Document:

Ex-4.7 July 27, 2006 Supplemental Indenture

 

Exhibit 4.7

SUPPLEMENTAL INDENTURE

     Supplemental Indenture (this “Supplemental Indenture”), effective as of July 27,
2006, among The Heart Center of Central Phoenix, L.P. (the “Guaranteeing Subsidiary”), a subsidiary
of IASIS Healthcare LLC (or its permitted successor), (the “Company”), the Company, IASIS Capital
Corporation (or its permitted successor), (“IASIS Capital,” and together with the Company, the
“Issuers”), the other Guarantors (as defined in the Indenture referred to herein) and The Bank of
New York Trust Company, N.A., as trustee under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H

     WHEREAS, the Issuers have heretofore executed and delivered to the Trustee an indenture (the
“Indenture”), dated as of June 22, 2004 providing for the issuance of 83/4% Senior Subordinated Notes
due 2014 (the “Notes”);

     WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary
shall execute and deliver to the Trustee a supplemental indenture pursuant to which the
Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the
Notes and the Indenture on the terms and conditions set forth herein (the “Subsidiary Guarantee”);
and

     WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and
deliver this Supplemental Indenture.

     NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Parties mutually covenant and agree
for the equal and ratable benefit of the Holders of the Notes as follows:

     1. Capitalized Terms. Capitalized terms used herein without definition shall have
the meanings assigned to them in the Indenture.

     2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees to provide an
unconditional Guarantee on the terms and subject to the conditions set forth in the Subsidiary
Guarantee and in this Indenture including but not limited to Article 11 thereof.

     3. No Recourse Against Others. No past, present or future director, officer,
employee, incorporator, stockholder or agent of the Guaranteeing Subsidiary, as such, shall have
any liability for any obligations of the Issuers or any Guaranteeing Subsidiary under the Notes,
any Subsidiary Guarantees, the Indenture or this Supplemental Indenture or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by
accepting a Note waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the SEC that such a waiver is against
public policy.

     4. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED
TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF

 

 

CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD
BE REQUIRED THEREBY.

     5. Counterparts. The parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement.

     6. Effect of Headings. The Section headings herein are for convenience only and
shall not affect the construction hereof.

     7. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of
the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary
and the Issuers.

[Signature Pages Follow]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed,
all as of the date first above written.

	 	 	 	 	 
	 	THE HEART CENTER OF CENTRAL PHOENIX, L.P.

 	 
	 	By:  	/s/ Frank A. Coyle
 	 
	 	 	Name:  	Frank A. Coyle 	 
	 	 	Title:  	Secretary 	 
	 

	 	 	 	 	 
	 	IASIS HEALTHCARE LLC

 	 
	 	By:  	W. Carl Whitmer
 	 
	 	 	Name:  	W. Carl Whitmer 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	IASIS CAPITAL CORPORATION

 	 
	 	By:  	W. Carl Whitmer
 	 
	 	 	Name:  	W. Carl Whitmer 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

ARIZONA DIAGNOSTIC & SURGICAL CENTER, INC.

BAPTIST JOINT VENTURE HOLDINGS, INC.

BEAUMONT HOSPITAL HOLDINGS, INC.

BILTMORE SURGERY CENTER, INC.

BILTMORE SURGERY CENTER HOLDINGS, INC.

BROOKWOOD DIAGNOSTIC CENTER OF TAMPA, INC.

DAVIS HOSPITAL HOLDINGS, INC.

DAVIS SURGICAL CENTER HOLDINGS, INC.

DECISIONPOINT SERVICES, INC.

FIRST CHOICE PHYSICIANS NETWORK HOLDINGS, INC.

IASIS FINANCE, INC.

IASIS HEALTHCARE HOLDINGS, INC.

IASIS MANAGEMENT COMPANY

IASIS PHYSICIAN SERVICES, INC.

IASIS TRANSCO, INC.

JORDAN VALLEY HOSPITAL HOLDINGS, INC.

MCS/AZ, INC.

METRO AMBULATORY SURGERY CENTER, INC.

 

 

NORTH VISTA HOSPITAL, INC.

PALMS OF PASADENA HOMECARE, INC.

PIONEER VALLEY HEALTH PLAN, INC.

PIONEER VALLEY HOSPITAL, INC.

PIONEER VALLEY HOSPITAL PHYSICIANS, INC.

ROCKY MOUNTAIN MEDICAL CENTER, INC.

SALT LAKE REGIONAL MEDICAL CENTER, INC.

SALT LAKE REGIONAL PHYSICIANS, INC.

IASIS HOSPITAL NURSE STAFFING COMPANY

SOUTHRIDGE PLAZA HOLDINGS, INC.

SSJ ST. PETERSBURG HOLDINGS, INC.

TAMPA BAY STAFFING SOLUTIONS, INC.

	 	 	 	 	 
	 	 	 
	 	By:  	                                              /s/ Frank A. Coyle
 	 
	 	 	Name:  	Frank A. Coyle 	 
	 	 	Title:  	Secretary 	 
	 

	 	 	 	 	 
	 	SEABOARD DEVELOPMENT LLC

 	 
	 	By:  	/s/ Frank A. Coyle
 	 
	 	 	Name:  	Frank A. Coyle 	 
	 	 	Title:  	Secretary 	 
	 

	 	 	 	 	 
	 	IASIS FINANCE TEXAS HOLDINGS, LLC

 	 
	 	By:  	/s/ Frank A. Coyle
 	 
	 	 	Name:  	Frank A. Coyle 	 
	 	 	Title:  	Secretary 	 

 

 

	 	 	 	 	 

ST. LUKE’S BEHAVIORAL HOSPITAL, LP

MEMORIAL HOSPITAL OF TAMPA, LP

MESA GENERAL HOSPITAL, LP

PALMS OF PASADENA HOSPITAL, LP

SOUTHWEST GENERAL HOSPITAL, LP

ST. LUKE’S MEDICAL CENTER, LP

TEMPE ST. LUKE’S HOSPITAL, LP

TOWN & COUNTRY HOSPITAL, LP

MOUNTAIN VISTA MEDICAL CENTER, LP

CARDIOVASCULAR SPECIALTY CENTERS OF UTAH, LP

IASIS GLENWOOD REGIONAL MEDICAL CENTER, L.P.

By: IASIS HEALTHCARE HOLDINGS, INC.,

       as General Partner

	 	 	 	 	 
	 	 	 
	 	By:  	                                              /s/ Frank A. Coyle
 	 
	 	 	Name:  	Frank A. Coyle 	 
	 	 	Title:  	Secretary 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee

 	 
	 	By:  	
/s/ Stefan Victory 	 
	 	 	Authorized SignatureEx-10.24 Amendment No. 15 to Contract

Table of Contents

Exhibit 10.24

ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM ADMINISTRATION

DIVISION OF BUSINESS AND FINANCE

CONTRACT AMENDMENT

	 	 	 	 	 	 	 	 	 	 
	1. AMENDMENT NO.:

	 	 	2. CONTRACT NO.:
	 	 	3. EFFECTIVE DATE OF AMENDMENT:
	 	 	4. PROGRAM:
	15

	 	 	YH04-0001-03
	 	 	October 1, 2006
	 	 	DHCM

 

	5.	 	CONTRACTOR/PROVIDER NAME AND ADDRESS:

Health Choice Arizona

1600 W. Broadway, Suite 260

Tempe, Arizona 85282-1136

 

	6.	 	PURPOSE:

               To amend Sections B, C, D and E and Attachments A, H and I.

	7.	 	The above referenced contract is hereby amended as follows:

	 	A.	 	CHANGES IN REQUIREMENTS: In accordance with Section E, Paragraph 30, “Changes”,
various changes in contract requirements are indicated in this contract restatement.
	 
	 	B.	 	By signing this contract amendment, the Contractor is agreeing to the terms of the contract
as amended.

			
	NOTE: Please sign and date both and return one original to:	 	Pat Watkinson, Contracts Manager

AHCCCS Contracts and Purchasing

701 E. Jefferson, MD 5700

Phoenix, AZ 85034

	8.	 	EXCEPT AS PROVIDED FOR HEREIN, ALL TERMS AND CONDITIONS OF THE ORIGINAL CONTRACT NOT
HERETOFORE CHANGED AND/OR AMENDED REMAIN UNCHANGED AND IN FULL EFFECT.
	 
	 	 	IN WITNESS WHEREOF THE PARTIES HERETO SIGN THEIR NAMES IN AGREEMENT.

 

	 	 	 	 
	9. NAME OF CONTRACTOR:

	 	 	10. ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM
	HEALTH CHOICE ARIZONA

	 	 	 
	 	 	 	 
	SIGNATURE OF AUTHORIZED INDIVIDUAL: /s/ CAROLYN ROSE

	 	 	SIGNATURE: /s/ MICHAEL VEIT
	 	 
	 	 	 	 
	TYPED
NAME:

	 	 	TYPED NAME:
	CAROLYN ROSE

	 	 	MICHAEL VEIT
	 	 	 	 
	TITLE: CHIEF EXECUTIVE OFFICER

	 	 	TITLE: CONTRACTS AND PURCHASING ADMINISTRATOR
	 	 	 	 
	DATE 9/26/06

	 	 	DATE: August 9, 2006
	
	 	 	 

 

Table of Contents

Janet
Napolitano, Governor

Anthony D. Rodgers, Director

801 East Jefferson, Phoenix AZ 85034

PO Box 25520, Phoenix AZ 85002

			
	Our first care is your health care
	 	phone 602 417 4000
	     ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM
	 	www.ahcccs.state.az.us

August 25, 2006

The Acute Care contract for October 1, 2006–September 30, 2007, Paragraph 57 — Reinsurance, as
amended, establishes the following deductible and coinsurance levels for the reinsurance program
based on enrollment as of the beginning of each contract year:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Title XIX Waiver Group	 	 
	 	 	Annual Deductible*	 	Annual Deductible	 	 
	Statewide Plan	 	 	 	Prospective	 	 
	Enrollment 	 	 	 	Reinsurance	 	Coinsurance
	0-34,999
	 	$	20,000	 	 	$	15,000	 	 	 	75	%
	35,000-49,999
	 	$	35,000	 	 	$	15,000	 	 	 	75	%
	50,000 and over
	 	$	50,000	 	 	$	15,000	 	 	 	75	%

 

			
	*	 	applies to all members except for Title XIX Waiver Group, SSDI and SOBRA Family Planning
members

Per the RFP, Contractors that fall into the $35,000 and $50,000 deductible levels for
prospective reinsurance are allowed to elect a lower deductible level at the beginning of each
contract year. Contractors at the $20,000 deductible level are not allowed to elect a higher
deductible level. All Contractors must complete the following form electing your deductible choice.
If your plan is at the $20,000 deductible level, check the $20,000 box. If your health plan is
above the $20,000 deductible level, determine if you would like to remain at the deductible level
according to the table above, or if you would like to elect a lower deductible level.

Please complete the attached form, by checking the appropriate deductible level box and return to
Division of Health Care Management by September 1, 2006.

Attached are the Reinsurance Offsets for CYE’07.

 

Table of Contents

Reinsurance
Deductible Choice

August 25, 2006

Contract Year Ending 9/30/07 Reinsurance Deductible Level Choice:

o $20,000 Prospective Reinsurance Deductible Level

o $35,000 Prospective Reinsurance Deductible Level

o $50,000 Prospective Reinsurance Deductible Level

	 	 	 	 	 
	 
	 	 	 	 	 
	Signature

	 	 	 	Date
	 
	 	 	 	 
	 	 	 	 	 
	Title
	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	Health Plan
	 	 	 	 

Please sign and return this form to Kathy Rodham, AHCCCS, Division of
Health Care Management, Mail Drop 6100, by Friday, September 1, 2006.

 

Table of Contents

					
	 	 	 	 	 
	State of Arizona — AHCCCS
	 	Updated Reinsurance Offsets
	 	Proprietary & Confidential
	 
	 	by Deductible Level	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Reinsurance Offsets at $20,000 Deductible Level 1
	 	 	TANF/KC<1	 	TANF/KC 1-13	 	TANK/KC 14-44 F 2	 	TANF/KC 14-44 M 2	 	TANF 45 +	 	SSIW/MED	 	SSIW/O MED
	GSA 2
	 	$	62.94	 	 	$	1.38	 	 	$	4.99	 	 	$	6.33	 	 	$	12.02	 	 	$	1.01	 	 	$	75.39	 
	GSA 4
	 	$	61.91	 	 	$	1.34	 	 	$	4.97	 	 	$	5.96	 	 	$	12.17	 	 	$	2.07	 	 	$	69.70	 
	GSA 6
	 	$	62.51	 	 	$	1.47	 	 	$	5.56	 	 	$	6.06	 	 	$	11.60	 	 	$	1.64	 	 	$	67.09	 
	GSA 8
	 	$	56.84	 	 	$	1.29	 	 	$	5.35	 	 	$	6.02	 	 	$	11.02	 	 	$	0.96	 	 	$	64.26	 
	GSA 10
	 	$	61.68	 	 	$	1.38	 	 	$	5.09	 	 	$	6.51	 	 	$	12.24	 	 	$	1.71	 	 	$	74.39	 
	GSA 12
	 	$	57.09	 	 	$	1.37	 	 	$	5.25	 	 	$	6.16	 	 	$	11.65	 	 	$	1.16	 	 	$	70.98	 
	GSA 14
	 	$	57.12	 	 	$	1.40	 	 	$	4.75	 	 	$	5.77	 	 	$	11.01	 	 	$	0.96	 	 	$	64.28	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Reinsurance Offsets at $35,000 Deductible Level 1
	 	 	TANF/KC<1	 	TANF/KC 1-13	 	TANK/KC 14-44 F 2	 	TANF/KC 14-44 M 2	 	TANF 45 +	 	SSIW/MED	 	SSIW/O MED
	GSA 2
	 	$	46.48	 	 	$	1.07	 	 	$	3.69	 	 	$	4.79	 	 	$	8.89	 	 	$	0.80	 	 	$	60.55	 
	GSA 4
	 	$	45.69	 	 	$	1.04	 	 	$	3.70	 	 	$	4.42	 	 	$	9.01	 	 	$	1.88	 	 	$	54.85	 
	GSA 6
	 	$	46.13	 	 	$	1.14	 	 	$	4.12	 	 	$	4.50	 	 	$	8.59	 	 	$	1.49	 	 	$	54.90	 
	GSA 8
	 	$	41.95	 	 	$	1.07	 	 	$	3.96	 	 	$	4.47	 	 	$	8.34	 	 	$	0.77	 	 	$	50.57	 
	GSA 10
	 	$	45.52	 	 	$	1.14	 	 	$	3.79	 	 	$	4.98	 	 	$	9.05	 	 	$	1.37	 	 	$	60.95	 
	GSA 12
	 	$	42.13	 	 	$	1.14	 	 	$	3.91	 	 	$	4.68	 	 	$	8.67	 	 	$	1.04	 	 	$	58.06	 
	GSA 14
	 	$	42.15	 	 	$	1.08	 	 	$	3.52	 	 	$	4.28	 	 	$	8.42	 	 	$	0.84	 	 	$	51.97	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Reinsurance Offsets at $55,000 Deductible Level 1
	 	 	TANF/KC<1	 	TANF/KC 1-13	 	TANK/KC 14-44 F 2	 	TANF/KC 14-44 M 2	 	TANF 45 +	 	SSIW/MED	 	SSIW/O MED
	GSA 2
	 	$	36.62	 	 	$	0.88	 	 	$	2.92	 	 	$	3.87	 	 	$	7.02	 	 	$	0.68	 	 	$	51.65	 
	GSA 4
	 	$	35.98	 	 	$	0.86	 	 	$	2.94	 	 	$	3.50	 	 	$	7.11	 	 	$	1.77	 	 	$	45.96	 
	GSA 6
	 	$	36.32	 	 	$	0.94	 	 	$	3.25	 	 	$	3.56	 	 	$	6.80	 	 	$	1.40	 	 	$	47.60	 
	GSA 8
	 	$	33.02	 	 	$	0.94	 	 	$	3.13	 	 	$	3.54	 	 	$	6.73	 	 	$	0.65	 	 	$	42.37	 
	GSA 10
	 	$	35.84	 	 	$	1.00	 	 	$	3.01	 	 	$	4.06	 	 	$	7.15	 	 	$	1.16	 	 	$	52.89	 
	GSA 12
	 	$	33.17	 	 	$	1.00	 	 	$	3.11	 	 	$	3.79	 	 	$	6.89	 	 	$	0.96	 	 	$	50.32	 
	GSA 14
	 	$	33.18	 	 	$	0.89	 	 	$	2.78	 	 	$	3.39	 	 	$	6.88	 	 	$	0.77	 	 	$	44.59	 

 

	
	1  These offsets are inclusive of the inpatient, transplant, and catastrophic
PMPMs;

 

Table of Contents

SUMMARY OF CHANGES — AMENDMENT 10/1/06

This summary is provided as a convenience to the Contractor and does not supersede the revised
text of the renewal document. This summary is believed to be an accurate summary of changes;
however, any conflict between the summary and the text will be resolved in favor of the text.

All text revisions summarized below are considered either an actual change to contract
requirements or a clarification of existing requirements. Finally, punctuation, grammar and
style changes have been made throughout the revised text which have no effect on the contract
requirements and which may not be otherwise identified.

	 	 	 	 	 
	Para #:	 	PARAGRAPH TITLE:	 	SUMMARY OF CHANGE OR CLARIFICATION:
	 

	 	Throughout the Document	 	 
	 
	 	 	 	 
	 

	 	Throughout the Document	 	 
	 
	 	 	 	 
	 

	 	Definitions
	 	BIDDER’S LIBRARY — deleted “at the AHCCCS Office in Phoenix. A
limited, virtual library is located”.
	 
	 	 	 	 
	 

	 	Definitions
	 	Deleted “HMO” definition.
	 
	 	 	 	 
	 

	 	Definitions
	 	Inserted definition for “Medical Management”.
	 
	 	 	 	 
	 

	 	Definitions
	 	Deleted “Medicare HMO” definition and added “Medicare Advantage”
definition.
	 
	 	 	 	 
	 

	 	Definitions
	 	Revised “Appeal Resolution” to be “Notice of Appeal Resolution”
	 
	 	 	 	 
	 

	 	Definitions
	 	Added “filed by a provider or Contractor, whichever is applicable” to Claim
Dispute definition
	 
	 	 	 	 
	 

	 	Definitions
	 	Added definition for Adjudicated Claims : Claims which have been received
and processed by the Contractor which resulted in a payment or denial of
payment.
	 
	 	 	 	 
	 

	 	Definitions
	 	Added the following definitions:
	 
	 	 	 	 
	 

	 	 	 	Delegated Agreements, Management Service Agreements and Service Level
Agreements
	 
	 	 	 	 
	 

	 	Definitions
	 	Further defined definition for Management Service Agreements:
	 

	 	 	 	An agreement with an entity in which the owner of the Contractor delegates
some or all of the comprehensive management and administrative services
necessary for the operation of the Contractor
	 
	 	 	 	 
	 

	 	Definitions
	 	Added definition — Medicare Managed Care Plan: A managed care entity that
has a Medicare contract with CMS to provide services to Medicare
beneficiaries, including Medicare Advantage Prescription Drug Plan
(MAPDP), MAPDP Special Needs Plan, or Medicare Prescription Drug Plan
	 
	 	 	 	 
	 

	 	Definitions
	 	Added definition for Major Upgrade to clarify language in Paragraph 38,
Claims Payment/Health Information System: Major Upgrade — Any
upgrade or system changes that may result in a disruption to the
following: Loading of contracts, providers or members, issuing prior authorizations or the
adjudication of claims.
	 
	 	 	 	 
	 

	 	Definitions
	 	Subcontractor — updated definition: (1) A provider of health care who agrees
to furnish covered services to members (2) A person, agency or organization
with which the Contractor has contracted or delegated some of its
management/administrative functions or responsibilities (3) A person, agency
or organization with which a fiscal agent has entered into a contract,
agreement, purchase order or lease (or leases of real property) to obtain space,
supplies, equipment or services provided under the AHCCCS agreement.

Page 1 of 10

Table of Contents

	 	 	 	 	 
	Para #:	 	PARAGRAPH TITLE:	 	SUMMARY OF CHANGE OR CLARIFICATION:
	D-2

	 	Eligibility Categories
	 	Added : Social Security
Disability Insurance Temporary Medical Coverage
	 

	 	 	 	(SSDI-TMC)
	 

	 	 	 	Laws 2006, Chapter 373 established a Temporary Medical Coverage Program.
	 

	 	 	 	SSDI-TMC provides health care coverage to persons who:
	 

	 	 	 	     1 . Are citizens and residents who have been enrolled in AHCCCS at
any time within the last 24 months

	 
	 

	 	 	 	     2. And became ineligible for AHCCCS coverage due to federal
disability insurance benefit payments making them over income for
Medicaid,

	 
	 

	 	 	 	     3. And they are not yet eligible for Medicare.

	 

	 	 	 	In order to participate in SSDI-TMC, eligible persons must pay a premium.
Participants become ineligible for SSDI-TMC once they become eligible for
Medicare. SSDI-TMC is funded entirely by the State. Contractors will be
capitated for these members under unique rate codes and AHCCCS may
provide a reconciliation to limit the profit or loss of this population. If
reconciliation is to be implemented, an SSDI-TMC reconciliation policy will
be developed which will discuss the details of the reconciliation calculations
and timelines. SSDI-TMC members will not be eligible for behavioral health
services, prior period coverage, any supplemental payments or reinsurance.
Members will be entitled to all other AHCCCS Acute Care benefits.
	 
	 	 	 	 
	D-3

	 	Enrollment and
Disenrollment
	 	Revised Policy title.
	 
	 	 	 	 
	D-3

	 	Enrollment and
Disenrollment
	 	Native Americans — change IHS to AHCCCS FFS
	 
	 	 	 	 
	D-8

	 	Mainstreaming of ALTCS
Members
	 	Deleted “sex” and replaced with “gender”. In the 1st subparagraph inserted
“literacy and” and “including assistance for the visual and hearing impaired”.
Removed “of any language” Added back in “free of charge”
	 
	 	 	 	 
	D-9

	 	Transition of Members
	 	Added language to include CMDP.
	 
	 	 	 	 
	D-9

	 	Transition of Members
	 	Removed HIS, a PL 93-638 tribal entity
	 
	 	 	 	 
	D-10

	 	Scope of Services — Notice
of Action
	 	Added “reduce, terminate or suspend” to the “written notice of any decision to
deny...”
	 
	 	 	 	 
	D-10

	 	Covered Services —

Immunizations
	 	Inserted “or others as medically indicated” and referenced the AMPM for
current immunization requirements.
	 
	 	 	 	 
	D-10

	 	Covered Services —

Transplants
	 	Deleted second sentences beginning
with “Such limitations . . . . . . ”
	 
	 	 	 	 
	D-10

	 	Emergency Services
	 	Inserted “Claims submission by the hospital constitutes notice to the
Contractor.” Into the second item #2. Added to #2 – Claim submission by the
hospital within 10 calendar days of presentation for the emergency services
constitutes notice to the Contractor.
	 
	 	 	 	 
	D-10

	 	Emergency Services
	 	Insert “Emergency Room” Provider -
	 
	 	 	 	 
	D-10

	 	Emergency Services
	 	Added sentence to the end: For additional information and requirements
regarding emergency services, refer to AHCCCS Rules R9-22-201 et seq.

Page 2 of 10

Table of Contents

	 	 	 	 	 
	Para #:	 	PARAGRAPH TITLE:	 	SUMMARY OF CHANGE OR CLARIFICATION:
	D-10

	 	Children’s Rehabilitative
Services (CRS)
	 	Updated 4th Paragraph: A member with private insurance is not required to
utilize CRSA. This includes members with Medicare whether they are enrolled
in Medicare FFS or a Medicare Managed Care Plan. If the member uses the
private insurance network or Medicare for a CRS covered condition, the
Contractor is responsible for all applicable deductibles and copayments. If the
member is on Medicare, the AHCCCS Policy 201- Medicare Cost Sharing for
Members in Traditional Fee for Service Medicare and Policy 202 — Medicare
Cost Sharing for Members in Medicare Managed Care Plans shall apply. When
the private insurance or Medicare is exhausted, or certain annual or lifetimes
limits are reached with respect to CRS covered conditions, the Contractor shall
refer the member to CRSA for determination for CRS services. If the member
with private insurance or Medicare chooses to enroll with CRS, CRS becomes
the secondary payer responsible for all applicable deductibles and copayments.
The Contractor is not responsible to provide services in instances when the CRS
eligible member, who has no primary insurance or Medicare, refuses to receive
CRS covered services through the CRS Program....”
	 
	 	 	 	 
	D-10

	 	CRS
	 	CRS Regional Medical Director when it denies a service for the reason that
it is not covered by the CRS Program. The Contractor may also request a
hearing with the Administration if it is dissatisfied with the
CRSA
determination. If the AHCCCS Hearing Decision determines that the service
should have been provided by CRSA, CRSA shall be financially responsible
for the costs incurred by the Contractor in providing the service
	 
	 	 	 	 
	D-12

	 	Behavioral Health
	 	Adjusted First two sentences to read:
	 
	 	 	 	 
	 

	 	 	 	AHCCCS members, except for SOBRA Family Planning and SSDI-TMC
members, are eligible for comprehensive behavioral health services. For
SOBRA Family Planning and SSDI-TMC members, there is no behavioral
health coverage.
	 
	 	 	 	 
	D-12

	 	Behavioral Health
	 	Updated list of covered services to coincide with the Behavioral Health Services
Guide.
	 
	 	 	 	 
	D-12

	 	Behavioral Health
	 	Substitute the first 2 sentences under Emergency Services with: Contractors are
responsible for providing up to 72 hours inpatient emergency behavioral health
services to members with psychiatric or substance abuse diagnoses who are not
behavioral health recipients in accordance with AHCCCS Rule R9-22-210.01.
For additional information regarding behavioral health services refer to Title 9
Chapter 22 Articles 2 and 12. It is expected that Contractors initiate a referral to
the RBHA for evaluation and behavioral health recipient eligibility as soon as
possible after admission.
	 
	 	 	 	 
	D-13

	 	AHCCC Guidelines,
Policies and Manuals
	 	Paragraph revised to reference all AHCCCS guidelines, policies and manuals.
	 
	 	 	 	 
	D-13

	 	AHCCC Guidelines,
Policies and Manuals
	 	Added (Arizona Administrative Code) to the end of AHCCCS Rules
	 
	 	 	 	 
	D-13

	 	AHCCC Guidelines,
Policies and Manuals
	 	Added “or upon request” to “All AHCCCS guidelines, policies and manuals
are available on the AHCCCS Home Page on the Internet 
@
www.azahcccs.gov”
	 
	 	 	 	 
	D-13

	 	AHCCC Guidelines,
Policies and Manuals
	 	Added language to the end of paragraph: Upon adoption by AHCCCS,
updates will be made available to the Contractors. Once notification to the
Contractors has taken place, the Contractor shall be responsible for
implementing and maintaining current copies of updates.

Page 3 of 10

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	Para #:	 	PARAGRAPH TITLE:	 	SUMMARY OF CHANGE OR CLARIFICATION:
	D-15

	 	Pediatric Immunizations
and the Vaccine for
Children’s Program.
	 	Changed Vaccine to plural to match verbiage of the CDC
	 
	 	 	 	 
	D-15

	 	Pediatric Immunizations
and the Vaccine for
Children’s Program.
	 	The last sentence of the 1st subparagraph deleted “providing immunizations”
and inserted “a physician acting as primary care physician (PCP)”. In the last
sentence of the 2nd subparagraph deleted “are encouraged” and inserted
“must” and “and monitor to ensure compliance.”
	 
	 	 	 	 
	D-16

	 	Staff Requirements and
Support Services
	 	Replace bullet n. “Grievance Manager” with the following:

	 

	 	 	 	  “A Grievance
Manager who will manage and adjudicate member and
provider grievances and requests for hearings.” Changed to read “A Grievance
Manager who will manage and adjudicate member and provider disputes arising
under the Grievance System including member grievances, appeals, and requests
for hearing and provider claim disputes.”.
	 
	 	 	 	 
	D-16

	 	Staff Requirements and
Support Services
	 	Replace bullet s. “Pharmacy Coordinator/Director” with the following:

	 

	 	 	 	     
“A Pharmacy Coordinator/Director who is an Arizona licensed
pharmacist or physician who oversees and administers the prescription drug
and pharmacy benefits. The Pharmacy Coordinator/Director may be an
employee or contractor of the Plan.”
	 
	 	 	 	 
	D-16

	 	Staff Requirements and
Support Services
	 	Replace bullet f. “Maternal Health/EPSDT Coordinator” title with the following:

	 

	 	 	 	     “Maternal
Health/EPSDT (child health) Coordinator”
	 
	 	 	 	 
	D-16

	 	Staff Requirements and
Support Services
	 	Changed item e to read : A Utilization Management/Medical Management
Coordinator
	 
	 	 	 	 
	D-16

	 	Staff Requirements and
Support Services
	 	Added bullet t. Dental Director/Coordinator as follows:

 t.
   Dental Director/Coordinator that is responsible for coordinating dental
activities of the health plan and providing required communication
between the plan and AHCCCS. The Dental Director/Coordinator may
be an employee or contractor of the plan and must be licensed in Arizona
if they are required to review or deny dental services

	 
	 	 	 	 
	D-1S

	 	Member Information
	 	Added requirement for Contractors to develop and distribute a member
newsletter at least quarterly.
	 
	 	 	 	 
	D-18

	 	Member Information
	 	Changed the 4th grade level requirement to read: The Contractor shall make
every effort to ensure that all information prepared for distribution to members
is written using an easily understood language and format and as further
described in the AHCCCS Member Information Policy.
	 
	 	 	 	 
	D-I9

	 	Surveys
	 	Deleted “The Program Contractor will not be required to conduct a member
survey during CYE 06”.
	 
	 	 	 	 
	D-21

	 	Medical Records
	 	Inserted “medical (including dental) records”. - removed from this
paragraph but added as a requirement for subcontracts #37, H
	 
	 	 	 	 
	D-23

	 	Medical Management
	 	Updated all references from UM to MM. Added new language. It addresses
MM assessment, monitoring and reporting requirements.
	 
	 	 	 	 
	D-23

	 	Medical Management
	 	Removed the word “all” from the statement “the Contractor will asses, monitor
and report quarterly through the MM Committee, all medical decisions.
.. . . .
	 
	 	 	 	 
	D-23

	 	Medical Management
	 	Changed order of paragraphs to state the requirement of the MM Committee
first, then the expectations of the committee.
	 
	 	 	 	 
	D-23

	 	Medical Management
	 	 
8. Disease Management or Chronic Care Program that reports results and
provides for analysis of the program through the MM Committee; and...

Page 4 of 10

Table of Contents

	 	 	 	 	 
	Para #:	 	PARAGRAPH TITLE:	 	SUMMARY OF CHANGE OR CLARIFICATION:
	D-24

	 	Performance Standards
	 	Changed “Dental Visits” in the Performance Standards table to read “Children’s
Dental Visits”
	 
	 	 	 	 
	D-24

	 	Performance Standards
	 	Updated Table : Minimum Performance Standards, Goals and Benchmarks for
each measure
	 
	 	 	 	 
	D-25

	 	Grievance System
	 	Inserted in 1st subparagraph “non-contracted” in front of “providers”.
	 
	 	 	 	 
	D-26

	 	Quarterly Grievance

System Reports
	 	Last Paragraph — updated to read: The Contractor shall trend and analyze
Enrollee Appeal and Provider Claim Disputes at least quarterly; any identified
trends and corrective action plans shall be reported to AHCCCS, Division of
Health Care Management with the Enrollee Appeal and Provider Claim
Dispute Report.
	 
	 	 	 	 
	D-29

	 	Network Management
	 	In the subparagraph language that Contractors may be directed by AHCCCSA
to meet with providers.
	 
	 	 	 	 
	D-29

	 	Network Management
	 	Updated language regarding meetings
with providers (4th paragraph): Contractors may be required to conduct meetings with providers to address
issues (or to provider general information, technical assistance, etc.) related to
federal and state requirements, changes in policy, reimbursement matters,
prior authorization and other matters as identified or requested by the
Administration.
	 
	 	 	 	 
	D-29

	 	Network Management
	 	Changed the word physician groups to provider groups in paragraph 5 –
regarding 90 days prior notice of a contract termination without cause.
	 
	 	 	 	 
	D-32

	 	Referral Management
Procedures and Standards
	 	Changed Medicare HMO to Medicare
Managed Care Plan in item “g.”
	 
	 	 	 	 
	D-35

	 	Provider Manual
	 	Added website manual reference to the following:

	 
	 

	 	 	 	“The Contractor shall develop, distribute and maintain a provider manual.
The Contractor shall ensure that each contracted provider is made aware of a
website provider manual or, if requested, issued a hard copy of the
provider manual and is encouraged to distribute a provider manual to any
individual or group that submits claim and encounter data.
	 
	 	 	 	 
	D-35

	 	Provider Manual
	 	Added the following to letter f. “EPSDT providers must document
immunizations into ASIIS and enroll every year in the Vaccine for Children
program.”
	 
	 	 	 	 
	D-35

	 	Provider Manual
	 	Added item dd. “How to access or obtain Practice Guidelines and coverage
criteria for authorization decisions.”
	 
	 	 	 	 
	D-36

	 	Provider Registration
	 	Removed “and receive an AHCCCS Provider ID Number.” And replaced
“each provider who does not already have a current AHCCCS ID
Number” with “each provider who is not already an AHCCCS registered
provider.” Added : The National Provider Identifier (NPI) will be required
on all claim submissions and subsequent encounters (from providers who are
eligible for a NPI) effective for dates of service on or after May 23, 2007.
Contractors shall work with providers to obtain their NPI
	 
	 	 	 	 
	D-37

	 	Subcontracts
	 	Added dental to h.
	 
	 	 	 	 
	D-37

	 	Subcontracts
	 	Added to “r” “concurrent review”, Under Provider Agreements, 3rd
subparagraph inserted “at the request of the Contractor” and deleted “on its
behalf.”

	 
	 

	 	 	 	Changed letters a-c to reflect Delegated Agreements, Management Service
Agreements, and Service Level agreements and removed letter d.

Page 5 of 10

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	Para #:	 	PARAGRAPH TITLE:	 	SUMMARY OF CHANGE OR CLARIFICATION:
	D-37

	 	Subcontracts
	 	 a. Further defined types of contracts that require approval : All subcontracts or
delegated agreements that delegate any function related to the management
of the contract with AHCCCS. Examples include quality management,
medical management (e.g., prior authorization, concurrent review, medical
claims review)

	 

	 	 	 	 b. All subcontracts or delegated agreements that delegate claims processing,
including pharmacy claims.

	 

	 	 	 	 c. All subcontracts or delegated agreements that delegate credentialing
including those for only primary source verification

	 

	 	 	 	 d. All service level agreements with any Division or Subsidiary of a corporate
parent owner

	 
	 	 	 	 
	D-38

	 	Claims Payment
	 	Added “Tax Identification Number to the following “ ...... recoupment greater
than $50,000 per provider Tax Identification Number per contract year.”
Changed submission of recoupment requests to DHCM Acute Operations Unit.
	 
	 	 	 	 
	D-38

	 	Claims Payment
	 	Changed timeliness requirements to be based on adjudicated claims vs. paid
claims — see paragraph.
	 
	 	 	 	 
	D-38

	 	Claims Payment
	 	Added a new 4th subparagraph regarding remittance advice requirements.
There was also reordering of some paragraphs along with some wording
changes.
	 
	 	 	 	 
	D-38

	 	Claims Payment
	 	Interest Payments — Removed “The Contractor must report the interest
separately from the health plan paid amount on the encounter. Interest should
be reported in the 837 CAS adjustment loop using reason code 85”. Replaced
with “When interest is paid, the Contractor must report the interest as directed in
the Encounter Manual”
	 
	 	 	 	 
	D-40

	 	Hospital Subcontracting
and Reimbursement
	 	In the first paragraph, replaced the following language: “The Contractor shall
submit all hospital subcontracts and any amendments to AHCCCSA, Division
of Health Care Management, for prior approval.” with “The Contractor, upon
request, shall make available to AHCCCSA, all hospital subcontracts and any
amendments.”
	 
	 	 	 	 
	D-40

	 	Hospital Subcontracting
and Reimbursement
	 	Added “For non-contracted
out-of-state providers of emergency services,
Contractors shall pay no more than the AHCCCS Fee-For-Service rates, pursuant
to Section 6085 of the Federal Deficit Reduction Act.”
	 
	 	 	 	 
	D-46

	 	Performance Bond or

Bond Substitute
	 	Added the following language: “The Contractor must request an annual
acceptance from AHCCCSA when a substitute security in lieu of the
performance bond, irrevocable letter of credit or cash deposit is established.”
	 
	 	 	 	 
	D-49

	 	Advances, Distributions,
Loans and Investments
	 	Deleted “All investments, other than investments in U.S. Government
securities or Certificates of Deposit, also require AHCCCSA prior approval.”
	 
	 	 	 	 
	D-49

	 	Advances, Distributions,
Loans and Investments
	 	Added language: The Contractor shall not, without the prior approval of
AHCCCSA, make any advances, distributions, loans or loan guarantees to
related parties or affiliates including another fund or line of business within
its organization. The Contractor shall not, without prior notification to
AHCCCSA, make advances to its subcontractors in excess of $50,000. All
requests for prior approval and notifications are to be submitted to the
AHCCCSA Division of Health Care Management.
	 
	 	 	 	 
	D-50

	 	Financial Viability
Standards and
Performance Guidelines
	 	Changed Equity Per Member: For purposes of this measurement, the equity
will be measured according to the “Performance Bond and Equity per Member
Requirements” policy effective October 1, 2007.

Page 6 of 10

Table of Contents

	 	 	 	 	 
	Para #:	 	PARAGRAPH TITLE:	 	SUMMARY OF CHANGE OR CLARIFICATION:
	D-50

	 	Financial Viability
Standards and
Performance Guidelines
	 	Clarified that sanctions will not be automatically imposed if a Contractor does
not meet the financial viability criteria.
	 
	 	 	 	 
	D-50

	 	Financial Viability
Standards and
Performance Guidelines
	 	Added the following language to criteria:

•    Current Ratio: added “A request to include long-term investments that
can be converted to cash within 24 hours in the current ratio calculation
must be sent to AHCCCS, DHCM, within 30 days of the contract start
date and within 30 days of contract renewal).

	 

	 	 	 	•     Equity per Member: “Non restricted equity” 

	 
	 	 	 	 
	D-53

	 	Compensation
	 	Removed Title XIX Waiver Member reconciliation language and added the
following: “Effective October 1, 2006, AHCCCSA will no longer reconcile the
Title XIX Waiver Member population.
	 
	 	 	 	 
	D-53

	 	Compensation
	 	Added “if applicable” to the end of item h.
	 
	 	 	 	 
	D-53

	 	Compensation
	 	Added second sentence to Risk Sharing for Title XIX Waiver Members: The
PPC TWG population will be reconciled with the PPC reconciliation referred
to above. Capitation rates will be adjusted where necessary.
	 
	 	 	 	 
	D-53

	 	Compensation
	 	Added sentence to the end of the Hospitalized Supplemental Payment: If the
member has Medicare Part A or other third party insurance coverage, they will
not be eligible for the supplemental payment
	 
	 	 	 	 
	D-56

	 	Incentives
	 	Removed the Use of Website language from this location in the contract and
added it to paragraph 74.
	 
	 	 	 	 
	D-56

	 	Incentives
	 	Added reporting periods to auto assignment algorithm incentive.
	 
	 	 	 	 
	D-57

	 	Reinsurance
	 	Added “....SSDI TMC and SOBRA family planning” underneath RI
deductible table.
	 
	 	 	 	 
	D-57

	 	Reinsurance
	 	Removed the last sentence from b) Prior Period Coverage “except Title XIX
Waiver members. See section C below for additional information”.
	 
	 	 	 	 
	D-57

	 	Reinsurance
	 	Removed the prior period reference and the last sentence from c) Title XIX
Waiver Members — “ There can only be one reinsurance case for prior period
and prospective enrollment”
	 
	 	 	 	 
	D-57

	 	Reinsurance
	 	Removed “Transplant case types have another risk limitation methodology
described in the AHCCCSA Reinsurance Claims Processing Manual.”
	 
	 	 	 	 
	D-57

	 	Reinsurance
	 	Added “and pass all encounter edits” to the following sentence: Encounters
for reinsurance claims that have passed the fifteen month deadline and are
being adjusted due to a claim dispute or hearing decision must be submitted
and pass all encounter and reinsurance edits within 90 calendar days of the
date of the claim dispute or hearing decision.
	 
	 	 	 	 
	D-57

	 	Reinsurance
	 	Added language addressing quick pay discounts, slow payment penalties and
interest and Medicare/TPL payments — see paragraph.
	 
	 	 	 	 
	D-57

	 	Reinsurance
	 	Removed the following: “AHCCCSA will also provide a reconciliation of
reinsurance payments in the case where encounters used in the calculation of
reinsurance benefits are subsequently adjusted or voided.”
	 
	 	 	 	 
	D-57

	 	Reinsurance
	 	Added “whichever is applicable” to the last paragraph for a) under Encounter
Submission and Payments for Reinsurance.

Page 7 of 10

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	Para #:	 	PARAGRAPH TITLE:	 	SUMMARY OF CHANGE OR CLARIFICATION:
	D-58

	 	Coordination of Benefits -
Members with CRS
Conditions
	 	Updated 4th Paragraph: A member with private insurance is not required to
utilize CRSA. This includes members with Medicare whether they are enrolled
in Medicare FFS or a Medicare Managed Care Plan. If the member uses the
private insurance network or Medicare for a CRS covered condition, the
Contractor is responsible for all applicable deductibles and copayments. If the
member is on Medicare, the AHCCCS Policy 201- Medicare Cost Sharing for
Members in Traditional Fee for Service Medicare and Policy 202 — Medicare
Cost Sharing for Members in Medicare Managed Care Plans shall apply. When
the private insurance or Medicare is exhausted, or certain annual or lifetimes
limits are reached with respect to CRS covered conditions, the Contractor shall
refer the member to CRSA for determination for CRS services. If the member
with private insurance or Medicare chooses to enroll with CRS, CRS becomes
the secondary payer responsible for all applicable deductibles and copayments.
The Contractor is not responsible to provide services in instances when the CRS
eligible member, who has no primary insurance or Medicare, refuses to receive
CRS covered services through the CRS Program....”
	 
	 	 	 	 
	D-58

	 	Coordination of Benefits -
Cost Avoidance
	 	Removed the following sentences from second paragraph: The Contractor
must decide whether it is more cost-effective to provide the service within its
network or pay coinsurance and deductibles for a service outside its network.
For continuity of care, the Contractor may also choose to provide the service
within its network.
	 
	 	 	 	 
	D-62

	 	Corporate Compliance
	 	Added information regarding False Claims Act.
	 
	 	 	 	 
	D-65

	 	Encounter Data Reporting
	 	Inserted the following language to the 3rd subparagraph: “received by
AHCCCSA no later than 240 days after the end of the month in which the
service was rendered, or the effective date of the enrollment with the Contractor,
whichever date is later.” “Twice” was inserted to begin the 3rd subparagraph.
	 
	 	 	 	 
	D-72

	 	Sanctions
	 	Added The Contractor may dispute
the decision to impose a sanction in accordance with the process
outlined in A.A.C. R9-34-401
	 
	 	 	 	 
	D-73

	 	Business Continuity and
Recovery Plan
	 	Added language to include the loss of satellite offices.
	 
	 	 	 	 
	D-74

	 	Technological

Advancement
	 	See changes
	 
	 	 	 	 
	D-74

	 	Technological

Advancement
	 	Added “use of Website” language from paragraph 56
	 
	 	 	 	 
	D-74

	 	Technological

Advancement
	 	Added e-health language
	 
	 	 	 	 
	D-75

	 	Pending Legislative /Other

Issues
	 	Added Waiver language : AHCCCS is in negotiations with CMS to renew the
1115 waiver that enables AHCCCS to operate a mandatory managed care
program. These negotiations may result in changes to the program. AHCCCS
will either amend the contract or incorporate changes in policies incorporated
in the contract by reference.
	 
	 	 	 	 
	D-77

	 	Healthcare Group of
Arizona
	 	Removed paragraph, reserved for future use
	 
	 	 	 	 
	D-78

	 	Medicare Modernization

Act (MMA)
	 	Language was slightly modified with no substantive changes.
	 
	 	 	 	 
	Section E
	 	 	 	 
	 

	 	General Comment
	 	There were several changes throughout this section that were not substantive
(Paragraphs 3, 6, 7, 10, 15, 19, 32, 33, 34, 40, 42 and 46).
	 
	 	 	 	 
	8

	 	Indemnification
	 	The paragraph language was deleted and replaced with two subparagraphs:
	 

	 	 	 	“Contractor/Vendor Indemnification (Not Public Agency)” and
“Contractor/Vendor Indemnification (Public Agency)”.

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	Para #:	 	PARAGRAPH TITLE:	 	SUMMARY OF CHANGE OR CLARIFICATION:
	12

	 	Property of the State
	 	Deleted the two subparagraphs and replaced with two new subparagraphs.
	 
	 	 	 	 
	12

	 	Property of the State
	 	Replaced the word paragraph with contract
	 
	 	 	 	 
	20

	 	Termination — Availability
of Funds
	 	Added the second subparagraph.
	 
	 	 	 	 
	20

	 	Termination — Availability
of Funds
	 	Changed the term Contractor to AHCCCSA in the first sentence of the second
paragraph
	 
	 	 	 	 
	20

	 	Termination — Availability
of Funds
	 	Added to the last sentence “except as otherwise provided in this contract”
	 
	 	 	 	 
	25

	 	Term of Contract and
Option to Renew
	 	Deleted paragraph and inserted four new subparagraphs.
	 
	 	 	 	 
	26

	 	Disputes
	 	Language noting that contract claims and disputes will be adjudicated in
accordance with AHCCCS rules. The Rules and ARS citations are included.
	 
	 	 	 	 
	26

	 	Disputes
	 	Updated to Chapter 22 and ARS 36.2903.01
	 
	 	 	 	 
	29

	 	Contract
	 	Deleted paragraph and inserted two new subparagraphs.
	 
	 	 	 	 
	31

	 	Type of Contract
	 	Added except as otherwise provided to the end of sentence
	 
	 	 	 	 
	48

	 	IRS W9
	 	New contract term and condition.
	 
	 	 	 	 
	49

	 	Continuation of
Performance Through
Termination
	 	New contract term and condition.
	 
	 	 	 	 
	Attach A

	 	8, Confidentiality

Requirement
	 	Updated reference from 36-2932 to 36-2903
	 
	 	 	 	 
	Attach A

	 	Minimum Subcontractor

Provisions
	 	Added statute and rules references so all Contractors and Health Plans use the
same Minimum Subcontractor requirements. Updated language and
references throughout Attachment A.
	 
	 	 	 	 
	Attach A

	 	15, Insurance
	 	At the end of paragraph inserted “The requirement for Worker’s
Compensation Insurance doesn’t apply when a Subcontractor is exempt under
ARS 23-901, and when such Subcontractor executes the appropriate waiver
(Sole Proprietor/Independent Contractor) form.
	 
	 	 	 	 
	Attach A

	 	16, Limitations on Billing
and Collection Practices
	 	This paragraph was rewritten to clarify that a subcontractor shall not bill, or
attempt to collect payment from a person who was AHCCCS eligible at the time
the covered service(s) were provided.
	 
	 	 	 	 
	Attach A

	 	20 Records Retention
	 	Added and/or Dental after medical records (lst paragraph, last sentence)
	 
	 	 	 	 
	Attach A

	 	15 —Insurance
	 	Corrected typo — replaced underarms with under ARS
	 
	 	 	 	 
	Attach F

	 	Periodic Report

Requirements
	 	Moved Claim recoupments >$50,000 from the DHCM finance unit to the
Operations unit.
	 
	 	 	 	 
	Attach G

	 	Auto Assignment

Algorithm —Factor #3
	 	Updated to read: Performance Measures as reported from the data warehouse
at AHCCCS — Measurement period CYE05, reported in 2006
	 
	 	 	 	 
	Attach 

H(l)

	 	Enrollee Grievance System
Standards and Policy
	 	Changed #2: Information explaining the grievance, appeal, and fair hearing
procedures and timeframes. This information shall include a description of
the circumstances when there is a right to a hearing, the method for obtaining
a hearing, the requirements which govern representation at the hearing, the
right to file grievance and appeals and the requirements and timeframes for
filing a grievance, appeal, or request for hearing.
	 
	 	 	 	 
	Attach 

H(l)

	 	Enrollee Grievance System
Standards and Policy
	 	Added the following as the last sentence: The Notice of Action must comply
with the advance notice requirements when there is a termination or reduction
of a previously authorized service OR when there is a denial of an
authorization request and the physician asserts that the requested
service/treatment is a necessary continuation of a previously authorized
service.

Page 9 of 10

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	Para #:	 	PARAGRAPH TITLE:	 	SUMMARY OF CHANGE OR CLARIFICATION:
	Attach 

H(l)

	 	Enrollee Grievance System
Standards and Policy
	 	Modified #25 regarding the mailing of a Notice of Action to state in subpart
1) “except as provided in (a)- (e) below; eliminate subpart 5) and modify
subpart 4) to state: within 14 days from receipt of a standard service
authorization request and within three business days from receipt of an
expedited service authorization request, unless an extension is in effect. For
service authorization decisions, the Contractor shall also ensure that the
Notice of Action provides the enrollee with advance notice and the right to
request continued benefits for all terminations and reductions of a previously
authorized service and for denials when the physician asserts that the
requested service/treatment which has been denied is a necessary continuation
of a previously authorized service. As described below, the Contractor may
elect to mail a Notice of Action no later than the date of action
when....
	 
	 	 	 	 
	Attach 

H(l)

	 	Enrollee Grievance System
Standards and Policy
	 	Modified # 36 regarding the provision of services by a Contractor when a
denial/reduction is reversed: That if the Contractor or the State fair decision
reverses a decision to deny, limit or delay services not furnished during the
appeal or the pendency of the hearing process, the Contractor shall authorize
or provide the services promptly and as expeditiously as the enrollee’s health
condition requires irrespective of whether the Contractor contests the decision.
	 
	 	 	 	 
	Attach H

(2)

	 	Provider Claims Dispute
System and Standards
Policy
	 	Added ....unless otherwise provided
by law.” to item 8.
	 
	 	 	 	 
	Attach I

	 	Enrollee Grievance System
	 	Minor language changes for
clarification. “grievance or” was deleted from #8.
	 
	 	 	 	 
	Attach I

	 	Encounter Submission
Standards and Sanctions
	 	Language clarification under Encounter validation Studies — Timeliness
paragraph.
	 
