HomeMy WebLinkAboutAnthem/Health Insurance/Admin agreementADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement ( "Agreement") is entered into by and between City of Carmel ( "Employer")
and Anthem Insurance Companies, Inc. dba Anthem Blue Cross and Blue Shield ( "Anthem ") and is effective as of
January 1, 2015 upon the following terms and conditions:
1. Employer is the sponsor of a self- funded Group Health Plan (as defined below) providing, among other
things, health care benefits to certain eligible employees and their qualified dependents.
2. Employer desires to retain Anthem as an independent contractor to administer certain elements of
Employer's Group Health Plan.
3. Anthem desires to administer certain elements of Employer's Group Health Plan pursuant to the terms of
this Agreement.
In consideration of the promises and the mutual covenants contained in this Agreement, Anthem and Employer (the
"Party" or "Parties" as appropriate) agree as follows:
ARTICLE 1 - DEFINITIONS
For purposes of this Agreement and any amendments, attachments or schedules to this Agreement, the following
words and terms have the following meanings unless the context or use clearly indicates another meaning or intent:
ADMINISTRATIVE SERVICES FEES. The amount payable to Anthem in consideration of its administrative services
and operating expenses as indicated in Section 3 of Schedule A, excluding any cost for stop loss insurance coverage
or any other policy of insurance, if applicable. All additional charges not included in the Administrative Services Fees
are specified elsewhere in this Agreement.
AGREEMENT PERIOD. The period of time indicated in Section 1 of Schedule A.
ANTHEM AFFILIATE. An entity controlling, under common control with or controlled by Anthem.
BENEFITS PLAN DESIGN. A description of the portion of the health care benefits provided under the Plan that is
administered by Anthem that is reviewed and approved by both Parties.
BILLED CHARGES. The amount that appears on a Member's Claim form (or other written notification acceptable to
Anthem that Covered Services have been provided) as the Provider's charge for the services rendered to a Member,
without any adjustment or reduction and irrespective of any applicable reimbursement arrangement with the Provider.
BLUE CROSS BLUE SHIELD ASSOCIATION ( "BCBSA "). An association of independent Blue Cross and Blue
Shield companies.
CLAIM. Written or electronic notice of a request for reimbursement of any health care service or supply on a form
acceptable to Anthem.
CLAIMS RUNOUT SERVICES. Processing and payment of Claims that are incurred but unreported and/or unpaid
as of the date this Agreement terminates.
COVERED SERVICE. Any health care service or supply rendered to Members for which benefits are eligible for
reimbursement pursuant to the terms of the applicable Plan.
GROUP HEALTH PLAN OR PLAN. An employee welfare benefit plan established by the Employer, in effect as of
the Effective Date, as described in the Plan Documents, as they may be amended from time to time.
INTER -PLAN PROGRAMS. Blue Cross and Blue Shield Association programs, including the BlueCard Program,
where Anthem can process certain Claims for Covered Services received by Members, which may include accessing
the reimbursement arrangement of a Provider that has contracted with another Blue Cross and /or Blue Shield plan.
INVOICE DUE DATE. The date on the invoice provided to Employer indicating when payment is due.
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MEMBER. The individuals, including the Subscriber and his /her dependents, as defined in the Plan, who have
satisfied the Plan eligibility requirements of Employer, applied for coverage, and been enrolled for Plan benefits.
NETWORK PROVIDER. A physician, health professional, hospital, pharmacy, or other individual, organization
and /or facility that has entered into a contract, either directly or indirectly, with Anthem to provide Covered Services to
Members through negotiated reimbursement arrangements.
PAID CLAIM. The amount charged to Employer for Covered Services or services provided during the term of this
Agreement. Paid Claims may also include any applicable interest and any surcharges assessed by a state or
government agency. In addition, Paid Claims shall be determined as follows:
1. Provider and Vendor Claims. Except as otherwise provided in this Agreement, Paid Claims shall mean the
amount Anthem actually pays the Provider or Vendor without regard to: (i) whether Anthem reimburses such
Provider or Vendor on a percentage of charges basis, a fixed payment basis, a global fee basis, single case
rate, or other reimbursement methodology; (H) or whether such amount is more or less than the Provider's or
Vendor's actual Billed Charges for a particular service or supply; or (iii) whether such payments are
increased or decreased by the Provider's or Vendor's achievement of, or failure to achieve, certain specified
goals, outcomes or standards adopted by Anthem.
2. Prescription Drug Claims. If applicable to the Plan benefits as indicated in Schedule B, Paid Claims for
Prescription Drugs shall mean an amount that Anthem invoices Employer for Prescription Drugs dispensed
to Members by pharmacies. Anthem shall retain the difference, if any, between the amount invoiced to
Employer and the amount paid to the pharmacy benefit manager ( "PBM ") for Prescription Drugs dispensed
to Members as a portion of Anthem's reasonable compensation for services under this Agreement .
