
is an additional copy of this letter. Please sign both copies where indicated retaining
one for your files and returning the other via fax and mail before close of business June 30, 2006
to:

Georgia Department of Community Health

Contracts Administration

2 Peachtree Street, NW,
40th Floor

Atlanta, Georgia 30303-3159

Fax: (404) 463-5025

Please contact me at (404) 463-1930 or via email at bshepard@dch.ga.gov should you have any
questions or require additional information. We look forward to continuing with your contract in
Fiscal Year 2007.

	 	 	 	 	 
	 	Sincerely,

 	 
	 	/s/     Joanne Mitchell
 	 
	 	Joanne Mitchell 	 
	 	Contract Manager 	 
	 

	CC: Charemon Grant, Esq. General Counsel File

Signature
of Acceptance:

We, PEACH STATE HEALTH PLAN, do hereby acknowledge the renewal of our
contract, Contract #0653 agree to the renewal terms as heretofore stated by the duly
authorized signature below:

	 	 	 	 	 
	/s/
David McNichols

	 	 	 	7/26/2006
	 

	 	 	 	 
	Authorized Signature

	 	 	 	Date
	PRESIDENT, CEO

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