	 	 	 	 
	Contract 

Clauses

	 	#23
	 	Replaced the duplicated word “religion” with “gender”

Page 10 of 10

Table of Contents

 

ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM

CAPITATION RATE SUMMARY — ACUTE RATES

Health Choice Arizona

10/1/06-9/30/07

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Maternity	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	TANF	 	TANF	 	TANF	 	TANF	 	TANF	 	SSI	 	SSI	 	 	 	 	 	Delivery	 	 	 	 	 	 	 	 	 	MED Hospital
	Title
XIX and KidsCare Rates:	 	<1, M/F	 	1-13, M/F	 	14-44, F	 	14-44, M	 	45+, M/F	 	w/Med	 	w/o Med	 	SFP	 	Supplement	 	Non-MED	 	MED	 	Supplement
	 	4	 	 	Apache/Coconino/Mohave/Navajo
	 	$	429.47	 	 	$	104.12	 	 	$	206.67	 	 	$	162.10	 	 	$	376.72	 	 	$	202.59	 	 	$	691.75	 	 	$	16.82	 	 	$	5,942.20	 	 	$	450.86	 	 	$	918.14	 	 	$	11,694.29	 
	 	8	 	 	Gila/Pinal
	 	$	494.94	 	 	$	109.92	 	 	$	177.47	 	 	$	124.64	 	 	$	343.84	 	 	$	180.02	 	 	$	552.23	 	 	$	18.71	 	 	$	6,286.38	 	 	$	415.06	 	 	$	979.58	 	 	$	10,372.10	 
	 	10	 	 	Pima
	 	$	485.18	 	 	$	100.53	 	 	$	188.88	 	 	$	130.61	 	 	$	370.41	 	 	$	187.60	 	 	$	683.49	 	 	$	15.01	 	 	$	6,143.79	 	 	$	385.55	 	 	$	942.74	 	 	$	10,780.45	 
	 	12	 	 	Maricopa
	 	$	492.24	 	 	$	110.09	 	 	$	183.30	 	 	$	138.66	 	 	$	375.13	 	 	$	173.55	 	 	$	613.54	 	 	$	19.70	 	 	$	6,338.50	 	 	$	458.01	 	 	$	981.99	 	 	$	10,249.18	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	TANF	 	TANF	 	TANF	 	TANF	 	TANF	 	SSI	 	SSI	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	PPC Rates:	 	<1, M/F	 	1-13, M/F	 	14-44, F	 	14-44, M	 	45+, M/F	 	w/Med	 	w/o Med	 	 	 	 	 	Non-MED	 	MED	 	 
	 	4	 	 	Apache/Coconino/Mohave/Navajo
	 	$	831.54	 	 	$	47.94	 	 	$	172.04	 	 	$	150.56	 	 	$	333.68	 	 	$	73.38	 	 	$	156.67	 	 	 	 	 	 	 	 	 	 	$	737.17	 	 	$	1,719.07	 	 	 	 	 
	 	8	 	 	Gila/Pinal
	 	$	831.54	 	 	$	47.94	 	 	$	172.04	 	 	$	150.56	 	 	$	333.68	 	 	$	73.38	 	 	$	156.57	 	 	 	 	 	 	 	 	 	 	$	692.11	 	 	$	1,701.01	 	 	 	 	 
	 	10	 	 	Pima
	 	$	1,353.11	 	 	$	47.94	 	 	$	178.93	 	 	$	156.58	 	 	$	347.02	 	 	$	57.37	 	 	$	147.72	 	 	 	 	 	 	 	 	 	 	$	750.14	 	 	$	1,743.68	 	 	 	 	 
	 	12	 	 	Maricopa
	 	$	1,348.09	 	 	$	47.94	 	 	$	178.93	 	 	$	156.58	 	 	$	347.02	 	 	$	57.58	 	 	$	147.72	 	 	 	 	 	 	 	 	 	 	$	672.07	 	 	$	1,688.16	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	HIFA	 	HIFA	 	HIFA	 	HIV/AIDS	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Other Rates:	 	14-44, F	 	14-44, M	 	45+, M/F	 	Supplement	 	 	 	SSDI	 	 	 		 	 	 	 	 	 	 	 
	 	4	 	 	Apache/Coconino/Mohave/Navajo
	 	$	229.08	 	 	$	159.57	 	 	$	386.58	 	 	$	1,051.86	 	 	 	 	 	 	$	696.76	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	8	 	 	Gila/Pinal
	 	$	203.23	 	 	$	135.91	 	 	$	380.74	 	 	$	1,051.86	 	 	 	 	 	 	$	696.76	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	10	 	 	Pima
	 	$	203.10	 	 	$	128.97	 	 	$	410.59	 	 	$	1,051.86	 	 	 	 	 	 	$	696.76	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	12	 	 	Maricopa
	 	$	205.43	 	 	$	139.42	 	 	$	387.80	 	 	$	1,051.86	 	 	 	 	 	 	$	696.76	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

			
	*	 	Rates have been adjusted for $35,000 Reinsurance Deductible

 

Table of Contents

Contract/RFP No. YH04-0001

ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM ADMINISTRATION

DIVISION OF BUSINESS AND FINANCE

SECTION A. CONTRACT AMENDMENT

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	1.

	 	AMENDMENT
	 	 	2.	 	 	CONTRACT
	 	 	3.	 	 	EFFECTIVE DATE OF
	 	 	4.	 	 	PROGRAM
	 

	 	NUMBER:
	 	 	 	 	 	NO.:
	 	 	 	 	 	AMENDMENT:	 	 	 	 	 	 
	 

	 	
	 	 	 	 	 	YH04-0001
	 	 	 	 	 	October 1, 2006
	 	 	 	 	 	DHCM

 

5. CONTRACTOR’S NAME AND ADDRESS:

 

6. PURPOSE OF AMENDMENT: To
amend Sections B, C, D and E and Attachments A, B, F, G, H, I and L.

 

7. THE CONTRACT REFERENCED ABOVE IS AMENDED AS FOLLOWS:

A. CHANGES IN REQUIREMENTS: In accordance with Section E, Paragraph 30, “Changes”, various changes
in contract requirements are indicated in this contract restatement.

B. By signing this contract amendment, the Contractor is agreeing to the terms of the contract as
amended.

 

	 	 	 	 	 
	 

	 	NOTE: Please sign and date both and then return one to:
	 	Michael Veit, MD 5700
	 
	 	 	 	 
	 

	 	 	 	AHCCCS Contracts and Purchasing
	 

	 	 	 	701 E Jefferson Street
	 

	 	 	 	Phoenix AZ 85034

 

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

IN WITNESS WHEREOF THE PARTIES HERETO SIGN THEIR NAMES IN AGREEMENT

 

	 	 	 
	9. SIGNATURE OF AUTHORIZED REPRESENTATIVE:

	 	10. SIGNATURE OF AHCCCSA
CONTRACTING OFFICER:
	 
	 	 
	 

	 	 
	TYPED NAME:

	 	MICHAEL VEIT
	 
	 	 
	 

	 	 
	TITLE:

	 	CONTRACTS & PURCHASING
	 

	 	ADMINISTRATOR
	 
	 	 
	 

	 	 
	DATE:

	 	DATE:
	 
	 	 

	 	 	 	 	 
	 

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Table of Contents

Contract/RFP No. YH04-0001

TABLE OF CONTENTS

	 	 	 	 	 
	SECTION A. CONTRACT AMENDMENT
	 	 	1	 
	 
	 	 	 	 
	SECTION B: CAPITATION RATES
	 	 	6	 
	 
	 	 	 	 
	SECTION C: DEFINITIONS
	 	 	7	 
	 
	 	 	 	 
	SECTION D: PROGRAM REQUIREMENTS 
	 	 	15	 
	 
	 	 	 	 
	1. TERM OF CONTRACT AND OPTION TO RENEW
	 	 	15	 
	2. ELIGIBILITY CATEGORIES
	 	 	16	 
	3. ENROLLMENT AND DISENROLLMENT
	 	 	17	 
	4. ANNUAL ENROLLMENT CHOICE
	 	 	20	 
	5. OPEN ENROLLMENT
	 	 	20	 
	6. AUTO-ASSIGNMENT ALGORITHM
	 	 	20	 
	7. AHCCCS MEMBER IDENTIFICATION CARDS
	 	 	20	 
	8. MAINSTREAMING OF AHCCCS MEMBERS
	 	 	20	 
	9. TRANSITION OF MEMBERS
	 	 	21	 
	10. SOPE OF SERVICES
	 	 	22	 
	11. SPECIAL HEALTH CARE NEEDS
	 	 	30	 
	12. BEHAVIORAL HEALTH SERVICES
	 	 	30	 
	13. AHCCCS GUIDELINES, POLICIES AND MANUALS
	 	 	33	 
	14. MEDICAID SCHOOL BASED CLAIMING PROGRAM (MSBC)
	 	 	33	 
	15. PEDIATRIC IMMUNIZATIONS AND THE VACCINES FOR CHILDREN PROGRAM
	 	 	33	 
	16. STAFF REQUIREMENTS AND SUPPORT SERVICES
	 	 	34	 
	17. WRITTEN POLICIES, PROCEDURES AND JOB DESCRIPTIONS
	 	 	35	 
	18. MEMBER INFORMATION
	 	 	36	 
	19. SURVEYS
	 	 	37	 
	20. CULTURAL COMPETENCY
	 	 	37	 
	21. MEDICAL RECORDS
	 	 	37	 
	22. ADVANCE DIRECTIVES 
	 	 	38	 
	23. QUALITY MANAGEMENT AND MEDICAL MANAGEMENT (QM/MM)
	 	 	39	 
	24. PERFORMANCE STANDARDS
	 	 	41	 
	25. GRIEVANCE SYSTEM
	 	 	45	 
	26. QUARTERLY GRIEVANCE SYSTEM REPORTS
	 	 	45	 
	27. NETWORK DEVELOPMENT
	 	 	46	 
	28. PROVIDER AFFILIATION TRANSMISSION
	 	 	48	 
	29. NETWORK MANAGEMENT
	 	 	48	 
	30. PRIMARY CARE PROVIDER STANDARDS
	 	 	50	 
	31. MATERNITY CARE PROVIDER STANDARDS
	 	 	51	 
	32. REFERRAL MANAGEMENT PROCEDURES AND STANDARDS
	 	 	51	 
	33. APPOINTMENT STANDARDS
	 	 	52	 
	34. FEDERALLY QUALIFIED HEALTH CENTERS (FQHC) and RURAL HEALTH CLINICS (RHC)
	 	 	53	 
	35. PROVIDER MANUAL
	 	 	53	 
	36. PROVIDER REGISTRATION
	 	 	54	 
	37. SUBCONTRACTS
	 	 	54	 
	38. CLAIMS PAYMENT/HEALTH INFORMATION SYSTEM
	 	 	57	 
	39. SPECIALTY CONTRACTS
	 	 	58	 
	40. HOSPITAL SUBCONTRACTING AND REIMBURSEMENT
	 	 	59	 
	41. NURSING FACILITY REIMBURSEMENT
	 	 	60	 
	42. PHYSICIAN INCENTIVES/PAY FOR PERFORMANCE
	 	 	60	 
	43. MANAGEMENT SERVICES AGREEMENT AND COST ALLOCATION PLAN
	 	 	61	 

	 	 	 	 	 
	 

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	 	 	 	August 16, 2006

 

Table of Contents

Contract/RFP
No. YH04-0001

	 	 	 	 	 
	44. RESERVED
	 	 	61	 
	45. MINIMUM CAPITALIZATION REQUIREMENTS
	 	 	61	 
	46. PERFORMANCE BOND OR BOND SUBSTITUTE
	 	 	62	 
	47. AMOUNT OF PERFORMANCE BOND
	 	 	63	 
	48. ACCUMULATED FUND DEFICIT
	 	 	63	 
	49. ADVANCES, DISTRIBUTIONS, LOANS AND INVESTMENTS
	 	 	63	 
	50. FINANCIAL VIABILITY STANDARDS / PERFORMANCE GUIDELINES
	 	 	63	 
	51. SEPARATE INCORPORATION
	 	 	64	 
	52. MERGER, REORGANIZATION AND CHANGE OF OWNERSHIP
	 	 	65	 
	53. COMPENSATION
	 	 	65	 
	54. PAYMENTS TO CONTRACTORS
	 	 	66	 
	55. CAPITATION ADJUSTMENTS
	 	 	67	 
	56. INCENTIVES
	 	 	67	 
	57. REINSURANCE
	 	 	68	 
	58. COORDINATION OF BENEFITS / THIRD PARTY LIABILITY
	 	 	71	 
	59. COPAYMENTS
	 	 	74	 
	60. MEDICARE SERVICES AND COST SHARING
	 	 	74	 
	61. MARKETING
	 	 	75	 
	62. CORPORATE COMPLIANCE
	 	 	75	 
	63. RECORDS RETENTION
	 	 	76	 
	64. DATA EXCHANGE REQUIREMENTS
	 	 	77	 
	65. ENCOUNTER DATA REPORTING
	 	 	77	 
	66. ENROLLMENT AND CAPITATION TRANSACTION UPDATES
	 	 	78	 
	67. PERIODIC REPORT REQUIREMENTS
	 	 	79	 
	68. REQUESTS FOR INFORMATION
	 	 	79	 
	69. DISSEMINATION OF INFORMATION
	 	 	79	 
	70. OPERATIONAL AND FINANCIAL READINESS REVIEWS
	 	 	79	 
	71. OPERATIONAL AND FINANCIAL REVIEWS
	 	 	80	 
	72. SANCTIONS
	 	 	80	 
	73. BUSINESS CONTINUITY AND RECOVERY PLAN
	 	 	81	 
	74. TECHNOLOGICAL ADVANCEMENT
	 	 	82	 
	75. PENDING LEGISLATIVE / OTHER ISSUES
	 	 	83	 
	76. BALANCED BUDGET ACT OF 1997 (BBA)
	 	 	83	 
	77. RESERVED
	 	 	83	 
	78. MEDICARE MODERNIZATION ACT (MMA)
	 	 	83	 
	 
	 	 	 	 
	SECTION
E: CONTRACT CLAUSES
	 	 	85	 
	 
	 	 	 	 
	1) APPLICABLE LAW
	 	 	85	 
	2) AUTHORITY
	 	 	85	 
	3) ORDER OF PRECEDENCE
	 	 	85	 
	4) CONTRACT INTERPRETATION AND AMENDMENT
	 	 	85	 
	5) SEVERABILITY
	 	 	85	 
	6) RELATIONSHIP OF PARTIES
	 	 	85	 
	7) ASSIGNMENT AND DELEGATION
	 	 	85	 
	8} INDEMNIFICATION
	 	 	85	 
	9)
INDEMNIFICATION— PATENT AND COPYRIGHT
	 	 	86	 
	10) COMPLIANCE WITH APPLICABLE LAWS, RULES AND REGULATIONS
	 	 	86	 
	11) ADVERTISING AND PROMOTION OF CONTRACT
	 	 	86	 
	12) PROPERTY OF THE STATE
	 	 	86	 
	13) THIRD PARTY ANTITRUST VIOLATIONS
	 	 	86	 
	14) RIGHT TO ASSURANCE
	 	 	86	 
	15) TERMINATION FOR CONFLICT OF INTEREST
	 	 	87	 
	16) GRATUITIES
	 	 	87	 
	17) SUSPENSION OR DEBARMENT
	 	 	87	 
	18) TERMINATION FOR CONVENIENCE
	 	 	87	 

	 	 	 	 	 
	 

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Table of Contents

Contract/RFP
No. YH04-0001

	 	 	 	 	 
	19) TEMPORARY MANAGEMENT/OPERATION OF A CONTRACTOR AND TERMINATION
	 	 	87	 
	20) TERMINATION -AVAILABILITY OF FUNDS
	 	 	88	 
	21) RIGHT OF OFFSET
	 	 	88	 
	22) NON-EXCLUSIVE REMEDIES
	 	 	88	 
	23) NON-DISCRIMINATION
	 	 	89	 
	24) EFFECTIVE DATE
	 	 	89	 
	25) INSURANCE
	 	 	89	 
	26) DISPUTES
	 	 	89	 
	27) RIGHT TO INSPECT PLANT OR PLACE OF BUSINESS
	 	 	90	 
	28) INCORPORATION BY REFERENCE
	 	 	90	 
	29) COVENANT AGAINST CONTINGENT FEES
	 	 	90	 
	30) CHANGES
	 	 	90	 
	31) TYPE OF CONTRACT
	 	 	90	 
	32) AMERICANS WITH DISABILITIES ACT
	 	 	90	 
	33) WARRANTY OF SERVICES
	 	 	90	 
	34) NO GUARANTEED QUANTITIES
	 	 	90	 
	35) CONFLICT OF INTEREST
	 	 	90	 
	36) DISCLOSURE OF CONFIDENTIAL INFORMATION
	 	 	91	 
	37) COOPERATION WITH OTHER CONTRACTORS
	 	 	91	 
	38) ASSIGNMENT OF CONTRACT AND BANKRUPTCY
	 	 	91	 
	39) OWNERSHIP OF INFORMATION AND DATA
	 	 	91	 
	40) AHCCCSA RIGHT TO OPERATE CONTRACTOR
	 	 	91	 
	41) AUDITS AND INSPECTIONS
	 	 	92	 
	42) LOBBYING
	 	 	92	 
	43) CHOICE OF FORUM
	 	 	92	 
	44) DATA CERTIFICATION
	 	 	92	 
	45)
OFF SHORE PERFORMANCE OF WORK PROHIBITED
	 	 	92	 
	46) FEDERAL IMMIGRATION AND NATIONALITY ACT
	 	 	93	 
	47) IRS W-9 FORM
	 	 	93	 
	48) CONTINUATION OF PERFORMANCE THROUGH TERMINATION
	 	 	93	 
	 
	 	 	 	 
	SECTION
F: INDEX — PROGRAM REQUIREMENTS AND CONTRACT CLAUSES
	 	 	94	 
	 
	 	 	 	 
	ATTACHMENT
A: MINIMUM SUBCONTRACT PROVISIONS
	 	 	97	 
	 
	 	 	 	 
	1. ASSIGNMENT AND DELEGATION OF RIGHTS AND RESPONSIBILITIES
	 	 	97	 
	2. AWARDS OF OTHER SUBCONTRACTS
	 	 	97	 
	3. CERTIFICATION OF COMPLIANCE — ANTI-KICKBACK AND LABORATORY TESTING
	 	 	97	 
	4. CERTIFICATION OF TRUTHFULNESS OF REPRESENTATION
	 	 	97	 
	5. CLINICAL LABORATORY IMPROVEMENT AMENDMENTS OF 1988
	 	 	98	 
	6. COMPLIANCE WITH AHCCCSA RULES RELATING TO AUDIT AND INSPECTION
	 	 	98	 
	7. COMPLIANCE WITH LAWS AND OTHER REQUIREMENTS
	 	 	98	 
	8. CONFIDENTIALITY REQUIREMENT
	 	 	98	 
	9. CONFLICT IN INTERPRETATION OF PROVISIONS
	 	 	98	 
	10. CONTRACT CLAIMS AND DISPUTES
	 	 	98	 
	11. ENCOUNTER DATA REQUIREMENT
	 	 	98	 
	12. EVALUATION OF QUALITY, APPROPRIATENESS, OR TIMELINESS OF SERVICES
	 	 	98	 
	13. FRAUD AND ABUSE
	 	 	99	 
	14. GENERAL INDEMNIFICATION
	 	 	99	 
	15. INSURANCE
	 	 	99	 
	16. LIMITATIONS ON BILLING AND COLLECTION PRACTICES
	 	 	99	 
	17. MAINTENANCE OF REQUIREMENTS TO DO BUSINESS AND PROVIDE SERVICES
	 	 	99	 
	18. NON-DISCRIMINATION REQUIREMENTS
	 	 	99	 
	19. PRIOR AUTHORIZATION AND UTILIZATION MANAGEMENT
	 	 	100	 
	20. RECORDS RETENTION
	 	 	100	 
	21. SEVERABILITY
	 	 	100	 

	 	 	 	 	 
	 

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	 	 	 	August 16, 2006

 

Table of Contents

Contract/RFP No. YH04-0001

	 	 	 	 	 
	22. SUBJECTION OF SUBCONTRACT
	 	 	100	 
	23. TERMINATION OF SUBCONTRACT
	 	 	100	 
	24. VOIDABILITY OF SUBCONTRACT
	 	 	101	 
	25. WARRANTY OF SERVICES
	 	 	101	 
	26. OFF-SHORE PERFORMANCE OF WORK PROHIBITED
	 	 	101	 
	27. FEDERAL IMMIGRATION AND NATIONALITY ACT
	 	 	101	 
	 
	 	 	 	 
	ATTACHMENT B: MINIMUM NETWORK STANDARDS (BY GEOGRAPHIC SERVICE AREA) 
	 	 	102	 
	 
	 	 	 	 
	ATTACHMENT F: PERIODIC REPORT REQUIREMENTS
	 	 	106	 
	 
	 	 	 	 
	ATTACHMENT G: AUTO-ASSIGNMENT ALGORITHM
	 	 	110	 
	 
	 	 	 	 
	ATTACHMENT H (1): ENROLLEE GRIEVANCE SYSTEM STANDARDS AND POLICY
	 	 	113	 
	 
	 	 	 	 
	ATTACHMENT H(2) PROVIDER CLAIM DISPUTE STANDARDS AND POLICY
	 	 	118	 
	 
	 	 	 	 
	ATTACHMENT I: ENCOUNTER SUBMISSION REQUIREMENTS
	 	 	120	 
	 
	 	 	 	 
	ATTACHMENT L: COST SHARING COPAYMENTS 
	 	 	123	 

	 	 	 	 	 
	 

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	 	 	 	August 16, 2006

 

Table of Contents

					
	CAPITATION RATES
	 	 
	 	Contract/RFP No. YH04-0001
	 	 	 	 	 

SECTION B: CAPITATION RATES

The Contractor shall provide services as described in this contract. In consideration for these
services, the Contractor will be paid the attached Contractor specific rates per member per month
for the term October 1, 2006 through September 30, 2007.

See
attached.

					
	 	 	 	 	 
	 
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August 16, 2006

 

Table of Contents

					
	DEFINITIONS
	 	 
	 	Contract/RFP No. YH04-0001
	 	 	 	 	 

SECTION C: DEFINITIONS

	 	 	 
	638 TRIBAL 

FACILITY

	 	A facility that is operated by an Indian tribe and that is authorized to provide
services pursuant to Public Law 93-638, as amended.
	 
	 	 
	1931

	 	Eligible individuals and families under the 1931 provision of the Social Security
Act, with household income levels at or below 100% of the FPL.
	 
	 	 
	ACOM

	 	AHCCCS Contractor Operations Manual, available on the AHCCCS Website at
www.azahcccs.gov.
	 
	 	 
	ADHS

	 	Arizona Department of Health Services, the state agency mandated to serve the
public health needs of all Arizona citizens.
	 
	 	 
	ADHS BEHAVIORAL 

HEALTH RECIPIENT

	 	A Title XIX or Title XXI acute care member who is eligible for, and is receiving,
behavioral health services through ADHS and its subcontractors.
	 
	 	 
	ADJUDICATED 

CLAIMS

	 	Claims which have been received and processed by the Contractor which resulted
in a payment or denial of payment
	 
	 	 
	AGENT

	 	Any person who has been delegated the authority to obligate or act on behalf of
another person or entity.
	 
	 	 
	AHCCCS

	 	Arizona Health Care Cost Containment System, which is composed of the
Administration, Contractors, and other arrangements through which health care
services are provided to an eligible person, as defined by A.R.S. § 36-2902, et
seq.
	 
	 	 
	AHCCCS BENEFITS

	 	See “COVERED SERVICES”.
	 
	 	 
	AHCCCS MEMBER

	 	See “MEMBER”.
	 
	 	 
	AHCCCSA

	 	Arizona Health Care Cost Containment System Administration.
	 
	 	 
	ALTCS

	 	The Arizona Long Term Care System, a program under AHCCCSA that delivers
long term, acute, behavioral health and case management services to members, as
authorized by A.R.S. § 36-2932.
	 
	 	 
	AMBULATORY CARE

	 	Preventive, diagnostic and treatment services provided on an outpatient basis by
physicians, nurse practitioners, physician assistants and other health care
providers.
	 
	 	 
	AMPM

	 	AHCCCS Medical Policy Manual.
	 
	 	 
	ANNUAL 

ENROLLMENT 

CHOICE (AEC)

	 	The opportunity, given each member annually, to change to another Contractor in
their GSA.
	 
	 	 
	APPEAL 

RESOLUTION

	 	The written determination by the Contractor concerning an appeal.
	 
	 	 
	ARIZONA
ADMINISTRATIVE
CODE (A.A.C.)

	 	State regulations established pursuant to relevant statutes. For purposes of this
solicitation, the relevant sections of the AAC are referred to throughout this
document as “AHCCCS Rules”.
	 
	 	 
	A.R.S.

	 	Arizona Revised Statutes.
	 
	 	 
	BBA

	 	The Balanced Budget Act of 1997.

					
	 	 	 	 	 
	 
	 	- 7 -
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August 16, 2006

 

Table of Contents

					
	DEFINITIONS
	 	 
	 	Contract/RFP No. YH04-0001
	 	 	 	 	 

	 	 	 
	BCCTP

	 	Breast and Cervical Cancer
Treatment Program, a Title XIX
eligibility expansion program for
women who are not otherwise Title
XIX eligible and are diagnosed as
needing treatment for breast and/or
cervical cancer or lesions.
	 
	 	 
	BIDDER’S LIBRARY

	 	A repository of manuals, statutes,
rules and other reference material
located on the AHCCCS website at
www.azahcccs.gov.
	 
	 	 
	BOARD CERTIFIED

	 	An individual who has successfully
completed all prerequisites of the
respective specialty board and
successfully passed the required
examination for certification.
	 
	 	 
	CAPITATION

	 	Payment to Contractor by AHCCCSA of
a fixed monthly payment per person
in advance for which the Contractor
provides a full range of covered
services as authorized under A.R.S.
§ 36-2904 and § 36-2907.
	 
	 	 
	CATEGORICALLY LINKED TITLE XIX 

MEMBER

	 	Member eligible for Medicaid under
Title XIX of the Social Security
Act including those eligible under
1931 provisions of the Social
Security Act, Sixth Omnibus Budget
Reconciliation Act (SOBRA),
Supplemental Security Income (SSI),
SSI-related groups. To be
categorically linked, the member
must be aged 65 or over, blind,
disabled, a child under age 19, a
parent of a dependent child, or
pregnant
	 
	 	 
	CLAIM DISPUTE

	 	A dispute, filed by a provider or
Contractor, whichever is
applicable, involving a payment of
a claim, denial of a claim,
imposition of a sanction or
reinsurance.
	 
	 	 
	CLEAN CLAIM

	 	A claim that may be processed
without obtaining additional
information from the provider of
service or from a third party; but
does not include claims under
investigation for fraud or abuse or
claims under review for medical
necessity.
	 
	 	 
	CMS

	 	Centers for Medicare and Medicaid
Services, an organization within
the U.S. Department of Health and
Human Services, which administers
the Medicare and Medicaid programs
and the State Children’s Health
Insurance Program.
	 
	 	 
	COMPETITIVE BID PROCESS

	 	A state procurement system used to
select Contractors to provide
covered services on a geographic
basis.
	 
	 	 
	CONTINUING OFFEROR

(INCUMBENT)

	 	An AHCCCS Contractor during CYE 03
that submits a proposal pursuant to
this solicitation.
	 
	 	 
	CONTRACT 

SERVICES

	 	See “COVERED SERVICES”.
	 
	 	 
	CONTRACT YEAR

(CY)

	 	Corresponds to Federal fiscal year
(Oct. 1 through Sept. 30). For
example, Contract Year 04 is
10/01/03 — 9/30/04.
	 
	 	 
	CONTRACTOR

	 	An organization or entity agreeing
through a direct contracting
relationship with AHCCCSA to
provide the goods and services
specified by this contract in
conformance with the stated
contract requirements, AHCCCS
statute and rules and Federal law
and regulations.
	 
	 	 
	CONVICTED

	 	A judgment of conviction has been
entered by a Federal, State or
local court, regardless of whether
an appeal from that judgment is
pending.
	 
	 	 
	COPAYMENT

	 	A monetary amount specified by the
Director that the member pays
directly to a Contractor or
provider at the time covered
services are rendered, as defined
in R9-22-107.

					
	 	 	 	 	 
	 
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	DEFINITIONS
	 	 
	 	Contract/RFP No. YH04-0001
	 	 	 	 	 

	 	 	 
	COVERED SERVICES

	 	Health care services to be delivered by a Contractor which
are designated in Section D of this contract, AHCCCS Rules R9-22,
Article 2 and R9-31, Article 2 and the AMPM. [42 CER
438.210(a)(4)]
	 
	 	 
	CRS

	 	The Children’s Rehabilitative Services administered by ADHS,
as defined in R9-22-114.
	 
	 	 
	CRS ELIGIBLE

	 	An individual who has completed the CRS application process,
as delineated in the CRS Policy and Procedure Manual, and has met
all applicable criteria to be eligible to receive CRS related
services.
	 
	 	 
	CRS RECIPIENT

	 	A CRS recipient is a CRS eligible individual who has
completed the initial medical visit at an approved CRS Clinic,
which allows the individual to participate in the CRS
program.
	 
	 	 
	CY

	 	See “CONTRACT YEAR”.
	 
	 	 
	CYE

	 	Contract Year Ending; same as “CONTRACT YEAR”.
	 
	 	 
	DAYS

	 	Calendar days unless otherwise specified as defined in the
text, as defined in R9-22-101.
	 
	 	 
	DELEGATED AGREEMENT

	 	An agreement with a qualified organization or person to
perform one or more functions required to be provided by the
Contractor pursuant to this contract.
	 
	 	 
	DIRECTOR

	 	The Director of AHCCCSA.
	 
	 	 
	DISCLOSING ENTITY

	 	An AHCCCS provider or a fiscal
agent.
	 
	 	 
	DISENROLLMENT

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

	 	Durable Medical Equipment, which is an item, or appliance
that can withstand repeated use, is designated to serve a medical
purpose, and is not generally useful to a person in the absence of
a medical condition, illness or injury as defined in
R9-22-102.
	 
	 	 
	DUAL ELIGIBLE

	 	A member who is eligible for both Medicare and Medicaid.
	 
	 	 
	ELIGIBILITY 

DETERMINATION

	 	A process of determining, through a written application and
required documentation, whether an applicant meets the
qualifications for Title XIX or Title XXI.
	 
	 	 
	EMERGENCY MEDICAL 

CONDITION

	 	A medical condition manifesting itself by acute symptoms of
sufficient severity (including severe pain) such that a prudent
layperson, who possesses an average knowledge of health and
medicine, could reasonably expect the absence of immediate medical
attention to result in: a) placing the patient’s health (or, with
respect to a pregnant woman, the health of the woman or her unborn
child) in serious jeopardy; b) serious impairment to bodily
functions; or c) serious dysfunction of any bodily organ or part.
[42 CFR 438.114(a)]
	 
	 	 
	EMERGENCY MEDICAL 

SERVICE

	 	Covered inpatient and outpatient services provided after the
sudden onset of an emergency medical condition as defined above.
These services must be furnished by a qualified provider, and must
be necessary to evaluate or stabilize the emergency medical
condition. [42 CFR 438.114(a)]
	 
	 	 
	ENCOUNTER

	 	A record of a health care related service rendered by a
provider or providers registered with AHCCCSA to a member who is
enrolled with a Contractor on the date of service.

					
	 	 	 	 	 
	 
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	DEFINITIONS
	 	 
	 	Contract/RFP No. YH04-0001
	 	 	 	 	 

	 	 	 
	ENROLLEE

	 	A Medicaid recipient who is currently enrolled with a contractor. [42 CFR
438.10(a)]
	 
	 	 
	ENROLLMENT

	 	The process by which an eligible person becomes a member of a contractor’s
plan.
	 
	 	 
	EPSDT

	 	Early and Periodic Screening, Diagnosis and Treatment; services for persons
under 21 years of age as described in AHCCCS rules R9-22, Article 2.
	 
	 	 
	FAMILY PLANNING 

SERVICES EXTENSION 

PROGRAM

	 	A program that provides only family planning services for a maximum of 24
months to SOBRA women whose pregnancy has ended and who are not otherwise eligible
for full Title XIX services.
	 
	 	 
	FEDERALLY QUALIFIED 

HEALTH CENTER (FQHC)

	 	An entity which meets the requirements and receives a grant and funding
pursuant to Section 330 of the Public Health Service Act. An FQHC includes an
outpatient health program or facility operated by a tribe or tribal organization
under the Indian Self-Determination Act (PL 93-638) or an urban Indian organization
receiving funds under Title V of the Indian Health Care Improvement Act.
	 
	 	 
	FEE-FOR-SERVICE (FFS)

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

	 	Federal Emergency Services program covered under R9-22-217, to treat an
emergency medical condition for a member who is determined eligible under A.R.S. §
36-2903.03 (D).
	 
	 	 
	FFP

	 	Federal financial participation (FFP) refers to the contribution that the
Federal government makes to the Title XIX and Title XXI program portions of AHCCCS as
defined in 42 CFR 400.203.
	 
	 	 
	FISCAL YEAR (FY)

	 	The budget year — Federal Fiscal Year: October 1 through September 30; State
fiscal year: July 1 through June 30.
	 
	 	 
	FREEDOM TO WORK

(TICKET TO WORK)

	 	A Federal program that expands Title XIX eligibility to individuals, 16 through
64 years old, who are disabled and whose earned income, after allowable deductions,
is at or below 250% of the Federal Poverty Level.
	 
	 	 
	GEOGRAPHIC SERVICE 

AREA (GSA)

	 	A specific county or defined grouping of counties designated by AHCCCSA within
which a Contractor provides, directly or through subcontract, covered health care to
members enrolled with that Contractor.
	 
	 	 
	GRIEVANCE 

SYSTEM

	 	A system that includes a process for enrollee grievances, enrollee appeals,
provider claim disputes, and access to the state fair hearing system.
	 
	 	 
	HEALTHCARE GROUP OF 

ARIZONA (HCG)

	 	A prepaid medical coverage plan marketed to small, uninsured businesses and
political subdivisions within the state.
	 
	 	 
	HEALTH PLAN

	 	See “CONTRACTOR”.
	 
	 	 
	HIFA

	 	The CMS Health Insurance Flexibility and Accountability Demonstration
Initiative , which targets State Children’s Health Insurance Program (Title XXI)
funding for populations with incomes below 200 percent of the Federal Poverty Level,
seeking to maximize private health insurance coverage options.
	 
	 	 
	HIFA PARENTS

	 	Parents of Medicaid (SOBRA) and KidsCare eligible children who are eligible for
AHCCCS benefits under the HIFA Waiver. All eligible parents must pay an enrollment
fee and a monthly premium based on household income.

					
	 	 	 	 	 
	 
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	DEFINITIONS
	 	 
	 	Contract/RFP No. YH04-0001
	 	 	 	 	 

	 	 	 
	IBNR

	 	Incurred But Not Reported liability for
services rendered for which claims have
not been received.
	 
	 	 
	IHS

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

	 	Individuals under the age of 19,
eligible under the SCHIP program, in
households with income at or below 200%
FPL. All members, except Native American
members, are required to pay a premium
amount based on the number of children
in the family and the gross family
income. Also referred to as Title XXI.
	 
	 	 
	LIEN

	 	A legal claim, filed with the County
Recorder’s office in which a member
resides and in the county an injury was
sustained, for the purpose of ensuring
that AHCCCS receives reimbursement for
medical services paid. The lien is
attached to any settlement the member
may receive as a result of an injury.
	 
	 	 
	MANAGED CARE

	 	Systems that integrate the financing and
delivery of health care services to
covered individuals by means of
arrangements with selected providers to
furnish comprehensive services to
members; establish explicit criteria for
the selection of health care providers;
have financial incentives for members to
use providers and procedures associated
with the plan; and have formal programs
for quality, utilization management and
the coordination of care.
	 
	 	 
	MANAGEMENT SERVICES 

AGREEMENT

	 	An agreement with an entity in which the
owner of the Contractor delegates some
or all of the comprehensive management
and administrative services necessary
for the operation of the Contractor.
	 
	 	 
	MANAGEMENT SERVICES

SUBCONTRACTOR

	 	An entity to which the Contractor delegates the comprehensive management and administrative services necessary
for the operation of the Contractor
	 
	 	 
	MANAGING EMPLOYEE

	 	A general manager, business manager,
administrator, director, or other
individual who exercises operational or
managerial control over, or who directly
or indirectly conducts the day-to-day
operation of an institution,
organization or
agency.
	 
	 	 
	MATERIAL OMISSION

	 	Facts, data or other information
excluded from a report, contract, etc.,
the absence of which could lead to
erroneous conclusions following
reasonable review of such report,
contract, etc.
	 
	 	 
	MAJOR UPGRADE

	 	Any upgrade or changes that may result
in a disruption to the following: Loading of contracts, providers,
members, issuing prior authorizations or
the adjudication of claims.
	 
	 	 
	MEDICAID

	 	A Federal/State program authorized by
Title XIX of the Social Security Act, as
amended.
	 
	 	 
	MEDICAL EXPENSE DEDUCTION

(MED)

	 	Title XIX Waiver member whose family
income is more than 100% of the Federal
Poverty Level and has family medical
expenses that reduce income to or below
40% of the Federal Poverty Level. MED’s
may have a categorical link to a Title
XIX category; however, their income
exceeds the limits of the Title XIX
category.
	 
	 	 
	MEDICAL MANAGEMENT

	 	An integrated process or system that is
designed to assure appropriate
utilization of health care resources, in
the amount and duration necessary to
achieve desired health outcomes, across
the continuum of care (from prevention
to end of life care).
	 
	 	 
	MEDICARE

	 	A Federal program authorized by Title
XVIII of the Social Security Act, as
amended.

					
	 	 	 	 	 
	 
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	DEFINITIONS
	 	 
	 	Contract/RFP No. YH04-0001
	 	 	 	 	 

	 	 	 
	MEDICARE MANAGED CARE 

PLAN

	 	A managed care entity that has a Medicare contract with CMS
to provide services to Medicare beneficiaries, including Medicare
Advantage Prescription Drug Plan (MAPDP), MAPDP Special Needs
Plan, or Medicare Prescription Drug Plan
	 
	 	 
	MEDICARE PART D 

EXCLUDED DRUGS

	 	Medicare Part D is the Prescription Drug Coverage option
available to Medicare beneficiaries, including those also eligible
for Medicaid. Medications that are available under this benefit
will not be covered by AHCCCS post January 1, 2006. There are
certain drugs that are excluded from coverage by Medicare, and
will continue to be covered by AHCCCS. Those medications are
barbiturates, benzodiazepines, and over the counter medication as
defined in the AMPM. Prescription medications that are covered
under Medicare, but are not on a Part D Health Plan’s formulary
are not considered excluded drugs, and will not be covered by
AHCCCS.
	 
	 	 
	MEMBER

	 	An eligible person who is enrolled in the system, as defined
in A.R.S. § 36-2901, A.R.S. § 36-2981 and A.R.S. §
36-2981.01.
	 
	 	 
	NEW OFFEROR

	 	An organization or entity that submits a proposal in
response to this solicitation and which has not been an AHCCCS
Contractor during CYE 03.
	 
	 	 
	NON-CONTRACTING 

PROVIDER

	 	A person who provides services as prescribed in A.R.S. §
36-2939 and who does not have a subcontract with an AHCCCS
Contractor.
	 
	 	 
	OFFEROR

	 	An organization or other entity that submits a proposal to
the Administration in response to this RFP, as defined in
R9-22-106.
	 
	 	 
	PERFORMANCE 

STANDARDS

	 	A set of standardized indicators designed to assist AHCCCSA
in evaluating, comparing and improving the performance of its
Contractors. Specific descriptions of health services measurement
goals are found in Section D, Paragraph 24, Performance
Standards.
	 
	 	 
	PMMIS

	 	AHCCCSA’s Prepaid Medical Management Information System.
	 
	 	 
	POST 

STABILIZATION SERVICES

	 	Medically necessary services, related to an emergency
medical condition, provided after the member’s condition is
sufficiently stabilized in order to maintain, improve or resolve
the member’s condition so that the member could alternatively be
safely discharged or transferred to another location. [42 CFR
438-114(a)]
	 
	 	 
	POTENTIAL ENROLLEE

	 	A Medicaid eligible recipient who is not yet enrolled with a
contractor. [42 CFR 438.10(a)]
	 
	 	 
	PRIMARY CARE PROVIDER

(PCP)

	 	An individual who meets the requirements of A.R.S. §
36-2901, and who is responsible for the management of a member’s
health care. A PCP may be a physician defined as a person licensed
as an allopathic or osteopathic physician according to A.R.S.
Title 32, Chapter 13 or Chapter 17 or a practitioner defined as a
physician assistant licensed under A.R.S. Title 32, Chapter 25, or
a certified nurse practitioner licensed under A.R.S. Title 32,
Chapter 15.
	 
	 	 
	PRIOR PERIOD

	 	The period of time, prior to the member’s enrollment, during
which a member is eligible for covered services. The time frame is
from the effective date of eligibility to the day a member is
enrolled with a Contractor.
	 
	 	 
	PROVIDER

	 	Any person or entity who contracts with AHCCCSA or a
Contractor for the provision of covered services to members
according to the provisions A.R.S. § 36-2901 or any subcontractor
of a provider delivering services pursuant to A.R.S. §
36-2901.

					
	 	 	 	 	 
	 
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	DEFINITIONS
	 	 
	 	Contract/RFP No. YH04-0001
	 	 	 	 	 

	 	 	 
	QUALIFIED MEDICARE 

BENEFICIARY (QMB)

	 	A person, eligible under A.R.S. § 36-2971(6), who is entitled to
Medicare Part A insurance and meets certain income and residency
requirements of the Qualified Medicare Beneficiary program. A
QMB, who is also eligible for Medicaid, is commonly referred to
as a QMB dual eligible.
	 
	 	 
	RATE CODE

	 	Eligibility classification for capitation payment purposes.
	 
	 	 
	REGIONAL BEHAVIORAL HEALTH 

AUTHORITY (RBHA)

	 	An organization under contract with ADHS, who administers
covered behavioral health services in a geographically specific
area of the state. Tribal governments, through an agreement with
ADHS, may operate a tribal regional behavioral health authority
(TRBHA) for the provision of behavioral health services to
Native American members living on-reservation.
	 
	 	 
	REINSURANCE

	 	A risk-sharing program provided by AHCCCSA to Contractors for
the reimbursement of certain contract service costs incurred for
a member beyond a certain monetary threshold.
	 
	 	 
	RELATED PARTY

	 	A party that has, or may have, the ability to control or
significantly influence a Contractor, or a party that is, or may
be, controlled or significantly influenced by a Contractor.
“Related parties” include, but are not limited to, agents,
managing employees, persons with an ownership or controlling
interest in the disclosing entity, and their immediate families,
subcontractors, wholly-owned subsidiaries or suppliers, parent
companies, sister companies, holding companies, and other
entities controlled or managed by any such entities or persons.
	 
	 	 
	RISK GROUP

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

	 	Request For Proposal is a document prepared by AHCCCSA, which
describes the services required and instructs prospective
offerors about how to prepare a
response (proposal), as defined in R9-22-106.
	 
	 	 
	SCHIP

	 	State Children’s Health Insurance Program under Title XXI of the
Social Security Act. The Arizona version of SCHIP is referred to
as “Kidscare”. See Kidscare.
	 
	 	 
	SCOPE OF SERVICES

	 	See “COVERED SERVICES”.
	 
	 	 
	SERVICE LEVEL 

AGREEMENT

	 	An agreement with a a corporate owner, or any of its Divisions
or Subsidiaries, that requires specific levels of service for
administrative functions or services for the Contractor
specifically related to fulfilling the Contractor’s obligations
to AHCCCSA under the terms of this contract, as defined in
R9-22-101.
	 
	 	 
	SOBRA

	 	Section 9401 of the Sixth Omnibus Budget and Reconciliation Act,
1986, amended by the Medicare Catastrophic Coverage Act of 1988,
U.S.C. 1396a(a)(10)(A)(ii)(IX), November 5, 1990.
	 
	 	 
	SPECIAL HEALTH CARE NEEDS

	 	Members with special health care needs are those members who
have serious and chronic physical, developmental or behavioral
conditions, and who also require medically necessary health and
related services of a type or amount beyond that required by
members generally.
	 
	 	 
	STATE

	 	The State of Arizona.
	 
	 	 
	STATE PLAN

	 	The written agreements between the State and CMS which describe
how the AHCCCS program meets CMS requirements for participation
in the Medicaid program and the State Children’s Health
Insurance Program.

					
	 	 	 	 	 
	 
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	DEFINITIONS
	 	 
	 	Contract/RFP No. YH04-0001
	 	 	 	 	 

	 	 	 
	SUBCONTRACT

	 	An agreement entered into by the Contractor with a provider of health care services,
who agrees to furnish covered services to members or with any other organization or person
who agrees to perform any administrative function or service for the Contractor
specifically related to fulfilling the Contractor’s obligations to AHCCCSA under the terms
of this contract, as defined in R9-22-101.
	 
	 	 
	SUBCONTRACTOR

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

	 	(2) A person, agency or organization with which the Contractor has contracted or
delegated some of its management/administrative functions or responsibilities
	 
	 	 
	 

	 	(3) A person, agency or organization with which a fiscal agent has entered into a
contract, agreement, purchase order or lease (or leases of real property) to obtain space,
supplies, equipment or services provided under the AHCCCS agreement.
	 
	 	 
	SUPPLEMENTAL SECURITY 

INCOME (SSI)

	 	Federal cash assistance program
under Title XVI of the Social Security Act.
	 
	 	 
	TEMPORARY 

ASSISTANCE TO NEEDY FAMILIES

(TANF)

	 	A Federal cash assistance program under Title IV of the Social Security Act
established by the Personal Responsibility and Work Opportunity Act
of 1996. It replaced
Aid To Families With Dependent Children (AFDC).
	 
	 	 
	THIRD PARTY

	 	An individual, entity or program
that is or may be liable to pay all or part of the
medical cost of injury, disease or disability of an AHCCCS applicant or member, as defined
in R9-22-1001.
	 
	 	 
	THIRD PARTY 

LIABILITY

	 	The resources available from a person or entity that is, or may be, by agreement,
circumstance or otherwise, liable to pay all or part of the medical expenses incurred by
an AHCCCS applicant or member, as defined in R9-22-1001,
	 
	 	 
	TITLE XIX MEMBER

	 	Member eligible for Federally funded Medicaid programs under Title XIX of the Social
Security Act including those eligible under 1931 provisions of the Social Security Act,
Sixth Omnibus Budget Reconciliation Act (SOBRA), Supplemental Security Income (SSI),
SSI-related groups, Title XIX Waiver groups. Medicare Cost Sharing groups, Breast and
Cervical Cancer Treatment program and Freedom to Work.
	 
	 	 
	TITLE XIX WAIVER 

MEMBER

	 	All MED (Medical Expense Deduction) members, and adults or childless couples at or
below 100% of the Federal Poverty Level who are not categorically linked to another Title
XIX program. This would also include Title XIX linked individuals whose income exceeds the
limits of the categorical program.
	 
	 	 
	TITLE XXI MEMBER

	 	Member eligible for acute care services under Title XXI of the Social Security Act,
referred to in Federal legislation as the “State Children’s Health Insurance Program”
(SCHTP and HIFA). The Arizona version of SCHIP is referred to as “KidsCare.”
	 
	 	 
	WWHP

	 	Well Woman Health check Program, administered by the Arizona Department of Health
Services and funded by the Centers for Disease Control and Prevention. (See AMPM Chapter
400)
	 
	 	 
	YEAR

	 	See “Contract Year”.

[END OF DEFINITIONS]

					
	 	 	 	 	 
	 
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	PROGRAM REQUIREMENTS
	 	 
	 	Contract/RFP No. YH04-0001
	 	 	 	 	 

SECTION
D: PROGRAM REQUIREMENTS

1. TERM OF CONTRACT AND OPTION TO RENEW

The initial term of this contract shall be 10/1/03 through 9/30/06, with two one-year options to
renew. All contract renewals shall be through contract amendment. AHCCCSA shall issue amendments
prior to the end date of the contract when there is an adjustment to capitation rates and/or
changes to the scope of service contained herein. Changes to scope of service include but are not
limited to changes in the enrolled population, changes in covered services, changes in GSA’s

If the Contractor has been awarded a contract in more than one GSA, each such contract will be
considered separately renewable. AHCCCSA may renew the Contractor’s contract in one GSA, but not in
another. In addition, if the Contractor has had significant problems of non-compliance in one GSA,
it may result in the capping of the Contractor’s enrollment in all GSAs. Further, AHCCCSA may
require the Contractor to renew all currently awarded GSA’s, or may terminate the contract if the
Contractor does not agree to renew all currently awarded GSA’s.

When AHCCCSA issues an amendment to the contract, the provisions of such renewal will be deemed to
have been accepted 60 days after the date of mailing by AHCCCSA, even if the amendment has not been
signed by the Contractor, unless within that time the Contractor notifies AHCCCSA in writing that
it refuses to sign the renewal amendment If the Contractor provides such notification, AHCCCSA will
initiate contract termination proceedings.

Contractor’s
Notice of Intent Not To Renew: If the Contractor chooses not to renew this contract,
the Contractor may be liable for certain costs associated with the transition of its members to a
different Contractor. If the Contractor provides AHCCCSA written
notice of its intent not to renew
this contract at least 180 days before its expiration, this liability for transition costs may be
waived by AHCCCSA.

Contract
Termination:In the event the contract, or any portion thereof, is terminated for any
reason, or expires, the Contractor shall assist AHCCCSA in the transition of its members to other
contractors, and shall abide by standards and protocols set forth in Paragraph 9, Transition of
Members. In addition, AHCCCSA reserves the right to extend the term of the contract on a
month-to-month basis to assist in any transition of members. The Contractor shall make provision
for continuing all management and administrative services until the transition of all members is
completed and all other requirements of this contract are satisfied. The Contractor shall be
responsible for providing all reports set forth in this contract and necessary for the transition
process and shall be responsible for the following:

	a.	 	Notification of subcontractors and members.
	 
	b.	 	Payment of all outstanding obligations for medical care rendered to members.
	 
	c.	 	Until AHCCCSA is satisfied that the Contractor has paid all such obligations, the Contractor
shall provide
the following reports to AHCCCSA:

	 	(1)	 	A monthly claims aging report by provider/creditor including IBNR amounts;
	 
	 	(2)	 	A monthly summary of cash disbursements;
	 
	 	(3)	 	Copies of all bank statements received by the Contractor.

	d.	 	Such reports shall be due on the fifth day of each succeeding month for the prior month.
	 
	e.	 	In the event of termination or suspension of the contract by AHCCCSA, such termination or
suspension shall
not affect the obligation of the Contractor to indemnify AHCCCSA for any claim by any third party
against
the State or AHCCCSA arising from the Contractor’s performance of this contract and for which the
Contractor would otherwise be liable under this contract.
	 
	f.	 	Any dispute by the Contractor, with respect to termination or suspension of this contract by
AHCCCSA,
shall be exclusively governed by the provisions of Section E, Paragraph 26, Disputes.

					
	 	 	 	 	 
	 
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	PROGRAM REQUIREMENTS
	 	 
	 	Contract/RFP No. YH04-0001
	 	 	 	 	 

	g.	 	Any funds, advanced to the Contractor for coverage of members for periods after the date of
termination, shall be returned to AHCCCSA within 30 days of termination of the contract.

2. ELIGIBILITY CATEGORIES

AHCCCS is Arizona’s Title XIX Medicaid program operating under an 1115 Waiver and Title XXI program
operating under Title XXI State Plan authority. Arizona has the authority to require mandatory
enrollment in managed care. All members eligible for AHCCCS benefits, with few exceptions, are
enrolled with acute care contractors and paid for on a capitated basis. AHCCCSA pays for health
care expenses on a fee for service (FFS) basis for Title XIX and Title XXI eligible members who
receive services through the Indian Health Service; for Title XIX eligible members who are entitled
to emergency services under the Federal Emergency Services (FES) program; for Medicare cost sharing
beneficiaries under QMS programs.

The following describes the eligibility groups enrolled in the managed care program and covered
under this contract [42 CFR 434.6(a)(2)].

TitleXIX

1931
(Also referred to as TANF): Eligible individuals and families under the 1931 provision
of the Social Security Act, with household income levels at or below 100% of the FPL.

SSI
and SSI Related Groups: Eligible individuals receiving Supplemental Security Income (SSI) or
who are aged, blind or disabled with household income levels at or below 100% of the FPL.

Freedom
to Work (Ticket to Work): Eligible individuals under the Title XIX expansion program that
extends eligibility to individuals, 16 through 64 years old who meet SSI disability criteria, whose
earned income, after allowable deduction, is at or below 250% of the FPL and who are not eligible
for any other Medicaid program. These members must pay a premium to
AHCCCSA ranging from $10 to
$35, depending on income.

SOBRA:
Under the Sixth Omnibus Budget and Reconciliation Act of 1986, eligible pregnant women, with
household income levels at or below 133% of the FPL, and children in families with household
incomes ranging from below 100% to 340% of the FPL, depending on the
age of the child.

SOBRA
Family Planning: Family planning extension program that covers the costs for family planning
services only, for a maximum of 24 months following the loss of SOBRA eligibility.