3. Payment Innovation Programs. If a Provider or Vendor participates in any Anthem payment innovation
program, excluding any programs described in paragraph 1 of this provision, in which performance
incentives, rewards or bonuses are paid based on the achievement of cost, quality, efficiency, or service
standards or metrics adopted by Anthem ( "Payment Innovation Programs ") Paid Claims shall also include
the amount of such payments to Providers or Vendors for these Payments Innovation Programs. Such
payments may be charged to Employer on a per Claim, lump sum, per Subscriber, or per Member basis and
shall be based on Anthem's predetermined methodology for such Payment Innovation Program, as may be
amended from time to time. The total monies charged in advance to fund a Payment Innovation Program
shall be actuarially determined as the amount necessary to fund the expected payments attributable to the
Payment Innovation Program. Prior to its implementation, Anthem shall provide Employer with a description
of the Payment Innovation Program, the methodology that will be utilized to charge the Employer, and any
reconciliation process performed in connection with such program. Payments to Providers or Vendors under
these Payment Innovation Programs shall not impact Member cost shares.
4. Fees Paid to Manage and /or Coordinate Care or Costs. Paid Claims may also include fees paid to Providers
or Vendors for managing and /or coordinating the care or cost of care for designated Members.
5. Claims Payment Pursuant to any Judgment, Settlement, Legal or Administrative Proceeding. Paid Claims
shall include any Claim amount paid as the result of a settlement, judgment, or legal, regulatory or
administrative proceeding brought against the Plan and /or Anthem, or otherwise agreed to by Anthem, with
respect to the decisions made by Anthem regarding the coverage of or amounts paid for services under the
terms of the Plan. Paid Claims also includes any amount paid as a result of Anthem's billing dispute
resolution procedures with a Provider or Vendor. Any Claims paid pursuant to this provision will count
towards any stop loss accumulators under a stop loss agreement with Anthem.
6. Claims Payment Pursuant to Inter -Plan Programs and Other BCBSA Programs. Paid Claims shall include
any amount paid for Covered Services that are processed through Inter -Plan Programs or for any amounts
paid for Covered Services provided through another BCBSA program (e.g. BCBSA Blue Distinction Centers
for Transplant). More information about Inter -Plan Programs is found in Article 15 of this Agreement.
7. Claims Payment Pursuant to a Consumer Directed Health Plan Account. If applicable to Plan benefits and
as indicated on Schedule B of this Agreement, Paid Claims shall include any amount actually paid by
Anthem from a consumer directed health plan account, such as a health reimbursement account or a health
incentive account.
PLAN DOCUMENTS. The documents that set forth the terms of the Plan, and which include the Benefits Plan
Design.
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PRESCRIPTION DRUG. Insulin and those drugs and drug compounds that are included in the U.S. Pharmacopoeia
and that are required to be dispensed pursuant to a prescription or that are otherwise included on Anthem's formulary
(e.g., certain over - the - counter drugs).
PROPRIETARY INFORMATION AND CONFIDENTIAL INFORMATION. Employer's Proprietary Information is
information about the systems, procedures, methodologies and practices used by Employer to run its operations and
the Plan and other non - public information about Employer. Anthem's Proprietary Information is non - public, trade
secret, commercially valuable, or competitively sensitive information, or other material and information relating to the
products, business, or activities of Anthem or an Anthem Affiliate, including but not limited to: (1) Information about
Anthem's Provider networks, Provider negotiated fees, Provider discounts, and Provider contract terms; (2)
information about the systems, procedures, methodologies, and practices used by Anthem and Anthem Affiliates in
performing their services such as underwriting, Claims processing, Claims payment, and health care management
activities; and (3) combinations of data elements that could enable information of this kind to be derived or
calculated. Anthem's Confidential Information is information that Anthem or an Anthem Affiliate is obligated by law or
contract to protect, including but not limited to: (1) Social Security numbers; (2) Provider tax identification numbers
(TINs); (3) National Provider Identification Numbers (NPIs); (4) Provider names, Provider addresses, and other
identifying information about Providers; and (5) drug enforcement administration (DEA) numbers, pharmacy numbers,
and other identifying information about pharmacies.
PROVIDER. A duly licensed physician, health professional, hospital, pharmacy or other individual, organization
and /or facility that provides health services or supplies within the scope of an applicable license and /or certification
and meets any other requirements set forth in the Plan.
SUBSCRIBER. An employee or retiree of Employer or other eligible person (other than a dependent) who is enrolled
in the Plan.
SUMMARY PLAN DESCRIPTION ( "SPD "). A document provided to Subscribers by Employer or its designee that
describes the health care benefits available to Members under the Plan, their rights under the Plan and the
obligations of the Plan. This document may incorporate the Benefits Plan Design. In the event of any conflict or
inconsistency between the Summary Plan Description and the Benefits Plan Design, the terms of the Benefits Plan
Design shall control Anthem's performance under this Agreement.