Breast
and Cervical Cancer Treatment Program (BCCTP): Eligible individuals under the Title XIX
expansion program for women with income up to 250% of the FPL, who are diagnosed with and need
treatment for breast and/or cervical cancer or cervical lesions and are not eligible for other
Title XIX programs providing full Title XIX services. Eligible members cannot have other creditable
health insurance coverage, including Medicare.

Title
XIX Waiver Group

Non-MED: Eligible individuals and couples whose income is at or below 100% of the FPL, and
who are not categorically linked to another Title XIX program.

MED: Eligible individuals and families whose income is above 100% of the FPL with medical expenses
that reduce income to or below 40% of the FPL.

					
	 	 	 	 	 
	 
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	PROGRAM REQUIREMENTS
	 	 
	 	Contract/RFP No. YH04-0001
	 	 	 	 	 

Title
XXI

KidsCare:
Individuals under the age of 19, whose income does not exceed 200% FPL. All members,
except Native American members, are required to pay a premium amount to AHCCCSA based on the number
of children in the family and the gross family income.

HIFA
Parents: Non-Title XIX-eligible parents of KidsCare children or parents of Title XIX SOBRA
eligible children who are eligible under the HIFA demonstration initiative waiver. HIFA parents are
required to pay a one-time enrollment fee and a monthly premium to
AHCCCSA ranging from $15 to $25
per parent (except Native American members), based on household income. Due to funding
considerations, this program has an enrollment cap.

Social
Security Disability Insurance Temporary Medical Coverage (SSDI-TMC)

Laws 2006, Chapter 373 established a Temporary Medical Coverage Program. SSDI-TMC provides health
care coverage to persons who:

1. Are citizens and residents who have been enrolled in AHCCCS at any time within the last 24
months

2. And became ineligible for AHCCCS coverage due to federal disability insurance benefit payments
making them over income for Medicaid,

3.
And they are not yet eligible for Medicare.

In order to participate in SSDI-TMC, eligible persons must pay a premium. Participants become
ineligible for SSDI-TMC once they become eligible for Medicare. SSDI-TMC is funded entirely by the
State. Contractors will be capitated for these members under unique rate codes and AHCCCS may
provide a reconciliation to limit the profit or loss of this population. If reconciliation is to be
implemented, an SSDI-TMC reconciliation policy will be developed which will discuss the details of
the reconciliation calculations and timelines. SSDI-TMC members will
not be eligible for behavioral health services, prior period Coverage, any supplemental payments
or reinsurance. Members will be entitled to all other AHCCCS Acute Care benefits.

3. ENROLLMENT AND DISENROLLMENT

AHCCCSA
has the exclusive authority to enroll and disenroll members. The
Contractor shall -not
disenroll any member for any reason unless directed to do so by AHCCCSA. The Contractor may request
AHCCCSA to change the member’s enrollment in accordance with the
ACOM Enrollment Choice and Change
of Contractor Policy. The Contractor may not request disenrollment because of an adverse change in
the member’s health status, or because of the member’s utilization of medical services, diminished
mental capacity, or uncooperative or disruptive behavior resulting from his or her special needs.
An AHCCCS member may request disenrollment from the Contractor for cause at any time. Refer those
requests due to situations defined in Section A (1) of the ACOM Change of Plan Policy to AHCCCSA to
the AHCCCS Verification Unit via mail or at (602) 417-4000 or (800) 962-6690. For medical
continuity requests, the Contractor shall follow the procedures outlined in the ACOM Change of Plan
Policy, before notifying the AHCCCSA. AHCCCSA will disenroll the member when the member becomes
ineligible for the AHCCCS program, moves out of the Contractor’s service areas, changes contractors
during the member’s open enrollment/annual enrollment choice period, the Contractor does not,
because of moral or religious objections, cover the service the member seeks or when approved for a
Contractor change through the ACOM Change of Plan Policy, [42 CFR 438.56] Eligibility for the
various AHCCCS coverage groups is determined by one of the following agencies:

	 	 	 
	Social Security Administration (SSA)

	 	SSA determines eligibility for the Supplemental Security
Income (SSI) cash program. SSI cash recipients are automatically eligible for AHCCCS coverage.
	 
	 	 
	Department of Economic Security (DBS)

	 	DES determines eligibility for the families with
children under

					
	 	 	 	 	 
	 
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	 	section 1931 of the Social Security Act, pregnant women and children under SOBRA, the Adoption
Subsidy Program, Title IV-E foster care children, Young Adult Transitional Insurance Program, the
Federal Emergency Services program (FES), HIFA parents of SOBRA
eligible children, the Title XIC
Waiver Members.
	 
	 	 
	AHCCCSA

	 	AHCCCSA determines eligibility for
the SSI/Medical Assistance Only groups, including the FES program for this population (aged, disabled, blind), the Arizona
Long-Term Care System (ALTCS), the Qualified Medicare Beneficiary program and other Medicare cost
sharing programs, BCCTP, the Freedom to Work program, the Title XXI
KidsCare program, and HIFA
parents of KidsCare children.
	 
	 	 
	 

	 	

AHCCCS acute care members are enrolled with Contractors in accordance with the rules set forth in
R9-22, Article 17, R9-31-306,307,309 and 1719.

Health Plan Choice

All AHCCCS members eligible for services covered under this contract have a choice of
available contractors. Information about these contractors will be given to each applicant during
the application process for AHCCCS benefits. If there is only one contractor available for the
applicant’s Geographic Service Area, no choice is offered as long as the contractor offers the
member a choice of PCPs. Members, who do not choose prior to AHCCCSA being notified of their
eligibility, are automatically assigned to a contractor based on
family continuity or the auto assignment algorithm.
Once assigned, AHCCCS sends a choice notice to the member and
gives them 16 days to choose a different contractor from the auto-assigned contractor. See Section
D, Paragraph 6, Auto-Assignment Algorithm, for further explanation.

The Contractor will share with AHCCCSA the cost of providing information about the acute care
contractors to potential members and to those eligible for annual enrollment choice.

Exceptions to the above enrollment policies for Title XIX members include previously enrolled
members who have been disenrolled for less than 90 days. These members will be automatically
enrolled with the same Contractor, if still available. Members who have less than 30 days of
continued eligibility will not be enrolled with a Contractor, but will be placed on Fee for
Service. FES members are not enrolled with a contractor. Women, who become eligible for the Family
Planning Services Extension Program, will remain assigned to their current contractor. Some
specialty groups will also be FFS, such as persons approved only for the inpatient hospital stay.
These are inmates who are temporarily residing in a hospital.

The
effective date of enrollment for a new Title XIX member with the Contractor is the day AHCCCSA
takes the enrollment action, generally the day prior to the date the Contractor receives
notification from AHCCCSA via the daily roster. However, the Contractor is responsible for payment
of medically necessary covered services retroactive to the member’s beginning date of eligibility.

KidsCare members must select a contractor prior to being determined eligible and therefore, will
not be auto-assigned. If the HIFA parent does not choose, they will be enrolled with their child’s
contractor following the enrollment rules set forth in R9-31-1719. When a member is transferred
from Title XIX to Title XXI and has not made a contractor choice for Title XXI, the member will
remain with their current contractor and a choice notice will be sent to the member. The member may
then change plans no later than 16 days from the date the choice notice is sent.

					
	 	 	 	 	 
	 
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	PROGRAM REQUIREMENTS
	 	 
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The effective date of enrollment for a Title XXI member, including HIFA parents, will be the first
day of the month following notification to the contractor, with few exceptions.

Prior
Period Coverage: AHCCCS provides prior period coverage for the period of time, prior to the
Title XIX member’s enrollment, during which a member is eligible for covered services. The time
frame is from the effective date of eligibility to the day a member is enrolled with the
Contractor. The Contractor receives notification from the Administration of the member’s
enrollment. The Contractor is responsible for payment of all claims for medically necessary covered
services provided to members during prior period coverage. This may include services provided prior
to the contract year (See Section D, Paragraph 53, Compensation, for a description of the
Contractor’s reimbursement from AHCCCSA for this eligibility time period.)

Newborns:
Newborns, born to AHCCCS eligible mothers enrolled at the time of the child’s birth, will
be enrolled with the mother’s contractor, when newborn notification is received by AHCCCSA. The
Contractor is responsible for notifying AHCCCSA of a child’s birth to an enrolled member.
Capitation for the newborn will begin on the date notification is received by AHCCCSA (except for
cases of births during prior period coverage). The effective date of AHCCCS eligibility will be the
newborn’s date of birth, and the Contractor is responsible for all covered services to the newborn
whether or not AHCCCSA has received notification of the child’s birth. AHCCCSA is currently
available to receive notification 24 hours a day, 7 days a week via phone or the AHCCCS website.
Eligible mothers of newborns are sent a letter advising them of their right to choose a different
contractor for their child; the date of the change will be the date of processing the request from
the mother. If the mother does not request a change, the child will remain with the mother’s
contractor.

Newborns of FES mothers are auto-assigned to a contractor and mothers of these newborns are sent a
letter advising them of their right to choose a different contractor for their child. In the event
the FES mother chooses a different contractor, AHCCCS will recoup all capitation paid to the
originally assigned contractor and the baby will be enrolled retroactive to the date of birth in
the second contractor. The second contractor will receive prior period capitation from the date of
birth to the day before assignment and prospective capitation from the date of assignment forward.
The second contractor will be responsible for all covered services to the newborn from date of
birth.

Enrollment
Guarantees: Upon initial capitated enrollment as a Title XIX-eligible member, the member
is guaranteed a minimum of five full months of continuous enrollment. Upon initial capitated
enrollment as a Title XXI-eligible member, the member is guaranteed a minimum of 12 full months of
continuous enrollment. Enrollment guarantees do not apply to HIFA parents. The enrollment guarantee
is a one-time benefit. If a member changes from one contractor to another within the enrollment
guarantee period, the remainder of the guarantee period applies to the new contractor. The
enrollment guarantee may not be granted or may be terminated if the member is incarcerated or, if a
minor child is adopted. AHCCCS Rule R9-22, Article 17 and R9-31, Article 3 describes other reasons
for which the enrollment guarantee may not apply.

Native
Americans: Native Americans, on or off-reservation, may choose to receive services from
Indian Health Service (IHS), a PL 93-638 tribal facility or any available contractor. If a choice
is not made within the specified time limit, Native American Title XIX members living
on-reservation will be assigned to AHCCCS FFS. Native American Title XIX members living
off-reservation will be assigned to an available contractor using AHCCCS’ Family Continuity Policy
and auto-assignment algorithm. Native American Title XXI members must make a choice prior to being
determined eligible. Title XXI HIFA parent members’ enrollment will follow the Title XIX enrollment
rules. Native Americans may change from AHCCCS FFS to a contractor or from a contractor to AHCCCS
FFS at any time.

Member
Rights: Members may submit plan change requests to the Contractor or the AHCCCS
Administration. A denial of any plan change request must include a description of the member’s
right to appeal the denial.

					
	 	 	 	 	 
	 
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	PROGRAM REQUIREMENTS
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4. ANNUAL ENROLLMENT CHOICE

AHCCCSA conducts an Annual Enrollment Choice (AEC) for members on their annual anniversary date,
[42 CFR 438.56(c)(2)(ii)] AHCCCSA may hold an open enrollment as deemed necessary. During AEC,
members may change contractors subject to the availability of other contractors within their
Geographic Service Area. Members are mailed a printed enrollment form and other information
required by the Balanced Budget Act of 1997 (BBA) 60 days prior to their AEC date and may choose a
new contractor by contacting AHCCCSA to complete the enrollment process. If the member does not
participate in the AEC, no change of contractor will be made (except for approved changes under the
ACOM Change of Plan Policy) during the new anniversary year. This holds true if a contractor’s
contract is renewed and the member continues to live in a contractor’s service area. The Contractor
shall comply with the ACOM Member Transition for Annual Enrollment Choice, Open Enrollment and
Other Plan Changes Policy and the AMPM.

5. OPEN ENROLLMENT

In the event that AHCCCSA does not award a CYE ‘04 contract to an incumbent contractor, AHCCCSA
will hold an open enrollment for those members enrolled with the exiting contractor. If those
members do not elect to choose a contractor, they will be auto assigned. In addition to open
enrollment, AHCCCSA will make changes to both annual enrollment choice materials and new enrollee
materials prior to October 1, 2003 to reflect the change in available contractors. The auto
assignment algorithm will be adjusted to exclude auto assignment of new enrollees to exiting
contractors(s). The exact dates for the open enrollment and other changes described above have not
yet been determined, but will be communicated when they are finalized.

6. AUTO-ASSIGNMENT ALGORITHM

Once auto-assigned, AHCCCS sends a choice notice to the member and gives them 16 days to choose a
different contractor from the auto-assigned contractor. Members who do not exercise their right to
choose and do not have family continuity, are assigned to a contractor through an auto-assignment
algorithm. The algorithm is a mathematical formula used to distribute members to the various
contractors in a manner that is predictable and consistent with AHCCCSA goals. The algorithm favors
those contractors with lower capitation rates in the latest contract award and higher rates in
selected Performance Measures. For further details on the AHCCCS Auto-Assignment Algorithm, refer
to Attachment G. AHCCCSA may change the algorithm at any time during the term of the contract in
response to contractor-specific issues (e.g. imposition of an enrollment cap). Capitation rates may
be adjusted to reflect changes to a contractor’s risk due to changes in the algorithm.

7. AHCCCS MEMBER IDENTIFICATION CARDS

Contractors are responsible for paying the costs of producing AHCCCS member identification cards.
The Contractor will receive an invoice the month following the issue date of the identification
card.

8. MAINSTREAMING OF AHCCCS MEMBERS

To ensure mainstreaming of AHCCCS members, the Contractor shall take affirmative action so that
members are provided covered services without regard to payer source, race, color, creed, gender,
religion, age, national origin (to include those with limited English proficiency), ancestry,
marital status, sexual preference, genetic information, or physical or mental handicap, except
where medically indicated. Contractors must take into account a member’s literacy and culture, when
addressing members and their concerns, and must take reasonable steps to encourage subcontractors
to do the same. The Contractor must make interpreters, including assistance for the visual or
hearing impaired, available free of charge for all members to ensure appropriate

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

Examples of prohibited practices include, but are not limited to, the following, in accordance
with Title VI of the US Civil Rights Act of 1964, 42 USC, Section 2001, Executive Order 13166,
and rules and regulation promulgated according to, or as otherwise provided by law:

	a.	 	Denying or not providing a member any covered service or access to an available facility.
	 
	b.	 	Providing to a member any covered service which is different, or is provided in a
different manner or at a different time from that provided to other members, other public
or private patients or the public at large, except where medically necessary.
	 
	c.	 	Subjecting a member to segregation or separate treatment in any manner related to the
receipt of any covered service; restricting a member in any way in his or her enjoyment of
any advantage or privilege enjoyed by others receiving any covered service.
	 
	d.	 	The assignment of times or places for the provision of services on the basis of the
race, color, creed, religion, age, sex, national origin, ancestry, marital status, sexual
preference, income status, AHCCCS membership, or physical or mental handicap of the
participants to be served.

If the Contractor knowingly executes a subcontract with a provider with the intent of allowing
or permitting the subcontractor to implement barriers to care (i.e.
the terms of the
subcontract act to discourage the full utilization of services by some members), the
Contractor will be in default of its contract.

If the Contractor identifies a problem involving discrimination by one of its providers, it
shall promptly intervene and implement a corrective action plan. Failure to take prompt
corrective measures may place the Contractor in default of its contract.

9. TRANSITION OF MEMBERS

The Contractor shall comply with the AMPM, and the ACOM Member Transition for Annual
Enrollment Choice, Open Enrollment and Other Plan Changes Policy standards for member
transitions between contractors or GSAs, participation in or discharge from CRS or CMDP, to
or from an ALTCS Contractor and upon termination or expiration of a contract. The Contractor
shall develop and implement policies and procedures, which comply with these policies to
address transition of:

	a.	 	Members with significant medical conditions such as a high-risk pregnancy or
pregnancy within the last 30 days, the need for organ or tissue transplantation, chronic
illness resulting in hospitalization or nursing facility placement, etc.;
	 
	b.	 	Members who are receiving ongoing services such as dialysis, home health,
chemotherapy and/or radiation therapy or who are hospitalized at the time of transition;
	 
	c.	 	Members who have received prior authorization for services such as scheduled
surgeries, out-of-area specialty services, nursing home admission;
	 
	d.	 	Prescriptions, DME and medically necessary transportation ordered for the
transitioning member by the relinquishing contractor; and
	 
	e.	 	Medical records of the transitioning member (the cost, if any, of reproducing and
forwarding medical records shall be the responsibility of the relinquishing AHCCCS
contractor).
	 
	f.	 	Any members transitioning to CMDP.

When relinquishing members, the Contractor is responsible for timely notification to the
receiving contractor regarding pertinent information related to any special needs of
transitioning members. The Contractor, when receiving a transitioning member with special
needs, is responsible for coordinating care with the relinquishing contractor in order that
services not be interrupted, and for providing the new member with contractor and service
information, emergency numbers and instructions about how to obtain services.

					
	 	 	 	 	 
	 
	 	 
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10. SCOPE OF SERVICES

The Contractor shall provide covered services to AHCCCS members in accordance with all applicable
Federal, State and local laws, rules, regulations and policies, including services listed in this
document, listed by reference in attachments, and AHCCCS policies referenced in this document The
services are described in detail in AHCCCS Rules R9-22, Article 2 and the AHCCCS Medical Policy
Manual (AMPM}, all of which are incorporated herein by reference, except for provisions specific to
the Fee-for-Service program, and may be found in the Bidder’s Library. [42 CFR 438.210(a)(l)] The
covered services must be medically necessary and are briefly described below. [42 CFR
438.210(a)(4)] Except for annual well woman exams, behavioral health and children’s dental
services, covered services must be provided by, or coordinated with, a primary care provider. The
Contractor shall coordinate the services it provides to a member with services the member
receives from other entities, including behavioral health services the member receives through an
ADHS/RBHA provider. The Contractor shall ensure that, in the process of coordinating care, each
member’s privacy is protected in accordance with the privacy requirements in 45 CFR Parts 160 and
164 Subparts A and E, to the extent that they are applicable.
[42 CFR 438.208(b)(4) and 438.224]
Services must be rendered by providers that are appropriately licensed or certified, operating
within their scope of practice, and registered as an AHCCCS provider. The Contractor shall provide
the same standard of care for all members regardless of the member’s eligibility category. The
Contractor shall ensure that the services are sufficient in amount, duration, or scope to
reasonably be expected to achieve the purpose for which the services are furnished. The Contractor
shall not arbitrarily deny or reduce the amount, duration, or scope of a required service solely
because of diagnosis, type of illness, or condition of the member. The Contractor may place
appropriate limits on a service on the basis of criteria such as medical necessity; or for
utilization control, provided the services furnished can reasonably be expected to achieve their
purpose. [42 CFR 438.210(a)(3)]

Authorization of Services: For the processing of requests for initial and continuing authorizations
of services, the Contractor shall have in place, and follow, written policies and procedures. The
Contractor shall have mechanisms in place to ensure consistent application of review criteria for
authorization decisions. Any decision to deny a service authorization request or to authorize a
service in an amount, duration, or scope that is less than requested, shall be made by a health
care professional who has appropriate clinical expertise in treating the member’s condition or
disease. [42 CFR 438.2I0(b)]

Notice of Action: The Contractor shall notify the requesting provider, and give the member written
notice of any decision by the Contractor to deny, reduce, suspend or terminate a service
authorization request, or to authorize a service in an amount, duration, or scope that is less than
requested. The notice shall meet the requirements of 42 CFR 438.404, except for the requirement
that the notice to the provider be in writing. [42 CFR 438.210(c)]

The Contractor shall ensure that its providers are not restricted or inhibited in any way from
communicating freely with members regarding the members’ health care, medical needs and treatment
options, even if needed services are not covered by the Contractor.

Ambulatory Surgery and Anesthesiology: The Contractor shall provide surgical services for either
emergency or scheduled surgeries when provided in an ambulatory or outpatient setting such as a
freestanding surgical center or a hospital based outpatient surgical setting.

Anti-hemophilic Agents and Related Services: The Contractor shall provide services for the
treatment of hemophilia and Von Willebrands disease (See Paragraph 57, REINSURANCE,
Catastrophic Reinsurance). AHCCCSA holds a single-source specialty contract for
anti-hemophilic agents and related services for hemophilia. Non-hemophilia related services are not
covered under this contract. Non-hemophilia-related care is defined as any care that is provided
not related to the hemophilia services.

					
	 	 	 	 	 
	 
	 	 
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AHCCCSA’s participating Contractors may access anti-hemophilic agents and related pharmaceutical
services for hemophilia or Von Willebrands under the terms and conditions of this contract for
members enrolled in their plans. In that instance, the Contractor is the authorizing payor. As
such, the Contractor will provide prior authorization, care coordination, and reimbursement for all
components covered under the contract for their members. Contractors utilizing the contract will
comply with the terms and conditions of the contract. Contractors may use the AHCCCSA contract or
contract with a provider of their choice.

Audiology: The Contractor shall provide audiology services to members under the age of 21 including
the identification and evaluation of hearing loss and rehabilitation of the hearing loss through
medical or surgical means (i.e. hearing aids). Only the identification and evaluation of hearing
loss are covered for members 21 years of age and older unless the hearing loss is due to an
accident or injury-related emergent condition.

Behavioral Health: The Contractor shall provide behavioral health services as described in Section
D, Paragraph 12, Behavioral Health Services.

Children’s Rehabilitative Services (CRS): The program for children with CRS-covered conditions is
administered by the Arizona Department of Health Services (ADHS) for children who meet CRS
eligibility criteria. The Contractor shall refer children to the CRS program who are potentially
eligible for services related to CRS covered conditions, as specified in R9-22, Article 2 and
A.R.S. Title-36; Chapter 2, Article 3. The Contractor is responsible for care of members until
Children’s Rehabilitative Services Administration (CRSA) determines those members eligible. In
addition, the Contractor is responsible for covered services for CRS eligible members unless and
until the Contractor has received written confirmation from CRSA that CRSA will provide the
requested service. The Contractor shall require the member’s Primary Care Provider (PCP) to
coordinate the member’s care with the CRS Program. For more detailed information regarding
eligibility criteria, referral practices, and contractor-CRS coordination issues, refer to the CRS
Policy and Procedures Manual and the ACOM, including Section 409 “Notices of Action.”

The Contractor shall respond to requests for services potentially covered by CRSA in accordance
with Section 409 “Notices of Action” of the ACOM. The Contractor is responsible to address prior
authorization requests if CRSA fails to comply with the timeframes specified in Section 409. The
Contractor remains ultimately responsible for the provision of all covered services to its members,
including emergency services not related to a CRS condition, emergency services related to a CRS
condition rendered outside the CRS network, and AHCCCS covered services denied by CRSA for the
reason that it is not a service related to a CRS condition.

Referral to CRSA does not relieve the Contractor of the responsibility for timely providing
medically necessary AHCCCS services not covered by CRSA. In the event that CRSA denies a medically
necessary AHCCCS service for the reason that it is not related to a CRS condition, the Contractor
must promptly respond to the service authorization request and authorize the provision of
medically necessary services. CRSA cannot contest the Contractor prior authorization determination
if CRSA fails to timely respond to a service authorization request. Contractors, through their
Medical Directors, may request review from CRS Regional Medical Director when it denies a service
for the reason that it is not covered by the CRS Program. The Contractor may also request a
hearing with the Administration if it is dissatisfied with the CRSA determination. If the AHCCCS
Hearing Decision determines that the service should have been provided by CRSA, CRSA shall be
financially responsible for the costs incurred by the Contractor in providing the service.

A member with private insurance is not required to utilize CRSA. This includes members with
Medicare whether they are enrolled in Medicare FFS or a Medicare Managed Care Plan. If the member
uses the private insurance network or Medicare for a CRS covered condition, the Contractor is
responsible for all applicable deductibles and copayments. If the member is on Medicare, the
AHCCCS Policy 201- Medicare Cost Sharing for Members in Traditional Fee for Service Medicare and
Policy 202 — Medicare Cost Sharing for Members in Medicare Managed Care Plans shall apply. When
the private insurance or Medicare is exhausted, or certain annual or lifetime limits are reached
with respect to CRS covered conditions, the Contractor shall refer the member to CRSA for
determination for CRS services. If the member with private insurance or Medicare

					
	 	 	 	 	 
	 
	 	 
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chooses to enroll with CRS, CRS becomes the secondary payer responsible for all applicable
deductibles and copayments. The Contractor is not responsible to provide services in instances
when the CRS eligible member, who has no primary insurance or Medicare, refuses to receive CRS
covered services through the CRS Program. If the Contractor becomes aware that a member with a
CRS covered condition refuses to participate in the CRS application process or refuses to receive
services through the CRS Program, the member may be billed by the provider in accordance with
AHCCCS regulations regarding billing for unauthorized services.

Chiropractic Services: The Contractor shall provide chiropractic services to members under age
21 when prescribed by the member’s PCP and approved by the Contractor in order to ameliorate the
member’s medical condition. Medicare approved chiropractic services shall also be covered,
subject to limitations specified in CFR 410.22, for Qualified Medicare Beneficiaries if
prescribed by the member’s PCP and approved by the Contractor.

Dental: The Contractor shall provide all members under the age of 21 with all medically
necessary dental services including emergency dental services, dental screening and preventive
services in accordance with the AHCCCS periodicity schedule, as well as therapeutic dental
services, dentures, and pre-transplantation dental services. The Contractor shall monitor
compliance with the EPSDT periodicity schedule for dental screening services. The Contractor is
required to meet specific utilization rates for members as described in Section D, Paragraph 24,
Performance Standards. The Contractor shall ensure that members are notified when dental
screenings are due if the member has not been scheduled for a visit. If a dental screening is not
received by the member, a second notice must be sent. Members under
the age of 21 may request
dental services without referral and may choose a dental provider from the Contractor’s provider
network. For members who are 21 years of age and older, the Contractor shall provide emergency
dental care, medically necessary dentures and dental services for transplantation services as
specified in the AMPM.

Dialysis:
The Contractor shall provide medically necessary dialysis, supplies, diagnostic testing
and medication for all members when provided by Medicare-certified hospitals or
Medicare-certified end stage renal disease (ESRD) providers. Services may be provided on an
outpatient basis, or on an inpatient basis if the hospital admission is not solely to provide
chronic dialysis services.

Early and Periodic Screening, Diagnosis and Treatment (EPSDT): The Contractor shall provide
comprehensive health care services through primary prevention, early intervention, diagnosis and
medically necessary treatment to correct or ameliorate defects and physical or mental illness
discovered by the screenings for members under age 21. The Contractor shall ensure that these
members receive required health screenings, including those for developmental/behavioral health,
in compliance with the AHCCCS periodicity schedule. The Contractor shall submit all EPSDT
reports to the AHCCCS Division of Health Care Management, as required by the AMPM. The
Contractor is required to meet specific participation/utilization rates for members as described
in Section D, Paragraph 24, Performance Standards.

The Contractor shall ensure the initiation and coordination of a referral to the ADHS/RBHA
system for members in need of behavior health services. The Contractor shall follow up with the
RBHA to monitor whether members have received these health services.

Emergency Services: The Contractor shall have and/or provide the following as a minimum:

	 	a.	 	Emergency services facilities adequately staffed by qualified medical
professionals to provide pre- hospital, emergency care on a 24-hour-a-day, 7-day-a-week
basis, for the sudden onset of a medically emergent condition. Emergency medical
services are covered without prior authorization. The Contractor is encouraged to
contract with emergency service facilities for the provision of emergency services. The
Contractor is also encouraged to contract with or employ the services of non-emergency
facilities (e.g, urgent care centers) to address member non-emergency care issues
occurring after regular office hours or on weekends. The Contractor shall be
responsible for educating members and providers regarding appropriate utilization of
emergency room services including behavioral health emergencies.

					
	 	 	 	 	 
	 
	 	 
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The Contractor shall monitor emergency service utilization (by both provider and member) and shall have guidelines for
implementing corrective action for inappropriate utilization;

	 	b.	 	All medical services necessary to rule out an emergency condition;
	 
	 	c.	 	Emergency transportation; and
	 
	 	d.	 	Member access by telephone to a physician, registered nurse, physician assistant or nurse practitioner
for advice in emergent or urgent situations, 24 hours per day, 7 days per week.

Per the Balanced Budget Act of 1997, CFR 438.114, the following conditions apply with respect to coverage and payment of
emergency services:

The Contractor must cover and pay for emergency services regardless of whether the provider that furnishes the service has a
contract with the Contractor.

The Contractor may not deny payment for treatment obtained under either of the following circumstances:

	 	1.	 	A member had an emergency medical condition, including cases in which the absence of medical
attention would not have resulted in the outcomes identified in the definition of emergency medical
condition CFR 438.114.
	 
	 	2.	 	A representative of the Contractor (an employee or subcontracting provider) instructs the member to
seek emergency medical services.

Additionally, the Contractor may not:

	 	1.	 	Limit what constitutes an emergency medical condition as defined in CFR 438.114, on the basis of
lists of diagnoses or symptoms.
	 
	 	2.	 	Refuse to cover emergency services based on the failure of the emergency room provider, hospital, or
fiscal agent to notify the Contractor of the member’s screening and treatment within 10 calendar days
of presentation for emergency services. Claims submission by the hospital within 10 calendar days of
presentation for the emergency services constitutes notice to the Contractor. This notification
stipulation is only related to the provision of emergency services.
	 
	 	3.	 	Require notification of Emergency Department treat and release visits as a condition of payment
unless the plan has prior approval of the AHCCCS Administration.

A member who has an emergency medical condition may not be held liable for payment of subsequent screening and treatment needed
to diagnose the specific condition or stabilize the patient.

The attending emergency physician, or the provider actually treating the member, is responsible for determining when the member
is sufficiently stabilized for transfer or discharge, and such determination is binding on the Contractor responsible for
coverage and payment. The Contractor shall comply with BBA guidelines regarding the coordination of post-stabilization care.

For additional information and requirements regarding emergency services, refer to AHCCCS Rules R9-22-201 et seq..

Eye
Examinations/Optometry: The Contractor shall provide all medically necessary emergency eye care, vision examinations,
prescriptive lenses, and treatments for conditions of the eye for all members under the age of 21. For members who are 21 years of
age and older, the Contractor shall provide emergency care for eye conditions which meet the definition of an emergency medical
condition. Also covered for this population is cataract removal, and medically necessary vision examinations and prescriptive
lenses, if required, following cataract removal and other eye
conditions as specified in the AMPM.

Family
Planning: The Contractor shall provide family planning services
in accordance with the AMPM, for all members who choose to
delay or prevent pregnancy. These include medical, surgical, pharmacological and

					
	 	 	 	 	 
	 
	 	 
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laboratory services, as well as contraceptive devices. Information and counseling, which allow
members to make informed decisions regarding family planning methods, shall also be included. If
the Contractor does not provide family planning services, it must contract for these services
through another health care delivery system, which allows members freedom of choice in selecting a
provider.

The Contractor shall provide services to members enrolled in the Family Planning Services Extension
Program, a program that provides family planning services only, for a maximum of 24 months, to
women whose SOBRA eligibility has terminated. The Contractor is also responsible for notifying
AHCCCSA when a SOBRA woman is sterilized to prevent inappropriate enrollment in the SOBRA Family
Planning Services Extension Program. Notification should be made at the time the newborn is
reported or after the sterilization procedure is completed.

Health Risk Assessment and Screening: The Contractor shall provide these services for
non-hospitalized members, 21 years of age and older. These services include, but are not limited
to, screening for hypertension, elevated cholesterol, colon cancer, sexually transmitted diseases,
tuberculosis and HIV/AIDS; nutritional assessment in cases when the member has a chronic
debilitating disease affected by nutritional needs; mammograms and prostate screenings; physical
examinations and diagnostic work-ups; and immunizations. Required assessment and screening services
for members under age 21 are included in the AHCCCS EPSDT periodicity schedule.

Home and Community Based Services (HCBS): Assisted living facility, alternative residential
setting, or home and community based services (HCBS) as defined in R9-22, Article 2 and R9-28,
Article 2 that meet the provider standards described in R9-28, Article 5, and subject to the
limitations set forth in the AMPM. This service is covered in lieu of a nursing facility.

Home Health: This service shall be provided under the direction of a physician to prevent
hospitalization or institutionalization and may include nursing, therapies, supplies and home
health aide services. It shall be provided on a part-time or intermittent basis.

Hospice: These services are covered for members under 21 years of age who are certified by a
physician as being terminally ill and having six months or less to live. See the AMPM for details
on covered hospice services.

Hospital: Inpatient services include semi-private accommodations for routine care, intensive and
coronary care, surgical care, obstetrics and newborn nurseries, and behavioral health
emergency/crisis services. If the member’s medical condition requires isolation, private inpatient
accommodations are covered. Nursing services, dietary services and ancillary services such as
laboratory, radiology, Pharmaceuticals, medical supplies, blood and blood derivatives, etc. are
also covered. Outpatient hospital services include any of the above, which may be appropriately
provided on an outpatient or ambulatory basis (i.e. laboratory, radiology, therapies, ambulatory
surgery, etc.). Observation services may be provided on an outpatient basis, if determined
reasonable and necessary, when deciding whether the member should be admitted for impatient care.
Observation services include the use of a bed and periodic monitoring by hospital nursing staff
and/or other staff to evaluate, stabilize or treat medical conditions of a significant degree of
instability and/or disability.

Immunizations: The Contractor shall provide immunizations for adults (21 years of age and older) to
include diphtheria-tetanus, influenza, pneumococcus, rubella, measles and hepatitis-B, or others as
medically indicated. For all members under the age of 21, immunization requirements include
diphtheria, tetanus, pertussis vaccine (DPT), inactivated polio vaccine (IPV), measles, mumps,
rubella (MMR) vaccine, H. influenza, type B (HIB) vaccine, hepatitis B (Hep B) vaccine, varicella
zoster virus (VZV) vaccine and pneumococcal conjugate vaccine (PCV). The Contractor is required to
meet specific immunization rates for members under the age of 21, which are described in Paragraph
24, Performance Standards, (Please refer to the AMPM for current immunization requirements.)

					
	 	 	 	 	 
	 
	 	 
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Indian Health Service (IHS): AHCCCSA will reimburse claims on a FFS basis for acute care services
that are medically necessary, eligible for 100% Federal reimbursement, and are provided to Title
XIX members enrolled with the Contractor, in an IHS or a 638 tribal facility. The Contractor is
responsible for reimbursement to IHS or tribal facilities for emergency services provided to Title
XXI Native American members enrolled with the Contractor. The Contractor may choose to subcontract
with an IHS or 638 tribal facility as part of their provider network for the delivery of covered
services, however, the Contractor will be liable for the cost of the care in the event they choose
to do so.

Laboratory: Laboratory services for diagnostic, screening and monitoring purposes are covered when
provided by a CLIA (Clinical Laboratory Improvement Act) approved free standing, hospital, clinic,
physician office or other health care facility laboratory.

Upon written request, the Contractor may obtain laboratory test data on members from a freestanding
laboratory or hospital- based laboratory subject to the requirements specified in A.R.S. §
36-2903(R) and (S). The data shall be used exclusively for quality improvement activities and
health care outcome studies required and/or approved by the Administration.

Maternity: The Contractor shall provide pre-conception counseling, pregnancy identification,
prenatal care, treatment of pregnancy related conditions, labor and delivery services, and
postpartum care for members. Services may be provided by physicians, physician assistants, nurse
practitioners, or certified nurse midwives. Members may select or be assigned to a PCP specializing
in obstetrics. All members, anticipated to have a low-risk delivery, may elect to receive labor and
delivery services in their home, if this setting is included in the allowable settings of the
Contractor and the Contractor has providers in its network that offer home labor and delivery
services. All members, anticipated to have a low-risk prenatal course and delivery, may elect to
receive prenatal care, labor and delivery and postpartum care provided by licensed midwives, if
these providers are in the Contractor’s network. All licensed midwife labor and delivery services
must be provided in the member’s home, as licensed midwives do not have admitting privileges in
hospitals or AHCCCS registered freestanding birthing centers. Members receiving maternity services
from a licensed midwife must also be assigned to a PCP for other health care and medical services.
The Contractor shall allow women and their newborns to receive up to 48 hours of inpatient hospital
care after a routine vaginal delivery and up to 96 hours of inpatient care after a cesarean
delivery. The attending health care provider, in consultation with the mother, may discharge
the mother or newborn prior to the 48-hour minimum length of stay. A normal newborn may be granted
an extended stay in the hospital of birth when the mother’s continued stay in the hospital is
beyond the 48 or 96 hour stay.

The Contractor shall inform all assigned AHCCCS pregnant women of voluntary prenatal HIV testing
and the availability of medical counseling if the test is positive. The Contractor shall provide
information in the member handbook and annually in the member newsletter, which encourages
pregnant women to be tested and provides instructions about where testing is available.
Semi-annually, the Contractor shall report to AHCCCS the number of pregnant women who have been
identified as HIV/AIDS positive. This report is due no later than 30 days after the end of the
second and fourth quarters of the contract year.

Medical Foods: Medical foods are covered within limitations defined in the AMPM for members
diagnosed with a metabolic condition included under the ADHS Newborn Screening Program and
specified in the AMPM. The medical foods, including metabolic formula and modified low protein
foods, must be prescribed or ordered under the supervision of a physician.

Medical Supplies, Durable Medical Equipment (DME), Orthotic and Prosthetic Devices: These services
are covered when prescribed by the member’s PCP, attending physician, practitioner, or by a
dentist. Medical equipment may be rented or purchased only if other sources, which provide the
items at no cost, are not available. The total cost of the rental must not exceed the purchase
price of the item. Reasonable repairs or

					
	 	 	 	 	 
	 
	 	 
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adjustments of purchased equipment are covered to make the equipment serviceable and/or when the
repair cost is less than renting or purchasing another unit.

Nursing Facility: The Contractor shall provide services in nursing facilities, including
religious non-medical health care institutions, for members who require short-term convalescent
care not to exceed 90 days per contract year. In lieu of a nursing facility, the member may be
placed in an assisted living facility, an alternative residential setting, or receive home and
community based services (HCBS) as defined in R9-22, Article 2 and R9-28, Article 2 that meet the
provider standards described in R9-28, Article 5, and subject to the limitations set forth in
the AMPM.

Nursing facility services must be provided in a dually-certified Medicare/Medicaid nursing
facility, which includes in the per-diem rate: nursing services; basic patient care equipment and
sickroom supplies; dietary services; administrative physician visits; non-customized DME;
necessary maintenance and rehabilitation therapies; over-the-counter medications; social,
recreational and spiritual activities; and administrative, operational medical direction
services. See Paragraph 41, Nursing Facility Reimbursement, for further details.

The Contractor shall notify the Assistant Director of the Division of Member Services, in
writing, when a member has been residing in a nursing facility for 75 days. This will allow
AHCCCSA time to follow-up on the status of the ALTCS application and to prepare for potential
fee-for-service coverage,-if the stay goes beyond the 90-day maximum.

Nutrition: Nutritional assessments may be conducted as a part of the EPSDT screenings for members
under age 21, and to assist members 21 years of age and older whose health status may improve with
nutritional intervention. Assessment of nutritional status on a periodic basis may be provided as
determined necessary, and as a part of the health risk assessment and screening services provided by
the member’s PCP. AHCCCS covers nutritional therapy on an
enteral, parenteral or oral basis, when
determined medically necessary to
provide either complete daily dietary requirements or to supplement a member’s daily nutritional
and caloric intake and when AHCCCS criteria specified in the AMPM
are met.

Physician: The Contractor shall provide physician services to include medical assessment,
treatments and surgical services provided by licensed allopathic or
osteopathic physicians.

Podiatry: The Contractor shall provide podiatry services to include bunionectomies, casting for
the purpose of constructing or accommodating orthotics, medically necessary orthopedic shoes that
are an integral part of a brace, and medically necessary routine foot care for patients with a
severe systemic disease which prohibits care by a nonprofessional person.

Post-stabilization Care Services Coverage and Payment: Pursuant to 42 CFR 438.114, 422.113(c) and
422.133, the following conditions apply with respect to coverage and payment of emergency and of
post-stabilization care services, except where otherwise noted in the contract:

The Contractor must cover and pay for post-stabilization care services without authorization,
regardless of whether the provider that furnishes the service has a contract with the Contractor,
for the following situations:

	 	1.	 	Post-stabilization care services that were pre-approved by the Contractor, or,
	 
	 	2.	 	Post-stabilization care services were not pre-approved by the Contractor
because the Contractor did not respond to the treating provider’s request for
pre-approval within one hour after being requested to approve such care or could not
be contacted for pre-approval.
	 
	 	3.	 	The Contractor representative and the treating physician cannot reach
agreement concerning the member’s care and a contractor physician is not available
for consultation. In this situation, the Contractor must give the treating physician
the opportunity to consult with a contractor physician and the treating physician
may continue with care of the patient until a contractor physician is reached or one
of the criteria in CFR 422.113(c)(3) is met.

					
	 	 	 	 	 
	 
	 	 
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Pursuant to CFR 422.113(c)(3), the Contractor’s financial responsibility for post-stabilization
care services that have not been pre-approved ends when:

	 	1.	 	A contractor physician with privileges at the treating hospital assumes
responsibility for the member’s care;
	 
	 	2.	 	A contractor physician assumes responsibility for the member’s care through transfer;
	 
	 	3.	 	A contractor representative and the treating physician reach an agreement
concerning the member’s care; or
	 
	 	4.	 	The member is discharged.

Pregnancy Terminations: AHCCCS covers pregnancy termination if the pregnant member suffers from a
physical disorder, physical injury, or physical illness, including a life endangering physical
condition caused by, or arising from, the pregnancy itself, that would, as certified by a
physician, place the member in danger of death unless the pregnancy is terminated; the pregnancy is
a result of rape or incest.

The attending physician must acknowledge that a pregnancy termination has been determined medically
necessary by submitting the Certificate of Necessity for Pregnancy Termination. This certificate
must be submitted to the appropriate assigned Contractor Medical Director. The Certificate must
certify that, in the physician’s professional judgment, one or more of the previously mentioned
criteria have been met.

Prescription Drugs: Medications ordered by a PCP, attending physician, dentist or other authorized
prescriber and dispensed under the direction of a licensed pharmacist are covered subject to
limitations related to prescription supply amounts, contractor formularies and prior authorization
requirements. Contractors may include over-the-counter medications in their formulary, as defined
in the AMPM. An appropriate over-the-counter medication may be
prescribed, when it is determined to
be a lower-cost alternative to prescription drugs.

Primary Care Provider (PCP): PCP services are covered when provided by a physician, physician
assistant or nurse practitioner selected by, or assigned to, the member. The PCP provides primary
health care and serves as a coordinator in referring the member for specialty medical services. [42
CFR 438.208(b)] The PCP is responsible for maintaining the member’s primary medical record, which
contains documentation of all health risk assessments and health care services of which they are
aware whether or not they were provided by the PCP.

Radiology and Medical Imaging: These services are covered when ordered by the member’s PCP,
attending physician or dentist and are provided for diagnosis, prevention, treatment or assessment
of a medical condition. Services are generally provided in hospitals, clinics, physician offices
and other health care facilities.

Rehabilitation Therapy: The Contractor shall provide occupational, physical and speech therapies.
Therapies must be prescribed by the member’s PCP or attending physician for an acute condition and
the member must have the potential for improvement due to the rehabilitation. Physical therapy for
all members, and occupational and speech therapies for members under the age of 21, are covered in
both inpatient and outpatient settings. For those members who are 21 and over, occupational and
speech therapies are covered in inpatient settings only.

Respiratory Therapy: This therapy is covered in inpatient and outpatient settings when prescribed
by the member’s PCP or attending physician, and is necessary to restore, maintain or improve
respiratory functioning.

Transplantation of Organs and Tissue, and Related Immunosuppressant Drugs: These services are
covered within limitations defined in the AMPM for members diagnosed with specified medical
conditions. Services include pre-transplant inpatient or outpatient evaluation; donor search;
organ/tissue harvesting or procurement; preparation and transplantation services; and convalescent
care. In addition, if a member receives, or has

					
	 	 	 	 	 
	 
	 	 
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received, a transplant covered by a source other than AHCCCS, medically necessary non-experimental
services are provided, within limitations, after the discharge from the acute care hospitalization
for the transplantation. AHCCCS has contracted with transplantation providers for the Contractor’s
use or the Contractor may select its own transplantation provider.

Transportation: These services include emergency and non-emergency medically necessary
transportation. Emergency transportation, including transportation initiated by an emergency
response system such as 911, may be provided by ground, air or water ambulance to manage an
AHCCCS member’s emergency medical condition at an emergency scene and transport the member to
the nearest appropriate medical facility. Non-emergency transportation shall be provided for
members who are unable to provide their own transportation for medically necessary services.

Triage/Screening and Evaluation: These are covered services when provided by acute care hospitals,
IHS facilities and urgent care centers to determine whether or not an emergency exists, assess the
severity of the member’s medical condition and determine what services are necessary to alleviate
or stabilize the emergent condition. Triage/screening services must be reasonable, cost effective
and meet the criteria for severity of illness and intensity of service.

11. SPECIAL HEALTH CARE NEEDS

The Contractor shall have in place a mechanism to identify and stratify all members with special
health care needs [42 CFR 438.240(b)(4)]. The Contractor shall implement mechanisms to assess each
member identified as having special health care needs, in order to identify any ongoing special
conditions of the member which require a course of treatment or regular care monitoring. The
assessment mechanisms shall use appropriate health care professionals
[42 CFR 438.208(c)(2)]. The
Contractor shall share with other entities providing services to that member the results of its
identification and assessment of that member’s needs so that those activities need not be
duplicated [42 CFR 438.208(b)(3)].

For members with special health care needs determined to need a specialized course of treatment or
regular care monitoring, the Contractor must have procedures in place to allow members to directly
access a specialist (for example through a standing referral or an approved number of visits) as
appropriate for the member’s condition and identified needs. [42 CFR 438.208(c)(4)]

The Contractor shall have a methodology to identify providers willing to provide medical home
services and make reasonable efforts to offer access to these providers.

The American Academy of Pediatrics (AAP) describes care from a medical home as:

	 	•	 	Accessible
	 
	 	•	 	Continuous
	 
	 	•	 	Coordinated
	 
	 	•	 	Family-centered
	 
	 	•	 	Comprehensive
	 
	 	•	 	Compassionate
	 
	 	•	 	Culturally effective

12. BEHAVIORAL HEALTH SERVICES

AHCCCS members, except for SOBRA Family Planning and SSDI-TMC members, are eligible for
comprehensive behavioral health services. For SOBRA Family Planning and SSDI-TMC members, there is
no behavioral health coverage. With the exception of the Contractor’s providers’ medical
management of certain behavioral health conditions as described under
“Medication Management
Services” below, the behavioral

					
	 	 	 	 	 
	 
	 	 
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health benefit for these members is provided through the ADHS — Regional Behavioral Health
Authority (RBHA) system. The Contractor shall be responsible for member education regarding these
benefits; provision of limited emergency inpatient services; and screening and referral to the
RBHA system of members identified as requiring behavioral health services.

Member Education: The Contractor shall be responsible for educating members in the member handbook
and other printed documents about covered behavioral health services and where and how to access
services. Covered services include:

	a.	 	Behavior Management (behavioral health personal care, family support/home care training,
self-help/peer support)
	 
	b.	 	Behavioral Health Case Management Services (limited)
	 
	c.	 	Behavioral Health Nursing Services
	 
	d.	 	Emergency Behavioral Health Care
	 
	e.	 	Emergency and Non-Emergency Transportation

	 
	f.	 	Evaluation and Assessment
	 
	g.	 	Individual, Group and Family Therapy and Counseling
	 
	h.	 	Inpatient Hospital Services
	 
	i.	 	Non-Hospital Inpatient Psychiatric Facilities Services (Level I residential treatment
centers and sub-acute
facilities)
	 
	j.	 	Laboratory and Radiology Services for Psychotropic Medication Regulation and Diagnosis
	 
	k.	 	Opioid Agonist Treatment
	 
	l.	 	Partial Care (Supervised day program, therapeutic day program and medical day program)
	 
	m.	 	Psychosocial Rehabilitation (living skills training; health promotion; supportive employment
services)
	 
	n.	 	Psychotropic Medication
	 
	o.	 	Psychotropic-Medication Adjustment and Monitoring
	 
	p.	 	Respite Care (with limitations)
	 
	q.	 	Rural Substance Abuse Transitional Agency Services
	 
	r.	 	Screening
	 
	s.	 	Therapeutic Foster Care Services

Referrals: As specified in Section D, Paragraph 10, Scope of Services, EPSDT, the Contractor must
provide developmental/behavioral health .screenings for members up to 21 years of age in
compliance with the AHCCCS periodicity schedule. The Contractor shall ensure the initiation and
coordination of behavioral health referrals of these members to the RBHA when determined
necessary through the screening process. The Contractor is responsible for RBHA referral and
follow-up collaboration, as necessary, for other members identified as needing behavioral health
evaluation and treatment. Members may also access the RBHA system for evaluation by self-referral
or be referred by schools, State agencies or other service providers. The Contractor is
responsible for providing transportation to a member’s first RBHA evaluation appointment if a
member is unable to provide his/her own transportation.

Emergency Services: Contractors are responsible for providing up to 72 hours inpatient emergency
behavioral health services to members with psychiatric or substance abuse diagnoses who are not
behavioral health recipients in accordance with AHCCCS
Rule R9-22-210.01. For additional
information regarding behavioral health services refer to Title 9 Chapter 22 Articles 2 and 12.
It is expected that Contractors initiate a referral to the RBHA for evaluation and behavioral
health recipient eligibility as soon as possible after admission.

When members present in an emergency room setting, the Contractor is responsible for all
emergency medical services including triage, physician assessment and diagnostic tests. For
members who are not ADHS behavioral health recipients, the Contractor is responsible to provide
medically necessary psychiatric consultations or psychological consultations in emergency room
settings to help stabilize the member or determine the need for inpatient behavioral health
services. ADHS is responsible for medically necessary psychiatric consultations provided to ADHS
behavioral health recipients in emergency room settings.

					
	 	 	 	 	 
	 
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Coordination of Care: The Contractor is responsible for ensuring that a medical record is
established by the PCP when behavioral health information is received from the RBHA or provider
about an assigned member even if the PCP has not yet seen the assigned member. In lieu of actually
establishing a medical record, such information may be kept in an appropriately labeled file but
must be associated with the member’s medical record as soon as one is established. The Contractor
shall require the PCP to respond to RBHA/provider information requests pertaining to ADHS
behavioral health recipient members within 10 business days of receiving the request. The response
should include all pertinent information, including, but not limited to, current diagnoses,
medications, laboratory results, last PCP visit, and recent hospitalizations. The Contractor shall
require the PCP to document or initial signifying review of member behavioral health information
received from a RBHA behavioral health provider who is also treating the member. All affected
subcontracts shall include this provision by July 1, 2005. For prior period coverage, the
Contractor is responsible for payment of all claims for medically necessary covered behavioral
health services to members who are not ADHS behavioral health recipients.

Medication Management Services: The Contractor shall allow PCPs to provide medication management
services (prescriptions, medication monitoring visits, laboratory and other diagnostic tests
necessary for diagnosis and treatment of behavioral disorders) to members with diagnoses of
depression, anxiety and attention deficit hyperactivity disorder. The Contractor shall make
available, on the Contractor’s formulary, medications for the treatment of these disorders.

The Contractor shall ensure that training and education are available to PCPs regarding behavioral
health referral and consultation procedures. The Contractor shall establish policies and procedures
for referral and consultation and shall describe them in its provider manual. Policies for referral
must include, at a minimum, criteria, processes, responsible parties and minimum requirements no
less stringent than those specified in this contract for the forwarding of member medical
information.

Transfer of Care: When a PCP has initiated medication management services for a member to treat a
behavioral health disorder, and it is subsequently determined by the PCP or contractor that the
member should be transferred to a RBHA prescriber for evaluation and/or continued medication
management services, the Contractor will require and ensure that the PCP or contractor coordinates
the transfer of care. All affected subcontracts shall include this provision by July 1, 2005. The
Contractor shall establish policies and procedures for the transition of members who are referred
to the RBHA for ongoing treatment. The contractor shall ensure that PCPs maintain continuity of
care for these members. The policies and procedures must address, at a minimum, the following:

	 	1.	 	Guidelines for when a transition of the member to the RBHA for ongoing treatment is
indicated.
	 
	 	2.	 	Protocols for notifying the RBHA of the member’s transfer, including reason for
transfer, diagnostic information, and medication history.
	 
	 	3.	 	Protocols and guidelines for the transfer of medical records, including but not
limited to which parts of the medical record are to be copied, timeline for making the
medical record available to the RBHA, observance of confidentiality of the member’s
medical record, and protocols for responding to RBHA requests for additional medical
record information.
	 
	 	4.	 	Protocols for transition of prescription services, including but not limited to
notification to the RBHA of the member’s current medications and timeframes for dispensing
and refilling medications during the transition period. This coordination must ensure at a
minimum, that the member does not run out of prescribed medications prior to the first
appointment with a RBHA prescriber and that all relevant member pertinent medical
information as outlined above and, including the reason for transfer is forwarded to the
receiving RBHA prescriber prior to the member’s first scheduled appointment with the RBHA
prescriber.
	 
	 	5.	 	Contractor activities to monitor to ensure that members are appropriately
transitioned to the RBHA for care.

					
	 	 	 	 	 
	 
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The Contractor shall ensure that its quality management program incorporates monitoring of the
PCP’s management of behavioral health disorders and referral to, coordination of care with and
transfer of care to RBHA providers as required under this contract.

13. AHCCCS GUIDELINES, POLICIES and MANUALS

All AHCCCS guidelines, policies and manuals are hereby incorporated by reference into this
contract. All guidelines, policies and manuals are available on the AHCCCS Home Page on the
Internet at www.azahcccs.gov or upon request. The Contractor is responsible for complying with the
requirements set forth within. In addition, linkages to AHCCCS rules (Arizona Administrative Code),
Statutes and other resources are also available to all interested parties through the AHCCCS Home
Page. Upon adoption by AHCCCS, updates will be made available to the Contractors. Once
notification to the Contractors has taken place, the Contractor shall
be responsible for
implementing and maintaining current copies of updates.

14. MEDICAID SCHOOL BASED CLAIMING PROGRAM (MSBC)

Pursuant to an Intergovernmental Agreement with the Department of Education, and a contract with a
Third Party Administrator, AHCCCSA reimburses participating school districts for specifically
identified Medicaid services when provided to Medicaid eligible children who are included under the
Individuals with Disabilities Education Act (IDEA). The Medicaid
services must be identified in the
member’s Individual Education Plan (IEP) as medically necessary for the child to obtain a public
school education.

MSBC services are provided in a school setting or other approved setting specifically to allow
children to receive a public school education. They do not replace medically necessary services
provided outside the school setting or other MSBC approved alternative setting. Currently, services
include audiology, therapies (OT, PT and speech/language); behavioral health evaluation and
counseling; nursing and attendant care; and specialized transportation. The Contractor’s
evaluations and determinations, about whether services are medically necessary, should be made
independent of the fact that the child is receiving MSBC services.

Contractors and their providers must coordinate with schools and school districts that provide MSBC
services to the Contractor’s enrolled members. Services should not be duplicative. Contractor case
managers, working with special needs children, should coordinate with school or school district
case managers/special education teachers, working with these members. Transfer of member medical
information and progress toward treatment goals between the Contractor and the member’s school or
school district is required and should be used to enhance the services provided to members.

15. PEDIATRIC IMMUNIZATIONS AND THE VACCINES FOR CHILDREN PROGRAM

Through the Vaccines for Children Program, the Federal and State governments purchase, and make
available to providers free of charge, vaccines for AHCCCS children under age 19. The Contractor
shall not utilize AHCCCS funding to purchase vaccines for members under the age of 19. If vaccines
are not available through the VFC Program, the Contractor shall contact the AHCCCSA Division of
Health Care Management, Clinical Quality Management Unit. Any provider, licensed by the State to
administer immunizations, may register with ADHS as a “VFC provider” and receive free vaccines.
The Contractor shall not reimburse providers for the administration of the vaccines in excess of
the maximum allowable as set by CMS. The Contractor shall comply with all VFC requirements and
monitor its providers to ensure that, a physician if acting as primary care physician (PCP) to
AHCCCS members under the age of 19, is registered with ADHS/VFC.

Arizona State law requires the reporting of all immunizations given to children under the age of
19. Immunizations must be reported at least monthly to the ADHS. Reported immunizations are held
in a central

					
	 	 	 	 	 
	 
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database
known as ASIIS (Arizona State Immunization Information System), which can be accessed by
providers to obtain complete, accurate immunization records. Software is available from ADHS to
assist providers in meeting this reporting requirement. Contractors must educate their provider
network about these reporting requirements and the use of this resource and monitor to ensure
compliance.

16. STAFF REQUIREMENTS AND SUPPORT SERVICES

The Contractor shall have in place the organization, management and administrative systems capable
of fulfilling all contract requirements. For the purposes of this contract, the Contractor shall
not employ or contract with any individual that has been debarred, suspended or otherwise lawfully
prohibited from participating in any public procurement activity or from participating in
non-procurement activities under
regulations issued under Executive Order No. 12549 or under guidelines implementing Executive Order
12549. [42 CFR 438.610(a) and (b)]. The Contractor is responsible for maintaining a significant
local (within the State of Arizona) presence. This presence would include staff as described in a.,
b., d., e., f., g., i., k., n,, o., p. and q. below. The Contractor must obtain approval from
AHCCCS prior to moving functions outside the State of Arizona. Such a request for approval must
include a description of the processes in place that assure rapid responsiveness to effect changes
for contract compliance.

The Contractor shall be responsible for any additional costs associated with on-site audits or
other oversight activities which result from required system located outside of the State of
Arizona.

At a minimum, the following staff is required:

	a.	 	A full-time Administrator/CEO/COO or designee must be available during working hours to
fulfill the responsibilities of the position and to oversee the entire operation of the
contractor. The Administrator
shall devote sufficient time to the Contractor’s operations to ensure adherence to program
requirements and timely responses to AHCCCS Administration.
	 
	b.	 	A Medical Director who shall be an Arizona-licensed physician. The Medical Director shall be
actively involved in all-major clinical programs and QM/UM components of the Contractor. The
Medical Director shall devote sufficient time to the Contractor to ensure timely medical
decisions, including after-hours consultation as needed.
	 
	c.	 	A Chief Financial Officer/CFO who is available at all times to fulfill the responsibilities
of the position and to oversee the budget and accounting systems implemented by the
Contractor.
	 
	d.	 	A Quality Management/ Coordinator who is an Arizona-licensed registered nurse, physician or
physician’s assistant.
	 
	e.	 	A Utilization Management/Medical Management Coordinator who is an Arizona licensed registered
nurse, physician or physician’s assistant.
	 
	f.	 	A Maternal Health/EPSDT (child health) Coordinator who shall be an Arizona licensed nurse,
physician or physician’s assistant; or have a Master’s degree in health services, public
health or health care administration or other related field.
	 
	g.	 	A Behavioral Health Coordinator who shall be a behavioral health professional as described in
Health Services Rule R9-20. The Behavioral Health Coordinator shall devote sufficient time to
ensure that the Contractor’s behavioral health referral and coordination activities are
implemented per AHCCCSA requirements.
	 
	h.	 	Prior Authorization staff to authorize health care 24 hours per day, 7 days per week. This
staff shall include an Arizona-licensed nurse, physician or physician’s assistant. The staff
will work under the direction of an Arizona-licensed registered nurse, physician, or
physician’s assistant.
	 
	i.	 	Concurrent Review staff to conduct inpatient concurrent review. This staff shall consist
of an Arizona-licensed nurse, physician, physician’s assistant. The staff will work under the
direction of an Arizona-licensed registered nurse, physician or physician’s assistant.
	 
	j.	 	Member Services Manager and staff to coordinate communications with members and act as
member advocates. There shall be sufficient Member Service staff to enable members to
receive prompt resolution

					
	 	 	 	 	 
	 
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	 	 	to their inquiries/problems, and to meet the Contractor’s standards for resolution,
telephone abandonment
rates and telephone hold times.
	 
	k.	 	Provider Services Manager and staff to coordinate
communications between the Contractor and its
subcontractors. There shall be sufficient Provider Services staff to enable providers to receive
prompt
resolution to their problems or inquiries and appropriate education about participation in the
AHCCCS
program.
	 
	l.	 	A Claims Administrator and Claims Processors to ensure the timely and accurate
processing of original
claims, resubmissions and overall adjudication of claims.
	 
	m.	 	Encounter Processors to ensure
the timely and accurate processing and submission to AHCCCSA of
encounter data and reports.
	 
	n.	 	A Grievance Manager who will manage and adjudicate member and
provider disputes arising under the
Grievance System including member grievances, appeals, and requests for hearing and provider
claim
disputes.
	 
	o.	 	 A Compliance Officer who will implement and oversee the Contractor’s
compliance program. The
compliance officer shall be an on-site management official, available to all employees, with
designated
and recognized authority to access records and make independent referrals to the AHCCCSA,
Office of
Program Integrity, See Paragraph 62, Corporate Compliance, for more information.
	 
	p.	 	Contractor Staff sufficient to implement and oversee compliance with both the Contractor’s Cultural
Competency Plan and the A COM Cultural Competency Policy, and to oversee compliance with all
AHCCCS requirements pertaining to limited English proficiency (LEP).
	 
	q.	 	Clerical and Support
staff to ensure appropriate functioning of the
Contractor’s operation.
	 
	r.	 	Business Continuity
Planning Coordinator as noted in the ACOM Business Continuity and Recovery
Plan Policy.
	 
	s.	 	A Pharmacy Coordinator/Director who is an Arizona licensed pharmacist or
physician who oversees and
administers the prescription drug and pharmacy benefits. The Pharmacy Coordinator/Director may
be an
employee or contractor of the Plan.
	 
	t.	 	Denial Director/Coordinator that is responsible for coordinating dental activities of the
health plan and
providing required communication between the plan and AHCCCS. The Dental Director/Coordinator
may
be an employee or contractor of the plan and must be licensed in Arizona if they are required
to review or
deny dental services.

The Contractor shall inform AHCCCS, Division of Health Care Management, in writing within seven
days, when an employee leaves one of the key positions listed below. The name of the interim
contact person should be included with the notification. The name and resume of the permanent
employee should be submitted as soon as the new hire has taken place.

	 	 	 
	Administrator

	 	Member Services Manager
	Medical Director

	 	Provider Services Manager
	Chief Financial Officer

	 	Claims Administrator
	Maternal Health/ EPSDT Coordinator

	 	Quality Management/Utilization Management
	Grievance Manager

	 	Coordinator
	Compliance Officer

	 	Behavioral Health Coordinator

The Contractor shall ensure that all staff have appropriate training, education, experience
and orientation to fulfill the requirements of the position.

17. WRITTEN POLICIES, PROCEDURES AND JOB DESCRIPTIONS

The Contractor shall develop and maintain written policies, procedures and job descriptions for
each functional area of its plan, consistent in format and style. The Contractor shall maintain
written guidelines for developing, reviewing and approving all policies, procedures and job
descriptions. All policies and procedures shall be reviewed at least annually to ensure that the
Contractor’s written policies reflect current practices.

					
	 	 	 	 	 
	 
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Reviewed policies shall be dated and signed by the Contractor’s appropriate manager, coordinator,
director or administrator. Minutes reflecting the review and approval of the policies by an
appropriate committee are also acceptable documentation. All medical and quality management
policies must be approved and signed by the Contractor’s Medical Director. Job descriptions shall
be reviewed at least annually to ensure that current duties performed by the employee reflect
written requirements.

18. MEMBER INFORMATION

The Contractor shall be accessible by phone for general member information during normal business
hours. All enrolled members will have access to a toll free phone number. All informational
materials, prepared by the Contractor, shall be approved by AHCCCSA prior to distribution to
members. The reading level and name of the evaluation methodology used should be included.

All materials shall be translated when the Contractor is aware that a language is spoken by 3,000
or 10%, whichever is less, of the Contractor’s members, who also have limited English proficiency
(LEP).

All vital materials shall be translated when the Contractor is aware that a language is spoken by
1,000 or 5%, whichever is less, of the Contractor’s members, who also have LEP. Vital materials
must include, at a minimum, Notices of Action, vital information from the member handbooks and
consent forms.

All written notices informing members of their right to interpretation and translation services in
a language shall be translated when the Contractor is aware that 1,000 or 5 % (whichever is less)
of the Contractor’s members speak that language and have LEP. [42 CFR 438.10(c)(3)]

Oral
interpretation services must be available and free of charge to all members regardless of the
prevalence of the language. The Contractor must notify all members of their right to access oral
interpretation services and how to access them. Refer to the ACOM Member Information Policy. [42
CFR 438.10(c)(4) and (5)]

The Contractor shall make every effort to ensure that all information prepared for distribution to
members is written using an easily understood language and format and as further described in the
AHCCCS Member Information Policy. Regardless of the format chosen by the Contractor, the member
information must be printed in a type, style and size, which can easily be read by members with
varying degrees of visual impairment. The Contractor must notify its members that alternative
formats are available and how to access them. [42 CFR 438.10(d)]

When there are program changes, notification shall be provided to the affected members at least 30
days before implementation.

The Contractor shall produce and provide the following printed information to each member or
family within 10 days of receipt of notification of the enrollment date [42 CFR 438.10(f)(3)]:

	I.	 	A member handbook which, at a minimum, shall include the items listed in the ACOM Member
Information Policy.
	 
	 	 	The Contractor shall review and update the Member Handbook at least once a year. The handbook
must be submitted to AHCCCS, Division of Health Care Management for approval by August 15th of
each contract year, or within four weeks of receiving the annual renewal amendment, whichever
is later.
	 
	II.	 	A description of the Contractor’s provider network, which at a minimum, includes those
items listed in the ACOM Member Information Policy.

					
	 	 	 	 	 
	 
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The Contractor must give written notice about termination of a contracted provider, within 15
days after receipt or issuance of the termination notice, to each member who received their primary
care from, or is seen on a regular basis by, the terminated provider. Affected members must be
informed of any other changes in the network 30 days prior to the implementation date of the
change. [42 CFR 438.10(f)(4) and (5)]The Contractor shall have information available for potential
enrollees as described in the ACOM Member Information Policy.

The
Contractor must develop and distribute, at a minimum, quarterly newsletters during the contract
year. The following types of information are to be contained in the newsletter:

	 	•	 	Educational information on chronic illnesses and ways to self-manage care
	 
	 	•	 	Reminders of flu shots and other prevention measures at appropriate times
	 
	 	•	 	Medicare Part D issues
	 
	 	•	 	Cultural Competency
	 
	 	•	 	Contractor specific issues

The Contractor will, on an annual basis, inform all members of their right to request the following
information [42 CFR 438.10(f)(6) and 42 CFR 438.100(a)(l) and (2)]:

	a.	 	An updated member handbook at no cost to the member

	 
	b.	 	The network description as described in the ACOM Member Information Policy

This information may be sent in a separate written communication or included with other written
information such as in a member newsletter.

19. SURVEYS

The Contractor may be required to perform its own annual general or focused member survey. All
such contractor surveys, along with a timeline for the project, shall be approved in advance by
AHCCCS DHCM. The results and the analysis of the results shall be submitted to the Health Plan
Operations Unit within 45 days of the completion of the project. AHCCCSA may require inclusion of
certain questions.

AHCCCSA may periodically conduct surveys of a representative sample of the Contractor’s membership
and providers. AHCCCSA will consider suggestions from the Contractor for questions to be included
in each survey. The results of these surveys, conducted by AHCCCSA, will become public
information and available to all interested parties upon request. The draft reports from the
surveys will be shared with the Contractor prior to finalization. The Contractor will be
responsible for the cost of these surveys based on its share of
AHCCCS enrollment.

20. CULTURAL COMPETENCY

The Contractor shall have a Cultural Competency Plan that meets the requirements of the ACOM
Cultural Competency Policy. An annual assessment of the effectiveness of the plan, along with any
modifications to the plan, must be submitted to the Division of Health Care Management, no later
than 45 days after the start of each contract year. This plan should address all services and
settings. [42 CFR 438.206(c)(2)]

21. MEDICAL RECORDS

					
	 	 	 	 	 
	 
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The member’s medical record is the property of the provider who generates the record. Each member
is entitled to one copy of his or her medical record free of charge. The Contractor shall have
written policies and procedures to maintain the confidentiality of all medical records.

The Contractor is responsible for ensuring that a medical record is established when information is
received about a member. If the PCP has not yet seen the member, such information may be kept
temporarily in an appropriately labeled file, in lieu of establishing a medical record, but must
be associated with the member’s medical record as soon as one is established.

The Contractor shall have written policies and procedures for the maintenance of medical records so
that those records are documented accurately and in a timely manner, are readily accessible, and
permit prompt and systematic retrieval of information.

The Contractor shall have written standards for documentation on the medical record for legibility,
accuracy and plan of care, which comply with the AMPM.

The Contractor shall have written plans for providing training and evaluating providers’ compliance
with the Contractor’s medical records standards. Medical records shall be maintained in a detailed
and comprehensive manner, which conforms to good professional medical practice, permits effective
professional medical review and medical audit processes, and which facilitates an adequate system
for follow-up treatment. Medical records must be legible, signed and dated.

When a member changes PCPs, his or her medical records or copies of medical records must be
forwarded to the new PCP within 10 business days from receipt of the request for transfer of the
medical records.

AHCCCSA is
not required to obtain written approva from a member, before requesting the member’s
medical
record from the PCP or any other agency. The Contractor may obtain a copy of a member’s medical
records without written approval of the member, if the reason for such request is directly related
to the administration of the AHCCCS program. AHCCCSA shall be afforded access to all members’
medical records whether electronic or paper within 20 business days
of receipt of request.

Information related to fraud and abuse may be released so long as protected HIV-related
information is not disclosed (A.R.S. §36-664(I)).

22. ADVANCE DIRECTIVES

In accordance with 42 CFR 422.128, the Contractor shall maintain policies and procedures
addressing advanced directives for adult members that specify:

	a.	 	Each contract or agreement with a hospital, nursing facility, home health agency, hospice
or organization responsible for providing personal care, must comply with Federal and State
law regarding advance directives for adult members [42 CFR
438.6(i)(1)]. Requirements
include:

	 	(1)	 	Maintaining written policies that address the rights of adult members to make
decisions about medical care, including the right to accept or refuse medical care, and
the right to execute an advance directive. If the agency/organization has a conscientious
objection to carrying out an advance directive, it must be explained in policies. (A
health care provider is not prohibited from making such objection when made pursuant to
A.R.S. § 36-3205.C.1.)
	 
	 	(2)	 	Provide written information to adult members regarding each individual’s rights
under State law to make decisions regarding medical care, and the health care provider’s
written policies concerning advance directives (including any conscientious objections).
[42 CFR 438.6(i)(3)]

					
	 	 	 	 	 
	 
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	 	(3)	 	Documenting in the member’s medical record whether or not the adult member has been
provided the information and whether an advance directive has been executed.
	 
	 	(4)	 	Not discriminating against a member because of his or her decision to execute or not
execute an advance directive, and not making it a condition for the provision of care.
	 
	 	(5)	 	Providing education to staff on issues concerning advance directives including
notification of direct care providers of services, such as home health care and personal
care, of any advanced directives executed by members to whom they are assigned to provide
services.

	b.	 	Contractors shall require subcontracted PCPs, which have agreements with the entities
described in paragraph a. above, to comply with the requirements of subparagraphs a. (2)
through (5) above. Contractors shall also encourage health care providers specified in
subparagraph a. to provide a copy of
the member’s executed advanced directive, or documentation of refusal, to the member’s PCP for
inclusion in the member’s medical record.
	 
	c.	 	The Contractor shall provide written information to adult members that describe the following:

	 	(1)	 	A member’s rights under State law, including a description of the applicable State law
	 
	 	(2)	 	The organization’s policies respecting the implementation of those rights, including
a statement of any limitation regarding the implementation of advance directives as a
matter of conscience.
	 
	 	(3)	 	The member’s right to file complaints directly with AHCCCSA.
	 
	 	(4)	 	Changes to State law as soon as possible, but no later than 90 days after the
effective date of the change. [42 CFR 438.6(i)(4)]

23. QUALITY MANAGEMENT AND MEDICAL MANAGEMENT (QM/MM)

Quality Management (QM): The Contractor shall provide quality medical care to members,
regardless of payer source or eligibility category. The Contractor shall use and disclose
medical records and any other health and enrollment information that identifies a particular
member in accordance with Federal and State privacy requirements. The Contractor shall execute
processes to assess, plan, implement and evaluate quality management and performance
improvement activities, as specified in the AMPM, that include at least the following [42 CFR
438.240(a)(1) and (e)(2)]:

	1.	 	Conducting Performance Improvement Projects (PIPs);
	 
	2.	 	QM monitoring and evaluation activities;
	 
	3.	 	Investigation, analysis, tracking and trending of quality of care issues, abuse and/or
complaints that includes:

	 	a.	 	Acknowledgement letter to the originator of the concern
	 
	 	b.	 	Documentation of all steps utilized during the investigation and resolution process
	 
	 	c.	 	Follow-up with the member to assist in ensuring immediate health care needs are met
	 
	 	d.	 	Closure/resolution letter that provides sufficient detail to ensure that the member
has an understanding of the resolution of their issue, any responsibilities they have in
ensuring all covered, medically necessary care needs are met, and a contact name/telephone
number to call for assistance or to express any unresolved concerns
	 
	 	e.	 	Documentation of implemented corrective action plan(s) or action(s) taken to resolve the
concern

	4.	 	AHCCCS mandated performance measures; and
	 
	5.	 	Credentialing, recredentialing and provisional credentialing processes for provider and
organizations [42 CFR 438.206(b)(6)].

AHCCCS has established a uniform credentialing, recredentialing and provisional credentialing
policy. The Contractor shall demonstrate that its providers are credentialed [42 CFR 438.214] and:

	 	a.	 	Shall follow a documented process for credentialing and recredentialing of
providers who have signed contracts or participation agreements with the Contractor;

					
	 	 	 	 	 
	 
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	 	b.	 	Shall not discriminate against particular providers that serve high-risk
populations or specialize in conditions that require costly treatment; and
	 
	 	c.	 	Shall not employ or contract with providers excluded from participation in Federal
health care programs.

The Contractor shall submit, within timelines specified in Attachment F, a written QM plan, QM
evaluation of the previous year’s QM program, and Quarterly Quality Management Report that
addresses its strategies for performance improvement and conducting the quality management
activities described in this section. The Contractor shall conduct performance improvement
projects as required in the AMPM.

The Contractor may combine its quality management plan with the plan that addresses utilization
management as described below.

Medical Management (MM); The Contractor shall execute processes to assess, plan,
implement and evaluate medical management activities, as specified in the AMPM, that include at
least the following:

	1.	 	Pharmacy Management; including the evaluation, reporting, analysis and interventions
based on the data and reported through the MM Committee
	 
	2.	 	Prior authorization and Referral Management;
	 
	 	 	For the processing of requests for initial and continuing authorizations of services the
Contractor shall:

	 	a)	 	Have in effect mechanisms to ensure consistent application
of review criteria for authorization decisions; and
	 
	 	b)	 	Consult with the requesting provider when appropriate [42 CFR 438.210(b)(2)]
	 
	 	c)	 	Monitor and ensure that all enrollees with special health care needs have direct
access to care

	3.	 	Development and/or Adoption of Practice Guidelines [42 CFR 438.236(b)], that

	 	a)	 	Are based on valid and reliable clinical evidence or a consensus of health care
professionals in the particular field;
	 
	 	b)	 	Consider the needs of the Contractor’s members;

 
	 
	 	c)	 	Are adopted in consultation with contracting health care professionals;
	 
	 	d)	 	Are reviewed and updated periodically as appropriate;
	 
	 	e)	 	Are disseminated by Contractors to all affected providers and, upon
request, to enrollees and potential enrollees [42 CFR 438.236(c)]; and
	 
	 	f)	 	Provide a basis for consistent decisions for utilization
management, member education, coverage of services, and other areas to which the
guidelines apply [42 CFR 438.236(d)]

4. Concurrent review;

	 	a)	 	Consistent application of review criteria; Provide a basis for
consistent decisions for utilization management, coverage of services, and other
areas to which the guidelines apply;
	 
	 	b)	 	Discharge planning

	5.	 	Continuity and coordination of care;
	 
	6.	 	Monitoring and evaluation of over and/or under utilization of
services [42 CFR 438-240(b)(3)];

	 
	7.	 	Evaluation of new medical technologies, and new uses of existing technologies; 8. Disease
Management
or Chronic Care Program that reports results and provides for analysis of the program through
the MM Committee; and
	 
	8.	 	Quarterly Utilization Management Report (details in the
AMPM)

The Contractor shall have a process to report MM data and management activities through a MM
Committee. The Contractor’s MM committee will analyze the data, make recommendations for action,
monitor the effectiveness of actions and report these findings to the committee. The Contractor
shall have in effect mechanisms to assess the quality and appropriateness of care furnished to
members with special health care needs. [42 CFR 438.240(b)(4)]

					
	 	 	 	 	 
	 
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The Contractor will assess, monitor and report quarterly through the MM Committee medical
decisions to assure compliance with timeliness, language and Notice of Action intent, and that the
decisions comply with all Contractor coverage criteria.

The Contractor shall maintain a written MM plan that addresses its plan for monitoring MM
activities described in this section. The plan must be submitted for review by AHCCCS Division of
Health Care Management within timelines specified in Attachment F.

24. PERFORMANCE STANDARDS

Administrative Measures:

The maximum allowable speed of answer (SOA) is 45 seconds. The SOA is defined as the on line wait
time in seconds that the member/provider waits from the moment the call is connected in the
Contractor’s phone switch until the call is picked up by a contractor representative or Interactive
Voice Recognition System (IVR). If the Contractor has IVR capabilities, callers must be given the
choice of completing their call by IVR or by contractor representative.

The Contractor shall meet the following standards for its member services and centralized provider
telephone line statistics. All calls to the line shall be included in the measure.

	 	a.	 	The Monthly Average Abandonment Rate shall be 5% or less;
	 
	 	b.	 	First Contact Call Resolution shall be 70% or better; and
	 
	 	c.	 	The Monthly Average Service Level shall be 75% or better.

The Monthly Average Abandonment Rate (AR) is:

Number of calls abandoned in a 24-hour period.

Total number of calls received in a 24-hour period

The ARs are then summed and divided by the number of days in the reporting period.

First Contact Call Resolution Rate (FCCR) is:

Number of calls received in 24-hour period for which no follow up communication or internal phone
transfer is needed, divided by Total number of calls received in 24-hour period

The daily FCCRs are then summed and divided by the number of days in the reporting period.

The Monthly Average Service Level (MASL) is:

Calls answered within 45 seconds for the month reported

Total of month’s answered calls + month’s abandoned calls + (if available) month’s calls receiving
a busy signal

Note: Do
not use average daily service levels divided by the days in the reporting period.

On a monthly basis the measures are to be reported for both the Member Services and Provider
telephone lines. For each of the Administrative Measures a. through c., the Contractor shall also
report the number of days in the reporting period that the standard was not met. The Contractor
shall include in the report the instances of down time for the centralized telephone lines, the
dates of occurrence and the length of time they were out of service. The reports should be sent to
the Contractor’s assigned Operations and Compliance Officer in the Health Plan Operations Unit of
the Division of Health Care Management. The deadline for submission of the reports is the 15th day
of the month following the reporting period (or the first business day following the

					
	 	 	 	 	 
	 
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15th). Back up documentation for the report, to the level of measured segments in the 24-hour
period, shall be retained for a rolling 12-month period. AHCCCSA will review the performance
measure calculation procedures and source data for this report.

Performance Measures:

All Performance Measures described below apply to all member populations [42 CFR 438.240(a)(2),
(b)(2) and (c)].

Contractors must meet AHCCCS stated Minimum Performance Standards. However, it is equally important
that Contractors continually improve their performance measure outcomes from year to year.
Contractors shall strive to meet the ultimate standard, or benchmark, established by AHCCCS.

AHCCCS has established three levels of performance:

Minimum Performance Standard — A Minimum Performance Standard is the minimal expected level of
performance by the Contractor. If a Contractor does not achieve this standard, or any measure rate
declines to a level below the AHCCCS Minimum Performance Standard, the Contractor will be required
to submit a corrective action plan and may be subject to sanctions.

Goal
— A Goal is a reachable standard for a given performance measure for the Contract Year, If the
Contractor has already met or exceeded the AHCCCS Minimum Performance Standard for any measure, the
Contractor must strive to meet the established Goal for the measure(s).

Benchmark — A Benchmark is the ultimate standard to be achieved. Contractors that have already
achieved or exceeded the Goal for any performance measure must strive to meet the Benchmark for the
measure(s). Contractors that have achieved the Benchmark are expected to maintain this level of
performance for future years.

A Contractor must show demonstrable and sustained improvement toward meeting AHCCCS Performance
Standards. In addition to corrective action plans, AHCCCS may impose sanctions on Contractors that
do not meet the Minimum Performance Standard and do not show statistically significant improvement
in a measure rate and/or require those Contractors to demonstrate that they are allocating
increased administrative resources to improving rates for a particular measure or service area.
AHCCCS also may require a corrective action plan of any Contractor that shows a statistically
significant decrease in its rate, even if it meets or exceeds the Minimum Performance Standard.

The corrective action plan must be received by AHCCCS within 30 days of receipt of notification
from AHCCCS. This plan must be approved by AHCCCS prior to implementation. AHCCCS may conduct one
or more follow-up on-site reviews to verify compliance with a corrective action plan.

Performance
Measures:The Contractor shall comply with AHCCCS quality management requirements to
improve performance for all AHCCCS established performance measures. Complete descriptions of these
measures can be found in the most recently published results and analysis of acute-care performance
measures, or upon request from AHCCCSA. The measures for postpartum visits and low birth weight
deliveries have been eliminated as contractual performance standards. The Contractor shall continue
to monitor rates for postpartum visits and low birth weight deliveries and implement interventions
as necessary to improve or sustain these rates. These activities will be monitored by AHCCCSA
during the Operational and Financial Review.

CMS has been working in partnership with states in developing core performance measures for
Medicaid and SCHIP programs. The current AHCCCS established performance measures may be subject to
change when these core measures are finalized and implemented.

					
	 	 	 	 	 
	 
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In addition, AHCCCS has established standards for the following measures:

EPSDT
Participation:The Contractor shall take affirmative steps to increase member participation
in the EPSDT program. The participation rate is the number of children younger than 21 years
receiving at least one medical screen during the contract year, compared to the number of children
expected to receive at least one medical screen. The number of children expected to receive at
least one medical screen is based on the AHCCCS EPSDT periodicity schedule and the average period
of eligibility.

The following table identifies the Minimum Performance Standards, Goals and Benchmarks for each
measure:

Acute-care
Contractor Performance Standards

	 	 	 	 	 	 	 
	Performance	 	CYE 07 Minimum	 	 	 	Benchmark (Healthy
	Measure	 	Performance Standard	 	CYE 07 Goal	 	People Goals)
	Immunization of Two-year-olds
	 	 	 	 	 	 
	4:3:1 Series
	 	84%	 	90%	 	90%
	4:3:1:3:3 Series
	 	74%	 	80%	 	80%
	DTaP — 4 doses
	 	85%	 	90%	 	90%
	Polio - 3 doses
	 	90%	 	90%	 	90%
	MMR - 1 dose
	 	90%	 	90%	 	90%
	Hib - 3 doses
	 	86%	 	90%	 	90%
	HBV-3 doses
	 	90%	 	90%	 	90%
	Varicella - 1 dose
	 	86%	 	90%	 	90%
	Adolescent Immunizations(l)
	 	60%	 	63%	 	90%
	Children’s Dental Visits
	 	51%	 	57%	 	57%
	Well-child Visits 15 Months (2)
	 	70%	 	72%	 	90%
	Well-child Visits 3 - 6 Years
	 	56%	 	58%	 	80%
	Adolescent Well-care Visits
	 	37%	 	38%	 	50%
	EPSDT Participation
	 	68%	 	69%	 	80%
	Children’s Access to PCPs 12-24
Months
	 	85%	 	86%	 	97%
	Children’s Access to PCPs 25
months-6 Years
	 	78%	 	80%	 	97%
	Children’s Access to PCPs 7-11
Years
	 	77%	 	79%	 	97%
	Children’s Access to PCPs 12-19
Years
	 	79%	 	81%	 	97%
	Cervical Cancer Screening
	 	57%	 	60%	 	90%
	Breast Cancer Screening
	 	50%	 	52%	 	70%
	Adult Preventive/Ambulatory Care
20-44 Years
	 	78%	 	80%	 	96%
	Adult Preventive/Ambulatory Care
45-64 Years
	 	83%	 	84%	 	96%
	Timeliness of Prenatal Care
	 	70%	 	72%	 	90%
	Chlamydia Screening(3)
	 	43%	 	45%	 	62%

 

(1) This measure cannot be reliably generated through administrative data, and current AHCCCS
data is not yet available. MPS and Goal are based on NCQA Medicaid average

					
	 	 	 	 	 
	 
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(2) CYE 2007 Minimum Performance Standard and Goal for Well-child Visits in the First 15
Months of Life is unchanged from the CYE 2006 contract because validated data for this measure was
not available in time to be incorporated into the contract renewal.

(3) Baseline rate generated from AHCCCS Decision Support System (ADDS) MeasureBase and used to
establish MPS and Goal; Benchmark based on HP 2010 objective 25-16b.

Quality Improvement:

Contractors shall implement an ongoing quality assessment and performance improvement
programs for the services it furnishes to members. [42 CFR 438.240(a)(l)] Basic elements of the
Contractor quality assessment and performance improvement programs, at a minimum, shall comply with
the following requirements:

A. Quality Assessment Program:

The Contractor shall have an ongoing quality assessment program for the services it furnishes to
members that includes the following:

	1.	 	The program shall be designed to achieve, through ongoing measurements and intervention,
significant improvement, sustained over time, in clinical care and non-clinical care areas that are
expected to have a favorable effect on health outcomes and member satisfaction.
	 
	2.	 	The Contractor must [42 CFR 438.240(b)(2) and (c)]:

	 	a.	 	Measure and report to the State its performance, using standard measures required by the State,
or as required by CMS,
	 
	 	b.	 	Submit to the State, data specified by the State, that enables the State to measure the
Contractor’s performance; or 
	 
	 	c.	 	Perform a combination of the activities.

	3.	 	The Contractor must have in effect mechanisms to detect both under utilization and over
utilization of services.
	 
	4.	 	The Contractor must have in effect mechanisms to assess the quality and appropriateness of care
furnished to members with special health care needs.
	 
	5.	 	The Contractor must have in place a process for internal monitoring of Performance Measure
rates, using standard methodology established or adopted by AHCCCS, for each required Performance
Measure. The Contractor’s Quality Assessment/Performance Improvement Program will report its
performance on an ongoing basis to its administration. It also will report this Performance Measure
data to AHCCCSA in conjunction with its Quarterly EPSDT Progress Report, according to a format
developed by AHCCCS.

B. Performance Improvement Program:

The Contractor shall have an ongoing program of performance improvement projects that focus on
clinical and non-clinical areas, and that involve the following [42 CFR 438.240(b)(l) and (d)(l)]:

	 	1.	 	Measurement of performance using objective quality indicators.
	 
	 	2.	 	Implementation of system interventions to achieve improvement in quality
	 
	 	3.	 	Evaluation of the effectiveness of the interventions.
	 
	 	4.	 	Planning and initiation of activities for increasing or sustaining improvement.

The Contractor shall report the status and results of each project to the AHCCCSA as requested.
Each performance improvement project must be completed in a reasonable time period so as to
generally allow
information on the success of performance improvement projects in the aggregate to produce new
information on quality of care every year. [42 CFR 438.240(d)(2)]

C. Data Collection Procedures:

					
	 	 	 	 	 
	 
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When requested, the Contractor must submit data for standardized Performance Measures and/or
Performance Improvement Projects as required by AHCCCS within specified timelines and according to
AHCCCS procedures for collecting and reporting the data. Contractor is responsible for collecting
valid and reliable data, using qualified staff and personnel to collect the data. Data collected
for Performance Measures and/or Performance Improvement Projects must be returned by the Contractor
in the format and according to instructions from AHCCCS, by the due date specified. Any extension
for additional time to collect and report data must be made in writing in advance of the initial
due date. Failure to follow the data collection and reporting instructions that accompany the data
request may result in sanctions imposed on the Contractor.

The Contractor shall participate in immunization audits, at intervals specified by AHCCCSA, based
on random sampling to verify the immunization status of members at 24 months of age. If records are
missing for more than 5 percent of the Contractor’s final sample, the Contractor is subject to
sanctions by AHCCCSA. An External Quality Review Organization (EQRO) may conduct a study to
validate the Contractor’s reported rates.

25. GRIEVANCE SYSTEM

The Contractor shall have in place a written grievance system process for subcontractors, enrollees
and non-contracted providers, which defines their rights regarding disputed matters with the
Contractor. The Contractor’s grievance system for enrollees includes a grievance process (the
procedures for addressing enrollee grievances), an appeals process and access to the state’s fair
hearing process. The Contractor shall provide the appropriate personnel to establish, implement and
maintain the necessary functions related to the grievance systems process. Refer to Attachments
H(l) and H(2) for Enrollee Grievance System and Provider Grievance System Standards and Policy,
respectively.

The Contractor may delegate the grievance system process to subcontractors, however, the Contractor
must ensure that standards which are delegated comply with applicable Federal and State laws,
regulations and policies, including, but not limited to 42 CFR Part 438 Subpart F. The Contractor
shall remain responsible for compliance with all requirements. The Contractor shall also ensure
that it timely provides written information to both enrollees and providers, which clearly explains
the grievance system requirements. This information must include a description of: the right to a
state fair hearing, the method for obtaining a state fair hearing, the rules that govern
representation at the hearing, the right to file grievances, appeals and claim disputes, the
requirements and timeframes for filing grievances, appeals and claim disputes, the availability of
assistance in the filing process, the toll-free numbers that the enrollee can use to file a
grievance or appeal by phone, that benefits will continue when requested by the enrollee in an
appeal or state fair hearing request concerning certain actions which are timely filed, that the
enrollee may be required to pay the cost of services furnished during the appeal/hearing process if
the final decision is adverse to the enrollee, and that a provider may file an appeal on behalf of
an enrollee with the enrollee’s written consent. Information to enrollees must meet cultural
competency and limited English proficiency requirements as specified in Section D, Paragraph 18,
Member Information, and Paragraph 20, Cultural Competency.

The Contractor shall be responsible to provide the necessary professional, paraprofessional and
clerical services for the representation of the Contractor in all issues relating to the grievance
system and any other matters arising under this contract which rise to the level of administrative
hearing or a judicial proceeding. Unless there is an agreement with the State in advance, the
Contractor shall be responsible for all attorney fees and costs awarded to the claimant in a
judicial proceeding.

26. QUARTERLY GRIEVANCE SYSTEM REPORTS

					
	 	 	 	 	 
	 
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Enrollee Appeal and Provider Claim Dispute Report: The Contractor must submit the Enrollee
Appeal and Provider Claim Dispute Report to AHCCCSA, Division of Health Care Management, using the
Quarterly Grievance System Report Format, no later than 45 days from the end of each quarter.

Enrollee Grievance Report: The Contractor must accept, resolve and track enrollee grievances as
required in the ACOM Enrollee Grievance Policy. The Contractor must submit the Enrollee Grievance
Report no later than 45 days from the end of each quarter. The report must include the following:

	 	A.	 	Number of grievances received in the reporting period

	 	i.	 	Total
	 
	 	ii.	 	By the categories used in the Contractor’s executive summary reports

	 	B.	 	Number of days to resolution

	 	i.	 	Number resolved within 10 days
	 
	 	ii.	 	Number resolved in 11 or more days, but less than 29 days
	 
	 	iii.	 	Number resolved in 30 or more
days, but less than 59 days
	 
	 	iv.	 	Number resolved in 60 to 90 days
	 
	 	v.	 	Average days to resolution

Report A. and B. above by the current quarter, prior quarter and
current quarter for the previous year.

The
Contractor shall trend and analyze grievance, appeals and claim disputes at least quarterly;
any identified trends and corrective action plans shall be reported to AHCCCSA, Division of Health
Care Management with the Enrollee Appeal and Provider Claim Dispute Report.

27. NETWORK DEVELOPMENT

The Contractor shall develop and maintain a provider network that is designed to support a medical
home for members and sufficient to provide all covered services to AHCCCS members [42 CFR
438.206(b)(l)]. It shall ensure covered services are provided promptly and are reasonably
accessible in terms of location and hours of operation. [42 CFR
438.206(c)(l)(i) and (ii)] There
shall be sufficient personnel for the provision of covered services, including emergency medical
care on a 24-hour-a-day, 7-days-a-week basis [42 CFR 438.206(c)(l)(iii). The proposed network shall
be sufficient to provide covered services within designated time and distance limits. For Maricopa
and Pima Counties only, this includes a network such that 95% of its members residing within the
boundary area of metropolitan Phoenix and Tucson do not have to travel more than 5 miles to see a
PCP, dentist or pharmacy. PCPs and specialists who provide inpatient services to the Contractor’s
members shall have admitting and treatment privileges in a minimum of one general acute care
hospital within the Contractor’s service area. Hospitalists may satisfy this requirement.
Contractors in Maricopa and/or Pima counties must have at least one hospital contract in each of
the service districts specified in Attachments B. Contractors must provide a comprehensive provider
network that ensures its membership has access at least equal to, or better than, community norms.
Services shall be as accessible to AHCCCS members in terms of timeliness, amount, duration and
scope as those services are to non-AHCCCS persons within the same service area [42 CFR
438.210(a)(2)]. The Contractor is expected to consider the full spectrum of care when developing
its network. The Contractor must also consider communities whose residents typically receive care
in neighboring states. If the Contractor is unable to provide those services locally, it must so
demonstrate to AHCCCSA and shall provide reasonable alternatives for members to access care. These
alternatives must be approved by AHCCCSA. If the Contractor’s network is unable to provide
medically necessary services required under contract, the Contractor must adequately and timely
cover these services through an out of network provider until a network provider is contracted. The
Contractor and out of network provider must coordinate with respect to authorization and payment
issues in these circumstances. [42 CFR 438.206(b)(4) and (5)]

The Contractor is also encouraged to develop non-financial incentive programs to increase
participation in its provider network.

					
	 	 	 	 	 
	 
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AHCCCS is committed to workforce development and support of the medical residency and dental
student training programs in the state of Arizona. Working proactively with these programs is
beneficial to protect their viability, and also provides an excellent opportunity for the
Contractors to educate future providers on the principles of managed care. In addition, AHCCCS
believes that these programs can influence the provider capacity issues in Arizona. In the future,
AHCCCS would like to provide incentives to those programs that are working to retain physicians in
Arizona after completion of the program.

AHCCCS encourages plans to work with the many residency programs currently operating in the state
and to investigate opportunities for resident participation in contractor medical management and
committee activities. If any Contractor or Contractors enter into the Graduate Medical Education
Memorandum of Understanding with a residency program and assign members to it, AHCCCSA may increase
the auto-assignment algorithm to favor those Contractors.

The Contractor shall not discriminate with respect to participation in the AHCCCS program,
reimbursement or indemnification against any provider based solely on the provider’s type of
licensure or certification [42 CER 438.12(a)(l)]. In addition, the Contractor must not discriminate
against particular providers that service high-risk populations or specialize in conditions that
require costly treatment [42 CFR 438.214(c)]. This provision, however, does not prohibit the
Contractor from limiting provider participation to the extent necessary to meet the needs of the
Contractor’s members. This provision also does not interfere with measures established by the
Contractor to control costs consistent with its responsibilities under this contract [42 CFR
438.12(b)(l)]. If a Contractor declines to include individual or groups of providers in its
network, it must give the affected providers written notice of the reason for its decision [42 CFR
438.12(a)(l)]. The Contractor may not include providers excluded from participation in Federal
health care programs, under either section 1128 or section 1128A of the Social Security Act [42 CFR
438.214(d)].

See Attachment B, Minimum Network Requirements, for details on network requirements by Geographic
Service Area.

Provider Network Development and Management Plan: The Contractor shall develop and maintain a
provider network development and management plan, which ensures that the provision of covered
services will occur as stated above. [42 CFR 438.207(b)] This plan shall be updated annually and
submitted to AHCCCSA, Division of Health Care Management, 45 days from the start of each contract
year. The plan shall identify the methodology used by the Contractor to determine a geographically
appropriate distribution of medical disciplines for primary care, obstetrical care and individual
medical specialties for its membership. The plan shall also contain a description of the
Contractor’s criteria used to determine the numbers and kinds of PCP providers and of specialists,
and whether hospital privileges are considered when making this determination. A similar,
description should be included for the dental and pharmacy networks and for the adequacy of
non-emergency transportation services. The plan shall identify the current status of the
Contractor’s network, and project future needs based upon, at a minimum, membership growth; the
number and types (in terms of training, experience and specialization) of providers that exist in
the Contractor’s service area, as well as the number of physicians who have privileges with and
practice in hospitals; the expected utilization of service, given the characteristics of its
population and its health care needs; the numbers of providers not accepting new Medicaid patients;
and access of its membership to specialty services as compared to the general population of the
community. [42 CFR 438.206(b)(l)] The plan, at a minimum, shall also include the following:

	 	a.	 	Current network gaps and the methodology used to identify them;
	 
	 	b.	 	Immediate short-term interventions when a gap occurs, including expedited or temporary
credentialing;
	 
	 	c.	 	Interventions to fill network gaps and barriers to those interventions;
	 
	 	d.	 	Outcome measures/evaluation of interventions;
	 
	 	e.	 	Ongoing activities for network development;
	 
	 	f.	 	Coordination between internal departments;
	 
	 	g.	 	Coordination with outside organizations;

					
	 	 	 	 	 
	 
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	 	h.	 	A description of network design by GSA for the general population, including details
regarding special populations including, but not limited to, the developmentally delayed (Arizona
Early Intervention Program (AzEIP), the homeless and those in border communities.

The description should cover:

	 	i.	 	how members access the system
	 
	 	ii.	 	relationships between various levels of the system
	 
	 	iii.	 	the plan for incorporating the medical home for members and the progress in its implementation

	 	i.	 	A description of the adequacy of the geographic access to tertiary hospital services for the
Contractor’s membership.
	 
	 	j.	 	The assistance provided to PCPs when they refer members to specialists. The methods used to
communicate the availability of this assistance to the providers.
	 
	 	k.	 	The methodology (ies) the Contractor uses to collect and analyze provider feedback about the
network designs and implementation. When specific provider issues are identified, the protocols for
handling them.

The plan must include answers to the following questions:

	 	a.	 	How does the Contractor assess the medical and social needs of new members to determine how the
contractor may assist the member in navigating the network more efficiently?
	 
	 	b.	 	What assistance is provided to members with a high severity of illness or higher utilization to
better navigate the provider network?
	 
	 	c.	 	Does the Contractor utilize any of the following strategies to reduce unnecessary emergency
department utilization by the membership? If so, how are members educated about these options?

	 	i.	 	Physician coverage/call availability after-hours and on weekends
	 
	 	ii.	 	Same-day PCP appointments
	 
	 	iii.	 	 Nurse call-in centers/information lines
	 
	 	iv.	 	 Urgent Care facilities

	 	d.	 	Are members with special health care needs assigned to specialists for their primary care needs?
	 
	 	e.	 	What are the most significant barriers to efficient network deployment within the Contractor’s
service area? How can AHCCCS best support the Contractor’s efforts to improve its network and the
quality of care delivered to its membership?

28. PROVIDER AFFILIATION TRANSMISSION

The Contractor shall submit information quarterly regarding its provider network. This information
shall be submitted in the format described in the Provider Affiliation Transmission User Manual on
October 15, January 15, April 15, and July 15 of each contract year. The manual may be found in the
Bidder’s Library. If the provider affiliation transmission is not timely, accurate and complete,
the Contractor may be required to submit a corrective action plan and may be subject to sanction.

29. NETWORK MANAGEMENT

The Contractor shall have policies and procedures in place that pertain to all service
specifications described in the AMPM. In addition, the Contractor shall have policies on how the
Contractor will [42 CFR 438.214(a)]:

	a.	 	Communicate with the network regarding contractual and/or program changes and requirements;
	 
	b.	 	Monitor network compliance with policies and rules of AHCCCSA and the Contractor, including
compliance with all policies and procedures related to the grievance process and ensuring the
member’s care is not compromised during the grievance process;
	 
	c.	 	Evaluate the quality of services delivered by the network;

					
	 	 	 	 	 
	 
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	d.	 	Provide or arrange for medically necessary covered services should the network become
temporarily insufficient within the contracted service area;
	 
	e.	 	Monitor the adequacy, accessibility and availability of its provider network to meet the needs
of its members, including the provision of care to members with limited proficiency in English;
	 
	f.	 	Process expedited and temporary credentials;
	 
	g.	 	Recruit, select, credential, re-credential and contract with providers in a manner that
incorporate quality management, utilization, office audits and provider profiling; and
	 
	h.	 	Provide training for its providers and maintain records of such training.

Contractor policies shall be subject to approval by AHCCCSA, Division of Health Care Management,
and shall be monitored through operational audits. A material change in Contractor policy or
process requires 30 days advance notice to affected providers and members. A material change is
defined as any change in overall business practice that could have an impact on 5% or more of the
members, providers, or AHCCCS program, or may significantly impact the delivery of services
provided by an AHCCCS Contractor. Contractors are required to submit the member notices to AHCCCS
for approval 30 days prior to the notice being sent. Upon receipt of the member notice for review,
AHCCCSA may comment on the material change or may intervene if the policy/process change will have
an adverse affect to the overall system.

Provider notices do not require prior approval, however, the Contractor must notify AHCCCSA of the
material policy change 15 days prior to the provider notice being sent out. During the 15 day time
period, AHCCCS shall have the right to comment or may intervene if the change to policy/process
will lead to an adverse affect to the overall system. This provision is not intended to include
contract negotiations between Contractors and providers.

Contractors may be required to conduct meetings with providers to address issues (or to provider
general information, technical assistance, etc.) related to federal and state requirements, changes
in policy, reimbursement matters, prior authorization and other matters as identified or requested
by the Administration.

Contractors shall give hospitals and provider groups 90 days notice prior to a contract termination
without cause. Contracts between the Contractor and single practitioners are exempt from this
requirement.

All material changes in the Contractor’s provider network must be approved in advance by AHCCCSA,
Division of Health Care Management [42 CFR 438.207(c)]. A material change is defined as one which
affects, or can reasonably be foreseen to affect, the Contractor’s ability to meet the performance
and network standards as described in this contract. AHCCCSA will assess proposed changes in the
Contractor’s provider network for potential impact on members’ health care and provide a written
response to the Contractor. For emergency situations, AHCCCSA will expedite the approval process.

The Contractor shall notify AHCCCSA, Division of Health Care Management, within one business day of
any unexpected changes that would impair its provider network. This notification shall include (1)
information about how the change will affect the delivery of covered services, and (2) the
Contractor’s plans for maintaining the quality of member care, if the provider network change is
likely to affect the delivery of covered services.

Homeless
Clinics:

Contractors in Maricopa and Pima County must contract with homeless clinics at the AHCCCS
Fee-for-Service rate for Primary Care services on or before April 1, 2006. Contracts must stipulate
that:

	 	1.	 	Only those members that request a homeless clinic as a PCP may be assigned to them; and
	 
	 	2.	 	Members assigned to a homeless clinic may be referred out-of-network for needed specialty
services

The Contractor must make resources available to assist homeless clinics with administrative issues
such as obtaining Prior Authorization, and resolving claims issues.

					
	 	 	 	 	 
	 
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AHCCCSA
will convene meetings, as necessary, with the Contractors and the homeless clinics to
resolve administrative issues and perceived barriers to the homeless members receiving care.
Representatives from the Contractor must attend these meetings.

30.
PRIMARY CARE PROVIDER STANDARDS

The Contractor shall include in its provider network a sufficient number of PCPs to meet the
requirements of this contract. Health care providers designated by the Contractor as PCPs shall be
licensed in Arizona as allopathic or osteopathic physicians who generally specialize in family
practice, internal medicine, obstetrics, gynecology, or pediatrics; certified nurse practitioners
or certified nurse midwives; or physician’s assistants. [42 CFR 438.206(b)(2)]

The Contractor shall assess the PCP’s ability to meet AHCCCS appointment availability and other
standards when determining the appropriate number of its members to be assigned to a PCP. The
Contractor should also consider the PCP’s total panel size (i.e. AHCCCS and non-AHCCCS patients)
when making this determination. AHCCCS members shall not comprise the majority of a PCP’s panel of
patients. AHCCCSA shall inform the Contractor when a PCP has a panel of more than 1,800 AHCCCS
members (assigned by a single Contractor or multiple Contractors), to assist in the assessment of
the size of their panel. This information will be provided on a quarterly basis. The Contractor will
adjust the size of a PCP’s panel, as needed, for the PCP to meet AHCCCS appointment and clinical
performance standards.

The Contractor shall have a system in place to monitor and ensure that each member is assigned to
an individual PCP and that the Contractor’s data regarding PCP
assignments is current. The
Contractor is encouraged to assign members with complex medical conditions, who are age 12 and
younger, to board certified pediatricians. PCP’s, with assigned members diagnosed with AIDS or as
HIV positive, shall meet criteria and standards set forth in the AMPM.

To the extent required by this contract, the Contractor shall offer members freedom of choice
within its network in selecting a PCP [42 CFR 438.6(m) and 438.52(d)]. The Contractor may restrict
this choice when a member has shown an inability to form a relationship with a PCP, as evidenced by
frequent changes, or when there is a medically necessary reason. When a new member has been
assigned to the Contractor, the Contractor shall inform the member in writing of his enrollment and
of his PCP assignment within 10 days of the Contractor’s receipt of notification of assignment by
AHCCCSA. The Contractor shall include with the enrollment notification a list of all the
Contractor’s available PCPs, the process for changing the PCP assignment, should the member desire
to do so, as well as the information required in the ACOM Member
Information Policy. The Contractor
shall confirm any PCP change in writing to the member. Members may make both their initial PCP
selection and any subsequent PCP changes either verbally or in writing.

At a minimum, the Contractor shall hold the PCP responsible for the following activities [42 CFR
438.208(b)(1)];

	a.	 	Supervision, coordination and provision of care to each assigned member;
	 
	b.	 	Initiation of referrals for medically necessary specialty care;
	 
	c.	 	Maintaining continuity of care for each assigned member; and
	 
	d.	 	Maintaining the member’s medical record, including documentation of all services provided to the
member by the PCP, as well as any specialty or referral services. Services potentially requiring
medical follow up are the only dental services whose documentation must be included in the medical
record.

The Contractor shall establish and implement policies and procedures to monitor PCP activities and
to ensure that PCPs are adequately notified of, and receive documentation regarding, specialty and
referral services provided to assigned members by specialty physicians, and other health care
professionals. Contractor policies

					
	 	 	 	 	 
	 
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and procedures shall be subject to approval by AHCCCSA, Division of Health Care Management,
and shall be monitored through operational audits.

Contractors will work with AHCCCSA to develop a methodology to reimburse clinics for the homeless
and school based clinics. AHCCCSA and Contractors will identify coordination of care processes and
reimbursement mechanisms. The Contractor will be responsible for payment of these services directly
to the clinics.

31. MATERNITY CARE PROVIDER STANDARDS

The Contractor shall ensure that a maternity care provider is designated for each pregnant member
for the duration of her pregnancy and postpartum care and that maternity services are provided in
accordance with the AMPM. The Contractor may include in its provider network the following
maternity care providers:

	a.	 	Arizona licensed allopathic and/or osteopathic physicians who are general practitioners or
specialize in family practice or obstetrics
	 
	b.	 	Physician Assistants
	 
	c.	 	Nurse Practitioners
	 
	d.	 	Certified Nurse Midwives

Pregnant members may choose, or be assigned, a PCP who provides obstetrical care. Such assignment
shall be consistent with the freedom of choice requirements for selecting health care professionals
while ensuring that the continuity of care is not compromised. Members who choose to receive
maternity services from a licensed midwife shall also be assigned to a PCP for medical care, as
primary care is not within the scope of practice for licensed midwives.

All physicians and certified nurse midwives who perform deliveries shall have OB hospital
privileges or a documented hospital coverage agreement for those practitioners performing
deliveries in alternate settings. Licensed midwives perform deliveries only in the member’s home.
Labor and delivery services may also be provided in the member’s home by physicians, certified
nurse practitioners and certified nurse midwives who include such services within their practice.

32. REFERRAL MANAGEMENT PROCEDURES AND STANDARDS

The Contractor shall have adequate written procedures regarding referrals to specialists, to
include, at a minimum, the following:

	a.	 	Use of referral forms clearly identifying the Contractor
	 
	b.	 	A system for resolving disputes regarding the referrals
	 
	c.	 	PCP referral shall be required for specialty physician services, except that women shall have
direct access to in-network GYN providers, including physicians, physician assistants and nurse
practitioners within the scope of their practice, without a referral for preventive and routine
services [42 CFR 438.206(b)(2)]. In addition, for members with special health care needs determined
to need a specialized course of treatment or regular care monitoring, the Contractor must have a
mechanism in place to allow such members to directly access a specialist (for example through a
standing referral or an approved number of visits) as appropriate for the member’s condition and
identified needs. Any waiver of this requirement by the Contractor must be approved in advance by
AHCCCSA.
	 
	d.	 	Specialty physicians shall not begin a course of treatment for a medical condition other than
that for which the member was referred, unless approved by the member’s PCP.
	 
	e.	 	A process in place that ensures the member’s PCP receives all specialist and consulting reports
and a process to ensure PCP follow-up of all referrals including EPSDT referrals for behavioral
health services

					
	 	 	 	 	 
	 
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	f.	 	A referral plan for any member who is about to lose eligibility and who requests
information on low-cost or no-cost health care services
	 
	g.	 	Referral to Medicare Managed Care Plan including payment of copayments
	 
	h.	 	Allow for a second opinion from a qualified health care professional within the network, or if
one is not available in network, arrange for the member to obtain one outside the network, at no
cost to the member [42 CFR 438.206(b)(3)].

The Contractor shall comply with all applicable physician referral requirements and conditions
defined in Sections 1903(s) and 1877 of the Social Security Act. Upon finalization of the
regulations, the Contractor shall comply with all applicable physician referral requirements and
conditions defined in 42 CFR Part 411, Part 424, Part 435 and Part 455. Sections 1903(s) and 1877 of
the Act prohibits physicians from making referrals for designated health services to health care
entities with which the physician or a member of the physician’s family has a financial
relationship. Designated health services include:

	 	a.	 	Clinical laboratory services
	 
	 	b.	 	Physical therapy services
	 
	 	c.	 	Occupational therapy services
	 
	 	d.	 	Radiology services
	 
	 	e.	 	Radiation therapy services and supplies
	 
	 	f.	 	Durable medical equipment and supplies
	 
	 	g.	 	Parenteral and enteral nutrients, equipment and supplies
	 
	 	h.	 	Prosthetics, orthotics and prosthetic devices and supplies
	 
	 	i.	 	Home health services
	 
	 	j.	 	Outpatient prescription drugs
	 
	 	k.	 	Inpatient and outpatient hospital services

33. APPOINTMENT STANDARDS

For purposes of this section, “urgent” is defined as an acute, but not necessarily life-threatening
disorder, which, if not attended to, could endanger the patient’s health. The Contractor shall have
procedures in place that ensure the following standards are met:

	a.	 	Emergency PCP appointments — same day of request
	 
	b.	 	Urgent care PCP appointments — within 2 days of request
	 
	c.	 	Routine care PCP appointments — within 21 days of request

For specialty referrals, the Contractor shall be able to provide:

	a.	 	Emergency appointments — within 24 hours of referral
	 
	b.	 	Urgent care appointments — within 3 days of referral
	 
	c.	 	Routine care appointments — within 45 days of referral

For dental appointments, the Contractor shall be able to provide:

	a.	 	Emergency appointments — within 24 hours of request
	 
	b.	 	Urgent care appointments — within 3 days of request
	 
	c.	 	Routine care appointments — within 45 days of request

For maternity care, the Contractor shall be able to provide initial prenatal care appointments for
enrolled pregnant members as follows:

	a.	 	First trimester — within 14 days of request

					
	 	 	 	 	 
	 
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	b.	 	Second trimester - within 7 days of request
	 
	c.	 	Third trimester - within 3 days of request
	 
	d.	 	High risk pregnancies - within 3 days of identification of high risk by the Contractor or
maternity care provider, or immediately if an emergency exists

If a member needs non-emergent medically necessary transportation, the Contractor shall require its
transportation provider to schedule the transportation so that the member arrives on time for the
appointment, but no sooner than one hour before the appointment; does not have to wait more than
one hour after making the call to be picked up; nor have to wait for more than one hour after
conclusion of the appointment for transportation home.

The Contractor shall actively monitor the adequacy of its appointment processes and reduce the
unnecessary use of alternative methods such as emergency room visits [42 CFR 438.206(c)(l)(i)]. The
Contractor shall, actively monitor and ensure that a member’s waiting time for a scheduled
appointment at the PCP’s or specialist’s office is no more than 45 minutes, except when the
provider is unavailable due to an emergency.

The Contractor shall have written policies and procedures about educating its provider network
regarding appointment time requirements. The Contractor must assign a specific staff member or unit
within its organization to monitor compliance with appointment standards. The Contractor must
develop a corrective action plan when appointment standards are not met; if appropriate, the
corrective action plan should be developed in conjunction with the provider [42 CFR
438.206(c)(l)(iv), (v) and (vi)]. Appointment standards shall be included in the Provider Manual.
The Contractor is encouraged to include the standards in the provider subcontract.

34. FEDERALLY QUALIFIED HEALTH CENTERS (FQHC) and RURAL HEALTH CLINICS (RHC)

The Contractor is encouraged to use FQHCs/RHCs in Arizona to provide covered services and must
comply with the Federal mandates. AHCCCS expects the contractors to negotiate rates of payment with
FQHCs/RHCs for non-pharmacy services that are comparable to the rates paid to providers that
provide similar services.

Contractors
are required to submit member information for Title XIX members for each FQHC/RHC on a
quarterly basis to the AHCCCSA Division of Health Care Management. AHCCCSA will perform periodic
audits of the member information submitted. Contractors should refer to the AHCCCS Division of
Health Care Management’s policy on FQHC/RHC reimbursement for further guidance. The FQHCs/RHCs
registered with AHCCCS are listed on the AHCCCS website (www.azahcccs.gov).

35. PROVIDER MANUAL

The Contractor shall develop, distribute and maintain a provider manual. The Contractor shall
ensure that each contracted provider is made aware of a website provider manual or, if requested,
issued a hard copy of the provider manual and is encouraged to distribute a provider manual to any
individual or group that submits claim and encounter data. The Contractor remains liable for
ensuring that all providers, whether contracted or not, meet the applicable AHCCCS requirements
such as covered services, billing, etc. At a minimum, the Contractor’s provider manual must contain
information on the following:

	a.	 	Introduction to the Contractor which explains the Contractor’s organization and administrative
structure
	 
	b.	 	Provider responsibility and the Contractor’s expectation of the provider
	 
	c.	 	Overview of the Contractor’s Provider Service department and function
	 
	d.	 	Listing and description of covered and non-covered services, requirements and limitations
including behavioral health services
	 
	e.	 	Emergency room utilization (appropriate and non-appropriate use of the emergency room)

					
	 	 	 	 	 
	 
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	f.	 	EPSDT Services — screenings include a comprehensive history, developmental/behavioral
health screening, comprehensive unclothed physical examination, appropriate vision testing, hearing
testing, laboratory tests, dental screenings and immunizations. EPSDT providers must document
immunizations into ASIIS and enroll every year in the Vaccine for Children program.
	 
	g.	 	Dental services
	 
	h.	 	Maternity/Family Planning services
	 
	i.	 	The Contractor’s policy regarding PCP assignments
	 
	j.	 	Referrals to specialists and other providers, including access to behavioral health services
provided by the ADHS/RBHA system
	 
	k.	 	Grievance system process and procedures for providers and enrollees
	 
	l.	 	Billing and encounter submission information
	 
	m.	 	Information about policies and procedures relevant to the providers including, but not limited
to, utilization management and claims submission
	 
	n.	 	Reimbursement, including reimbursement for dual eligibles (i.e. Medicare and Medicaid) or
members with other insurance
	 
	o.	 	Cost sharing responsibility
	 
	p.	 	Explanation of remittance advice
	 
	q.	 	Prior authorization and notification requirements
	 
	r.	 	Claims medical review
	 
	s.	 	Concurrent review
	 
	t.	 	Fraud and Abuse
	 
	u.	 	Formulary information, including updates when changes occur, must be provided in advance to
providers,
including pharmacies. The Contractor is not required to send a hard copy, unless requested, of the
formulary each time it is updated. A memo may be used to notify providers of updates and changes,
and
refer providers to view the updated formulary op the Contractor’s website.
	 
	v.	 	AHCCCS appointment standards
	 
	w.	 	Americans with Disabilities Act (ADA) requirements and Title VI, as applicable
	 
	x.	 	Eligibility
verification
	 
	y.	 	Cultural competency information, including notification about Title VI of the Civil Rights Act
of 1964.
Providers should also be informed of how to access interpretation services to assist members who
speak a
language other the English or who use sign language.
	 
	z.	 	Peer review and appeal process.
	 
	aa.	 	Medication management services as described in Section D, Paragraph 12.
	 
	bb.	 	Information about a member’s right to be treated with dignity and respect as specified in 42
CFR 438.100.
	 
	cc.	 	Notification that the contractor has no policies which prevent the provider from advocating on
behalf of
the member.
	 
	dd.	 	Information on how to access or obtain Practice Guidelines and coverage criteria for
authorization
decisions.

36. PROVIDER REGISTRATION

The Contractor shall ensure that all of its subcontractors register with AHCCCSA as an approved
service provider. A Provider Participation Agreement must be signed by each provider who is not
already an AHCCCS registered provider. The original shall be forwarded to AHCCCSA. This provider
registration process must be completed in order for the Contractor to report services a
subcontractor renders to enrolled members and for the Contractor to be paid reinsurance. The
National Provider Identifier (NPI) will be
required on all claim submissions and subsequent encounters (from providers who are eligible for a
NPI) effective for dates of service on or after May 23, 2007. Contractors shall work with providers
to obtain their NPI.

37. SUBCONTRACTS

					
	 	 	 	 	 
	 
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The Contractor shall be legally responsible for contract performance whether or not
subcontracts are used [42 CFR 438.230(a) and 434.6(c)]. No subcontract shall operate to terminate
the legal responsibility of the Contractor to assure that all activities carried out by the
subcontractor conform to the provisions of this contract. Subject to such conditions, any function
required to be provided by the Contractor pursuant to this contract may be subcontracted to a
qualified person or organization. All such subcontracts must be in
writing [42 CFR 438.6(L)]. See
the ACOM Contractor Claims Processing by Health Plan Subcontracted Providers Policy.

All subcontracts entered into by the Contractor are subject to prior review and written approval by
AHCCCS, Division of Health Care Management, and shall incorporate by reference the terms and
conditions of this contract. The following types of subcontracts shall be submitted to AHCCCS,
Division of Health Care Management for prior approval at least 30 days prior to the beginning date
of the subcontract:

	a.	 	Delegated agreements that delegate:

	 	1)	 	Any function related to the management of the contract with AHCCCS. Examples include quality
management, medical management (e.g., prior authorization, concurrent review, medical claims
review)
	 
	 	2)	 	Claims processing, including pharmacy claims.
	 
	 	3)	 	Credentialing including those for only primary source verification

	b.	 	All Management Service Agreements
	 
	c.	 	All Service Level Agreements with any Division or Subsidiary of a corporate parent owner

The Contractor shall maintain a fully executed original of all subcontracts, which shall be
accessible to AHCCCS A within two business days of request by AHCCCSA. All requested subcontracts
must have full disclosure of all terms and conditions and must fully disclose all financial or
other requested information. Information may be designated as confidential but may not be withheld
from AHCCCS as proprietary. Information designated as confidential may not be disclosed by AHCCCS
without the prior written consent of the Contractor except as
required by law. All subcontracts
shall comply with the applicable provisions of Federal and State laws, regulations and policies.

Before entering into a subcontract which delegates Contractor duties or responsibilities to a
subcontractor, the Contractor must evaluate the prospective subcontractor’s ability to perform the
activities to be delegated. If the Contractor delegates duties or responsibilities such as
utilization management or claims processing to a subcontractor, then the Contractor shall establish
a written agreement that specifies the activities and reporting responsibilities delegated to the
subcontractor. The written agreement shall also provide for revoking delegation or imposing other
sanctions if the subcontractor’s performance is inadequate. In order to determine adequate
performance, the Contractor shall monitor the subcontractor’s performance on an ongoing basis and
subject it to formal review according to a periodic schedule. The schedule for review shall be
submitted to AHCCCSA, Division of Health Care Management for prior approval. As a result of the
performance review, any deficiencies must be communicated to the subcontractor in order to
establish a corrective action plan. The results of the performance review and the correction plan
shall be communicated to AHCCCS upon completion. [42 CFR 438.230(b)]

The Contractor must submit annually (within 90 days from the start of the contract year) a
statement whether any Contractor duties or responsibilities have been delegated to a subcontractor.
If duties or responsibilities have been delegated to a subcontractor, the Contractor must submit
annually (within 90 days from the start of the contract year) a report listing the following:

	 	•	 	Subcontractor’s name
	 
	 	•	 	Delegated duties and responsibilities
	 
	 	•	 	Most recent review date of the duties, responsibilities and financial position of the
subcontractor
	 
	 	•	 	Next scheduled review date
	 
	 	•	 	Identified areas of deficiency

					
	 	 	 	 	 
	 
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	 	•	 	Contractor’s corrective action plan

The Contractor shall promptly inform AHCCCS, Division of Health Care Management, in writing if a
subcontractor is in significant non-compliance that would affect their abilities to perform the
duties and responsibilities of the subcontract.

The Contractor shall not include covenant-not-to-compete requirements in its provider agreements.
Specifically, the Contractor shall not contract with a provider and require that the provider not
provide services for any other AHCCCS Contractor. In addition, except for cost sharing
requirements, the Contractor shall not enter into subcontracts that contain compensation terms that
discourage providers from serving any specific eligibility category.

The Contractor must enter into a written agreement with any provider (including out-of-state
providers) the Contractor reasonably anticipates will be providing services at the request of the
Contractor more than 25 times during the contract year [42 CFR 438.206(b)(l)]. Exceptions to this
requirement include the following:

	a.	 	If a provider who provides services more than 25 times during the contract year refuses to enter
into a written agreement with the Contractor, the Contractor shall submit documentation of such
refusal to AHCCCS, Division of Health Care Management within seven days of its final attempt to
gain such agreement.
	 
	b.	 	If a provider performs emergency services such as an emergency room physician or an ambulance
company, a written agreement is not required.
	 
	c.	 	Individual providers as detailed in the AMPM.
	 
	d.	 	Hospitals, as discussed in Section D, Paragraph 40,
Hospital Subcontracting and Reimbursement.
	 
	e.	 	If a provider primarily performs services in an inpatient setting.
	 
	f.	 	If upon the Medical Director’s review, it is determined that the Contractor or members would not
benefit by adding the provider to the contracted network.

Any other exceptions to this requirement must be approved by AHCCCS, Division of Health Care
Management, If AHCCCS does not respond within 30 days, the requested exception is deemed approved.
The Contractor may request an expedited review and approval.

All subcontracts must contain verbatim all the provisions of Attachment A, Minimum Subcontract
Provisions. In addition, each provider subcontract must contain the following [42 CER
438.206(b)(l)]:

	a.	 	Full disclosure of the method and amount of compensation or other consideration to be received
by the subcontractor.
	 
	b.	 	Identification of the name and address of the subcontractor.
	 
	c.	 	Identification of the population, to include patient capacity, to be covered by me
subcontractor.
	 
	d.	 	The amount, duration and scope of medical services to be provided, and for which compensation
will be paid.
	 
	e.	 	The term of the subcontract including beginning and ending dates, methods of extension,
termination and renegotiation.
	 
	f.	 	The specific duties of the subcontractor relating to coordination of benefits and determination
of third-party liability.
	 
	g.	 	A provision that the subcontractor agrees to identify Medicare and other third-party liability
coverage and to seek such Medicare or third party liability payment before submitting claims to the
Contractor.
	 
	h.	 	A description of the subcontractor’s patient, medical, dental and cost record keeping system.
	 
	i.	 	Specification that the subcontractor shall cooperate with quality management/quality improvement
programs, and comply with the utilization management and review procedures specified in 42 CFR Part
456, as specified in the AMPM.
	 
	j.	 	A provision stating that a merger, reorganization or change in ownership of a subcontractor that
is related to or affiliated with the Contractor shall require a contract amendment and prior
approval of AHCCCSA.

					
	 	 	 	 	 
	 
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	k.	 	Procedures for enrollment or re-enrollment of the covered population (may also refer to
the Provider
Manual).
	 
	1.	 	A provision that the subcontractor shall be fully responsible for all tax obligations, Worker’s
Compensation Insurance, and all other applicable insurance coverage obligations which arise under
this subcontract, for itself and its employees, and that AHCCCSA shall have no responsibility or
liability for any such taxes or insurance coverage.
	 
	m.	 	A provision that the subcontractor must obtain any necessary authorization from the Contractor
or
AHCCCSA for services provided to eligible and/or enrolled members.
	 
	n.	 	A provision that the subcontractor must comply with encounter reporting and claims submission
requirements as described in the subcontract.
	 
	o.	 	Provision(s) that allow the Contractor to suspend, deny, refuse to renew or terminate any
subcontractor in
accordance with the terms of this contract and applicable law and regulation.
	 
	p.	 	A provision that the subcontractor may provide the member with factual information, but is
prohibited from recommending or steering a member in the member’s selection of a Contractor.
	 
	q.	 	A provision that compensation to individuals or entities that conduct utilization management and
concurrent review activities is not structured so as to provide incentives for the individual or
entity to deny, limit or discontinue medically necessary services to any enrollee (42 CFR
438.210(e)).

38. CLAIMS PAYMENT/HEALTH INFORMATION SYSTEM

The Contractor shall develop and maintain a health information system that collects, analyzes,
integrates, and reports data. The system shall provide information on areas including, but not
limited to, service utilization, claim disputes and appeals. [42 CFR 438.242(a)]

The
Contractor will ensure that changing or making major upgrades to the information systems
affecting claims processing, or any other major business component, will be accompanied by a plan
which includes a timeline, milestones, and adequate testing before implementation. At least six
months before the anticipated implementation date, the contractor shall provide the system change
plan to AHCCCSA for review and comment.

The Contractor shall develop and maintain a claims payment system capable of processing, cost
avoiding and paying claims in accordance with A.R.S. §§ 36-2903 and 2904 and AHCCCS Rules R9-28
Article 7. This system must produce a remittance advice related to the Contractor’s payments to
providers and must contain, at a minimum:

	 	•	 	an adequate description of all denials and adjustments,
	 
	 	•	 	the reasons for such denials and adjustments,
	 
	 	•	 	the amount billed,
	 
	 	•	 	the amount paid,
	 
	 	•	 	application of COB and
	 
	 	•	 	provider rights for claim disputes.

The related remittance advice must be sent with the payment, unless the payment is made by
electronic funds transfer (EFT). The remittance advice sent related to an EFT must be mailed, or
sent to the provider, no later than the date of the EFT.

The Contractor’s claims payment system, as well as its prior authorization and concurrent review
process, must minimize the likelihood of having to recoup already-paid claims. Any individual
recoupment in excess of $50,000 per provider within a contract year must be approved in advance by
AHCCCSA, Division of Health Care Management, Acute Operations Unit. If AHCCCS does not respond
within 30 days, the recoupment request is deemed approved. AHCCCS must be notified of any
cumulative recoupment greater than $50,000 per provider Tax Identification Number per contract
year. A Contractor shall not recoup monies from a provider later than 12 months after the date of
original payment on a clean claim, without prior approval from AHCCCSA, unless the

					
	 	 	 	 	 
	 
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recoupment is a result of fraud, reinsurance audit findings, data validation or audits
conducted by the AHCCCSA Office of Program Integrity.

The Contractor is required to reimburse providers for previously recouped monies if the provider
was subsequently denied payment by the primary insurer based on timely filing limits or lack of
prior authorization and the member failed to disclose additional insurance coverage other than
AHCCCS.

Unless a subcontract specifies otherwise, Contractors with 50,000 or more members shall ensure that
95% of all clean claims are adjudicated within 30 days of receipt of the clean claim and 99% are
adjudicated within 60 days of receipt of the clean claim. Unless a subcontract specifies otherwise,
Contractors with fewer than 50,000 members shall ensure that 90% of all clean claims are
adjudicated within 30 days of receipt of the clean claim and 99% are adjudicated within 60 days of
receipt of the clean claim. Additionally, unless a shorter time period is specified in contract,
the Contractor shall not pay a claim initially submitted more than 6 months after date of service
or pay a clean claim submitted more than 12 months after date of service. Claim payment
requirements pertain to both contracted and non-contracted providers. The receipt date of the claim
is the date stamp on the claim or the date electronically received. The receipt date is the day the
claim is received at the Contractor’s specified claim mailing address. The paid date of the claim
is the date on the check or other form of payment. [42 CFR 447.45(d)] Claims submission deadlines
shall be calculated from the date of service or the effective date of eligibility posting,
whichever is later. Remittance advices accompanying the Contractor’s payments to providers must
contain, at a minimum, adequate descriptions of all denials and adjustments, the reasons for such
denials and adjustments, the amount billed, the amount paid, and provider rights for claim dispute.

Effective for all non-hospital clean claims with dates of service October 1, 2004 and thereafter,
in the absence of a contract specifying other late payment terms, Contractors are required to pay
interest on late payments. Late claims payments are those that are paid after 45 days of receipt of
the clean claim (as defined in this contract). In grievance situations, interest shall be paid back
to the date interest would have started to accrue beyond the
applicable 45 day requirement. Interest
shall be at the rate of ten per cent per annum, unless a different rate is stated in a written
contract. In the absence of interest payment terms in a subcontract, interest shall accrue starting
on the first day after a clean claim is contracted to be paid. For hospital clean claims, a slow
payment penalty shall be paid in accordance with A.R.S. 2903.01. When interest is paid, the
Contractor must report the interest as directed in the Encounter Manual.

Contractors are required to accept HIPAA compliant electronic claims transactions from any provider
interested and capable of electronic submission; and must be able to make claims payments via
electronic funds transfer. In addition, Contractors shall implement and meet the following
milestone in order to make claims processing and payment more efficient and timely:

	 	•	 	Receive and pay 50% of all claims (based on volume of actual claims excluding claims processed by
Pharmacy Benefit Managers (PBMs)) electronically by July 1, 2006

The Contractor shall submit a monthly Claims Dashboard as specified in the AHCCCS Claims Reporting
Guide. Beginning October 1, 2006, the Contractor shall submit: 1) Claims Dashboard reporting claims
received on a UB92 or 83712) Claims Dashboard reporting claims received on a CMS1500, dental claim
form, 837P or 837D 3) Claims Dashboard combining all claims. The Monthly report must be received by
the AHCCCSA, Division of Healthcare Management, no later than 15 days from the end of each month.

39. SPECIALTY CONTRACTS

AHCCCSA may at any time negotiate or contract on behalf of the Contractor and AHCCCSA for
specialized hospital and medical services. AHCCCSA will consider existing Contractor resources in
the development and execution of specialty contracts. AHCCCSA may require the Contractor to modify
its delivery network to accommodate the provisions of specialty contracts. Specialty contracts
shall take precedence over, and

					
	 	 	 	 	 
	 
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supersede, existing and future subcontracts for services that are subject to specialty
contracts. AHCCCSA may consider waiving this requirement in particular situations if such action is
determined to be in the best interest of the State; however, in no case shall reimbursement exceed
that payable under the relevant AHCCCSA specialty contract.

During the term of specialty contracts, AHCCCSA may act as an intermediary between the Contractor
and specialty contractors to enhance the cost effectiveness of service delivery. Adjudication of
claims related to such payments provided under specialty contracts shall remain the responsibility
of the Contractor. AHCCCSA may provide technical assistance prior to the implementation of any
specialty contracts.

Currently, AHCCCSA only has specialty contracts for transplant services and anti-hemophilic agents
and related pharmaceutical services. AHCCCSA shall provide at least 60 days advance written notice
to the Contractor prior to the implementation of any specialty contract.

40. HOSPITAL SUBCONTRACTING AND REIMBURSEMENT

Maricopa and Pima counties only: Effective October 1, 2003, legislation authorizes the Inpatient
Hospital Reimbursement Program (Program). The Program is defined in the Arizona Revised Statutes
(A.R.S.) 36-2905.01, and requires hospital subcontracts to be negotiated between contractors and
hospitals in Maricopa and Pima counties to establish reimbursement levels, terms and conditions.
Subcontracts shall be negotiated by the Contractor and hospitals to cover operational concerns,
such as timeliness of claims submission and payment, payment of discounts or penalties and legal
resolution which may, as an option, include establishing arbitration procedures. These negotiated
subcontracts shall remain under close scrutiny by AHCCCSA to ensure availability of quality
services within specific service districts, equity of related party interests and reasonableness of
rates. The general provisions of this program encompass acute care
hospital services and outpatient
hospital services that result in an admission. The Contractor, upon request, shall make available
to AHCCCSA, all hospital subcontracts and amendments. For non-emergency patient-days, the
Contractor shall ensure that at least 65% of its members use contracted hospitals. AHCCCSA reserves
the right to subsequently adjust the 65% standard. Further, if in AHCCCSA’s judgment the number of
emergency days at a particular non-contracted hospital becomes significant, AHCCCSA may require a
subcontract at that hospital. Pursuant to Section 6085 of the Federal Deficit Reduction Act,
non-contracted providers of emergency services shall be paid no more than the AHCCCS
Fee-for-Service rates. Furthermore, in accordance with R9-22-718, unless otherwise negotiated by
both parties, the reimbursement for inpatient services provided at a non-contracted hospital shall
be based on the rates as defined in A.R.S. § 36-2903.01, multiplied by 95%.

All counties EXCEPT Maricopa and Pima: The Contractor shall reimburse hospitals for member care in
accordance with AHCCCS Rule 
R9-22-705. The Contractor is encouraged to obtain subcontracts with
hospitals in all GSA’s and must submit copies of these subcontracts, including amendments, to
AHCCCSA, Division of Health Care Management.

Out-of-State Hospitals: The Contractor shall reimburse out-of-state hospitals in accordance with
AHCCCS Rule R9-22-705. Contractors serving border communities (excluding Mexico) are strongly
encouraged to establish contractual agreements with those out-of-state hospitals that are
identified by GSA in Attachment B. For non-contracted out-of-state providers of emergency services,
Contractors shall pay no more than the AHCCCS Fee-For-Service rates, pursuant to Section 6085 of
the Federal Deficit Reduction Act.

Outpatient hospital services: With passage, of SB 1410 (Laws of 2004, Chapter 279), effective for
dates of service on and after July 1, 2005, in absence of a contract, the default payment rate for
outpatient hospital services billed on a UB-92 will be based on the AHCCCS outpatient hospital fee
schedule, rather than a hospital specific cost-to-charge ratio (pursuant to ARS 36-2904).

					
	 	 	 	 	 
	 
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Hospital
Recoupments: The Contractor may conduct prepayment and post-payment medical reviews
of all hospital claims including outlier claims. Erroneously paid claims are subject to recoupment.
If the Contractor fails to identify lack of medical necessity through concurrent review and/or
prepayment medical review, lack of medical necessity identified during post-payment medical review
shall not constitute a basis for recoupment by the Contractor. This prohibition does not apply to
recoupments that are a result of an AHCCCS reinsurance audit. See also Section D, Paragraph 38,
Claims Payment System. For a more complete description of the guidelines for hospital
reimbursement, please consult the Bidder’s Library for applicable statutes and rules.

41. NURSING FACILITY REIMBURSEMENT

The Contractor shall not deny nursing facility services if the nursing facility is unable to obtain
prior authorization in situations where acute care eligibility and ALTCS eligibility overlap and
the member is enrolled with an AHCCCS acute care contractor. In such situations, the Contractor
shall impose reasonable authorization requirements. The Contractor’s payment responsibility,
described above, applies only in situations where the nursing facility has not been notified in
advance of the member’s enrollment with an AHCCCS acute care contractor. When ALTCS eligibility
overlaps AHCCCS acute care enrollment, the acute care enrollment takes precedence. Although the
member could be ALTCS eligible for this time period, there is no ALTCS enrollment that occurs on
the same days as AHCCCS acute enrollment.

The Contractor shall provide medically necessary nursing facility services for any member who has a
pending ALTCS application, who is currently residing in a nursing facility and is eligible for
services provided under this contract If the member becomes ALTCS eligible and is enrolled with an
ALTCS Contractor before the end of the maximum 90 days per contract year of nursing facility
coverage, the Contractor is only responsible for nursing facility coverage during the time the
member is enrolled with the Contractor. Nursing facility services, covered by a third party insurer
(including Medicare) while the member is enrolled with the Contractor, shall be applied to the 90
day per contract year limitation.

The Contractor shall notify the Assistant Director of the Division of Member Services in writing,
when a member has been residing in a nursing facility for 75 days. This will allow AHCCCSA time to
follow-up on the status of the ALTCS application process and to prepare for potential
fee-for-service coverage if the stay goes beyond the 90-day per contract year maximum.

42. PHYSICIAN INCENTIVES/PAY FOR PERFORMANCE

Physician Incentives

Reporting of Physician Incentive Plans has been suspended by CMS until further notice. No reporting
is
required until suspension is lifted.

The Contractor must comply with all applicable physician incentive requirements and conditions
defined in 42 CFR 417.479. These regulations prohibit physician incentive plans that directly or
indirectly make payments to a doctor or a group as an inducement to limit or refuse medically
necessary services to a member. The Contractor is required to disclose all physician incentive
agreements to AHCCCSA and to AHCCCS members who request them.

The
Contractor shall not enter into contractual arrangements that place
providers at significant
financial risk as defined in CFR 417.479 unless specifically approved in advance by the AHCCCSA
Division of Health Care Management. In order to obtain approval, the following must be submitted to
the AHCCCSA Division of Health Care Management 45 days prior to the implementation of the contract
[42 CFR 438.6(g)]:

	1.	 	A complete copy of the contract
	 
	2.	 	A plan for the member satisfaction survey

					
	 	 	 	 	 
	 
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	3.	 	Details of the stop-loss protection provided
	 
	4.	 	A summary of the compensation arrangement that meets the substantial financial risk definition.

The Contractor shall disclose to AHCCCSA the information on physician incentive plans listed in 42
CFR 417.479(h)(l) through 417.479(I) upon contract renewal, prior to initiation of a new contract,
or upon request from AHCCCSA or CMS. Please refer to the Physician Incentive Plan Disclosure by
Contractors Policy in the Bidder’s Library for details on providing required disclosures.

The Contractor shall also provide for compliance with physician incentive plan requirements as set
forth in 42 CFR 422.208, 422.210 and 438.6(h). These regulations apply to contract arrangements
with subcontracted entities that provide utilization management services.

Pay for Performance Any pay for performance that meets the requirements of 42 CFR 417.479
must be approved by AHCCCS Division of Health Care Management prior to implementation.

43. MANAGEMENT SERVICES AGREEMENT AND COST ALLOCATION PLAN

If a Contractor has subcontracted for management services, the management service agreement and the
corporate cost allocation plan must be approved in advance by AHCCCSA, Division of Health Care
Management. The cost allocation plan must be submitted with the proposed management fee agreement.
AHCCCSA reserves the right to perform a thorough review of actual management fees charged and/or
corporate allocations made. If the fees or allocations actually paid out are determined to be
unjustified or excessive, amounts may be subject to repayment to the Contractor. In addition,
sanctions may be imposed.

44. RESERVED

45. MINIMUM CAPITALIZATION REQUIREMENTS

In order to be considered for a contract award, the Offeror must meet a minimum capitalization
requirement for each GSA bid. The capitalization requirement for both new and continuing offerors
must be met within 30 days after contract award. [42 CFR 438.116]

Minimum capitalization requirements by GSA are as follows:

	 	 	 	 	 	 	 	 	 
	 	 	Capitalization	 	Capitalization
	 	 	Requirement —	 	Requirement —
	Geographic Service Area (GSA)	 	New Contractors	 	Existing Contractors
	Mohave/Coconino/Apache/Navajo
	 	$	4,400,000	 	 	$	3,000,000	 
	La Paz/Yuma
	 	$	3,000,000	 	 	$	2,000,000	 
	Maricopa
	 	$	5,000,000	 	 	$	4,000,000	 
	Pima/Santa Cruz
	 	$	4,500,000	 	 	$	3,000,000	 
	Cochise/Graham/ Greenlee
	 	$	2,150,000	 	 	$	2,000,000	 
	Pinal/Gila
	 	$	2,400,000	 	 	$	2,000,000	 
	Yavapai*
	 	$	1,600,000	 	 	$	1,600,000	 

 

			
	*	 	Yavapai’s minimum capitalization requirement for both new and existing offerors is limited
to $150 times the estimated number of members.

New Offerors: To be considered for a contract award in a given GSA or group of GSA’s, a new offerer
must meet the minimum capitalization requirements listed above. The capitalization requirement is
subject to a $10,000,000 ceiling regardless of the number of GSA’s awarded. This requirement is in
addition to the

					
	 	 	 	 	 
	 
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Performance Bond requirements defined in Paragraphs 46 and 47 below and must be met with cash
with no encumbrances, such as a loan subject to repayment. The capitalization requirement may be
applied toward meeting the equity per member requirement (see Section D, Paragraph 50, Financial
Viability Standards/Performance Guidelines) and is intended for use in operations of the
Contractor.

Continuing
Offerors: Continuing offerors that are bidding a county or GSA in which they currently
have a contract must meet the equity per member standard (see Section D, Paragraph 50, Financial
Viability Standards/Performance Guidelines) for their current
membership. Continuing offerors that
do not meet the equity standard must fund, through capital contribution, the necessary amount to
meet the minimum capitalization requirement. Continuing offerors that are bidding a new GSA must
provide the additional capitalization for the new GSA they are bidding. The amount of the required
capitalization for continuing offers may differ from that for new offerors due to size of the
existing offerors current enrollment. (See the table of requirements by GSA above).

Continuing offerors will not be required to provide additional capitalization if they currently
meet the equity per member standard with their existing membership and their excess equity is
sufficient to cover the proposed additional members, or they have at least $10,000,000 in equity.

46. PERFORMANCE BOND OR BOND SUBSTITUTE

The Contractor shall be required to provide a performance bond of standard commercial scope issued
by a surety company doing business in this State, an irrevocable letter of credit, or a cash
deposit (“Performance Bond”) to AHCCCSA for as long as the Contractor has ABCCCS-related
liabilities of $50,000 or more outstanding, or 15 months following the effective date of this
contract, whichever is later, to guarantee: (1) payment of the  “Contractor’s obligations to
providers, non-contracting providers, and non-providers; and
(2) performance by the Contractor of its obligations under this contract [42 CFR 438.116(a)(l) and (b)(l)]. The
Performance Bond shall be in a form acceptable to AHCCCSA as described in the ACOM Performance Bond
Policy available in the Bidder’s Library.

In the event of a default by the Contractor, AHCCCSA shall, in addition to any other remedies it
may have under this contract, obtain payment under the Performance Bond or substitute security for
the purposes of the following:

	a.	 	Paying any damages sustained by providers, non-contracting providers and non-providers by
reason of a breach of the Contractor’s obligations under this contract,
	 
	b.	 	Reimbursing AHCCCSA for any payments made by AHCCCSA on behalf of the Contractor, and
	 
	c.	 	Reimbursing AHCCCSA for any extraordinary administrative expenses incurred by reason of a
breach of the Contractor’s obligations under this contract, including, but not limited to, expenses
incurred after termination of this contract for reasons other than the convenience of the State by
AHCCCSA.

In the event AHCCCSA agrees to accept substitute security in lieu of the Performance Bond,
irrevocable letter of credit or cash deposit, the Contractor agrees to execute any and all
documents and perform, any and all acts necessary to secure and
enforce AHCCCSA’s
security interest in such substitute security including, but not limited to, security agreements
and necessary UCC filings pursuant to the Arizona Uniform Commercial Code. In the event such
substitute security is agreed to and accepted by AHCCCSA, the Contractor acknowledges that it has
granted AHCCCSA a security interest in such substitute security to secure performance of its
obligations under this contract. The Contractor is solely responsible for establishing the
credit-worthiness of all forms of substitute security. AHCCCSA may, after written notice to the
Contractor, withdraw its permission for substitute security, in which case the Contractor shall
provide AHCCCSA with a form of security described above. The Contractor may not change the amount,
duration or scope of the performance bond without prior written approval from AHCCCSA, Division of
Health Care Management.

 

					
	 
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The Contractor must request an annual acceptance from AHCCCSA when a substitute security in lieu
of the performance bond, irrevocable letter of credit or cash deposit is established.

The Contractor shall not leverage the bond for another loan or create other creditors using the
bond as security.

47. AMOUNT OF PERFORMANCE BOND

The initial amount of the Performance Bond shall be equal to 80% of the total capitation payment
expected to be paid to the Contractor in the first month of the contract year, or as determined by
AHCCCSA. The total capitation amount shall include delivery and hospital supplemental payments.
This requirement must be satisfied by the Contractor no later than 30 days after notification by
AHCCCSA of the amount required. Thereafter, AHCCCSA shall evaluate the enrollment statistics of the
Contractor on a monthly basis to determine if the Performance Bond must be increased. The
Contractor shall have 30 days following notification by AHCCCSA to increase the amount of the
Performance Bond. The Performance Bond amount that must be maintained after the contract term shall
be sufficient to cover all outstanding liabilities and will be determined by AHCCCSA. The
Contractor may not change the amount of the performance bond without prior written approval from
AHCCCS, Division of Health Care Management. Refer to the ACOM Performance Bond and Equity Per
Member Policy for more details.

48. ACCUMULATED FUND DEFICIT

The Contractor and its owners shall fund any accumulated fund deficit through capital contributions
in a form acceptable to AHCCCSA within 30 days after receipt by AHCCCSA of the final audited
financial statements, or as otherwise requested by AHCCCSA. AHCCCSA may, at its option, impose
enrollment caps in any or all USA’s as a result of an accumulated deficit, even if unaudited.

49. ADVANCES, DISTRIBUTIONS, LOANS AND INVESTMENTS

The Contractor shall not, without the prior approval of AHCCCSA, make any advances, distributions,
loans or loan guarantees to related parties or affiliates including another fund or line of
business within its organization. The Contractor shall not, without prior notification to AHCCCSA,
make advances to its subcontractors in excess of $50,000. All requests for prior approval and
notifications are to be submitted to the AHCCCSA Division of Health
Care Management.

50. FINANCIAL VIABILITY STANDARDS / PERFORMANCE GUIDELINES

AHCCCSA has established financial viability standards/performance guidelines. On a quarterly basis,
AHCCCSA will review the following ratios with the purpose of monitoring the financial health of the
Contractor. The two financial viability standards, the Current Ratio and Equity per Member, are the
standards that best represent the financial solvency of the Contractor. Therefore, the Contractor
must comply with these two financial viability standards.

AHCCCSA will also monitor the Medical Expense Ratio, the Administrative Cost Percentage, and the
RBUC’s Days Outstanding. These guidelines are analyzed as part of AHCCCSA’s due diligence in
financial statement monitoring. Sanctions will not automatically be imposed if the Contractor does
not meet these performance guidelines. AHCCCSA takes into account Contractors’ unique programs for
managing care and improving the heath status of members when analyzing medical expense and
administrative ratio results. However, if a critical combination of the Financial Viability
Standards and Performance Guidelines are not met, or if a Contractor’s experience differs
significantly from other Contractors’, additional monitoring, such as monthly reporting, may be
required.

 

					
	 
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FINANCIAL VIABILITY STANDARDS

	 	 	 
	Current Ratio

	 	Current assets divided by
current liabilities. “Current assets”
includes any long-term investments
that can be converted to cash within
24 hours without significant penalty
(i.e., greater than 20%). A request to
include long-term investments that can
be converted to cash within 24 hours
in the current ratio calculation must
be sent to AHCCCS, DHCM, within 30
days of the contract start date and
within 30 days of contract
renewal).
	 
	 	 
	 

	 	Standard: At least 1.00
	 
	 	 
	 

	 	If current assets include a
receivable from a parent company, the
parent company must have liquid assets
that support the amount of the
inter-company loan.
	 
	 	 
	Equity per Member

	 	Unrestricted equity, less
on-balance sheet performance bond,
divided by the number of non-SOBRA
Family Planning Extension Services
members enrolled at the end of the
period.

Standard: At least $150 for
Contractors with enrollment <
100,000

              $100 for Contractors with
enrollment of 100,000+

	 
	 	 
	 

	 	For purposes of this
measurement, the equity will be
measured according to the “Performance
Bond and Equity per Member
Requirements” policy effective October
1, 2007.
	 
	 	 
	 

	 	(Failure to meet this standard
may result in an enrollment cap being
imposed in any or all contracted
GSAs.)
	 
	 	 
	PERFORMANCE GUIDELINES
	 	 
	 
	 	 
	Medical Expense Ratio

	 	Total medical expenses divided
by the sum of total capitation +
Delivery Supplement + Hospital
Supplemental Payment + TPL +
Reinsurance + HIV/AIDS Supplement less
premium tax
	 
	 	 
	 

	 	Standard: At least 84%
	 
	 	 
	Administrative Cost Percentage

	 	Total administrative expenses
divided by the sum of total capitation
+ Delivery Supplement + Hospital
Supplemental Payment + TPL +
Reinsurance + HIV/AIDS Supplement less
premium tax
	 
	 	 
	 

	 	Standard: No more than 10%
	 
	 	 
	Received But Unpaid Claims (Days 

Outstanding)

	 	Received but unpaid claims
divided by the average daily medical
expenses for the period, net of
sub-capitation expense. 

Standard: No
more than 30 days

51. SEPARATE INCORPORATION

 

					
	 
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Within 60 days of contract award, a non-governmental contractor shall have established a
separate corporation for the purposes of this contract, whose sole activity is the performance of
contract function with AHCCCS.

52. MERGER, REORGANIZATION AND CHANGE OF OWNERSHIP

A proposed merger, reorganization or change in ownership of the Contractor shall require prior
approval of AHCCCSA and a subsequent contract amendment. The Contractor must submit a detailed
merger, reorganization and/or transition plan to AHCCCSA, Division of Health Care Management, for
review. The purpose of the plan review is to ensure uninterrupted services to members, evaluate the
new entity’s ability to support the provider network, ensure that services to members are not
diminished and that major components of the organization and AHCCCS programs are not adversely
affected by such merger, reorganization or change in ownership.

53. COMPENSATION

The method of compensation under this contract will be Prior Period Coverage (PPC) capitation,
prospective capitation, delivery supplement, hospitalized supplement for Medical Expense Deduction
(MED) members, HIV-AIDS supplement, reinsurance and third party liability, as described and defined
within this contract and appropriate laws, regulations or policies.

Actuaries establish the capitation rates using practices established by the Actuarial Standards
Board. AHCCCS provides the following data to its actuaries to establish rates for the purposes of
rebasing the capitation rates.

	 	a.	 	Utilization and unit cost data derived from reported encounters
	 
	 	b.	 	Both Audited and unaudited financial statements reported by Contractors
	 
	 	c.	 	Local market basket inflation trends
	 
	 	d.	 	AHCCCS fee for service schedule pricing adjustments
	 
	 	e.	 	Programmatic or Medicaid covered service changes that affect reimbursement
	 
	 	f.	 	Additional administrative requirements for Contractors
	 
	 	g.	 	Other changes to medical practices that affect reimbursement

AHCCCS adjusts its rates to best match payment to risk. This further ensures the actuarial basis
for the capitation rates. The following risk factors will be included:

	 	a.	 	Reinsurance (as described in Paragraph 57)
	 
	 	b.	 	HIV/AIDS supplemental payment
	 
	 	c.	 	Age/Gender for the 1931 (b), SOBRA, KidsCare and BCCTP eligibility groups
	 
	 	d.	 	Medicare enrollment for SSI members
	 
	 	e.	 	Delivery supplemental payment
	 
	 	f.	 	Hospitalized supplemental payments for MED members
	 
	 	g.	 	Geographic Service Area adjustments
	 
	 	h.	 	Risk sharing for Title XIX Waiver Group reimbursement (if applicable)
	 
	 	i.	 	Risk sharing for PPC reimbursement
	 
	 	j.	 	Member choice statistic for Title XIX Waiver Group
	 
	 	k.	 	Member share of cost amounts

The above information is reviewed by AHCCCS’ actuaries in renewal years to determine if adjustments
are necessary to maintain actuarially sound rates. A Contractor may cover services for members that
are not covered under the State Plan; however those services are not included in the data provided
to actuaries for setting capitation rates [42 CFR 438.6(e)]. In addition to the above data used to
review the appropriateness of capitation rates, during renewal years, AHCCCS may look at other
factors that potentially impact appropriate

 

					
	 
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reimbursement including the medical cost experience of members who exercise their right to choose a
contractor upon initial enrollment versus those who are auto assigned to a contractor.

Prospective Capitation: The Contractor will be paid capitation for all prospective member months,
including partial member months. This capitation includes the cost of providing medically necessary
covered services to members during the prospective period coverage.

Prior
Period Coverage (PPC) Capitation: Except for SOBRA Family Planning, KidsCare and HIFA
Parents, the Contractor will be paid capitation for all PPC member months, including partial member
months. This capitation includes the cost of providing medically necessary covered services to
members during prior period coverage. The PPC capitation rates will be set by AHCCCSA and will be
paid to the Contractor along with the prospective capitation described below. Contractors will not
receive PPC capitation for newborns of members who were enrolled at the time of delivery.

Reconciliation
of PPC Costs to Reimbursement: AHCCCSA will reconcile the Contractor’s PPC medical
cost expenses to PPC capitation paid to the Contractor during the year. This reconciliation will
limit the Contractor’s profits and losses to 2%. Any losses in excess of 2% will be reimbursed to
the Contractor, and likewise, profits in excess of 2% will be recouped. Encounter data will be used
to determine medical expenses. Refer to the ACOM. PPC Reconciliation Policy for further details.

Risk Sharing for Title XIX Waiver Members: Effective October 1, 2006, AHCCCSA will no longer
reconcile the prospective Title XIX Waiver Member population (TWG). The PPC TWG population will be
reconciled with the PPC reconciliation, referred to above. Capitation rates will be adjusted where
necessary.

Delivery Supplement: When the Contractor has an enrolled woman who delivers during a prospective
enrollment period, the Contractor will be entitled to a supplemental payment. Supplemental payments
will not apply to women who deliver in a prior period coverage time period. AHCCCSA reserves the
right at any time during the term of this contract to adjust the amount of this payment for women
who deliver at home. The delivery supplemental payment is not made if the hospitalized supplemental
payment has already been paid.

Hospitalized
Supplemental Payment: If an MED member is an inpatient on the date of application for
AHCCCS eligibility, and the date of application falls within the member’s eligibility period, the
Contractor is entitled to a supplemental payment to help defray costs related to the inpatient
stay. The payment is a one-time supplement that is paid when the member is enrolled with the
Contractor and is subject to review during the term of the contract. If the member has Medicare Part
A or other third party insurance coverage, they will not be eligible
for the supplemental payment.

HIV-AIDS Supplement: On a quarterly basis, the Contractor shall submit to AHCCCSA, Division of
Health Care Management, an unduplicated monthly count of members, by rate code, who are using
approved HIV/AIDS drugs along with the supporting pharmacy log. The report shall be submitted,
along with the quarterly financial reporting package, within 60 days after the end of each quarter.
AHCCCSA reserves the right to recoup any amounts paid for ineligible members as well as an
associated penalty for incorrect encounter reporting. The approved HIV/AIDS drug list is located on
the AHCCCS website at www.azahcccs.gov.

Refer to the ACOM Contractor HIV/AIDS Supplemental Payments Policy for further details and
requirements.

54. PAYMENTS TO CONTRACTORS

Subject to the availability of funds, AHCCCSA shall make payments to the Contractor in accordance
with the terms of this contract provided that the Contractor’s performance is in compliance with
the terms and conditions of this contract. Payment must comply with requirements of A.R.S. Title
36. AHCCCSA reserves the option to

 

					
	 
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make payments to the Contractor by wire or National Automated Clearing House Association (NACHA)
transfer and will provide the Contractor at least 30 days notice prior to the effective date of any
such change.

Where payments are made by electronic funds transfer, AHCCCSA shall not be liable for any error or
delay in transfer or indirect or consequential damages arising from the use of the electronic funds
transfer process. Any charges or expenses imposed by the bank for transfers or related actions
shall be borne by the Contractor. Except for adjustments made to correct errors in payment, and as
otherwise specified in this section, any savings remaining to the Contractor as a result of
favorable claims experience and efficiencies in service delivery at the end of the contract term
may be kept by the Contractor.

All funds received by the Contractor pursuant to this contract shall be separately accounted for in
accordance with generally accepted accounting principles.

Except for
funds received from the collection of permitted copayments and third-party liabilities,
the only source of payment to the Contractor for the services provided hereunder is the Arizona
Health Care Cost Containment System Fund. An error discovered by the State, with or without an
audit, in the amount of fees paid to the Contractor will be subject to adjustment or repayment by
AHCCCSA making a corresponding decrease in a current Contractor’s payment or by making an
additional payment to the Contractor. When a contractor identifies an overpayment, AHCCCSA must be
notified and reimbursed within 30 days of identification.

No payment due the Contractor by AHCCCSA may be assigned or pledged by the Contractor. This section
shall not prohibit AHCCCSA at its sole option from making payment to a fiscal agent hired by
Contractor.

55. CAPITATION ADJUSTMENTS

Except for changes made specifically in accordance with this contract, the rates set forth in
Section B shall not be subject to re-negotiation or modification during the contract period.
AHCCCSA may, at its option, review the effect of a program change and determine if a capitation
adjustment is needed. In these instances the adjustment will be prospective with assumptions
discussed with the Contractor prior to modifying capitation rates. The Contractor may request a
review of a program change if it believes the program change was not equitable; AHCCCSA will not
unreasonably withhold such a review.

If the Contractor is in any manner in default in the performance of any obligation under this
contract; AHCCCSA may, at its option and in addition to other available remedies, adjust the amount
of payment until there is satisfactory resolution of the default. The Contractor shall reimburse
AHCCCSA and/or AHCCCSA may deduct from future monthly capitation for any portion of a month during
which the Contractor was not at risk due to, for example:

	a.	 	death of a member
	 
	b.	 	member’s incarceration (not eligible for AHCCCS benefits from the date of incarceration)
	 
	c.	 	duplicate capitation to the same Contractor
	 
	d.	 	adjustment based on change in member’s contract type
	 
	e.	 	voluntary withdrawal

If a member is enrolled twice with the same Contractor, recoupment will be made as soon as the
double capitation is identified. AHCCCSA reserves the right to modify its policy on capitation
recoupments at any time during the term of this contract.

56. INCENTIVES

 

					
	 
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AHCCCSA will be implementing an incentive program that utilizes financial and/or non-financial
incentives to promote program quality. AHCCCSA will use contractor clinical performance indicators
in the development of an incentive program. Examples of incentive programs are listed below.

Auto assignment algorithm: Effective CYE ‘07, AHCCCSA will adjust the auto assignment algorithm
methodology to incorporate contractor’s clinical performance indicator results in the calculation
of target percentages. AHCCCSA will use the following performance indicators:

Prenatal Care in the First Trimester, measurement period CYE 2005, reported in CYE 2006 Well-Child
Visits 3-6 Years, measurement period CYE 2005, reported in CYE 2006

Administrative requirements: AHCCCSA may elect to reduce Operational Financial Review (OFR)
requirements for high performing contractors.

57. REINSURANCE

Reinsurance
is a stop-loss program provided by AHCCCSA to the Contractor for the partial
reimbursement of covered services, as described below, for a member with an acute medical condition
beyond an annual deductible level, AHCCCSA “self-insures” the reinsurance program through a
deduction to capitation rates that is intended to be budget neutral. Refer to the AHCCCSA
Reinsurance Claims Processing Manual for further details on the Reinsurance Program.

Inpatient Reinsurance

Inpatient
reinsurance covers partial reimbursement of covered inpatient facility medical services.
See the table below for applicable deductible levels and coinsurance percentages. The coinsurance
percent is the rate at which AHCCCSA will reimburse the Contractor for covered inpatient services
incurred above the deductible. The deductible is the responsibility
of the Contractor. Per diem
rates paid for nursing facility services provided within 30 days of an acute hospital stay,
including room and board, provided in lieu of hospitalization for up to 90 days in any contract
year shall be eligible for reinsurance coverage.

The following table represents deductible and coinsurance levels:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Title XIX Waiver Group	 	 
	 	 	Annual Deductible*	 	Annual Deductible	 	 
	Statewide Plan	 	Prospective	 	Prospective	 	 
	Enrollment	 	Reinsurance	 	Reinsurance	 	Coinsurance
	0-34,999
	 	$	20,000	 	 	$	15,000	 	 	 	75	%
	35,000-49,999
	 	$	35,000	 	 	$	15,000	 	 	 	75	%
	50,000 and over
	 	$	50,000	 	 	$	15,000	 	 	 	75	%

 

			
	*	 	applies to all members except for Title XIX Waiver Group, SSDI-TMC and SOBRA Family Planning
members

a) Prospective Reinsurance: This coverage applies to prospective enrollment periods. The deductible
level is based on the Contractor’s statewide AHCCCS acute care enrollment (not including SOBRA
Family Planning Extension services) as of October 1st each contract year for all rate codes and
counties, as shown in the table above. AHCCCSA will adjust the Contractor’s deductible level at the
beginning of a contract year if the Contractor’s enrollment changes to the next enrollment level. A
Contractor at the $35,000 or $50,000 deductible level may elect a lower deductible prior to the
beginning of a new contract year. These deductible

 

					
	 
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levels are
subject to change by AHCCCSA during the term of this contract. Any change will have
a corresponding impact on capitation rates.

	b)	 	Prior Period Coverage Reinsurance: Effective
October 1, 2007, AHCCCSA will no longer cover PPC
inpatient expenses under the reinsurance program for any members.
	 
	c)	 	Title XIX Waiver Members: A separate reinsurance deductible for the Title XIX Waiver Group
applies for the prospective coverage time period.

Catastrophic Reinsurance

The reinsurance program includes a special Catastrophic Reinsurance program. This program
encompasses members diagnosed with hemophilia, von Willebrand’s Disease, and Gaucher’s Disease. For
additional detail and restrictions refer to the AHCCCS Reinsurance Claims Processing Manual and the
AMPM. There are no deductibles for catastrophic reinsurance cases. All medically necessary covered
services provided during the contract year shall be eligible for reimbursement at 85% of the AHCCCS
allowed amount or the Contractor’s paid amount, depending on subcap code. Reinsurance coverage for
anti-hemophilic blood factors will be limited to 85% of the AHCCCS contracted amount or the
Contractor’s paid amount, whichever is lower. Capitation rates may be adjusted to reflect any cost
savings resulting from the implementation of the AHCCCS
anti-hemophilic blood factor contract. All
catastrophic claims are subject to medical review by AHCCCSA.

The Contractor shall notify AHCCCSA, Division of Health Care Management, Reinsurance Unit, of cases
identified for catastrophic reinsurance coverage within 30 days of (a) initial diagnosis, (b)
enrollment with the Contractor, and (c) the beginning of each contract year. Catastrophic
reinsurance will be paid for a maximum 30-day-retroactive period
•from the date of notification to
AHCCCSA. The determination of whether a case or type of case is catastrophic shall be made by the
Director or designee based on the following criteria; 1) severity of medical condition including
prognosis; and 2) the average cost or average length of hospitalization and medical care, or both,
in Arizona, for the type of case under consideration.

HEMOPHILIA: Catastrophic reinsurance coverage is available for all members diagnosed with
Hemophilia (ICD9 codes 286.0, 286.1, 286.2).

VON WILLEBRAND’S DISEASE: Catastrophic reinsurance coverage is available for all members diagnosed
with von Willebrand’s Disease who are non-DDAVP responders and dependent on Plasma Factor VIII.

GAUCHER’S DISEASE: Catastrophic reinsurance is available for members diagnosed with Gaucher’s
Disease classified as Type I and are dependent on enzyme replacement therapy.

Transplants

This program covers members who are eligible to receive covered major organ and tissue
transplantation including bone marrow, heart, heart/lung, lung, liver, kidney, and other organ
transplantation. Bone grafts and cornea transplantation services are not eligible for transplant
reinsurance coverage but are eligible under the regular inpatient reinsurance program. Refer to the
AMPM for covered services for organ and tissue transplants. Reinsurance coverage for transplants
is limited to 85% of the AHCCCS contract amount for the transplantation services rendered, or 85%
of the Contractor’s paid amount, whichever is lower. The AHCCCS contracted transplantation rates
may be found in the Bidder’s Library. When a member is referred to a transplant facility for an
AHCCCS-covered organ transplant, the Contractor shall notify AHCCCSA, Division of Health Care
Management.

Other

 

					
	 
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For all reinsurance case types other than transplants, Contractors will be reimbursed 100% for all
medically necessary covered expenses provided in a contract year, after the reinsurance case
reaches $650,000.

Encounter Submission and Payments for Reinsurance

a) Encounter Submission: A Contractor shall prepare, review, verify, certify, and submit,
encounters for consideration to AHCCCSA. Upon submission, the Contractor certifies that the
services listed were actually rendered. The encounters must be submitted in the format prescribed
by AHCCCSA. The Contractor must initiate and evaluate an encounter for probable 1st and 3rd party
liability before submitting the encounter for reinsurance consideration, unless the encounter
involves underinsured or uninsured motorist liability insurance, 1st and 3rd party liability
insurance or a tort feasor.

The Contractor must maintain evidence that costs incurred have been paid by the Contractor before
submitting reinsurance encounters. This information is subject to AHCCCSA review. Collections from
lst and 3rd parties should be reflected by the Contractor as reductions in
the encounters submitted on a dollar-for-dollar basis. For purposes of AHCCCSA reinsurance,
payments made by Contractor-purchased reinsurance are not considered lst and
3rd party collections.

All reinsurance claims must reach a clean claim status within fifteen months from the end date of
service, or date of eligibility posting, whichever is later. Encounters for reinsurance claims that
have passed the fifteen month deadline and are being adjusted due to a claim dispute or hearing
decision must be submitted and pass all encounter and reinsurance edits within 90 calendar days of
the date of the claim dispute decision or hearing decision, whichever is applicable. Failure to
submit the encounter within this timeframe will result in the loss of any related reinsurance
dollars.

b)
Encounter Processing: AHCCCSA will accept for processing only those encounters that are
submitted directly by an AHCCCS Contractor and that comply with the AHCCCSA Encounter Reporting
User Manual.

c) Payment of Inpatient and Catastrophic Reinsurance Cases: AHCCCSA will reimburse a Contractor
for costs incurred in excess of the applicable deductible level, subject to coinsurance percentages
and Medicare/TPL payment, less any applicable quick pay discounts, slow payment penalties and
interest. Amounts in excess of the deductible level shall be paid based upon costs paid by the
Contractor, minus the coinsurance and Medicare/TPL payment, unless the costs are paid under a
subcapitated arrangement. In subcapitated arrangements, the Administration shall base reimbursement
of reinsurance encounters on the lower of the AHCCCS allowed amount or the reported health plan
paid amount, minus the coinsurance and Medicare/TPL payment and applicable quick pay discounts,
slow payment penalties and interest. Reimbursement for these reinsurance benefits will be made to
the Contractor each month.

When a member with an annual enrollment choice changes Contractors within a contract year, for
reinsurance purposes, all eligible inpatient costs, nursing facility costs and inpatient
psychiatric costs incurred for that member will follow the member to the receiving contractor.
Therefore, all submitted encounters from the contractor the member is leaving (for dates of service
within the current contract year) will be applied toward, but not exceed, the receiving
contractor’s deductible level. For further details regarding this policy and other reinsurance
policies refer to the AHCCCS Reinsurance Claims Processing Manual.

d) Payment of Transplant Reinsurance Cases: Reinsurance benefits are based upon the lower of the
AHCCCS contract amount or the Contractor’s paid amount, subject to coinsurance percentages.
Effective for dates of service on or after October 1, 2004, Contractors are required to submit all
supporting service encounters for transplant services. Reinsurance payments will be linked to
transplant encounter submissions. Please refer to the AHCCCS Reinsurance Claims Processing Manual
for the appropriate billing of transplant services. Reimbursement for these reinsurance benefits
will be made to the Contractor each month.

 

					
	 
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Reinsurance Audits

For CYE 2002, CYE 2003, CYE 2004, and CYE 2005, the Reinsurance Audit Process as described in
contract is discontinued. No audit related recoupments will be made on reinsurance payments made
for services delivered in the above listed contract years.

Pre-Audit: Beginning in CYE 2006 medical audits on prospective and prior period coverage
reinsurance cases will be conducted on a statistically significant random sample selected based on
utilization trends. The Division of Health Care Management will select reinsurance cases based on
encounter data received during the contract year to assure timeliness of the audit process. The
Contractor will be notified of the documentation required for the medical audit. For closed
contracts, a 100% audit may be conducted.

Audit:
AHCCCSA will give the Contractor at least 45 days advance notice of any audit. The
Contractor shall have all requested medical records and financial documentation available to the
nurse auditors. Any documents not requested in advance by AHCCCSA shall be made available upon
request of the Audit Team during the course of the audit. The Contractor representative shall be
available to the Audit Team at all times during AHCCCSA audit activities. If an audit should be
conducted on-site, the Contractor shall provide the Audit Team with workspace, access to a
telephone, electrical outlets and privacy for conferences.

Audits may be completed without an on-site visit. For these audits, the Contractor will be asked to
send the required documentation to AHCCCSA. The documentation will then be reviewed by AHCCCS.

Audit Considerations: Reinsurance consideration will be given to inpatient facility contracts and
hearing decisions rendered by the Office of Legal Assistance. Pre-hearing and/or hearing penalties
discoverable during the review process will not be reimbursed under reinsurance.

Per diem rates may be paid for nursing facility and rehabilitation services provided the services
are rendered within 30 days of an acute hospital stay, including room and board, provided in lieu
of hospitalization for up to 90 days in any contract year. The services rendered in these sub-acute
settings must be of an acute nature and, in the case of rehabilitative or restorative services,
steady progress must be documented in the medical record.

Audit Determinations: The Contractor will be furnished a copy of the Reinsurance Post-Audit Results
letter approximately 45 days after the audit and given an opportunity to comment and provide
additional medical or financial documentation on any audit findings. AHCCCSA may limit reinsurance
reimbursement to a lower or alternative level of care if the Director or designee determines that
the less costly alternative could and should have been used by the Contractor. A recoupment of
reinsurance reimbursements made to the Contractor may occur based on the results of the medical
audit.

A Contractor whose reinsurance case is reduced or denied shall be notified in writing by AHCCCSA
and will be informed of rationale for reduction or denial determination and the applicable
grievance and appeal process available.

58. COORDINATION OF BENEFITS / THIRD PARTY LIABILITY

Pursuant to federal and state law, AHCCCSA is the payer of last resort. This means AHCCCSA shall be
used as a source of payment for covered services only after all other sources of payment have been
exhausted. The Contractor shall coordinate benefits in accordance with 42 CFR 433.135 et seq., ARS
36-2903, and A.A.C. R9-22-1001 et seq. so that costs for services otherwise payable by the
Contractor are cost avoided or recovered from a liable first or third-party payer. The Contractor
may require subcontractors to be responsible for coordination of benefits for services provided
pursuant to this contract.

The two methods used in the coordination of benefits are cost avoidance and post payment recovery.
The Contractor shall use these methods as described in A.A.C. R9-22-1001 et seq. and federal and
state law. See also Section D, Paragraph 60, Medicare Services and Cost Sharing.

 

					
	 
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Cost Avoidance: The Contractor shall take reasonable measures to determine the legal liability of
third parties who are liable to pay for covered services. The Contractor shall cost-avoid a claim
if it establishes the probable existence of a third party or has information that establishes that
third party liability exists. However, if the probable existence of third party liability cannot be
established or third party liability benefits are not available to pay the claim at the time the
claim is filed, the Contractor must process the claim.

If a third party insurer (other than Medicare) requires the member to pay any co-payment,
coinsurance or deductible, the Contractor is responsible for making these payments, even if the
services are provided outside of the Contractor network. The Contractor is not responsible for
paying coinsurance and deductibles that are in excess of what the Contractor would have paid for
the entire service per a written contract with the provider performing the service, or the AHCCCS
FFS payment equivalent. If the Contractor refers the member for services to a third-party insurer,
other than Medicare, and the insurer requires payment in advance of all co-payments, coinsurance
and deductibles, the Contractor must make such payments in advance.

If the Contractor knows that the third party insurer will not pay the claim for a covered service
due to untimely claim filing or as a result of the underlying insurance coverage (e.g. the service
is not a covered benefit), the Contractor shall not deny the service, deny payment of the claim
based on third party liability, or require a written denial letter if the service is medically
necessary. The Contractor shall communicate any known change in health insurance information,
including Medicare, to AHCCCS Administration, Division of Member Services, not later than 10 days
from the date of discovery using the approved AHCCCS correspondence. Failure to report these cases
may result in one of the remedies specified in Section D, Paragraph 72, Sanctions. If the
Contractor does not know whether a particular service is covered by the third party, and the
service is medically necessary, the Contractor shall contact the third party and determine whether
or not such service is covered rather than requiring the member to do so. In the event that the
service is not covered by the third party, the Contractor shall arrange for the timely provision of
the service. (See also Section D, Paragraph 60, Medicare Services and Cost Sharing.)

The requirement to cost-avoid applies to all AHCCCS covered services. For prenatal care and
preventive pediatric services, AHCCCS may require the Contractor to provide such service and then
coordinate payment with the potentially liable third party (“pay and chase”). In emergencies, the
Contractor shall provide the necessary services and then coordinate payment with the third-party
payer. The Contractor shall also provide medically necessary transportation so the member can
receive medical benefits. Further, if a service is medically necessary, the Contractor shall ensure
that its cost avoidance efforts do not prevent a member from receiving such service and that the
member shall not be required to pay any coinsurance or deductibles for use of the other insurer’s
providers.

Members with CRS condition:

A member
with private insurance is not required to utilize CRSA. This includes members with
Medicare whether they are enrolled in Medicare FFS or a Medicare Managed Care Plan. If the member
uses the private insurance network or Medicare for a CRS covered condition, the Contractor is
responsible for all applicable deductibles and copayments. If the member is on Medicare, the AHCCCS
Policy 201- Medicare Cost Sharing for Members in Traditional Fee for Service Medicare and Policy
202 — Medicare Cost Sharing for Members in Medicare Managed Care Plans shall apply. When the
private insurance or Medicare is exhausted, or certain annual or lifetime limits are reached with
respect to CRS covered conditions, the Contractor shall refer the member to CRSA for determination
for CRS services. If the member with private insurance or Medicare chooses to enroll with CRS, CRS
becomes the secondary payer responsible for all applicable deductibles and copayments. The
Contractor is not responsible to provide services in instances when the CRS eligible member, who
has no primary insurance or Medicare, refuses to receive CRS covered services through the CRS
Program. If the Contractor becomes aware that a member with a CRS covered condition refuses to
participate in the CRS application process or refuses to receive services through the CRS Program,
the member may be billed by the provider in accordance with AHCCCS regulations regarding billing
for unauthorized services.

 

					
	 
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Post-payment Recoveries: Post-payment recovery is necessary in cases where the Contractor was not
aware of third-party coverage at the time services were rendered or paid for, or was unable to
cost-avoid. The Contractor shall identify, through the use of trauma code edits, utilizing
diagnostic codes 799.9 and 800 to 999.9 (excluding code 994.6), and other procedures. The
Contractor shall notify AHCCCSA’s authorized representative within 10 business days of the
identification of a third-party liability case with reinsurance or fee-for service payments made by
AHCCCS. Failure to report these cases may result in one of the remedies specified in Section D,
Paragraph 72, Sanctions. The Contractor shall identify all potentially liable third parties and
pursue reimbursement from them except in the circumstances below.

The Contractor shall not pursue reimbursement in the following circumstances, unless the case has
been referred to the Contractor by AHCCCSA or AHCCCSA’s authorized representative:

	 	 	 
	Uninsured/underinsured motorist insurance

	 	Restitution Recovery
	First-and third-party liability insurance

	 	Worker’s Compensation
	Tortfeasors, including casualty
 Special Treatment Trust Recovery

	 	Estate Recovery

The Contractor shall report any cases involving the above circumstances to AHCCCSA’s authorized
representative should the Contractor identify such a situation. The Contractor shall cooperate with
AHCCCSA’s authorized representative in all collection efforts. In joint cases involving both AHCCCS
fee-for-service or reinsurance and the Contractor, AHCCCSA’s authorized representative is
responsible for performing all research, investigation and payment of lien-related costs,
subsequent to the referral of any and all relevant case information to AHCCCSA’s authorized
representative by the Contractor. AHCCCSA’s authorized representative is also responsible for
negotiating and acting in the best interest of all parties to obtain a reasonable settlement in
joint cases and may compromise a settlement in order to maximize overall reimbursement, net of
legal and other costs. The Contractor will be responsible for their prorated share of the
contingency fee. The Contractor’s share of the contingency fee will be deducted from the settlement
proceeds prior to AHCCCSA remitting the settlement to the Contractor. For total plan cases
involving only payments made by the Contractor, the Contractor is responsible for performing all
research, investigation, the mandatory filing of initial liens on
cases that exceed $250, lien
amendments, lien releases, and payment of other related costs in accordance with A.R.S. 36-2915 and
A.R.S. 36-2916. The Contractor shall use the AHCCCS approved casualty recovery correspondence when
filing liens and when corresponding to others in regard to casualty recovery. The Contractor may
retain up to 100% of its third-party collections if all of the following conditions exist:

	 	a.	 	Total collections received do not exceed the total amount of the Contractor’s financial
liability for the member;
	 
	 	b.	 	There are no payments made by AHCCCS related to fee-for-service, reinsurance or administrative
costs (i.e. lien filing , etc.); and
	 
	 	c.	 	Such recovery is not prohibited by state or Federal law.

Reporting: The Contractor may be required to report the amount of third-party collections and cost
avoidance. In addition, upon AHCCCSA’s request, the Contractor shall provide an electronic extract
of the Casualty cases, including open and closed cases. Data elements include, but are not limited
to: the member’s first and last name; AHCCCS ID; date of incident; claimed amount; paid/recovered
amount; and case status. The AHCCCSA TPL Section shall provide the format and reporting schedule
for this information to the Contractor. Prior to negotiating a settlement on a total plan case, the
Contractor shall notify AHCCCSA to ensure that there is no reinsurance or fee for service payments
that have been made by AHCCCS. For total plan cases, the contractor shall report settlement
information to AHCCCS, utilizing the AHCCCS approved casualty recovery Notification of Settlement
form, within 10 business days from the settlement date. Failure to report these cases may result in
one of the remedies specified in Section D, Paragraph 72, Sanctions.

 

					
	 
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AHCCCSA will provide the Contractor, on an agreed upon schedule, with a complete file of all
third-party coverage information (other than Medicare) for the purpose of updating the Contractor’s
files. The Contractor shall notify AHCCCSA of any known changes in coverage within deadlines and in
a format prescribed by AHCCCSA.

Title XXI (KidsCare), HIFA Parents and BCCTP: Eligibility for KidsCare, HIFA Parents and BCCTP
benefits require that the applicant/member not be enrolled with any other creditable health
insurance plan. If the Contractor becomes aware of any such coverage, the Contractor shall notify
AHCCCSA immediately. AHCCCSA will determine if the other insurance meets the creditable definition
in A.R.S. 36-2982(G).

Contract Termination: Upon termination of this contract, the Contractor will complete the existing
third party liability cases or make any necessary arrangements to transfer the cases to AHCCCSA’s
authorized TPL representative.

59. COPAYMENTS

Most of the AHCCCS members remain exempt from copayments while others are subject to an optional
copayment. Those populations exempt or subject to optional copayments may not be denied services
for the inability to pay the copayment. [42 CFR 438.108]

Any copayments collected shall belong to the Contractor or its subcontractors.

Attachment L provides detail of the populations and their related copayment structure.

60. MEDICARE SERVICES AND COST SHARING

AHCCCS has members enrolled who are eligible for both Medicaid and Medicare. These members are
referred to as “dual eligibles”. Generally, Contractors are responsible for payment of Medicare
coinsurance and/or deductibles for covered services provided to dual eligible members. However,
there are different cost sharing responsibilities that apply to dual eligible members based on a
variety of factors. Unless prior approval is obtained from AHCCCSA, the Contractor must limit their
cost sharing responsibility according to the ACOM Medicare Cost Sharing Policy. The Contractor
shall have no cost sharing obligation if the Medicare payment exceeds what the Contractor would
have paid for the same service of a non-Medicare member.

When a person with Medicare who is also eligible for Medicaid (dual eligible) is in a medical
institution that is funded by Medicaid for a full calendar month, the dual eligible person is not
required to pay co-payments for their Medicare covered prescription medications for the remainder
of the calendar year. To ensure appropriate information is communicated for these members to the
Center for Medicare and Medicaid Services (CMS), effective January 1, 2006 the Contractor must,
using the approved form, notify the AHCCCS Member File Integrity
Section (MFIS), via fax at (602)
253-4807 as soon as it determines that a dual eligible person is expected to be in a medical
institution that is funded by Medicaid for a full calendar month, regardless of the status of the
dual eligible person’s Medicare lifetime or annual benefits. This includes:

	 	a.	 	Members who have Medicare part “B” only;
	 
	 	b.	 	Members who have used their Medicare part “A” life
time inpatient benefit;
	 
	 	c.	 	Members who are in a continuous placement in a single medical institution or any combination of
continuous placements in a medical institution.

For purposes of the medical institution notification, medical institutions are defined as acute
hospitals, psychiatric hospital – Non IMD, psychiatric hospital
– IMD, residential treatment center
– Non IMD,

 

					
	 
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residential
treatment center – IMD, skilled nursing facilities, and Intermediate Care Facilities
for the Mentally Retarded.

61. MARKETING

The Contractor shall submit all proposed marketing and outreach materials and events that will
involve the general public to the AHCCCS Marketing Committee for prior approval in accordance with
the ACOM Marketing Outreach and Incentives Policy. [42 CFR 438.104] The Contractor must have signed
contracts with PCPs, specialists, dentists, and pharmacies in order for them to be included in
marketing materials.

62. CORPORATE COMPLIANCE

In accordance with A.R.S. Section 36-2918.01, all contractors are required to notify the AHCCCS,
Office of Program Integrity (OPI) immediately of all suspected fraud or abuse. The Contractor
agrees to promptly (within ten business days of discovery) inform OPI in writing of instances of
suspected fraud or abuse [42 CFR 455.1(a)(l)]. This shall include acts of suspected fraud or abuse
that were resolved internally but involved AHCCCS funds, contractors or sub-contractors.

As stated in A.R.S. Section 13-2310, incorporated herein by reference, any person who knowingly
obtains any benefit by means of false or fraudulent pretenses, representations, promises, or
material omissions is guilty of a Class 2 felony.

The Contractor agrees to permit and cooperate with any onsite review. A review by AHCCCS, OPI may
be conducted without notice and for the purpose of ensuring program
compliance. The Contractor also
agrees to respond to electronic, telephonic or written requests for information within the timeframe
specified by AHCCCSA.

The Contractor shall be in compliance with 42 CFR 43S.608. The Contractor must have a mandatory
compliance program, supported by other administrative procedures, that is designed to guard against
fraud and abuse. The Contractor shall have written criteria for selecting a Compliance Officer and
a job description that clearly outlines the responsibilities and the authority of the position. The
Compliance Officer shall have the authority to access records and independently refer suspected
member fraud, provider fraud and member abuse cases to AHCCCS, OPI or other duly authorized
enforcement agencies.

Pursuant to the Deficit Reduction Act of 2005 (DRA) the contractor will not be entitled to payment
for services unless they establish a compliance program which shall both prevent and detect
suspected fraud or abuse and must include:

	 	1.	 	Written policies, procedures, and standards of conduct that articulate the organization’s
commitment to and processes for complying with all applicable federal and state standards.
	 
	 	2.	 	The written designation of a compliance committee who are accountable to the Contractor’s top
management.
	 
	 	3.	 	The Compliance Officer must be an onsite management official who reports directly to the
Contractor’s top management. Any exceptions must be approved by AHCCCSA.
	 
	 	4.	 	Effective training and education.
	 
	 	5.	 	Effective lines of communication between the compliance officer and the organization’s
employees.
	 
	 	6.	 	Enforcement of standards through well-publicized disciplinary guidelines.
	 
	 	7.	 	Provision for internal monitoring and auditing.
	 
	 	8.	 	Provision for prompt response to problems detected.
	 
	 	 	 	 

					
	 
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	 	9.	 	A Compliance Committee which will be made up of, at a minimum, the Compliance Officer, a
budgetary official and other executive officials with the authority to commit resources. The
Compliance Committee will assist the Compliance Officer with monitoring, reviewing and assessing
the effectiveness of the compliance program and timeliness of compliance reporting.
	 
	 	10.	 	The Contractor must establish written policies for employees detailing:

	 	a.	 	The federal False Claims Act provisions;
	 
	 	b.	 	The administrative remedies for false claims and statements;
	 
	 	c.	 	Any state laws relating to civil or criminal penalties for false claims and statements;
	 
	 	d.	 	The whistleblower protections under such laws.

	 	11.	 	The Contractor must establish A process for training existing
staff and new hires on the compliance program and on the items in section 10. All training must be conducted in such a manner
that can be verified by AHCCCS.
	 
	 	12.	 	The Contractor must require, through policies documented in the Provider Manual and
subsequent contract amendments, that providers train their staff on the following aspects of the Federal False
Claims Act provisions;

	 	•	 	The administrative remedies for false claims and statements;
	 
	 	•	 	Any state laws relating to civil or criminal penalties for false claims and statements;
	 
	 	•	 	The whistleblower protections under such laws.

The
Contractor Provider. Manual must be updated to include the requirements listed above on or
before January 1, 2007. Contracts must be amended according to the Contractor contract update
schedule, but no later than April 1,2007

The Contractor is required to research potential overpayments identified by AHCCCS, OPI. After
conducting a cost benefit analysis to determine if such action is warranted, the Contractor should
attempt to recover any overpayments identified. The AHCCCS OPI shall be advised of the final
disposition of the research and advised of actions, if any, taken by the Contractor.

63. RECORDS RETENTION

The Contractor shall maintain books and records relating to covered services and expenditures
including reports to AHCCCSA and working papers used in the preparation of reports to AHCCCSA. The
Contractor shall comply with all specifications for record keeping established by AHCCCSA. All
books and records shall be maintained to the extent and in such detail as required by AHCCCS Rules
and policies. Records shall include but not be limited to financial statements, records relating
to the quality of care, medical records, prescription files and other records specified by AHCCCSA.

The Contractor agrees to make available, at all reasonable times during the term of this contract,
any of its records for inspection, audit or reproduction by any authorized representative of
AHCCCSA, State or Federal government. The Contractor shall be responsible for any costs associated
with the reproduction of requested information.

The Contractor shall preserve and make available all records for a period of five years from the
date of final payment under this contract. HIPAA related documents must be retained for a period of
six years per 45 CFR 164.530(j).

If this contract is completely or partially terminated, the records relating to the work terminated
shall be preserved and made available for a period of five years from the date of any such
termination. Records which relate to grievances, disputes, litigation or the settlement of claims
arising out of the performance of this
contract, or costs and expenses of this contract to which exception has been taken by AHCCCSA,
shall be retained by the Contractor for a period of five years after the date of final disposition
or resolution thereof.

 

					
	 
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64. DATA EXCHANGE REQUIREMENTS

The Contractor is authorized to exchange data with AHCCCSA relating to the information
requirements of this contract and as required to support the data elements to be provided AHCCCSA
in the formats prescribed by AHCCCSA and in formats prescribed by the Health Insurance Portability
and Accountability Act (HIPAA). Details for the formats may be found in the draft HIPAA Transaction
Companion Documents & Trading Partner Agreements, and in the AHCCCS Technical Interface Guidelines,
available in the Bidder’s Library.

The information so recorded and submitted to AHCCCSA shall be in accordance with all procedures,
policies, rules, or statutes in effect during the term of this contract. If any of these
procedures, policies, rules, regulations or statutes are hereinafter changed both parties agree to
conform to these changes following appropriate notification to both
parties by AHCCCSA.

The Contractor is responsible for any incorrect data, delayed submission or payment (to the
Contractor or its subcontractors), and/or penalty applied due to any error, omission, deletion, or
erroneous insert caused by Contractor-submitted data. Any data that does not meet the standards
required by AHCCCSA shall not be accepted by AHCCCSA.

The Contractor is responsible for identifying any inconsistencies immediately upon receipt of data
from AHCCCSA. If any unreported inconsistencies are subsequently discovered, the Contractor shall
be responsible for the necessary adjustments to correct its records at its.own expense.

The Contractor shall accept from AHCCCSA original evidence of eligibility and enrollment in a form
appropriate for electronic data exchange. Upon request by AHCCCSA, the Contractor shall provide to
AHCCCSA updated date sensitive PCP assignments in a form appropriate for electronic data exchange.

The Contractor shall be provided with a Contractor-specific security code for use in all data
transmissions made in accordance with contract requirements. Each data transmission by the
Contractor shall include the Contractor’s security code. The Contractor agrees that by use of its
security code, it certifies that any data transmitted is accurate and truthful, to the best of the
Contractor’s Chief Executive Officer, Chief Financial Officer or
designee’s knowledge [42 CFR
438.606]. The Contractor further agrees to indemnify and hold harmless the State of Arizona and
AHCCCSA from any and all claims or liabilities, including but not limited to consequential damages,
reimbursements or erroneous billings and reimbursements of attorney fees incurred as a consequence
of any error, omission, deletion or erroneous insert caused by the Contractor in the submitted
input data. Neither the State of Arizona nor AHCCCSA shall be responsible for any incorrect or
delayed payment to the Contractor’s AHCCCS services providers (subcontractors) resulting from such
error, omission, deletion, or erroneous input data caused by the Contractor in the submission of
AHCCCS claims.

The costs of software changes are included in administrative costs paid to the Contractor, There is
no separate payment for software changes. A PMMIS systems contact will be assigned after contract
award. AHCCCSA will work with the contractors as they evaluate Electronic Data Interchange options.

Health
Insurance Portability and Accountability Act (HIPAA): The Contractor shall comply with the
Administrative Simplification requirements of Subpart F of the HIPAA of 1996 (Public Law
107–191,110 Statutes 1936) and all Federal regulations implementing that Subpart that are
applicable to the operations of the Contractor by the dates required by the implementing Federal
regulations.

65. ENCOUNTER DATA REPORTING

The accurate and timely reporting of encounter data is crucial to the success of the AHCCCS
program. AHCCCSA uses encounter data to pay reinsurance benefits, set fee-for-service and
capitation rates, determine disproportionate share payments to hospitals, and to determine
compliance with performance standards. The

 

					
	 
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Contractor shall submit encounter data to AHCCCSA for all services for which the Contractor
incurred a financial liability and claims for services eligible for processing by the Contractor
where no financial liability was incurred, Including services provided during prior period
coverage. This requirement is a condition of the CMS grant award. [42 CFR438.242(b)(l)]

A Contractor shall prepare, review, verify, certify, and submit, encounters for consideration to
AHCCCSA. Upon submission, the Contractor certifies that the services listed were actually rendered
[42 CFR 455.1 (a)(2)]. The encounters must be submitted in the format prescribed by AHCCCSA.

Encounter data must be provided to AHCCCSA by electronic media and should be received by AHCCCSA no
later than 240 days after the end of the month in which the service was rendered, or the effective
date of the enrollment with the Contractor, whichever date is later. Requirements for encounter
data are described in the AHCCCSA Encounter Manual and the AHCCCSA Encounter Companion Document,
The Encounter Submission Requirements are included herein as Attachment L Refer to Paragraph 64,
Data Exchange Requirements, for further information.

An Encounter Submission Tracking Report must be maintained and made available to AHCCCSA upon
request. The Tracking Report’s purpose is to link each claim to an adjudicated or pended encounter
returned to the Contractor. Further information regarding the Encounter Submission Tracking Report
may be found in The AHCCCSA Encounter Reporting User’s Manual.

Twice each month AHCCCSA provides the Contractor with full replacement files containing provider
and medical procedure coding information. These files should be used to assist the Contractor in
accurate Encounter Reporting. Refer to Paragraph 64, Data Exchange Requirements, for further
information.

66. ENROLLMENT AND CAPITATION TRANSACTION UPDATES

AHCCCSA produces daily enrollment transaction updates identifying new members and changes to
members’ demographic, eligibility and enrollment data, which the Contractor shall use to update its
member records. The daily enrollment transaction update, which is run prior to the monthly
enrollment and capitation transaction update, is referred to as the “last daily” and will contain
all rate code changes made for the prospective month, as well as any new enrollments and
disenrollments.

AHCCCSA also produces a daily Manual Payment Transaction, which identifies enrollment or
disenrollment activity that was not included on the daily enrollment transaction update due to
internal edits. The Contractor shall use the Manual Payment Transaction in addition to the daily
enrollment transaction update to update its member records.

A weekly capitation transaction will be produced to provide contractors with member-level
capitation payment information. This file will show changes to the prospective capitation
payments, as sent in the monthly file, resulting from enrollment changes that occur after the
monthly file is produced. This file will also identify mass adjustments to and/or manual capitation
payments that occurred at AHCCCS after the monthly file is produced.

The monthly enrollment and monthly capitation transaction updates are generally produced two days
before the end of every month. The update will identify the total active population for the
Contractor as of the first day of the next month. These updates contain the information used by
AHCCCSA to produce the monthly capitation payment for the next month. The Contractor will reconcile
their member files with the AHCCCS monthly update. After reconciling the monthly update
information, the Contractor resumes posting daily updates beginning with the last two days of the
month. The last two daily updates are different from the regular
daily updates in that they pay
and/or recoup capitation into the next month. If the Contractor detects an error through the
monthly update process, the Contractor shall notify AHCCCSA, Division of Health Care Management.

 

					
	 
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Refer to
Paragraph 64, Data Exchange Requirements, for further information.

67. PERIODIC REPORT REQUIREMENTS

AHCCCSA, under the terms and conditions of its CMS grant award, requires periodic reports,
encounter data, and other information from the Contractor. The submission of late, inaccurate, or
otherwise incomplete reports shall constitute failure to report subject to the penalty provisions
described in this contract.

Standards applied for determining adequacy of required reports are as follows [42 CFR
438.242(b)(2)]:

	 	a.	 	Timeliness: Reports or other required data shall be received on or before scheduled due dates.
	 
	 	b.	 	Accuracy: Reports or other required data shall be prepared in strict conformity with
appropriate authoritative sources and/or AHCCCS defined standards.
	 
	 	c.	 	Completeness: All required information shall be fully disclosed in a manner that is both
responsive and pertinent to report intent with no material omissions.

AHCCCS requirements regarding reports, report content and frequency of submission of reports are
subject to change at any time during the term of the contract. The Contractor shall comply with all
changes specified by AHCCCSA.

The Contractor shall be responsible for continued reporting beyond the term of the contract. For
example, processing claims and reporting encounter data will likely continue beyond the term of the
contract because of lag time in filing source documents by subcontractors.

The Contractor shall comply with all financial reporting requirements contained in the Reporting
Guide for Acute
Health Care Contractors with the Arizona Health Care Cost Containment System, a copy of which may
be found in the Bidder’s Library. The required reports, which are subject to change during the
contract term, are summarized in Attachment F, Periodic Report Requirements.

68. REQUESTS FOR INFORMATION

AHCCCSA may, at any time during the term of this contract, request financial or other information
from the Contractor. Responses shall fully disclose all financial or
other information requested.
Information may be designated as confidential but may not be withheld from AHCCCS as proprietary.
Information designated as confidential may not be disclosed by AHCCCS without the prior written
consent of the Contractor except as required by law. Upon receipt of such written requests for
information, the Contractor shall provide complete information as requested no later than 30 days
after the receipt of the request unless otherwise specified in the request itself.

69. DISSEMINATION OF INFORMATION

Upon request, the Contractor shall assist AHCCCSA in the dissemination of information prepared by
AHCCCSA or the Federal government to its members. The cost of such dissemination shall be borne by
the Contractor. All advertisements, publications and printed materials that are produced by the
Contractor and refer to covered services shall state that such services are funded under contract
with AHCCCSA.

70. OPERATIONAL AND FINANCIAL READINESS REVIEWS

AHCCCSA may conduct Operational and Financial Readiness Reviews on all contractors and will,
subject to the availability of resources, provide technical assistance as appropriate. The
Readiness Reviews will be conducted

 

					
	 
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prior to the start of business. The purpose of Readiness Reviews is to assess new Contractors’
readiness and ability to provide covered services to members at the start of the contract year and
current Contractors’ readiness to expand to new geographic service areas. A new Contractor will be
permitted to commence operations only if the Readiness Review factors are met to AHCCCSA’s
satisfaction.

71. OPERATIONAL AND FINANCIAL REVIEWS

In accordance with CMS requirements, AHCCCSA, or an independent external agent, will conduct annual
Operational and Financial Reviews for the purpose of (but not limited to) ensuring operational and
financial program compliance [42 CFR 438.204]. The reviews will identify areas where improvements
can be made and make recommendations accordingly, monitor the Contractor’s progress towards
implementing mandated programs and provide the Contractor with technical assistance if necessary.
The Contractor shall comply with all other medical audit provisions as required by AHCCCS Rule
R9-22-521 and R9-31-521.

The type
and duration of the Operational and Financial Review will be solely
at the discretion of
AHCCCSA. Except in cases where advance notice is not possible or advance notice may render the
review less useful, AHCCCSA will give the Contractor at least three weeks advance notice of the
date of the on-site. review. In preparation for the on-site Operational and Financial Reviews, the
Contractor shall cooperate fully with AHCCCSA and the AHCCCSA Review Team by forwarding in advance
such policies, procedures, job descriptions, contracts, logs and other information that AHCCCSA may
request. The Contractor shall have all requested medical records on-site. Any documents, not
requested in advance by AHCCCSA, shall be made available upon request of the Review Team during the
course of the review. The Contractor personnel, as identified in advance, shall be available to the
Review Team at all times during AHCCCSA on-site review
activities. While on-site, the Contractor shall provide the Review Team with workspace, access to
a telephone, electrical outlets and privacy for conferences. Certain documentation submission requirements may
be waived at the discretion of AHCCCSA, if the Contractor has obtained accreditation from NCQA,
JCAHO or any other nationally recognized accrediting body. The Contractor must submit the entire
accreditation report to AHCCCSA for such waiver consideration.

The Contractor will be furnished a draft copy of the Operational and Financial Review Report and
given an opportunity to comment on any review findings prior to AHCCCSA publishing the final
report. Operational and Financial Review findings may be used in the scoring of subsequent bid
proposals by that Contractor. Recommendations, made by the Review Team to bring the Contractor into
compliance with Federal, State, AHCCCS, and/or contract requirements,
must be implemented by the
Contractor. AHCCCSA may conduct a follow-up Operational and Financial Review to determine the
Contractor’s progress in implementing recommendations and achieving program compliance. Follow-up
reviews may be conducted at any time after the initial Operational and Financial Review.

The Contractor shall not distribute or otherwise make available the Operational and Financial
Review Tool, draft Operational and Financial Review Report nor final report to other AHCCCS
Contractors.

AHCCCSA may conduct an Operational and Financial Review in the event the Contractor undergoes a
merger, reorganization, change in ownership or makes changes in three or more key staff positions
within a 12-month period.

AHCCCSA may request, at the expense of the Contractor, to conduct on-site reviews of functions
performed at out-of-state locations. AHCCCSA will coordinate travel arrangements and accommodations
with the Contractor at their request.

72. SANCTIONS

 

					
	 
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AHCCCSA may impose monetary sanctions, suspend, deny, refuse to renew, or terminate this contract
or any related subcontracts in accordance with AHCCCS Rules R9-22-606, ACOM Sanctions Policy and
the terms of this contract and applicable Federal or State law and regulations. [42 CFR 422.208,42
CFR 438.700,702,704 and 45 CFR 92.36(i)(l)] Written notice will be provided to the Contractor
specifying the sanction to be imposed, the grounds for such sanction and either the length of
suspension or the amount of capitation prepayment to be withheld. The Contractor may dispute the
decision to impose a sanction in accordance with the process outlined in A.A.C. 9-34-401 et seq.
Intermediate sanctions may be imposed, but are not limited to the following actions:

	a.	 	Substantial failure to provide medically necessary services that the Contractor is required to
provide under the terms of this contract to its enrolled members.
	 
	b.	 	Imposition of premiums or charges in excess of the amount allowed under the AHCCCS 1115 Waiver.
	 
	c.	 	Discrimination among members on the basis of their health status of need for health care
services.
	 
	d.	 	Misrepresentation or falsification of information furnished to CMS or AHCCCSA.
	 
	e.	 	Misrepresentation or falsification of information furnished to an enrollee, potential enrollee,
or provider.
	 
	f.	 	Failure to comply with the requirement for physician incentive plan as delineated in Paragraph
42.
	 
	g.	 	Distribution directly, or indirectly through any agent or independent contractor, of marketing
materials that have not been approved by AHCCCSA or that contain false or materially misleading
information.
	 
	h.	 	Failure to meet AHCCCS Financial Viability Standards.
	 
	i.	 	Material deficiencies in
the Contractor’s provider network.
	 
	j.	 	 Failure to meet quality of care and quality management requirements.
	 
	k.	 	Failure to meet AHCCCS encounter standards.
	 
	l.	 	Violation of other applicable State or Federal laws or regulations.
	 
	m.	 	Failure to fund accumulated deficit in a timely manner.
	 
	n.	 	Failure to increase the Performance Bond in a timely manner.
	 
	o.	 	Failure to comply with any provisions contained in this contract.
	 
	p.	 	Failure to report third party liability cases as described in Paragraph 58.

AHCCCSA may impose the following types of intermediate sanctions:

	a.	 	Civil monetary penalties
	 
	b.	 	Appointment of temporary management for a Contractor as
provided in 42 CFR 438.706 and A.R.S.
§36-2903 (M).
	 
	c.	 	Granting members the right to terminate enrollment without cause and notifying the affected
members of their right to disenroll [42 CFR 438.702(a)(3)].
	 
	d.	 	Suspension of all new enrollment, including auto assignments after the effective date of the
sanction.
	 
	e.	 	Suspension of payment for recipients enrolled after the effective date of the sanction until CMS
or AHCCCSA is satisfied that the reason for imposition of the sanction no longer exists and is not
likely to recur.
	 
	f.	 	Additional sanctions allowed under statue or regulation that address areas of noncompliance.

Cure Notice Process: Prior to the imposition of a sanction for non-compliance, AHCCCSA may provide
a written cure notice to the Contractor regarding the details of the non-compliance. The cure
notice will specify the period of time during which the Contractor must bring its performance back
into compliance with contract requirements. If, at the end of the specified time period, the
Contractor has complied with the cure notice requirements, AHCCCSA will take no further action. If,
however, the Contractor has not complied with the cure notice requirements, AHCCCSA may proceed
with the imposition of sanctions. Refer to the ACOM Sanctions Policy for details.

73. BUSINESS CONTINUITY AND RECOVERY PLAN

 

					
	 
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The Contractor shall adhere to all elements of the ACOM Business Continuity and Recovery Plan
Policy. The Contractor shall develop a Business Continuity and Recovery Plan to deal with
unexpected events that may affect its ability to adequately serve members. This plan shall, at a
minimum, include planning and training for:

	 	•	 	Electronic/telephonic failure at the Contractor’s main place of business
	 
	 	•	 	Complete loss of use of the main site and satellite offices out of state
	 
	 	•	 	Loss of primary computer system/records
	 
	 	•	 	Communication between the Contractor and AHCCCSA in the event of a business disruption
	 
	 	•	 	Periodic Testing

The Business Continuity and Recovery Plan shall be updated annually. The Contractor shall submit a
summary of the plan as specified in the ACOM Business Continuity and Recovery Plan Policy 15 days
after the start of the contract year. All key staff shall be trained and familiar with the Plan.

74. TECHNOLOGICAL ADVANCEMENT

Contractors must have a website with links to the following information:

	 	1.	 	Formulary
	 
	 	2.	 	Provider manual
	 
	 	3.	 	Member handbook
	 
	 	4.	 	Provider listing
	 
	 	5.	 	When available, Member and Provider Survey Results
	 
	 	6.	 	Performance Measure Results

Contractors must be able to perform the following functions electronically:

	 	1.	 	Enrollment Verification
	 
	 	2.	 	Claims inquiry
	 
	 	3.	 	Accept HIPAA compliant electronic claims transactions (See paragraph 38)
	 
	 	4.	 	Make Claims payments via electronic funds transfer (See paragraph 38)

Contractors
must also provide searchable provider directories on their web site. Web based
directories must include the following search functions and must be updated at least monthly, if
necessary:

	 	1.	 	Name
	 
	 	2.	 	Specialty/Service
	 
	 	3.	 	Languages spoken by Practitioner
	 
	 	4.	 	Office locations (e.g. county, city or zip code)

Use of Website: Contractors are required to post their clinical performance indicators compared to
AHCCCS
standard and statewide averages on their website. In addition, AHCCCSA will post contractor
performance indicators on its website.

Arizona Health-e Connection

AHCCCS supports the Governor executive order # 2005-25 on Arizona Health-e Connection Roadmap. This
executive order directs the development of an electronic health
information data exchange (HIE) of
personal health information between providers, payers and members and the deployment of necessary
health information technology to facilitate electronic health records in provider offices.

AHCCCS will develop a unified approach for AHCCCS health plans and program contractors to meet the
goal of the executive order and to connect AHCCCS, AHCCCS Contractors, ancillary subcontractors and
registered providers into a common web based electronic health information data exchange that will
meet the standards

 

					
	 
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established
by State and Federal governments. AHCCCS health plans and program contractors will
cooperate in assisting AHCCCS with developing the Health-e project plan and shall implement
required data exchange interfaces as required to meet the goals of the Governor’s executive order.

CMS will provide grants to state Medicaid agencies to support development of IT infrastructure and
applications to achieve the goal of health information data exchange. AHCCCS Contractors will be
required to:

	 	1)	 	 Encourage lab, pharmacy and ancillary subcontractors to develop common electronic interfaces for
the exchange of data in standard file formats.
	 
	 	2)	 	 AHCCCS may issue Minimum Subcontract language that will require subcontractors to participate in
the e-Health Initiative. Contractors must amend all provider subcontracts to include the amended
Minimum Subcontract provisions within six (6) months of issuance.
	 
	 	3)	 	Contractors will cooperate in passing on any AHCCCS professional fee or facility reimbursement
rate adjustments to primary care providers, nursing facility contractor, hospitals and any other
providers determined by AHCCCS to be eligible for reimbursement for participation in the health
information data exchange.

AHCCCS will continually work to enhance the functionality of the health information exchange and
web based applications. AHCCCS health plan and program contractors are expected to deploy upgrades
and enhancements as necessary to contracted providers.

75. PENDING LEGISLATIVE/OTHER ISSUES

The following constitute pending items that may be resolved after the issuance of this contract.
Any program changes due to the resolution of the issues will be reflected in future amendments to
the contract. Capitation rates may also be adjusted to reflect the financial impact of program
changes.

1115
Waiver Changes:

AHCCCS is in negotiations with CMS to renew the 1115 waiver that enables AHCCCS to operate a
mandatory managed care program. These negotiations may result in changes to the program. AHCCCS
will either amend the contract or incorporate changes in policies
incorporated in the contract by
reference.

76. BALANCED BUDGET ACT OF 1997 (BBA)

In August 2002, CMS issued final regulations for the implementation of the BBA. AHCCCS continues to
review all areas of the regulations to ensure full compliance with the BBA; however, there are some
issues that may require further clarification from CMS. Any program changes due to the resolution
of the issues will be reflected in amendments to the contract. Capitation rates may also be
adjusted to reflect the financial impact of the program changes.

77. RESERVED

78. MEDICARE MODERNIZATION ACT (MMA)

The Medicare Modernization Act of 2003 created a prescription drug benefit called Medicare Part D
for individuals who are eligible for Medicare Part A and/or enrolled in Medicare Part B. Beginning
January 1, 2006, AHCCCS no longer covers prescription drugs that are covered under Part D for dual
eligible members.

 

					
	 
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AHCCCS win not cover prescription drugs for this population whether or not they are enrolled in
Medicare Part D. Capitation rates reflect this coverage.

Drugs Excluded from Medicare Part D: AHCCCS does cover those drugs ordered by a PCP, attending
physician, dentist or other authorized prescriber and dispensed under the direction of a licensed
pharmacist subject to limitations related to prescription supply amounts, contractor formularies
and prior authorization requirements if they are excluded from Medicare Part D coverage.
Medications that are covered by Part D, but are not on a
specific Part D Health Plan’s formulary are
not considered excluded drugs and will not be covered by AHCCCS.

As the Medicare Modernization Act is fully implemented, there may be required changes to business
practices of AHCCCS and contractors or the contract. AHCCCS will identify potential impacts and
work with contractors to implement necessary program changes.

[END OF SECTION D]
 

					
	 
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	CONTRACT CLAUSES
	 	Contract/RFP No. YH04-0001

SECTION E: CONTRACT CLAUSES

1) APPLICABLE LAW

Arizona Law — The law of Arizona applies to this contract including, where applicable,
the Uniform Commercial Code, as adopted in the State of Arizona.

Implied
Contract Terms — Each provision of law and any terms required by law to be in this
contract are a part of this contract as if fully stated in it.

2) AUTHORITY

This contract is issued under the authority of the Contracting Officer who signed this contract.
Changes to the contract, including the addition of work or materials, the revision of payment
terms, or the substitution of work or materials, directed by an unauthorized state employee or
made unilaterally by the Contractor are violations of the contract and of applicable law. Such
changes, including unauthorized written contract amendments, shall be void and without effect, and
the Contractor shall not be entitled to any claim under this contract based on those changes.

3) ORDER OF PRECEDENCE

The parties to this contract shall be bound by all terms and conditions contained herein. For
interpreting such terms and conditions the following sources shall have precedence in descending
order: The Constitution and laws of the United States and applicable Federal regulations; the
terms of the CMS 1115 waiver for the State of Arizona; the Constitution and laws of Arizona, and
applicable State rules; the terms of this contract, including any attachments and executed
amendments and modifications; and AHCCCSA policies and procedures.

4)
CONTRACT INTERPRETATION AND AMENDMENT

No
Parol Evidence —This contract is intended by the parties as a final and complete
expression of their agreement. No course of prior dealings between the parties and no usage
of the trade shall supplement or explain any term used in this
contract.

No
Waiver —Either party’s failure to insist on strict performance of any term or condition of the
contract shall not be deemed a waiver of that term or condition even if the party accepting or
acquiescing in the non-conforming performance knows of the nature of the performance and fails to
object to it.

Written
Contract Amendments — The contract shall be modified only through a written contract
amendment within the scope of the contract signed by the procurement officer on behalf of the
State.

5) SEVERABILITY

The provisions of this contract are severable to the extent that any provision or application
held to be invalid shall not affect any other provision or application of the contract, which may
remain in effect without the invalid provision, or application.

6) RELATIONSHIP OF PARTIES

The Contractor under this contract is an independent contractor. Neither party to this contract
shall be deemed to be the employee or agent of the other party to the contract.

7) ASSIGNMENT AND DELEGATION

The Contractor shall not assign any right nor delegate any duty under this contract without
prior written approval of the Contracting Officer, who will not unreasonably withhold such
approval.

8) INDEMNIFICATION

Contractor/Vendor Indemnification (Not Public Agency)

					
	 	 	 	 	 
	 
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The parties to this contract agree that the State of Arizona, its departments, agencies, boards and
commissions shall be indemnified and held harmless by the Contractor for the vicarious liability of
the State as a result of entering into this contract. However, the parties further agree that the
State of Arizona, its departments, agencies, boards and commissions shall be responsible for its
own negligence. Each party to this contract is responsible for its own negligence.

Contractor/Vendor Indemnification (Public Agency)

Each party (“as indemnitor”) agrees to indemnify, defend, and hold harmless the other party (“as
indemnitee”) from and against any and all claims, losses, liability, costs, or expenses (including
reasonable attorney’s fees) (hereinafter collectively referred to as ‘claims’) arising out of
bodily injury of any person (including death) or property damage but only to the extent that such
claims which result in vicarious/derivative liability to the indemnitee, are caused by the act,
omission, negligence, misconduct, or other fault of the indemnitor, its officers, officials,
agents, employees, or volunteers.

9)
INDEMNIFICATION — PATENT AND COPYRIGHT

The Contractor shall defend, indemnify and hold harmless the State against any liability including
costs and expenses for infringement of any patent, trademark or copyright arising out of contract
performance or use by the State of materials furnished or work
performed under this contract.  The
State shall reasonably notify the Contractor of any claim for which it may be liable under this
paragraph.

10) COMPLIANCE WITH APPLICABLE LAWS, RULES AND REGULATIONS

The Contractor shall comply with all applicable Federal and State laws and regulations including
Title VI of the Civil Rights Act of 1964; Title IX of the Education Amendments of 1972 (regarding
education programs and activities); the Age Discrimination Act of 1975; the Rehabilitation Act of
1973 (regarding education programs and activities), and the Americans with Disabilities Act; EEO
provisions; Copeland Anti-Kickback Act; Davis-Bacon Act; Contract Work Hours and Safety Standards;
Rights to Inventions Made Under a Contract or Agreement; Clean Air Act and Federal Water Pollution
Control Act; Byrd Anti-Lobbying Amendment. The Contractor shall maintain all applicable licenses
and permits.

11) ADVERTISING AND PROMOTION OF CONTRACT

The Contractor shall not advertise or publish information for commercial benefit concerning
this contract without the prior written approval of the Contracting Officer.

12) PROPERTY OF THE STATE

Except as otherwise provided in this contract, any materials, including reports, computer programs
and other deliverables, created under this contract are the sole property of AHCCCSA. The
Contractor is not entitled to maintain any rights on those materials and may not transfer any
rights to anyone else. The Contractor shall not use or release these materials without the prior
written consent of AHCCCSA.

If a Contractor declares information to be confidential, AHCCCSA will maintain the
information as confidential and will not disclose it unless it is required by law or court
order.

13) THIRD PARTY ANTITRUST VIOLATIONS

The Contractor assigns to the State any claim for overcharges resulting from antitrust violations
to the extent that those violations concern materials or services supplied by third parties to the
Contractor toward fulfillment of this contract.

14) RIGHT TO ASSURANCE

If AHCCCSA, in good faith, has reason to believe that the Contractor does not intend to
perform or continue performing this contract, the procurement officer may demand in writing that
the Contractor give a written assurance of intent to perform. The demand shall be sent to the
Contractor by certified mail, return receipt required. Failure by the Contractor to provide
written assurance within the number of days specified in the demand may, at the State’s option, be
the basis for terminating the contract.

					
	 	 	 	 	 
	 
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15) TERMINATION FOR CONFLICT OF INTEREST

AHCCCSA may cancel this contract without penalty or further obligation if any person significantly
involved in initiating, negotiating, securing, drafting or creating the contract on behalf of
AHCCCSA is, or becomes at any time while the contract or any extension of the contract is in
effect, an employee of, or a consultant to, any other party to this contract with respect to the
subject matter of the contract. The cancellation shall be effective when the Contractor receives
written notice of the cancellation unless the notice specifies a later time.

If the Contractor is a political subdivision of the State, it may also cancel this contract as
provided by A.R. S. 38-511.

16) GRATUITIES

AHCCCSA may, by written notice to the Contractor, immediately terminate this contract if it
determines that employment or a gratuity was offered or made by the Contractor or a representative
of the Contractor to any officer or employee of the State for the purpose of influencing the
outcome of the procurement or securing the contract, an amendment to the contract, or favorable
treatment concerning the contract, including the making of any determination or decision about
contract performance. AHCCCSA, in addition to any other rights or remedies, shall be entitled to
recover exemplary damages in the amount of three times the value of the gratuity offered by the
Contractor.

17) SUSPENSION OR DEBARMENT

The Contractor shall not employ, consult, subcontract or enter into any agreement for Title XIX
services with any person or entity who is debarred, suspended or otherwise excluded from Federal
procurement activity or from participating in non-procurement activities under regulations issued
under Executive Order No. 12549 or under guidelines implementing Executive Order 12549 [42 CFR
438.610(a) and (b)]. This prohibition extends to any entity which employs, consults, subcontracts
with or otherwise reimburses for services any person substantially involved in the management of
another entity which is debarred, suspended or otherwise excluded from Federal procurement
activity.

The Contractor shall not retain as a director, officer, partner or owner of 5% or more of the
Contractor entity, any person, or affiliate of such a person, who is debarred, suspended or
otherwise excluded from Federal procurement activity.

AHCCCSA may, by written notice to the Contractor, immediately terminate this contract if it
determines that the Contractor has been debarred, suspended or otherwise lawfully prohibited
from participating in any public procurement activity.

18) TERMINATION FOR CONVENIENCE

AHCCCSA reserves the right to terminate the contract in whole or in part at any time for the
convenience of the State without penalty or recourse. The Contracting Officer shall give written
notice by certified mail, return receipt requested, to the Contractor of the termination at least
90 days before the effective date of the termination. In the event of termination under this
paragraph, all documents, data and reports prepared by the Contractor under the contract shall
become the property of and be delivered to AHCCCSA. The Contractor shall be entitled to receive
just and equitable compensation for work in progress, work completed and materials accepted before
the effective date of the termination.

19) TEMPORARY MANAGEMENT/OPERATION OF A CONTRACTOR AND TERMINATION

Temporary Management/Operation by AHCCCSA: Pursuant to the Balanced Budget Act of 1997, 42 CFR
438.700 et seq. and State Law ARS §36-2903, AHCCCSA is authorized to impose temporary management
for
a Contractor under certain conditions. Under federal law, temporary management may be imposed if
AHCCCS
determines that there is continued egregious behavior by the Contractor, including but not limited to the
following: substantial failure to provide medically necessary services the Contractor is required to provide;
imposition on enrollees premiums or charges that exceed those permitted by AHCCCSA, discrimination

					
	 	 	 	 	 
	 
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among enrollees on the basis of health status or need for health care services; misrepresentation
or falsification
of information to AHCCCSA or CMS; misrepresentation or falsification of information furnished to an
enrollee or provider; distribution of marketing materials that have not been approved by AHCCCS or
that are
false or misleading; or behavior contrary to any requirements of Sections 1903(m) or 1932 of the
Social
Security Act. Temporary management may also be imposed if AHCCCSA determines that there is
substantial
risk to enrollees’ health or that temporary management is necessary to ensure the health
of enrollees while the
Contractor is correcting the deficiencies noted above or until there is an orderly transition or
reorganization of
the Contractor. Under federal law, temporary management is mandatory if AHCCCSA determines that the
Contractor has repeatedly failed to meet substantive requirements in Sections 1903(m) or 1932 of
the Social
Security Act. In these situations, AHCCCSA shall not delay imposition of temporary management to
provide
a hearing before imposing this sanction.

State law
ARS §36-2903 authorizes AHCCCSA to operate a Contractor as specified in this contract.
Prior to operation of the Contractor by AHCCCSA pursuant to state statute, the Contractor shall
have the opportunity for a hearing. If AHCCCSA determines that emergency action is required,
operation of the Contractor may take place prior to hearing. Operation by AHCCCSA shall occur
only as long as it is necessary to assure delivery of uninterrupted care to members, to
accomplish orderly transition of those members to other contractors, or until the Contractor
reorganizes or otherwise corrects contract performance failure.

Termination:
AHCCCSA reserves the right to terminate this contract in
whole or in part due to the
failure of the Contractor to comply with any term or condition of the
contract and as authorized by
the Balanced Budget Act of 1997 and 42 CFR 438.708. If the Contractor
is providing services under
more than one contract with AHCCCSA, AHCCCSA may deem unsatisfactory performance under one contract
to be cause to require the Contractor to provide assurance of performance under any and all other
contracts. In such situations, AHCCCSA reserves the right to seek remedies under both actual and
anticipatory breaches of contract if adequate assurance of performance is not received. The
Contracting Officer shall mail written notice of the termination and the reason(s) for it to the
Contractor by certified mail, return receipt requested. Pursuant to the Balanced Budget Act of 1997
and 42 CFR 438.708, AHCCCSA shall provide the contractor with a pre-termination hearing before
termination of the contract

Upon termination, all documents, data, and reports prepared by the Contractor under the contract
shall become
the property of and be delivered to AHCCCSA on demand.

AHCCCSA may, upon termination of this contract, procure on terms and in the manner that it deems
appropriate, materials or services to replace those under this contract. The Contractor shall be
liable for any
excess costs incurred by AHCCCSA in re-procuring the materials or services.

20) TERMINATION — AVAILABILITY OF FUNDS

Funds are not presently available for performance under this contract beyond the current fiscal
year. No legal liability on the part of AHCCCSA for any payment may arise under this contract until
funds are made available for performance of this contract.

Notwithstanding any other provision in the Agreement, this Agreement may be terminated by AHCCCSA,
if, for any reason, there are not sufficient appropriated and available monies for the purpose of
maintaining this Agreement. In the event of such termination, the Contractor shall have no further
obligation to AHCCCSA, except as otherwise provided in this contract.

21) RIGHT OF OFFSET

AHCCCSA shall be entitled to offset against any amounts due the Contractor any expenses or
costs incurred by AHCCCSA concerning the Contractor’s non-conforming performance or failure to
perform the contract.

22) NON-EXCLUSIVE REMEDIES

The rights and the remedies of AHCCCSA under this contract are not exclusive.

					
	 	 	 	 	 
	 
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23) NON-DISCRIMINATION

The
Contractor shall comply with State Executive Order No. 99-4, which mandates that all persons,
regardless of race, color, religion, gender, national origin or political affiliation, shall have
equal access to employment opportunities, and all other applicable Federal and state laws, rules
and regulations, including the Americans with Disabilities Act and
Title VI. The Contractor shall
take positive action to ensure that applicants for employment, employees, and persons to whom it
provides service are not discriminated against due to race, creed, color, religion, gender,
national origin or disability.

24) EFFECTTVE DATE

The
effective date of this contract shall be the date referenced on page 1 of this contract.

25) INSURANCE

A certificate of insurance naming the State of Arizona and AHCCCSA as the “additional insured” must
be submitted to AHCCCSA within 10 days of notification of contract award and prior to commencement
of any services under this contract. This insurance shall be provided by carriers rated as “A+” or
higher by the A.M. Best Rating Service. The following types and levels of insurance coverage are
required for this contract:

	a.	 	Commercial General Liability: Provides coverage of at least $1,000,000 for each occurrence
for bodily
injury and property damage to others as a result of accidents on the premises of or as the
result of
operations of the Contractor.
	 
	b.	 	Commercial Automobile Liability: Provides coverage of at
least $1,000,000 for each
occurrence for bodily
injury and property damage to others resulting from accidents caused by vehicles operated by
the
Contractor.
	 
	c.	 	Workers Compensation: Provides coverage to employees of the Contractor for injuries sustained
in the
course of their employment. Coverage must meet the obligations imposed by Federal and State
statutes
and must also include Employer’s Liability minimum coverage of $100,000. Evidence of qualified
self-insured status will also be considered.
	 
	d.	 	Professional Liability (if applicable): Provides coverage for alleged professional
misconduct or lack of
ordinary skills in the performance of a professional act of service.

The above coverages may be evidenced by either one of the following:

	a.	 	The State of Arizona Certificate of Insurance: This is a form with the special conditions
required by the
contract already pre-printed on the form. The Contractor’s agent or broker must fill in the
pertinent policy
information and ensure the required special conditions are included in the Contractor’s policy.
	 
	b.	 	The Accord form: This standard insurance industry certificate of insurance does not contain
the preprinted special conditions required by this contract. These conditions must be entered on the
certificate by
the agent or broker and read as follows:

The State of Arizona and Arizona Health Care Cost Containment System are hereby added as
additional insureds. Coverage afforded under this Certificate shall be primary and any
insurance carried by the State or any of its agencies, boards, departments or commissions
shall be in excess of that provided by the insured Contractor. No policy shall expire, be
canceled or materially changed without 30 days written notice to the State. This
Certificate is not valid unless countersigned by an authorized representative of the
insurance company.

26) DISPUTES

Contract claims and disputes shall be adjudicated in accordance with AHCCCS rules.

Except as provided by 9AAC Chapter 28, Article 6, the exclusive manner for the Contractor to
assert any dispute against AHCCCSA shall be in accordance with the process outlined in 9 A.A.C.
Chapter 22 and ARS §36-2903.01. Pending the final resolution of any disputes involving this
contract, the Contractor shall proceed

					
	 	 	 	 	 
	 
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with performance of this contract in accordance with AHCCCSA’s instructions, unless
AHCCCSA specifically, in writing, requests termination or a temporary suspension-of
performance.

27) RIGHT TO INSPECT PLANT OR PLACE OF BUSINESS

AHCCCSA may, at reasonable times, inspect the part of the plant or place of business of the
Contractor or subcontractor that is related to the performance of this contract, in accordance
with A.R.S. §41-2547.

28) INCORPORATION BY REFERENCE

This solicitation and all attachments and amendments, the Contractor’s proposal, best and final
offer accepted by AHCCCSA, and any approved subcontracts are hereby incorporated by reference into
the contract.

29) COVENANT AGAINST CONTINGENT FEES

The Contractor warrants that no person or agency has been employed or retained to solicit or secure
this contract upon an agreement or understanding for a commission, percentage, brokerage or
contingent fee. For violation of this warranty, AHCCCSA shall have the right to annul this contract
without liability.

30) CHANGES

AHCCCSA may at any time, by written notice to the Contractor, make changes within the general
scope of this contract. If any such change causes an increase or
decrease in the cost of, or, the
time required for, performance of any part of the work under this contract, the Contractor may
assert its right to an adjustment in compensation paid under this contract. The Contractor must
assert its right to such adjustment within 30 days from the date of receipt of the change notice.
Any dispute or disagreement caused by such notice shall constitute a dispute within the meaning of
Section E, Paragraph 26, Disputes, and be administered accordingly.

When
AHCCCSA issues an amendment to modify the contract, the provisions of such amendment will be
deemed to have been accepted 60 days after the date of mailing by AHCCCSA, even if the amendment
has not been signed by the Contractor, unless within that time the Contractor notifies AHCCCSA in
writing that it refuses to sign the amendment. If the Contractor provides such notification,
AHCCCSA will initiate termination proceedings.

31) TYPE OF CONTRACT

Firm Fixed-Price stated as capitated per member per month, except as otherwise provided

32) AMERICANS WITH DISABILITIES ACT

People with disabilities may request special accommodations such as interpreters, alternative
formats or assistance with physical accessibility. Requests for special accommodations must be
made with at least three days prior notice by contacting the Solicitation Contact person.

33) WARRANTY OF SERVICES

The Contractor warrants that all services provided under this contract will conform to the
requirements stated herein. AHCCCSA’s acceptance of services provided by the Contractor shall not
relieve the Contractor from its obligations under this warranty. In addition to its other
remedies, AHCCCSA may, at the Contractor’s expense, require prompt correction of any services
failing to meet the Contractor’s warranty herein. Services corrected by the Contractor shall be
subject to all of the provisions of this contract in the manner and to the same extent as the
services originally furnished.

34) NO GUARANTEED QUANTITIES

AHCCCSA does not guarantee the Contractor any minimum or maximum quantity of services or goods to
be provided under this contract.

35) CONFLICT OF INTEREST

The Contractor shall not undertake any work that represents a potential conflict of interest, or
which is not in the best interest of AHCCCSA or the State without prior written approval by
AHCCCSA. The Contractor shall fully and completely disclose any situation that may present a
conflict of interest. If the Contractor is now performing or elects to perform during the term of
this contract any services for any AHCCCS contractor,

					
	 	 	 	 	 
	 
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provider or Contractor or an entity owning or controlling same, the Contractor shall disclose
this relationship prior to accepting any assignment involving such party.

36)
DISCLOSURE OF CONFIDENTIAL INFORMATION

The Contractor shall not, without prior written approval from AHCCCSA, either during or after the
performance of the services required by this contract, use, other than for such performance, or
disclose to any person other than AHCCCSA personnel with a need to know, any information, data,
material, or exhibits created, developed, produced, or otherwise obtained during the course of the
work required by this contract. This nondisclosure requirement shall also pertain to any information
contained in reports, documents, or other records furnished to the Contractor by AHCCCSA.

37) COOPERATION WITH OTHER CONTRACTORS

AHCCCSA may award other contracts for additional work related to this contract and Contractor
shall fully cooperate with such other contractors and AHCCCSA employees or designated agents, and
carefully fit its own work to such other contractors’ work. The Contractor shall not commit or
permit any act which will interfere with the performance of work by any other contractor or by
AHCCCSA employees.

38) ASSIGNMENT OF CONTRACT AND BANKRUPTCY

This contract is voidable and subject to immediate cancellation by AHCCCSA upon the Contractor
becoming insolvent or filing proceedings in bankruptcy or reorganization under the United States
Code, or assigning rights or obligations under this contract without the prior written consent of
AHCCCSA.

39) OWNERSHIP OF INFORMATION AND DATA

Any data or information system, including all software, documentation and manuals, developed by the
Contractor pursuant to this contract, shall be deemed to be owned by AHCCCSA. The Federal
government reserves a royalty-free, nonexclusive, and irrevocable license to reproduce, publish, or
otherwise use and to authorize others to use for Federal government purposes, such data or
information system, software, documentation and manuals. Proprietary software which is provided at
established catalog or market prices and sold or leased to the general public shall not be subject
to the ownership or licensing provisions of this section.

Data, information and reports collected or prepared by the Contractor in the course of performing
its duties and obligations under this contract shall be deemed to be owned by AHCCCSA. The
ownership provision is in consideration of the Contractor’s use of public funds in collecting or
preparing such data, information and reports. These items shall not be used by the Contractor for
any independent project of the Contractor or publicized by the Contractor without the prior
written permission of AHCCCSA. Subject to applicable state and Federal laws and regulations,
AHCCCSA shall have full and complete rights to reproduce, duplicate, disclose and otherwise use
all such information. At the termination of the contract, the Contractor shall make available all
such data to AHCCCSA within 30 days following termination of the contract or such longer period as
approved by AHCCCSA, Office of the Director. For purposes of this subsection, the term “data”
shall not include member medical records.

Except as otherwise provided in this section, if any copyrightable or patentable material is
developed by the Contractor in the course of performance of this contract, the Federal government,
AHCCCSA and the State of Arizona shall have a royalty-free, nonexclusive, and irrevocable right to
reproduce, publish, or otherwise use, and to authorize others to use, the work for state or
Federal government purposes. The Contractor shall additionally be subject to the applicable
provisions of 45 CFR Part 74 and 45 CFR Parts 6 and 8.

40) AHCCCSA RIGHT TO OPERATE CONTRACTOR

If, in the judgment of AHCCCSA, the Contractor’s performance is in material breach of the contract
or the Contractor is insolvent, AHCCCSA may directly operate the Contractor to assure delivery of
care to members enrolled with the Contractor until cure by the Contractor of its breach, by
demonstrated financial solvency or until the successful transition of those members to other
contractors.

					
	 	 	 	 	 
	 
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If AHCCCS undertakes direct operation of the Contractor, AHCCCS, through
designees appointed by the Director, shall be vested with full and exclusive
power of management and control of the Contractor as necessary to ensure the
uninterrupted care to persons and accomplish the orderly transition of
persons to a new or existing Contractor, or until the Contractor corrects the
Contract Performance failure to the satisfaction of AHCCCS. AHCCCS shall have
the power to employ any necessary assistants, to execute any instrument in
the name of the Contractor, to commence, defend and conduct in its name any
action or proceeding in which the Contractor may be a party.

All reasonable expenses of AHCCCS related to the direct operation of the
Contractor, including attorney fees, cost of preliminary or other audits of
the Contractor and expenses related to the management of any office or other
assets of the Contractor, shall be paid by the Contractor or withheld from
payment due from AHCCCS to the Contractor.

41) AUDITS AND INSPECTIONS

The Contractor shall comply with all provisions specified in applicable
AHCCCS Rule R9-22-521 and AHCCCS policies and procedures relating to the
audit of the Contractor’s records and the inspection of the Contractor’s
facilities. The Contractor shall fully cooperate with AHCCCSA staff and
allow them reasonable access to the Contractor’s staff, subcontractors,
members, and records. [42 CFR 438.6(g)]

At any time during the term of this contract, the Contractor’s or any
subcontractor’s books and records shall be subject to audit by AHCCCSA
and, where applicable, the Federal government, to the extent that the
books and records relate to the performance of the contract or
subcontracts. [42 CFR 438.242(b)(3)]

AHCCCSA, or its duly authorized agents, and the Federal government may
evaluate through on-site inspection or other means, the quality,
appropriateness and timeliness of services performed under this contract.

42)
LOBBYING

No funds paid to the Contractor by AHCCCSA, or interest earned thereon, shall
be used for the purpose of influencing or attempting to influence an officer
or employee of any Federal or State agency, a member of the United States
Congress or State Legislature, an officer or employee of a member of the
United States Congress or State Legislature in connection with awarding of
any Federal or State contract, the making of any Federal or State grant, the
making of any Federal or State loan, the entering into of any cooperative
agreement, and the extension, continuation, renewal, amendment or
modification of any Federal or State contract, grant, loan, or cooperative
agreement. The Contractor shall disclose if any funds, other than those paid
to the Contractor by AHCCCSA, have been used or will be used to influence the
persons and entities indicated above and will assist AHCCCSA in making such
disclosures to CMS.

43) CHOICE OF FORUM

The parties agree that jurisdiction over any action arising out of or
relating to this contract shall be brought or filed in a court of
competent jurisdiction located in the State of Arizona.

44)
DATA CERTIFICATION

The Contractor shall certify that financial and encounter data submitted to
AHCCCS is complete, accurate and truthful. Certification of financial and
encounter data must be submitted concurrently with the data. Certification
may be provided by the Contractor CEO, CFO or an individual who is delegated
authority to sign for, and who report directly to the CEO or CFO. 42 CFR
438.604 et seq.

45) OFF SHORE PERFORMANCE OF WORK PROHIBITED

Due to security and identity protection concerns, direct services under this
contract shall be performed within the borders of the United States. Any
services that are described in the specifications or scope of work that
directly serve the State of Arizona or its clients and may involve access to
secure or sensitive data or personal client data or development or
modification of software for the State shall be performed within the borders
of the United States. Unless specifically stated otherwise in the
specifications, this definition does not apply to

					
	 	 	 	 	 
	 
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indirect or “overhead” services, redundant back-up services or services that are
incidental to the performance of the contract. This provision applies to work performed by
subcontractors at all tiers.

46) FEDERAL IMMIGRATION AND NATIONALITY ACT

The Contractor shall comply with all federal, state and local immigration laws and regulations
relating to the
immigration status of their employees during the term of the contract. Further, the Contractor
shall flow down
this requirement to all subcontractors utilized during the term of the contract. The State shall
retain the right to
perform random audits of Contractor and subcontractor records or to inspect papers of any employee
thereof to
ensure compliance. Should the State determine that the Contractor and/or any subcontractors be
found
noncompliant, the State may pursue all remedies allowed by law, including, but not limited to;
suspension of
work, termination of the contract for default and suspension and/or debarment of the Contractor.

47) IRS W-9 FORM

In order to receive payment under any resulting contract, the Contractor shall have a current IRS
W-9 Form on file with the State of Arizona.

48) CONTINUATION OF PERFORMANCE THROUGH TERMINATION

The Contractor shall continue to perform, in accordance with the requirements of the contract, up
to the date of
termination and as directed in the termination notice.

[END OF SECTION E]

					
	 	 	 	 	 
	 
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REQUIREMENTS AND CONTRACT CLAUSES
	 	Contract/RFP No. YH8-0001

SECTION
F: INDEX — PROGRAM REQUIREMENTS AND CONTRACT CLAUSES

A

Accumulated Fund Deficit, 65

Advance Directives, 40

Advances, 66 
Ambulatory, 23, 27

Annual Enrollment, 21

Appointment Standards, 54

Auto-Assignment, 19, 20, 21

Auto-Assignment Algorithm, 19, 20, 21

B

BBA, 21, 26, 88

Behavioral Health, 23, 24, 25, 27, 32, 33, 34, 35, 36, 37, 54, 56

Breast and Cervical Cancer, 17, 19, 68, 77

Business Continuity Plan, 86

C

Capitalization, 64

Capitation, 20, 21, 65, 67, 68, 69, 70, 82, 85

Chiropractic, 25

Claims

   Clean, 60, 73

   Payment, 59, 62

Compensation, 67

Contraceptive, 27

Convalescent Care, 29, 31

Coordination of Benefits, 74

Coordination of Care, 33

Copayment, 54, 70

Copayments, 77

Cost Avoidance, 75

Cost Sharing, 17, 19, 56, 75, 77

Covered Services, 23, 33

Credentialing, 41, 49 
CRS, 22, 24

Cultural Competency, 39

Cure Notice, 85

D

Data Exchange, 81

Denials, 60, 74

Dental, 23, 25, 54, 56

Dialysis, 22, 25

Disenrollment, 82

Distributions, 66

DME, 22, 28, 29

Dual Eligibles, 56, 77

E

Eligibility

  CRS, 24

Emergency, 17, 25, 26, 28, 31, 54, 55, 58

Encounter, 36, 55, 56, 59, 68, 69, 73, 81, 82, 83,85

Enrollment, 18, 21, 82

   Annual, 18, 21, 22, 73

   Guarantees, 20

   Open, 18, 21

EPSDT, 25, 27, 29, 33, 36, 37, 45, 54, 56

F

Family Planning, 17, 19, 26, 27, 56, 67

Fee-for-Service, 23, 29, 63, 76, 82

Financial Viability Standards, 66

Formulary, 30, 33, 86

FQHC, 55

Fraud and Abuse, 40, 56, 78

Freedom to Work, 17, 19

G

Geographic
Service Area, 16, 19, 21, 49, 62, 64, 66, 68, 84

Grievance, 47

H

HIFA, 18,
19, 20, 68, 77

HIFA Parents, 18, 19, 20, 68, 77

HIFA PARENTS, 18, 19, 20, 77

HIPAA, 81

HIV/AIDS, 27, 28, 40, 52, 67, 68, 69

Home Health, 22, 27, 40, 54

Hospice, 27, 40

Hospital Subcontracting, 61

					
	 	 	 	 	 
	 
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	INDEX — PROGRAM
REQUIREMENTS AND CONTRACT CLAUSES	 	Contract/RFP No. YH8-0001
	 
	 	 

I

IBNR, 16

Identification Cards, 21

Immunizations, 27, 35, 56

Indian Health Service, 17, 18, 20, 22, 28, 31

Inpatient, 25, 27, 28, 30, 31, 32, 33, 36, 48, 54, 69, 71, 72, 73, 74

Investments, 66

K

KidsCare,
18, 19, 68, 77

L

Laboratory, 27, 28, 33, 54, 56

Limited English Proficiency (LEP), 38

Loans, 66

M

Management-Services,
33, 63, 64

Maternity, 28, 53, 55, 56

Medicaid in the Public Schools (MIPS), 34, 35

Medical Expense Deduction, 67

Medical Foods, 28

Member

    Education, 32

    Handbook, 38

    Information, 37, 38, 52

    Mainstreaming, 21

    Surveys, 39

    Transition, 22

Midwives, 28, 53

N

Network Management, 50

Non-Contracting Provider, 65

Nurse Practitioners, 28, 52, 53

Nursing Facility, 22, 29, 40, 62, 63, 71, 73, 74

Nutrition, 29

O

Observation, 27 
Omission, 81

Optometry, 26

Outpatient, 23, 25, 27, 30, 31, 54, 61

P

Performance Bond, 64, 65

Performance Standards, 25, 27, 43, 44, 45, 82

Periodicity Schedule, 25, 27, 33, 45

Pharmacy, 42, 48, 69

Physician Assistants, 28, 53

Physician Incentives, 63

Podiatry, 29

Postpartum Care, 28, 44, 53

Post-stabilization, 26, 29, 30

Pregnancy, 22, 26, 28, 30, 53

    Terminations, 30

Prenatal Care, 28, 55, 70, 75

Prescription Drugs, 30, 54, 80

Prescription Medication, 25, 30, 33, 54, 80

Primary Care Physician, 25, 28, 29, 30, 33, 34, 39, 40, 41, 48, 52,
53, 54, 55, 56, 81

Prior Authorization, 22, 25, 30, 42, 56, 60, 62

Prior Period Coverage, 20, 33, 67, 68, 69, 71, 72, 82

Provider, 50, 52, 53, 55, 56

Provider Manual, 55, 59

Provider Registration, 56

Q

QMB, 19

Quality Management, 35, 36, 37, 41

R

Radiology, 27, 30, 54

Rate Code, 69, 71, 82

RBHA, 32, 33, 56

Referral, 25, 31, 32, 33, 36, 37, 52, 53, 54, 56, 76, 77

Rehabilitation, 24, 29, 30, 74 

Reinsurance, 56, 62, 67, 68, 71, 72, 73, 74, 76, 82

Related Party, 61

Reporting Requirements, 81, 83

Respiratory, 30 

Reviews, 84

REP, 84, 85, 88

Risk Sharing, 27, 69

					
	 	 	 	 	 
	 
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	INDEX — PROGRAM
REQUIREMENTS AND CONTRACT CLAUSES
	 	Contract/RFP No. YH8-0001

Roster, 19, 82

S

Sanctions, 44, 63, 66, 85

SOBRA, 17, 18, 27, 65, 67, 68, 71

SOBRA Family Planning, 17, 27, 67, 71

SSI, 17, 18, 19, 68

Staff Requirements, 35

Sterilization, 27

Subcontract, 22, 28, 55, 57, 58,59, 60, 62, 93

Subcontractor, 22, 56, 57, 58, 59, 95, 98

Supplies, 25, 27, 28, 29, 54

T

TANF, 17

Technological Advancement, 86

Third Party, 16, 35, 59, 62, 68, 74, 75, 77, 92

Third Party Liability, 74

Ticket to Work, 17, 19

Title IX, 17, 18, 19, 20, 28, 33, 55, 67, 68, 69, 71, 72, 93

Title IX Waiver, 17, 18, 67, 68, 69, 71, 72

Title XXI, 17, 18, 19, 20, 28, 33, 77

Transplants, 22, 25, 30, 72

Transportation, 22, 26, 31, 33, 35, 55, 75

Triage, 31, 33

 U

Utilization Management, 37, 42

V

Vaccine for Children, 35

Vision, 26, 56

					
	 	 	 	 	 
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	ATTACHMENT A: MINIMUM SUBCONTRACT PROVISIONS
	 	Contract/RFP No. YH04-0001

ATTACHMENT A: MINIMUM SUBCONTRACT PROVISIONS

For the sole purpose of this Attachment, the following definitions apply:

“Subcontract”
means any contract between the Contractor and a third party for the performance of
any or all services or requirements specified under the Contractor’s contract with AHCCCS.

“Subcontractor” means any third party with a contract with the Contractor for the provision of any
or all services or requirements specified under the Contractor’s contract with AHCCCS.

Subcontractors who provide services under both the AHCCCS ALTCS and the Acute Care Program please
see the following:

	 	•	 	Rules for the ALTCS are found in Arizona Administrative Code (AAC) Tide 9, Chapter
28. AHCCCS statutes for long term care are generally found in Arizona Revised Statue (ARS) 36,
Chapter 29, Article 2.

	 	•	 	Rules for the Acute Care Program are found in AAC Title 9, Chapter 22. AHCCCS statutes for the
Acute Care Program are generally found in ARS 36, Chapter 29, Article 1. Rules for the
KidsCare
Program are found in AAC Title 9, Chapter 31 and the statutes for KidsCare Program may be
found in
ARS 36, Chapter 29, Article 4.

All statutes, rules and regulations cited in this attachment are listed for reference purposes
only and are not intended to be all inclusive.

[The
following provisions must be included verbatim in every contract.]

1. ASSIGNMENT AND DELEGATION OF RIGHTS AND RESPONSIBILITIES

No payment due the Subcontractor under this subcontract may be assigned without the prior
approval of the Contractor. No assignment or delegation of the duties of this subcontract shall
be valid unless prior written approval is received from the Contractor. (AAC R2-7-305)

2. AWARDS OF OTHER SUBCONTRACTS

AHCCCSA and/or the Contractor may undertake or award other contracts for additional or related
work to the work performed by the Subcontractor and the Subcontractor shall fully cooperate with
such other contractors, subcontractors or state employees. The Subcontractor shall not commit or
permit any act which will interfere with the performance of work by any other contractor,
subcontractor or state employee. (AAC R2-7-308)

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

By signing this subcontract, the Subcontractor certifies that it has not engaged in any violation
of the Medicare Anti-Kickback statute (42 USC §§1320a-7b)
or the “Stark I” and “Stark II” laws
governing related-entity referrals (PL 101-239 and PL 101-432) and compensation there from. If
the Subcontractor provides laboratory testing, it certifies that it has complied with 42 CFR
§411.361 and has sent to AHCCCSA simultaneous copies of the information required by that rule to
be sent to the Centers for Medicare and Medicaid Services. (42 USC
§§1320a-7b; PL 101-239 and PL
101-432; 42 CFR §411.361)

4. CERTIFICATION OF TRUTHFULNESS OF REPRESENTATION

By signing this subcontract, the Subcontractor certifies that all representations set forth herein
are true to the best of its knowledge.

					
	 	 	 	 	 
	 
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	ATTACHMENT A: MINIMUM SUBCONTRACT PROVISIONS
	 	Contract/RFP No. YH04-0001

5. CLINICAL LABORATORY IMPROVEMENT AMENDMENTS OF 1988

The Clinical Laboratory Improvement Amendment (CLIA) of 1988 requires laboratories and other
facilities that test human specimens to obtain either a CLIA Waiver or CLIA Certificate in
order to obtain reimbursement from the Medicare and Medicaid (AHCCCS) programs. In addition,
they must meet all the requirements of 42 CFR 493, Subpart A.

To comply with these requirements, AHCCCSA requires all clinical laboratories to provide
verification of CLIA
Licensure or Certificate of Waiver during the provider registration process. Failure to do so shall
result in either a
termination of an active provider ID number or denial of initial registration. These requirements
apply to all
clinical laboratories.

Pass-through billing or other similar activities with the intent of avoiding the above
requirements are prohibited. The Contractor may not reimburse providers who do not comply with
the above requirements. (CLIA of 1988; 42 CFR 493, Subpart A)

6. COMPLIANCE WITH AHCCCSA RULES RELATING TO AUDIT AND INSPECTION

The Subcontractor shall comply with all applicable AHCCCS Rules and Audit Guide relating to the
audit of the Subcontractor’s records and the inspection of the Subcontractor’s facilities. If
the Subcontractor is an inpatient facility, the Subcontractor shall file uniform reports and
Title XVIII and Title XIX cost reports with AHCCCSA. (ARS 41-2548; 45 CFR 74.48 (d))

7. COMPLIANCE WITH LAWS AND OTHER REQUIREMENTS

The Subcontractor shall comply with all federal, State and local laws, rules, regulations,
standards and executive orders governing performance of duties under this subcontract, without
limitation to those designated within this subcontract. (42 CFR 434.70) [42 CFR 438.6(1)]

8. CONFIDENTIALITY REQUIREMENT

Confidential information shall be safeguarded pursuant to 42 CFR Part 431, Subpart F, ARS
§36-107, 36-2932, 41-1959 and 46-135, AHCCCS Rules and the Health Insurance Portability and
Accountability Act (CFR 164).

9. CONFLICT IN INTERPRETATION OF PROVISIONS

In the event of any conflict in interpretation between provisions of this subcontract and the
AHCCCS Minimum Subcontract Provisions, the latter shall take precedence.

10. CONTRACT CLAIMS AND DISPUTES

Contract claims and disputes shall be adjudicated in accordance with AHCCCS Rules.

11. ENCOUNTER DATA REQUIREMENT

If the Subcontractor does not bill the Contractor (e.g., Subcontractor is capitated), the
Subcontractor shall submit encounter data to the Contractor in a form acceptable to AHCCCSA.

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

AHCCCSA or the U.S. Department of Health and Human Services may evaluate, through inspection or
other means, the quality, appropriateness or timeliness of services performed under this
subcontract.

					
	 	 	 	 	 
	 
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	ATTACHMENT A: MINIMUM SUBCONTRACT PROVISIONS
	 	Contract/RFP No. YH04-0001

13. FRAUD AND ABUSE

If the Subcontractor discovers, or is made aware, that an incident of suspected fraud or abuse has
occurred, the Subcontractor shall report the incident to the prime Contractor as well as to
AHCCCSA, Office of Program Integrity. All incidents of potential fraud should be reported to
AHCCCSA, Office of the Director, Office of Program Integrity.

14. GENERAL INDEMNIFICATION

The parties to this contract agree that AHCCCS shall be indemnified and held harmless by the
Contractor and Subcontractor for the vicarious liability of AHCCCS as a result of entering into
this contract. However, the parties further agree that AHCCCS shall be responsible for its own
negligence. Each party to this contract is responsible for its own negligence.

15. INSURANCE

[This provision applies only if the Subcontractor provides services directly to AHCCCS members]

The Subcontractor shall maintain for the duration of this subcontract a policy or policies of
professional liability insurance, comprehensive general liability insurance and automobile
liability insurance in amounts that meet Contractor’s requirements. The Subcontractor agrees that
any insurance protection required by this subcontract, or otherwise obtained by the Subcontractor,
shall not limit the responsibility of Subcontractor to indemnify, keep and save harmless and defend
the State and AHCCCSA, their agents, officers and employees as provided herein. Furthermore, the
Subcontractor shall be fully responsible for all tax obligations, Worker’s Compensation Insurance,
and all other applicable insurance coverage, for itself and its employees, and AHCCCSA shall have
no responsibility or liability for any such taxes or insurance
coverage. (45 CFR Part 74) The
requirement for Worker’s Compensation Insurance does not apply when a Subcontractor is exempt under
ARS 23-901, and when such Subcontractor executes the appropriate waiver (Sole
Proprietor/Independent Contractor) form.

16. LIMITATIONS ON BILLING AND COLLECTION PRACTICES

Except as provided in federal and state law and regulations, the Subcontractor shall not bill, or
attempt to collect payment from a person who was AHCCCS eligible at the time the covered service(s)
were rendered, or from the financially responsible relative or representative for covered services
that were paid or could have been paid by the System.

17. MAINTENANCE OF REQUIREMENTS TO DO BUSINESS AND PROVIDE SERVICES

The Subcontractor shall be registered with AHCCCSA and shall obtain and maintain all licenses,
permits and authority necessary to do business and render service under this subcontract and, where
applicable, shall comply with all laws regarding safety, unemployment insurance, disability
insurance and worker’s compensation.

18. NON-DISCRIMINATION REQUIREMENTS

The Subcontractor shall comply with State Executive Order No. 99-4, which mandates that all
persons, regardless of race, color, religion, gender, national origin or political affiliation,
shall have equal access to employment opportunities, and all other applicable Federal and state
laws, rules and regulations, including the Americans with Disabilities Act and Title VI. The
Subcontractor shall take positive action to ensure that applicants for employment, employees, and
persons to whom it provides service are not discriminated against due to race, creed, color,
religion, sex, national origin or disability. (Federal regulations,
State Executive order # 99-4)

 

					
	 
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	ATTACHMENT A: MINIMUM SUBCONTRACT PROVISIONS
	 	Contract/RFP No. YH04-0001

19. PRIOR AUTHORIZATION AND UTILIZATION MANAGEMENT

The Contractor and Subcontractor shall develop, maintain and use a system for Prior Authorization
and Utilization Review that is consistent with AHCCCS Rules and the Contractor’s policies.

20. RECORDS RETENTION

The Subcontractor shall maintain books and records relating to covered services and expenditures
including reports to AHCCCSA and working papers used in the preparation of reports to AHCCCSA. The
Subcontractor shall comply with all specifications for record keeping
established by AHCCCSA. All
books and records shall be maintained to the extent and in such detail as required by AHCCCS Rules
and policies. Records shall include but not be limited to financial statements, records relating to
the quality of care, medical records, dental records, prescription files and other records
specified by AHCCCSA.

The
Subcontractor agrees to make available at its office at all reasonable times during the term
of this contract and the period set forth in the following paragraphs, any of its records for
inspection, audit or reproduction by any authorized representative of AHCCCSA, State or Federal
government.

The Subcontractor shall preserve and make available all records for a period of five years from the
date of final payment under this contract unless a longer period of time is required by law..

If this contract is completely or partially terminated, the records relating to the work terminated
shall be preserved and made available for a period of five years from the date of any such
termination. Records which relate to grievances, disputes, litigation or the settlement of claims
arising out of the performance of this contract, or costs and expenses of this contract to which
exception has been taken by AHCCCSA, shall be retained by the
Subcontractor for a period of five
years after the date of final disposition or resolution thereof unless a longer period of time is
required by law. (45 CFR 74.53; 42 CFR 433.17; ARS 41-2548)

21. SEVERABILITY

If any provision of these standard subcontract terms and conditions is held invalid or
unenforceable, the remaining provisions shall continue valid and enforceable to the full extent
permitted by law.

22. SUBJECTION OF SUBCONTRACT

The terms of this subcontract shall be subject to the applicable material terms and conditions of
the contract existing between the Contractor and AHCCCSA for the
provision of covered services.

23. TERMINATION OF SUBCONTRACT

AHCCCSA
may, by written notice to the Subcontractor, terminate this subcontract if it is
found, after notice and hearing by the State, that gratuities in the form of entertainment, gifts,
or otherwise were offered or given by the Subcontractor, or any agent or representative of the
Subcontractor, to any officer or employee of the State with a view towards securing a contract or
securing favorable treatment with respect to the awarding, amending or the making of any
determinations with respect to the performance of the Subcontractor; provided, that the existence
of the facts upon which the state makes such findings shall be in issue and may be reviewed in any
competent court. If the subcontract is terminated under this section, unless the Contractor is a
governmental agency, instrumentality or subdivision thereof, AHCCCSA shall be entitled to a
penalty, in addition to any other damages to which it may be entitled by law, and to exemplary
damages in the amount of three times the cost incurred by the Subcontractor in providing any such
gratuities to any such officer or employee. (AAC R2-5-501; ARS 41-2616 C; 42 CFR 434.6, a. (6))

 

					
	 
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	ATTACHMENT A: MINIMUM SUBCONTRACT PROVISIONS
	 	Contract/RFP No. YH04-0001

24. VOIDABILITY OF SUBCONTRACT

This subcontract is voidable and subject to immediate termination by AHCCCSA upon the
Subcontractor becoming insolvent or filing proceedings in bankruptcy or reorganization under the
United States Code, or upon assignment or delegation of the subcontract without AHCCCSA’s prior
written approval.

25. WARRANTY OF SERVICES

The Subcontractor, by execution of this subcontract, warrants that it has the ability, authority,
skill, expertise and capacity to perform the services specified in
this contract.

26.
OFF-SHORE PERFORMANCE OF WORK PROHIBITED

Due to security and identity protection concerns, direct services under this contract shall be
performed within the borders of the United States. Any services that are described in the
specifications or scope of work that directly serve the State of Arizona or its clients and may
involve access to secure or sensitive data or personal client data or development or modification
of software for the State shall be performed within the borders of the United States. Unless
specifically stated otherwise in specifications, this definition does not apply to indirect or
“overhead” services, redundant back-up services or services that are incidental to the performance
of the contract. This provision applies to work performed by subcontractors at all tiers.

27. FEDERAL IMMIGRATION AND NATIONALITY ACT

The Subcontractor shall comply with all federal, state and local immigration laws and
regulations relating to the immigration status of their employees
during the term of the contract.
Further, the Subcontractor shall flow down this requirement to all subcontractors utilized during
the term of the contract. The State shall retain the right to perform random audits of Contractor
and subcontractor records or to inspect papers of any employee thereof to ensure compliance. Should
the State determine that the Contractor and/or any subcontractors be found noncompliant, the State
may pursue all remedies allowed by law, including, but not limited to; suspension of work,
termination of the contract for default and suspension and/or debarment of the Contractor.

					
	 	 	 	 	 
	 
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	ATTACHMENT
B: MINIMUM NETWORK STANDARDS
	 	Contract/RFP No. YH04-0001

ATTACHMENT
B: MINIMUM NETWORK STANDARDS (By Geographic Service Area)

INSTRUCTIONS:

Contractors shall have in place an adequate network of providers capable of meeting contract
requirements. The information that follows describes the minimum network requirements by
Geographic Service Area (GSA). Irs some GSA’s there are required service sites located outside
of the geographical boundary of a GSA. The reason for this relates to practical access to care.
In certain instances, a member must travel a much greater distance to receive services within
their assigned GSA, if the member were not allowed to receive services in an adjoining GSA or
state.

Split zip codes occur in some counties. Split zip codes are those which straddle two different
counties. Enrollment for members residing in these zip codes is based upon the county and GSA to
which the entire zip code has been assigned by AHCCCS. The Contractor shall be responsible for
providing services to members residing in the entire zip code that is assigned to the GSA for which
the Contractor has agreed to provide services. The split zip codes GSA assignments are as follows:

	 	 	 	 	 	 	 	 	 
	 	 	SPLIT BETWEEN	 	COUNTY ASSIGNED	 	 
	ZIP CODE	 	THESE COUNTIES	 	TO	 	ASSIGNED GSA
	85220

	 	Pinal and Maricopa
	 	Maricopa
	 	 	12	 
	85242

	 	Pinal and Maricopa
	 	Maricopa
	 	 	12	 
	85292

	 	Gila and Pinal
	 	Gila
	 	 	8	 
	85342

	 	Yavapai and Maricopa
	 	Maricopa
	 	 	12	 
	85358

	 	Yavapai and Maricopa
	 	Maricopa
	 	 	12	 
	85390

	 	Yavapai and Maricopa
	 	Maricopa
	 	 	12	 
	85643

	 	Graham and Cochise
	 	Cochise
	 	 	14	 
	85645

	 	Pima and Santa Cruz
	 	Santa Cruz
	 	 	10	 
	85943

	 	Apache and Navajo
	 	Navajo
	 	 	4	 
	86336

	 	Coconino and Yavapai
	 	Yavapai
	 	 	6	 
	86351

	 	Coconino and Yavapai
	 	Coconino
	 	 	4	 
	86434

	 	Mohave and Yavapai
	 	Yavapai
	 	 	6	 
	86340

	 	Coconino and Yavapai
	 	Yavapai
	 	 	6	 

If outpatient specialty services (OB, family planning, and pediatrics) are not included in the
primary care provider contract, at least one subcontract is required for each of these
specialties in the service sites specified.

In Tucson (GSA 10) and Metropolitan Phoenix (GSA 12), the Contractor must demonstrate its ability
to provide PCP, dental and pharmacy services so that members don’t need to travel more than 5
miles from their residence. Metropolitan Phoenix is defined on the Minimum Network Standard page
specific to GSA #12.

At a minimum, the Contractor shall have a physician with admitting and treatment privileges with
each hospital in its network. Contractors in GSA 10 and/or GSA 12 must have at least one hospital
contract in each service district. This requirement is part of the Hospital Subcontracting and
Reimbursement. Pilot Program, described more fully in Section D, Paragraph 35, Hospital
Reimbursement A list of Phoenix and Tucson area hospitals are included.

Provider
categories  required at various service delivery sites included in the Service Area Minimum
Network Standards are indicated as follows:

					
	 	 	 	 	 
	 
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	ATTACHMENT B: MINIMUM NETWORK STANDARDS
	 	Contract/RFP No. YH04-0001

	 	 	 
	H

	 	Hospitals
	P

	 	Primary Care Providers (physicians, certified nurse
practitioners and physician assistants)
	D

	 	Dentists
	Ph

	 	Pharmacies

					
	 	 	 	 	 
	 
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	ATTACHMENT B: MINIMUM NETWORK STANDARDS
	 	Contract/RFP No. YH04-0001

HOSPITALS
IN PHOENIX METROPOLITAIN AREA (By service district. by zip
code)

DISTRICT 1

	 	 	 
	85006

	 	Banner Good Samaritan Medical Center
	 

	 	St. Luke’s Medical Center
	85008

	 	Maricopa Medical Center
	85013

	 	St. Joseph’s Hospital & Medical Center
	85020

	 	John C. Lincoln Hospital — North Mountain

DISTRICT 2

	 	 	 
	85015

	 	Phoenix Baptist Hospital & Medical Center
	85027

	 	John C. Lincoln Hospital — Deer Valley
	85037

	 	Banner Estrella Medical Center
	85306

	 	Banner Thunderbird Medical Center
	85308

	 	Arrowhead Community Hospital & Medical Center
	85338

	 	West Valley Hospital
	85351

	 	Walter O. Boswell Memorial Hospital
	85375

	 	Del E. Webb Memorial Hospital

DISTRICT
3

	 	 	 
	85031

	 	Paradise Valley Hospital
	85054

	 	Mayo Clinic Hospital
	85251

	 	Scottsdale Healthcare — Osborn
	85261

	 	Scottsdale Healthcare — Shea

DISTRICT
4

	 	 	 
	85201

	 	Mesa General Hospital Medical Center
	 

	 	Mesa Lutheran Hospital
	 

	 	Banner Mesa Medical Center
	85202

	 	Banner Desert Medical Center
	85206

	 	Valley Lutheran Hospital
	85224

	 	Chandler Regional Hospital
	85281

	 	Tempe St. Luke’s Hospital

					
	 	 	 	 	 
	 
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	ATTACHMENT B: MINIMUM
NETWORK STANDARDS
	 	Contract/RFP No. YH04-0001

HOSPITALS
IN TUCSON METROPOLITAN AREA (By service district. by zip code)

DISTRICT
1

	 	 	 
	85719

	 	University Medical Center
	85741

	 	Northwest Hospital
	85745

	 	Carondelet St. Mary’s Hospital

DISTRICT
2

	 	 	 
	85711

	 	Carondelet St. Joseph’s Hospital
	85712

	 	El Dorado Hospital
	 

	 	Tucson Medical Center
	85713

	 	Kino Community Hospital

					
	 	 	 	 	 
	 
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	 	CYE ‘07 Acute Care Renewal
	 
	 	 	 	Final

August 16, 2006

Table of Contents

			
	ATTACHMENT F: PERIODIC REPORT REQUIREMENTS
	 	Contract/RFP No. YH04-0001

ATTACHMENT F: PERIODIC REPORT REQUIREMENTS

The following table is a summary of the periodic reporting requirements for AHCCCS acute care
contractors and is subject to change at any time during the term of the contract. The table is
presented for convenience only and should not be construed to limit the Contractor’s
responsibilities in any manner. “Reporting Guide” refers to the Reporting Guide for Acute Health
Care Contractors with the Arizona Health Care Cost Containment System,

	 	 	 	 	 	 	 
	REPORT	 	WHEN
DUB	 	SOURCE/REFERENCE	 	SEND TO:
	DHCM
Finance
	 	 
	 	 
	 	 
	Monthly Financial
Reporting Package

	 	30 days after the
end of the month, only when
required by AHCCCSA
	 	Reporting Guide
	 	Financial Manager
	Quarterly Financial
Reporting Package

	 	60 days after the
end of each quarter
	 	Reporting Guide
	 	Financial Manager
	FQHC Member
Information

	 	60 days after the
end of each quarter
	 	Reporting Guide Section D,
Paragraph 34
	 	Financial Manager
	HIV/AIDS Report

	 	60 days after the
end of each quarter
	 	Reporting Guide Section D,
Paragraph 53
	 	Financial Manager
	Draft Annual Financial
Reporting Package

	 	90 days after the
end of each fiscal
year
	 	Reporting Guide
	 	Financial Manager
	Final Annual Financial
Reporting Package

	 	120 days after the
end of each fiscal
year
	 	Reporting Guide
	 	Financial Manager
	Non-Transplant
Catastrophic Reinsurance
covered Diseases

	 	Annually, within 30
days of the beginning of
the
contract year,
enrollment to the plan, and
when newly diagnosed.
	 	Section D, Paragraph 57
	 	Reinsurance
Manager
	Cost Allocation Plans

	 	Within 30 days of
the effective date
	 	Section D, Paragraph 43
	 	Financial Manager
	Subcontracts

	 	As required per
Contract
	 	Section D, Paragraph 37
	 	Financial Manager
	TPA Subcontracts

	 	Within 30 days of
the effective date
	 	Section D, Paragraph 37
	 	Financial Manager
	Physician Incentive Plan
(PIP) reporting

	 	Suspended by CMS
	 	Section D, Paragraph 42
	 	Financial Manager
	Advances/Loans/Equity
Distributions

	 	Submit for approval
prior to effective
date
	 	Section D, Paragraph 49
	 	Financial Manager
	 
	 	 	 	 	 	 
	DHCM
Health Plan Operations
	 	 	 	 	 	 
	Report of all
subcontracts which delegate
Contractor duties and
responsibilities

	 	90 days
after the beginning
of the contract
year
	 	Section D, Paragraph 37
	 	Operations
and Compliance
Officer
	Provider Affiliation 

Transmission

	 	15 days
after the end of
each quarter
	 	Provider Affiliation
Transmission Manual, submitted to
PMMIS Provider-to-Contractor
FTP
	 	Operations
and Compliance
Officer
	Claims Dashboard

	 	15th
day of each
month following the
reporting
period
	 	Section D, Paragraph 38
	 	Operations
and Compliance
Officer
	Claim recoupments

>$50,000

	 	Upon identification by

Contractor
	 	Section D, Paragraph 38
	 	Operations
and Compliance
Officer

					
	 	 	 	 	 
	 
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Table of Contents

			
	ATTACHMENT F: PERIODIC REPORT REQUIREMENTS
	 	Contract/RFP No. YH04-0001

	 	 	 	 	 	 	 
	REPORT	 	WHEN
DUB	 	SOURCE/REFERENCE	 	SEND TO:
	Administrative Measures

	 	15th day of each
month following the reporting
period
	 	Section D, Paragraph 24
	 	Operations
and Compliance
Officer
	Enrollee Appeal and Provider
Claim Dispute Report

	 	45 days after the end of
each quarter
	 	Section D, Paragraph 26
	 	Operations
and Compliance
Officer
	Enrollee Grievance Report

	 	45 days after the end of
each quarter
	 	Section D, Paragraph 26
	 	Operations
and Compliance
Officer
	Provider Network Development
and Management Plan

	 	45 days after the first day
of a new contract year
	 	Section D, Paragraph 27
	 	Operations
and Compliance
Officer
	Cultural Competency Plan

	 	45 days after the first day
of a new contract year
	 	ACOM Cultural Competency

Policy
	 	Operations
and
Compliance
Officer
	Business Continuity and
Recovery Plan

	 	15 days after the beginning
of each contract year
	 	ACOM Business Continuity
and Recovery Plan Policy
	 	Operations
and Compliance
Officer
	Marketing Attestation 

Statement

	 	45 days after the beginning
of each contract year
	 	ACOM Marketing Outreach and
Incentives Policy
	 	Operations
and Compliance
Officer
	Marketing and Outreach
Materials

	 	30 days prior to
dissemination
	 	ACOM Marketing Outreach and
Incentives Policy
	 	Operations
and Compliance
Officer
	Member Handbook

	 	By August 15th
of contract year, or within 4
weeks of receiving annual
amendment, whichever is
later.
	 	Section D, Paragraph 18
	 	Operations
and Compliance
Officer
	Provider Network—Material 

Change

	 	Submit change for approval
prior to effective date
	 	Section D, Paragraph 29
	 	Operations
and Compliance
Officer
	Provider Network—Unexpected 

change

	 	Within one business day
	 	Section D, Paragraph 29
	 	Operations
and Compliance
Officer
	System Change Plan

	 	Six months prior to
implementation
	 	Section D, Paragraph 38
	 	Operations
and Compliance
Officer

	 	 	 	 	 	 	 
	REPORT	 	WHEN DUE	 	SOURCE/REFERENCE	 	SEND TO:
	DHCM
Data Analysis
	 	 	 	 	 	 
	Corrected Pended 

Encounter Data

	 	Monthly,
according to
established
schedule
	 	Encounter Manual
	 	Encounter

Administrator
	New Day Encounter

	 	Monthly,
according to
established
schedule
	 	Encounter Manual
	 	Encounter

Administrator
	Medical Records for 

Data Validation

	 	90 days after
the request
received from
AHCCCSA
	 	RFP Attachment I,

Encounter Submission

Requirements
	 	Encounter

Administrator

	 	 	 	 	 	 	 
	REPORT	 	WHEN DUE	 	SOURCE/REFERENCE	 	SEND TO:
	DHCM
Clinical Operations Management

Comprehensive
EPSDT Plan
including
Dental

	 	Annually on
December 15th
	 	RFP Section D, Paragraph 24
	 	DHCM/CQM
	EPSDT Progress Report
including Dental -

	 	15 days after
the end of each
quarter
	 	AMPM, Chapter 400
	 	DHCM/CQM

					
	 	 	 	 	 
	 
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Table of Contents

			
	ATTACHMENT F: PERIODIC REPORT REQUIREMENTS
	 	Contract/RFP No. YH04-0001

	 	 	 	 	 	 	 
	REPORT	 	WHEN
DUB	 	SOURCE/REFERENCE	 	SEND TO:
	Quarterly Update
	 	 	 	 	 	 
	Quality Management Plan
and Evaluation

	 	Annually on
December
15th
	 	AMPM, Chapter 900
	 	DHCM/CQM
	Monthly Pregnancy
Termination Report

	 	End of the month
following the
pregnancy
termination
	 	AMPM, Chapter 400
	 	DHCM/CQM
	Maternity Care Plan

	 	Annually on
December
15th
	 	AMPM, Chapter 400
	 	DHCM/CQM
	Sterilization

	 	Immediately
following

procedure
	 	AMPM, Chapter 400
	 	DHCM/CQM
	Semi-annual report of
number of pregnant women who
are HIV/AIDS positive

	 	30 days after
the end of the
2nd and
4th quarter
of each contract
year
	 	AMPM, Chapter 400
	 	DHCM/CQM
	Performance Improvement
Project Proposal
(initial/baseline year of the
project)

	 	Annually on
December
15th
	 	AMPM, Chapter 900
	 	DHCM/CQM
	Performance Improvement
Project Re-measurement
Report

	 	Annually on
December
15th
	 	AMPM, Chapter 900
	 	DHCM/CQM
	Performance Improvement
Project Final Report

	 	Within 180 days
of the end of the
project, as defined in
the project proposal
approved by AHCCCS
DHCM
	 	AMPM, Chapter 900
	 	DHCM/CQM
	QM Quarterly Report

	 	45 Days after
the end of each
quarter
	 	Section D, Paragraph 23
	 	DHCM/CQM
	Pediatric Immunization
Audit

	 	As requested
	 	Section D, Paragraph 24
	 	DHCM/CQM

	 	 	 	 	 	 	 
	REPORT	 	WHEN DUE	 	SOURCE/REFERENCE	 	SEND TO:
	DHCM
Medical Management
	 	 	 	 	 	 
	Quarterly Inpatient 

Hospital Showing

	 	15 days after
the end of each
quarter
	 	State Medicaid Manual and
the AMPM, Chapter 1000
	 	DHCM/MM
	Utilization Management
Plan and Evaluation

	 	Annually on

December
15th
	 	AMPM, Chapter 900
	 	DHCM/MM
	UM Quarterly Report

	 	45 Days after
the end of each
quarter
	 	Section D, Paragraph 23
	 	DHCM/MM
	HIV Specialty Provider 

List

	 	Annually, on
December
15th
	 	AMPM, Chapter 300
	 	DHCM/MM
	Transplant Report

	 	15 days after
the end of each
month
	 	AMPM, Chapter 1000
	 	DHCM/MM

	 	 	 	 	 	 	 
	REPORT	 	WHEN DUE	 	SOURCE/REFERENCE	 	SEND TO:
	Office
of Program Integrity

Provider Fraud/Abuse
Report

	 	Immediately
following
discovery
	 	Section D, Paragraph 62
	 	Office of
Program Integrity
Manager

					
	 	 	 	 	 
	 
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Table of Contents

	 	 	 	 
	ATTACHMENT F: PERIODIC REPORT REQUIREMENTS

	 	
	Contract/RFP No. YH04-0001

	 	 	 	 	 	 	 
	REPORT	 	WHEN DUB	 	SOURCE/REFERENCE	 	SEND TO:
	Eligible Person
Fraud/Abuse
Report

	 	Immediately
following
discovery
	 	Section D, Paragraph 62
	 	Office of
Program Integrity
Manager

	 	 	 	 	 	 	 
	REPORT	 	WHEN DUE	 	SOURCE/REFERENCE	 	SEND TO:
	Office
of the Director
	 	 	 	 	 	 
	Prescription
Drug Utilization
Report

	 	Quarterly,
within 45 days of
quarter end
	 	AMPM
	 	Pharmacy
Program
Administrator

	 	 	 	 	 	 	 
	REPORT	 	WHEN DUE	 	SOURCE/REFERENCE	 	SEND TO:
	As
Required/Needed

Contract Termination
Reports

	 	5 days after
the end of each
month
	 	Section D, Paragraph 1
	 	Financial Manager
	Nursing Facility Stay

	 	When a member
has been residing
in a nursing
facility for 75
days
	 	Section D, Paragraph 10,
Nursing Facility
	 	Division of Member
Services Assistant
Director
	Key Position Change

	 	Within 7 days
after an employee
leaves and as soon
as new hire has
taken place

Within 10
	 	Section D, Paragraph 16
	 	DHCM Assistant
Director
	Third Party Liability
Updates

	 	days of
discovery

Within 10
	 	Section D, Paragraph 58
	 	TPL Administrator
	Third Party Liability Case
Identification

	 	days of
discovery
	 	Section D, Paragraph 58
	 	TPL Administrator
	Certificate of Insurance

	 	Within 10
days of contract
award

	 	Section E, #25
	 	Contract Manager
	Generic Extra Credit
Requirement

	 	As required per your
contract
	 	Per Contract Award Requirement
	 	Per Your Contract

					
	 	 	 	 	 
	 
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Table of Contents

			
	ATTACHMENT G: AUTO-ASSIGNMENT ALGORITHM
	 	Contract/RFP No. YH04-0001

ATTACHMENT G: AUTO-ASSIGNMENT ALGORITHM

Members who do not have the right to choose a Contractor or members who have the right to choose
but do not exercise this right, are assigned to a Contractor through an auto-assignment algorithm.
The algorithm is a mathematical formula used to distribute members to the various Contractors in a
manner that is predictable and consistent with AHCCCSA goals.

The algorithm employs a data table and a formula to assign cases (a case may be a member or a
household of members) to Contractors using the target percentages developed. The algorithm data
table consists of all the geographic service areas (GSA) in the state, all Contractors serving each
GSA, and the target percentages by risk group within each GSA.

The Contractor farthest away from its target percentage within a GSA and risk group, the largest
negative difference, is assigned the next case for that GSA. The equation used is:

          (t/T)–P
= d

t = The total members assigned to the GSA, per risk group category, for the Contractor

T = The total members assigned to the GSA, per risk group category, all Contractors combined

P = The target percentage of members per risk group for the Contractor

d = The difference

The algorithm is calculated after each assignment to give a new difference for each Contractor.
When more than one Contractor has the same difference, and their differences are greater than all
other Contractors, the Contractor with the lowest Health Plan I.D. Number will be assigned the
case.

Assignment
by the algorithm applies to:

	 	1.	 	Members that are newly eligible to the AHCCCS program that did not choose a Contractor within
the prescribed time limits.
	 
	 	2.	 	Members whose assigned health plan is no longer available after the member moves to a new GSA
and did not choose a new Contractor within the prescribed time limits.
	 
	 	3.	 	Members whose assigned plan is no longer available at the beginning of a contract cycle that did
not choose a Contractor within the prescribed time limits.

All Contractors, within a given geographic service area (GSA) and for each risk group, will have a
placement in the algorithm and will receive members accordingly. A Contractor with a more favorable
target percentage in the algorithm will receive proportionally more members. Conversely, a
Contractor with a lower target percentage in the algorithm will receive proportionally fewer
members. The algorithm favors Contractors with both lower final bids and awarded rates. The
algorithm also favors those Contractors that score higher on selected Performance Measures (See
Section D, Paragraph 24, Performance Measures).

For Contractors in the Maricopa and Pima/Santa Cruz GSAs with fewer than 25,000 members statewide,
a temporary adjustment will be made to the algorithm formula in order to ensure a minimum
membership (see the discussion entitled “Adjustment Methodology for Contractors with Fewer than
25,000 Members” for more information).

Development of the Target Percentages

					
	 	 	 	 	 
	 
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Table of Contents

			
	ATTACHMENT G: AUTO-ASSIGNMENT ALGORITHM
	 	Contract/RFP No. YH04-0001

Beginning in CYE ‘06, the algorithm target percentages will be developed using the methodology
described below. However, for subsequent years, AHCCCS reserves the right to change the algorithm
methodology to assure assignments are made in the best interest of the AHCCCS program and the
State.

A Contractor’s placement in the algorithm is based upon the following three factors, which are
weighted as follows:

	 	 	 	 	 	 	 
	#	 	Factor	 	Weighting
	1

	 	The final capitation rate bid submitted by the
Contractor. Final bids that are below the bottom of the rate
range will be assigned to the bottom of the rate range for
development of the target percentages.
	 	 	30	%
	2

	 	The Contractor’s final awarded rate from AHCCCSA.
	 	 	30	%
	3

	 	The Contractor’s ranking in Well-Child visits, 3, 4,
5, and 6 Years of Age (weighted 75%) and Timeliness of
Prenatal Care (weighted 25%) Performance measures as reported
from the Data Warehouse at AHCCCS (measurement period CYE
2005, reported in CYE 2006).
	 	 	40	%

Points will be assigned to each Contractor by risk group by GSA. Based on the rankings of the
Final bid rates and the final awarded rates, each Contractor will be assigned a number of points
for each of these two components separately as follows:

TABLE
FOR FACTORS #1 AND #2

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
		 		 	2nd	 	3rd	 	4th	 	5th	 	6th	 	7th
	Number of	 	Lowest	 	Lowest	 	Lowest	 	Lowest	 	Lowest	 	Lowest	 	Lowest
	Awards in GSA	 	Rate	 	Rate	 	Rate	 	Rate	 	Rate	 	Rate	 	Rate
	2
	 	60	 	40	 	 	 	 	 	 	 	 	 	 
	3
	 	44	 	32	 	24	 	 	 	 	 	 	 	 
	4
	 	35	 	28	 	22	 	15	 	 	 	 	 	 
	5
	 	30	 	25	 	20	 	15	 	10	 	 	 	 
	6
	 	26	 	23	 	19	 	15	 	11	 	6	 	 
	7
	 	25	 	20	 	17	 	14	 	11	 	8	 	5

Contractors that have equal bids in a GSA for the same risk group will be given an equal
percentage of the points for all of the positions combined.

The third
component of the calculation, Performance Measure Rates(PMR), will be assigned a number
of points based on the Contractor’s ranking among the rates for the selected Performance Measures.
The higher the rate, the more points assigned. AHCCCS may update the algorithm assignment annually
based on the results of Factor #3. For this component, points will be assigned as follows:

TABLE FOR FACTOR #3

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
		 		 	2nd	 	3rd	 	4th	 	5th	 	6th	 	7th
	Number of	 	Highest	 	Highest	 	Highest	 	Highest	 	Highest	 	Highest	 	Highest
	Awards in GSA	 	PMR	 	PMR	 	PMR	 	PMR	 	PMR	 	PMR	 	PMR
	2
	 	60	 	40	 	 	 	 	 	 	 	 	 	 
	3
	 	44	 	32	 	24	 	 	 	 	 	 	 	 
	4
	 	35	 	28	 	22	 	15	 	 	 	 	 	 
	5
	 	30	 	25	 	20	 	15	 	10	 	 	 	 
	6
	 	26	 	23	 	19	 	15	 	11	 	6	 	 
	7
	 	25	 	20	 	17	 	14	 	11	 	8	 	5

					
	 	 	 	 	 
	 
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Table of Contents

			
	ATTACHMENT G: AUTO-ASSIGNMENT ALGORITHM
	 	Contract/KFP No. YH04-0001

Contractors that have equal Performance Measure Rates will be given an equal percentage of the
points for all of the positions combined.

The points awarded for the three components will be combined as follows to give the target
percentage for each Contractor by GSA by risk group:

Final
Bid Points (.30) + Awarded Bid Points (.30) + Performance Measure Points (.40) =
TARGET PERCENTAGE 100

Adjustment Methodology for Contractors with Fewer than 25,000 Members

At the beginning of the new contract cycle, the auto-assignment algorithm for the Maricopa and
Pima/Santa Cruz GSAs will be adjusted to favor Contractors with fewer than 25,000 members
statewide. The adjusted algorithm will be utilized until a target membership of 25,000 members
statewide, per Contractor, is reached.

The adjustment will be made to the final percentages developed using the methodology above. A
pre-determined percentage, based on the table below, will be added to the affected Contractor(s)
and subtracted evenly from the other Contractors.

	 	 	 	 	 	 	 	 	 
	Number of Contractors	 	Percentage Added	
	below 25,000 statewide	 	to New	
	miminum enrollment	 	Contractor Large	[ILLEGIBLE]    
	1

	 	 	20	%	 	 	20	%
	2

	 	 	15	%	 	 	30	%
	3

	 	 	10	%	 	 	30	%

 

* In the event that there are more than three affected Contractors, AHCCCS will disclose
adjustment methodology by July 1, 2003.

In the event that a Contractor only receives an award in rural GSAs, AHCCCS reserves the right to
make a temporary adjustment to the auto-assignment target to favor the new Contractor until a
minimum enrollment is reached.

AHCCCSA reserves the right to adjust capitation rates for potential changes to the populations
risk due to the adjusted algorithm.

					
	 	 	 	 	 
	 
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Table of Contents

			
	ATTACHMENT H: GRIEVANCE SYSTEM AND STANDARDS
	 	 	 Contract/RFP No. YH04-0001

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

The Contractor shall have a written policy delineating its Grievance System which shall be in
accordance wish applicable Federal and State laws, regulations and policies, including, but not
limited to 42 CFR Part 438 Subpart F. The Contractor shall provide the ACOM Enrollee Grievance
Policy to all providers and subcontractors at the time of contract. The Contractor shall also
furnish this information to enrollees within a reasonable time after the Contractor receives notice
of the enrollment. Additionally, the Contractor shall provide written notification of any
significant change in this policy at least 30 days before the intended effective date of the
change.

The written information provided to enrollees describing the Grievance System including the
grievance process, the appeals process, enrollee rights, the grievance system requirements and
timeframes, shall be in each prevalent non-English language occurring within the subcontractor’s
service area and in an easily understood language and format. The Contractor shall inform enrollees
that oral interpretation services are available in any language, that additional information is
available in prevalent non-English languages upon request and how enrollees may obtain this
information.

Written documents, including but not limited to the Notice of Action, the Notice of Appeal
Resolution, Notice of Extension for Resolution, and Notice of Extension of Notice of Action shall
be translated in the enrollee’s language if information is received by the Contractor, orally or in
writing, indicating that the enrollee has a limited English proficiency. Otherwise, these documents
shall be translated in the prevalent non-English language(s) or shall contain information in the
prevalent non-English language(s) advising the enrollee that the information is available in the
prevalent non-English language(s) and in alternative formats along with an explanation of how
enrollees may obtain this information. This information must be in large, bold print appearing in a
prominent location on the first page of the document.

At a minimum, the Contractor’s Grievance System Standards and Policy shall specify:

	1.	 	That the Contractor shall maintain records of all grievances and appeals and requests for
hearing.
	 
	2.	 	Information explaining the grievance, appeal, and fair hearing procedures and timeframes.
This information shall include a description of the circumstances when there is a right to a
hearing, the method for obtaining a hearing, the requirements which govern representation at the
hearing, the right to file grievance and appeals and the requirements and timeframes for filing a
grievance, appeal, or request for hearing.
	 
	3.	 	The availability of assistance in the filing process and the Contractor’s toll-free numbers that
an enrollee can use to file a grievance or appeal by phone if requested by the enrollee.
	 
	4.	 	That the Contractor shall acknowledge receipt of each grievance and appeal. For Appeals, the
Contractor shall acknowledge receipt of standard appeals in writing within five business days of
receipt and within one business day of receipt of expedited appeals.
	 
	5.	 	That the Contractor shall permit both oral and written appeals and grievances and that oral
inquiries appealing an action are treated as appeals.
	 
	6.	 	That the Contractor shall ensure that individuals who make decisions regarding grievances and
appeals are individuals not involved in any previous level of review or decision making and that
individuals who make decisions regarding: 1) appeals of denials based on lack of medical
necessity, 2) a grievance regarding denial of expedited resolution of an appeal or 3) grievances or
appeals involving clinical issues are health care professionals as defined in 42 CFR 438.2 with the
appropriate clinical expertise in treating the enrollee’s condition or disease.

					
	 	 	 	 	 
	 
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Table of Contents

			
	ATTACHMENT H:
	 	Contract/RFP No. YH04-0001
	GRIEVANCE SYSTEM AND STANDARDS	 	 

	7.	 	The resolution timeframes for standard appeals and expedited appeals may be extended up to 14
days if the enrollee requests the extension or if the Contractor establishes a need for additional
information and that the delay is in the enrollee’s interest.
	 
	8.	 	That if the Contractor extends the timeframe for resolution of an appeal when not requested by
the enrollee, the Contractor shall provide the enrollee with written notice of the reason for the
delay.
	 
	9.	 	The definition of grievance as a member’s expression of dissatisfaction with any aspect of their
care, other than the appeal of actions.
	 
	10.	 	That an enrollee must file a grievance with the Contractor and that the enrollee is not
permitted to file a grievance directly with the State.
	 
	11.	 	That the Contractor must dispose of each grievance in accordance with the ACOM Enrollee
Grievance Policy, but in no case shall the timeframe exceed 90 days.
	 
	12.	 	The definition of action as the [42 CFR 438.400(b)]:

	 	a.	 	Denial or limited authorization of a requested service, including the type or level of service;
	 
	 	b.	 	Reduction, suspension, or termination of a previously authorized service;
	 
	 	c.	 	Denial, in whole or in part, of payment for a service;
	 
	 	d.	 	Failure to provide services in a timely manner;
	 
	 	e.	 	Failure to act within the timeframes required for standard and expedited resolution of appeals
and standard disposition of grievances; or
	 
	 	f.	 	Denial of a rural enrollee’s request to obtain services outside the Contractor’s network under
42 CFR 438.52(b)(2)(ii), when the contractor is the only Contractor in the rural area.

	13.	 	The definition of a service authorization request as an enrollee’s request for the provision of
a service [42 CFR 431.201].
	 
	14.	 	The definition of appeal as the request for review of an action, as defined above.
	 
	15.	 	Information explaining that a provider acting on behalf of an enrolle and with the enrollee’s
written consent, may file an appeal.
	 
	16.	 	That an enrollee may file an appeal of: 1) the denial or limited authorization of a requested
service including the type or level of service, 2) the reduction, suspension or termination of a
previously authorized service, 3) the denial in whole or in pan of payment for service, 4) the
failure to provide services in a timely manner, 5) the failure of the Contractor to comply with the
timeframes for dispositions of grievances and appeals and 6) the denial of a rural enrollee’s
request to obtain services outside the Contractor’s network under 42 CFR 438.52(b)(2)(ii) when the
Contractor is the only Contractor in the rural area.
	 
	17.	 	The definition of a standard authorization request. For standard authorization decisions, the
Contractor must provide a Notice of Action to the enrollee as expeditiously as the enrollee’s
health condition requires, but not later than 14 days following the receipt of the authorization
with a possible extension of up to 14 days if the enrollee or provider requests an extension or if
the Contractor establishes a need for additional information and delay is in the enrollee’s best
interest [42 CFR 438.210(d)(1)]. The Notice of Action must comply with the advance notice
requirements when there is a termination or reduction of a previously authorized service OR when
there is a denial of an authorization request and the physician asserts that the requested
service/treatment is a necessary continuation of a previously authorized service.

					
	 	 	 	 	 
	 
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	18.	 	The definition of an expedited authorization request. For expedited authorization decisions,
the Contractor must provide a Notice of Action to the enrollee as expeditiously as the enrollee’s
health condition requires, but not later than 3 business days following the receipt of the
authorization with a possible extension of up to 14 days if the enrollee or provider requests an
extension or if the Contractor establishes a need for additional information and delay is in the
enrollee’s interest, [42 CFR 438.210(d)(2)]
	 
	19.	 	That the Notice of Action for a service authorization decision not made within the standard or
expedited timeframes, whichever is applicable, will be made on the
date that the timeframes
expire. If the Contractor extends the timeframe to make a standard or expedited authorization
decision, the contractor must give the enrollee written notice of the reason to extend the
timeframe and inform the enrollee of the right to file a grievance if the enrollee disagrees with
the decision. The Contractor must issue and carry out its decision as expeditiously as the
enrollee’s health condition requires and no later than the date the extension expires.
	 
	20.	 	That the Contractor shall notify the requesting provider of the decision to deny or reduce a
service authorization request. The notice to the provider need not be written.
	 
	21.	 	The definition of a standard appeal and that the Contractor shall resolve standard appeals no
later than 30 days from the date of receipt of the appeal unless an extension is in effect.
	 
	22.	 	The definition of an expedited appeal and that the Contractor shall resolve all expedited
appeals not later than three business days from the date the Contractor receives the appeal (unless
an extension is in effect) where the Contractor determines (for a request from the enrollee), or
the provider (in making the request on the enrollee’s behalf indicates) that the standard
resolution tirneframe could seriously jeopardize the enrollee’s life or health or ability to
attain, maintain or regain maximum function. The Contractor shall make reasonable efforts to
provide oral notice to an enrollee regarding an expedited resolution appeal.
	 
	23.	 	That if the Contractor denies a request for expedited resolution, it must transfer the appeal
to the 30-day timeframe for a standard appeal. The Contractor must make reasonable efforts to give
the enrollee prompt oral notice and follow-up within two days with a written notice of the denial
of expedited resolution.
	 
	24.	 	That an enrollee shall be given 60 days from the date of the Contractor’s Notice of Action to
file an appeal.
	 
	25.	 	That the Contractor shall mail a Notice of Action: 1) at least 10 days before the date of a
termination, suspension or reduction of previously authorized AHCCCS services, except as provided
in (a)—(e) below; 2) at least 5 days before the date of action in the case of suspected fraud; 3)
at the time of any action affecting the claim when there has been a denial of payment for a
service, in whole or in part; 4) within 14 days from receipt of a standard service authorization
request and within three business days from receipt of an expedited service authorization request,
unless an extension is in effect. For service authorization decisions, the Contractor shall also
ensure that the Notice of Action provides the enrollee with advance notice and the right to request
continued benefits for all terminations and reductions of a previously authorized service and for
denials when the physician asserts that the requested service/treatment which has been denied is a
necessary continuation of a previously authorized service. As described below, the Contractor may
elect to mail a Notice of Action no later than the date of action when:

	 	a.	 	The Contractor receives notification of the death of an enrollee;
	 
	 	b.	 	The enrollee signs a written statement requesting service termination or gives information
requiring termination or reduction of services (which indicates understanding that the termination
or reduction will be the result of supplying that information);
	 
	 	c.	 	The enrollee is admitted to an institution where he is ineligible for further services;
	 
	 	d.	 	The enrollee’s address is unknown and mail directed to the enrollee has no forwarding address;
	 
	 	e.	 	The enrollee has been accepted for Medicaid in another local jurisdiction;

					
	 	 	 	 	 
	 
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	26.	 	That the Contractor include, as parties to the appeal, the enrollee, the enrollee’s legal
representative, or the legal representative of a deceased enrollee’s estate,
	 
	27.	 	That the Notice of Action must explain: 1) the action the Contractor has taken or intends to
take, 2) the reasons for the action, 3) the enrollee’s right to file an appeal with the Contractor,
4) the procedures for exercising these rights, 5) circumstances when expedited resolution is
available and how to request it and 6) the enrollee’s right to receive continued benefits pending
resolution of the appeal, how to request continued benefits’ and the circumstances under which the
enrollee may be required to pay for the cost of these services.
	 
	28.	 	That benefits shall continue until a hearing decision is rendered if: 1) the enrollee files an
appeal before the later of a) 10 days from the mailing of the Notice of Action or b) the
intended date of the Contractor’s action, 2) a) the appeal involves the termination, suspension,
or reduction of a previously authorized course of treatment or b) the appeal involves a denial
and the physician asserts that the requested service/treatment is a necessary continuation of a
previously authorized service, 3) the services were ordered by an authorized provider and 4) the
enrollee requests a continuation of benefits.
	 
	 	 	For purposes of this paragraph, benefits shall be continued based on the authorization which was in
place prior to the denial, termination, reduction, or suspension which has been appealed.
	 
	29.	 	That for appeals, the Contractor provides the enrollee a reasonable opportunity to present
evidence and allegations of fact or law in person and in writing and that the Contractor informs
the enrollee of the limited time available in cases involving expedited resolution.
	 
	30.	 	That for appeals, the Contractor provides the enrollee and his representative the
opportunity before and during the appeals process to examine the enrollee’s case file including
medical records and other documents considered during the appeals process.
	 
	31.	 	That the Contractor must ensure that punitive action is not taken against a provider who either
requests an expedited resolution or supports an enrollee’s appeal.
	 
	32.	 	That the Contractor shall provide written Notice of Appeal Resolution to the enrollee and the
enrollee’s representative or the representative of the deceased enrollee’s estate which must
contain: 1) the results of the resolution process, including the legal citations or authorities
supporting the determination, and the date it was completed, and 2) for appeals not resolved wholly
in favor of enrollees: a) the enrollee’s right to request a State fair hearing (including the
requirement that the enrollee must file the request for a hearing in writing) no later than 30 days
after the date the enrollee receives the Contractor’s notice of appeal resolution and how to do
so, b) the right to receive continued benefits pending the hearing and how to request continuation
of benefits and c) information explaining that the enrollee may be held liable for the cost of
benefits if the hearing decision upholds the Contractor.
	 
	33.	 	That the Contractor continues extended benefits originally provided to the enrollee until any
of the following occurs: 1) the enrollee withdraws appeal, 2) the enrollee has not specifically
requested continued benefits pending a hearing decision within 10 days of the Contractor mailing of
the appeal resolution notice, or 3) the AHCCCS Administration issues a state fair hearing decision
adverse to the enrollee.
	 
	34.	 	That if the enrollee files a request for hearing the Contractor must ensure that the case file
and all supporting documentation is received by the AHCCCSA, Office of Legal Assistance (OLA) as
specified by OLA. The file provided by the Contractor must contain a cover letter that includes:

	 	a.	 	Enrollee’s name
	 
	 	b.	 	Enrollee’s AHCCCS I.D. number

					
	 	 	 	 	 
	 
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	 	c.	 	Enrollee’s address
	 
	 	d.	 	Enrollee’s phone number (if applicable)
	 
	 	e.	 	date of receipt of the appeal
	 
	 	f.	 	summary of the Contractor’s actions undertaken to resolve the appeal and summary of the appeal
resolution

	35.	 	The following material shall be included in the file sent by
the Contractor:

	 	a.	 	the Enrollee’s written request for hearing
	 
	 	b.	 	copies of the entire appeal file which includes all supporting documentation including pertinent
findings and medical records;
	 
	 	c.	 	the Contractor’s Notice of Appeal Resolution
	 
	 	d.	 	other information relevant to the resolution of the appeal

	36.	 	That if the Contractor or the State fair decision reverses a decision to deny, limit or delay
services not furnished during the appeal or the pendency of the hearing process, the Contractor
shall authorize or provide the services promptly and as expeditiously as the enrollee’s health
condition requires irrespective of whether the Contractor contests the decision..
	 
	37.	 	That if the Contractor or State fair hearing decision reverses a decision to deny authorization
of services and the disputed services were received pending appeal, the Contractor shall pay for
those services, as specified in policy and/or regulation.
	 
	38.	 	That if the Contractor or State fair hearing decision upholds a decision to deny authorization
of services and the disputed services were received pending appeal, the Contractor may recover the
cost of those services from the enrollee.

					
	 	 	 	 	 
	 
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	ATTACHMENT H:
	 	Contract/RFP No. YH04-0001
	GRIEVANCE SYSTEM AND STANDARDS	 	 

ATTACHMENT H(2) PROVIDER CLAIM-DISPUTE STANDARDS AND POLICY

The Contractor shall have in place a written claim dispute policy for providers. The policy shall
be in accordance with applicable Federal and State laws, regulations and policies. The claim
dispute policy shall include the following provisions:

	 	1.	 	The Provider Claim Dispute Policy shall be provided to all subcontractors at the time of
contract. For providers without a contract, the claim dispute policy may be mailed with a
remittance advice, provided the remittance is sent within 45 days of receipt of a claim.
	 
	 	2.	 	The Provider Claim Dispute Policy must specify that all claim disputes challenging claim
payments, denials or recoupments must be filed in writing with the Contractor no later than 12
months from the date of service, 12 months after the date of eligibility posting or within 60 days
after the payment, denial or recoupment of a timely claim submission, whichever is later.
	 
	 	3.	 	Specific individuals are appointed with authority to require corrective action and with
requisite experience to administer the claim dispute process.
	 
	 	4.	 	A log is maintained for all claim disputes containing sufficient information to identify the
Complainant, date of receipt, nature of the claim dispute and the date the claim dispute is
resolved. Separate logs must be maintained for provider and behavioral health recipient claim
disputes.
	 
	 	5.	 	Within five business days of receipt, the Complainant is informed by letter that the claim
dispute has been received.
	 
	 	6.	 	Each claim dispute is thoroughly investigated using the applicable statutory, regulatory,
contractual and policy provisions, ensuring that facts are obtained from all parties. 
	 
	 	7.	 	All documentation received by the Contractor during the claim dispute process is dated upon
receipt.
	 
	 	8.	 	All claim disputes are filed in a secure designated area and are retained for five years
following the Contractor’s decision, the Administration’s decision, judicial appeal or close of the
claim dispute, whichever is later, unless otherwise provided by law.
	 
	 	9.	 	A copy of the Contractor’s Notice of Decision (hereafter referred to as Decision) will be
communicated in writing to all parties. The Decision must include and describe in detail, the
following:

	 	a.	 	the nature of the claim dispute
	 
	 	b.	 	the issues involved
	 
	 	c.	 	the reasons supporting the Contractor’s Decision, including references to applicable statute,
rule, applicable contractual provisions, policy and procedure
	 
	 	d.	 	the Provider’s right to request a hearing by filling a written request for hearing to the
Contractor no later than 30 days after the date the Provider receives the Contractor’s decision.
	 
	 	e.	 	If the claim dispute is overturned, the requirement that the Contractor shall reprocess and pay
the claim(s) in a manner consistent with the decision within 15 business days of the date of the
Decision.

	 	10.	 	If the Provider files a written request for hearing, the Contractor must ensure that all
supporting documentation is received by the AHCCCSA, Office of Legal Assistance, no later than five
business days from the date the Contractor receives the
provider’s written hearing request. The file
sent by the Contractor must contain a cover letter that includes:

					
	 	 	 	 	 
	 
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	 	a.	 	Provider’s name
	 
	 	b.	 	Provider’s AHCCCS ID number 
	 
	 	c.	 	Provider’s address
	 
	 	d.	 	Provider’s phone number (if applicable)
	 
	 	e.	 	the date of receipt of claim dispute
	 
	 	f.	 	a summary of the Contractor’s actions undertaken to resolve the claim dispute and basis of the
determination

	 	11.	 	The following material shall be included in the file sent by
the Contractor:

	 	a.	 	written request for hearing filed by the Provider
	 
	 	b.	 	copies of the entire file which includes pertinent records; and the Contractor’s Decision

	 
	 	c.	 	other information relevant to the Notice of Decision of the claim dispute

	 	12.	 	If the Contractor’s decision regarding a claim dispute is reversed through the appeal process,
the Contractor shall reprocess and pay the claim (s) in a manner consistent with the decision
within 15 business days of the date of the Decision.

					
	 	 	 	 	 
	 
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	ATTACHMENT I: ENCOUNTER
SUBMISSION REQUIREMENTS
	 	Contract/RFP No. YH04-0001

ATTACHMENT I: ENCOUNTER SUBMISSION REQUIREMENTS

The Contractor will be assessed sanctions for noncompliance with encounter submission requirements.
AHCCCSA may also perform special reviews of encounter data, such as comparing encounter reports to
the Contractor’s claims files. Any findings of incomplete or inaccurate encounter data may result
in the imposition of sanctions or requirement of a corrective action plan.

Pended Encounter Corrections

The Contractor must resolve all pended encounters within 120 days of the original processing date.
Sanctions will be imposed according to the following schedule for each encounter pended for more
than 120 days unless the pend is due to AHCCCSA error:

	 	 	 	 	 	 	 	 	 
	0 – 120 days

	 	121 – 180 days
	 	181 – 240 days
	 	241 – 360 days
	 	361 + days
	No sanction

	 	$5 per month
	 	$ 10 per month
	 	$ 15 per month
	 	$20 per month

“AHCCCSA error” is defined as a pended encounter, which (1) AHCCCSA acknowledges to be the result
of its own error, and (2) requires a change to the system programming, an update to the database
reference table, or further research by AHCCCSA. AHCCCSA reserves the right to adjust the sanction
amount if circumstances warrant.

When the Contractor notifies AHCCCSA, in writing, that the resolution of a pended encounter depends
on AHCCCSA rather than the Contractor, AHCCCSA will respond in writing within 30 days of receipt of
such notification. The AHCCCSA response will report the status of each pending encounter problem or
issue in question.

Pended encounters will not qualify as AHCCCSA errors if AHCCCSA reviews the Contractor’s
notification and asks the Contractor to research the issue and provide additional substantiating
documentation, or if AHCCCSA disagrees with the Contractor’s claim of AHCCCSA error. If a pended
encounter being researched by AHCCCSA is later determined not to be caused by AHCCCSA error, the
Contractor may be sanctioned retroactively.

Before
imposing sanctions, AHCCCSA will notify the Contractor, in writing,
of the total numbers of
sanctionable encounters pended more than 120 days. Pended encounters shall not be deleted by the
Contractor as a means of avoiding sanctions for failure to correct encounters within 120 days. The
Contractor shall document deleted encounters and shall maintain a record of the deleted CRNs with
appropriate reasons indicated. The Contractor shall, upon request, make this documentation
available to AHCCCSA for review.

Encounter Validation Studies

Per CMS requirement, AHCCCSA will conduct encounter validation studies of the Contractor’s
encounter submissions, and sanction the Contractor for noncompliance with encounter submission
requirements. The purpose of encounter validation studies is to compare recorded utilization
information from a medical record or other source with the Contractor’s submitted encounter data.
Any and all covered services may be validated as part of these studies. Encounter validation
studies will be conducted at least yearly.

AHCCCSA may revise study methodology, timelines, and sanction amounts based on agency review or as
a result of consultations with CMS. The Contractor will be notified in writing of any significant
change in study methodology.

AHCCCSA will conduct two encounter validation studies. Study “A” examines non-institutional
services (form HCFA 1500 encounters), and Study “B” examines institutional services (form UB-92
encounters).

					
	 	 	 	 	 
	 
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	ATTACHMENT I: ENCOUNTER
SUBMISSION REQUIREMENTS	 	Contract/RFP No. YH04-0001

AHCCCSA will notify the Contractor in writing of the sanction amounts and of the selected
data needed for encounter validation studies. The Contractor will have 90 days to submit the
requested data to AHCCCSA. In the case of medical records requests, the Contractor’s failure to
provide AHCCCSA with the records requested within 90 days may result in a sanction of £1,000 per
missing medical record. If AHCCCSA does not receive a sufficient number of medical records from the
Contractor to select a statistically valid sample for a study, the Contractor may be sanctioned up
to 5% of its annual capitation payment

The criteria used in encounter validation studies may include timeliness, correctness, and omission
of encounters. These criteria are defined as follows:

Timeliness: The time elapsed between the date of service and the date that the encounter is
received at AHCCCS. For all encounters for which timeliness is evaluated, a sanction per encounter
error extrapolated to the population of encounters may be assessed if the encounter record is
received by AHCCCSA more than 240 days after the end of the month in which the service was
rendered, or the effective date of the enrollment. It is anticipated that the sanction amount will
be $1.00 per error extrapolated to the population of encounters; however, sanction amounts may be
adjusted if AHCCCSA determines that encounter quality has changed, or if . CMS changes sanction
requirements. The Contractor will be notified of the sanction amount in effect for the studies at
the time the studies begin.

Correctness: ‘A correct encounter contains a complete and accurate description of AHCCCS covered
services provided to a member. A sanction per encounter error extrapolated to the population of
encounters may be assessed if the encounter is incomplete or incorrectly coded. It is anticipated
that the sanction amount will be $1.00 per error extrapolated to the population of encounters;
however, sanction amounts may be adjusted if AHCCCSA determines that encounter quality has changed,
or if CMS changes sanction requirements. The Contractor will be notified of the sanction amount in
effect for the studies at the time the studies begin.

Omission of data: An encounter not submitted to AHCCCSA or an encounter inappropriately deleted
from AHCCCS A’s pending encounter file or historical files in lieu of correction of such record.
For Study “A” and for Study “B”, a sanction per encounter error extrapolated to the population of
encounters may be assessed for an omission. It is anticipated that the sanction amount will be $
5.00 per error extrapolated to the population of encounters for Study “A” and $10.00 per error
extrapolated to the population of encounters for Study “B”; however, sanction amounts may be
adjusted if AHCCCSA determines that encounter quality has changed, or if CMS changes sanction
requirements. The Contractor will be notified of the sanction amount
in effect for the studies at the time the studies begin.

For encounter validation studies, AHCCCSA will select all approved and pended encounters to be
studied no earlier than 240 days after the end of the month in which the service was rendered. Once
AHCCCSA has selected the Contractor’s encounters for encounter validation studies, subsequent
encounter submissions for the period being studied will not be considered.

AHCCCSA may review all of the Contractor’s submitted encounters, or may select a sample. The sample
size, or number of encounters to be reviewed, will be determined using statistical methods in order
to accurately estimate the Contractor’s error rates. Error rates will be calculated by dividing the
number of errors found by the number of encounters reviewed. A 95% confidence interval will be used
to account for limitations caused by sampling. The confidence interval shows the range within which
the true error rate is estimated to be. If error rates are based on a sample, the error rate used
for sanction purposes will be the lower limit of the confidence interval.

Encounter validation methodology and statistical formulas are provided in the AHCCCS Encounter Data
Validation Technical Document, which is available in the Bidders Library. This document also
provides

					
	 	 	 	 	 
	 
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	ATTACHMENT I: ENCOUNTER
SUBMISSION REQUIREMENTS	 
	Contract/RFP No. YH04-0001

examples, which illustrate how AHCCCSA determines study sample sizes, error rates, confidence
intervals, and sanction amounts.

Written preliminary results of all encounter validation studies will be sent to the Contractor for
review and comment. The Contractor will have a maximum of 30 days to review results and provide
AHCCCSA with additional documentation that would affect the final calculation of error rates and
sanctions. AHCCCSA will examine the Contractor’s documentation and may revise study results if
warranted. Written final results of the study will then be sent to the Contractor and communicated
to CMS, and any sanctions will be assessed.

The Contractor may file a written challenge to sanctions assessed by AHCCCSA not more than 35 days
after the Contractor receives final study results from AHCCCSA. Challenges will be reviewed by
AHCCCSA and a written decision will be rendered no later than 60 days from the date of receipt of a
timely challenge. Sanctions shall not apply to encounter errors successfully challenged. A
challenge must be filed on a timely basis and a decision must be rendered by AHCCCSA prior to
filing a claim dispute and request for hearing pursuant to A.A.C. 9-34-401 et seq. Sanction amounts
will be’deducted from the Contractor’s capitation payment.

Encounter Corrections

Contractors are required to submit replacement or voided encounters in the event that claims are
subsequently corrected following the initial encounter submission. This includes corrections as a
result of inaccuracies identified by fraud and abuse audits or investigations conducted by AHCCCSA
or the Contractor. Contractors shall refer to the Encounter Reporting User Manual for instructions
regarding submission of corrected encounters.

					
	 	 	 	 	 
	 
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	ATTACHMENT L: COST SHARING COPAYMENTS
	 	Contract/RFP No. YH04-0001

ATTACHMENT L: COST SHARING COPAYMENTS

	 	I.	 	EXEMPT POPULATIONS (REGARDLESS OF RATE CODE)
	 
	 	 	 	The following populations are exempt from copayments for ALL services ($0 copay):

	 	•	 	All members under the age of 19, including all KidsCare members
	 
	 	•	 	All Pregnant Women
	 
	 	•	 	All ALTCS enrolled members
	 
	 	•	 	All persons with Serious Mental Illness receiving RBHA services
	 
	 	•	 	All members who are receiving CRS services
	 
	 	•	 	SOBRA Family Planning Services Only members

Additionally, no member may be asked to make a copayment for family planning services or supplies.

	 	II.	 	STANDARD COPAYMENTS APPLY TO THE TITLE XIX WAIVER GROUP
	 
	 	 	 	Services to this population may not be denied for failure to pay copayment
	 
	 	 	 	The standard copayrnents apply to the Title XIX Waiver Group, including RBHA General Mental Health
and Substance Abuse service members. The standard copayrnents are as follows:

	 	 	 	 	 
	Service	 	Copayment	 
	Generic Prescriptions or Brand Name if generic not available
	 	$0 per Rx
	Brand Name Prescriptions when generic is available
	 	$ 0
	Non Emergency Use of ER
	 	$ 1
	Physician Office Visits
	 	$ 1

	 	III.	 	STANDARD COPAYMENTS APPLY TO THE FOLLOWING POPULATIONS
	 
	 	 	 	Services to this population may not be denied for failure to pay copayment.

	 	•	 	AHCCCS for Families with Children
	 
	 	•	 	Supplemental Security Income with and without Medicare

	 	 	 	 	 
	Service	Copayment
	Generic Prescriptions or Brand Name if generic not available
	 	$ 0	 	 
	Brand Name Prescriptions when generic is available
	 	$ 0	 	 
	Non Emergency Use of ER
	 	$ 1	 	 
	Physician Office Visits
	 	$ 1	 	 

	 	IV.	 	OTHER CO-PAYS
	 
	 	 	 	HIFA Parents (Parents of KidsCare and SOBRA Children)

	 	•	 	Copayment is not mandatory
	 
	 	•	 	EXCEPTION: Native American Contractor Enrolled Parents are exempt from any copayment

	 	 	 	 	 
	Service	Copayment	 
	Generic Prescriptions or Brand Name if generic not available
	 	$ 0	 	 
	Brand Name Prescriptions when generic is available
	 	$ 0	 	 
	Non Emergency Use of ER
	 	$ 1	 	 
	Physician Office Visits
	 	$ 0	 	 

					
	 	 	 	 	 
	 
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