VENDOR. A person or entity other than a Provider, including an Anthem Affiliate, that provides services or supplies
pursuant to a contract with Anthem.
ARTICLE 2 - ADMINISTRATIVE SERVICES PROVIDED BY ANTHEM
a. Anthem shall process the enrollment of eligible individuals and termination of Members as directed by the
Employer subject to the provisions of this Agreement. Anthem shall, with the assistance of Employer,
respond to direct routine inquiries made to it by employees and other persons concerning eligibility in the
Plan.
b. Anthem shall perform the following Claims administrative services:
1. Process Claims with a Claims Incurred Date indicated in Section 1 of Schedule A and provide
customer service, including investigating and reviewing such Claims to determine what amount, if
any, is due and payable according to the terms and conditions of the Plan and this
Agreement. Anthem shall perform coordination of benefits ( "COB ") with other payors, including
Medicare. In processing Claims, Anthem shall utilize Anthem's medical policies and medical
policy exception process, its definition of medical necessity, its precertification and /or
preauthorization policies and applicable Claim timely filing limits.
2. Disburse to the applicable individuals or entities (including Providers and Vendors) payments that
it determines to be due according to the provisions of the Plan.
3. Provide notice in writing when a Claim for benefits has been denied which notice shall set forth the
reasons for the denial and the right to a full and fair review of the denial under the terms of the
Plan and shall otherwise satisfy applicable regulatory requirements governing the notice of a
denied Claim.
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c. Employer delegates to Anthem fiduciary authority to determine claims for benefits under the Plan as well as
the authority to act as the appropriate fiduciary to determine appeals of any adverse benefit determinations
under the Plan. Anthem shall administer complaints, appeals and requests for independent review
according to Anthem's complaint and appeals policy, and any applicable law or regulation unless otherwise
provided in the Plan. In carrying out this authority, Anthem is delegated full discretion to determine eligibility
for benefits under the Plan and to interpret the terms of the Plan. Anthem shall be deemed to have properly
exercised such authority unless a Member proves that Anthem has abused its discretion or that its decision
is arbitrary and capricious. Anthem is a fiduciary of the Plan only to the extent necessary to perform its
obligations and duties as expressed in this Agreement and only to the extent that its performance of such
actions constitutes fiduciary action. Anthem shall have no fiduciary responsibility in connection with any
other element of the administration of the Plan. Anthem shall not act as the administrator of the Plan nor
shall it have any fiduciary responsibility in connection with any other element of the administration of the
Plan. Anthem shall charge Employer the fee described in Section 3.0 of Schedule A for any independent
review conducted pursuant to this provision.
d. Anthem shall have the authority, to institute from time to time, utilization management, case management,
disease management or wellness pilot initiatives in certain designated geographic areas. These pilot
initiatives are part of Anthem's ongoing effort to find innovative ways to make available high quality and
more affordable healthcare services. A pilot initiative may affect some, but not all Members under the Plan.
Anthem will provide 60 days advance written notice of a pilot program that affects Plan benefits, and
Employer has 30 days to notify Anthem, in writing, if it does not wish to participate in the program. Anthem
reserves the right to discontinue a pilot initiative at any time without advance notice to Employer.
e. Anthem shall perform recovery services as provided in Article 13.
9,
Anthem shall issue identification cards to Subscribers and /or Members, as applicable, and the content and
design of the identification cards shall comply with BCBSA regulations.
This provision is intentionally omitted in its entirety.
h. Anthem shall provide Members and potential Members access to an online directory of Providers
contracted with Anthem ( "Provider Directories "). Such Provider Directories shall also be available and
distributed in booklet format upon Member request. Additionally, if applicable to Plan benefits, Anthem shall
ensure that Members and potential Members have access to the BlueCard directory of Providers via a
website sponsored by BCBSA.
Anthem reserves the right to make benefit payments to either Providers or Members at its discretion.
Employer agrees that the terms of the Plan will include provisions for supporting such discretion in
determining the direction of payment including, but not limited to, a provision prohibiting Members from
assigning their rights to receive benefit payments, unless otherwise prohibited by applicable law.
If applicable to the Plan benefits and as indicated in Schedule B of this Agreement, Anthem may provide or
arrange for the provision of the following managed care services:
Conduct medical necessity review, utilization review, and a referral process, which may include,
but is not limited to: (a) preadmission review to evaluate and determine the medical necessity of
an admission or procedure and the appropriate level of care, and for an inpatient admission, to
authorize an initial length of stay; (b) concurrent review throughout the course of the inpatient
admission for authorization of additional days of care as warranted by the patient's medical
condition; (c) retrospective review; and (d) authorizing a referral to a non - Network
Provider. Anthem shall have the authority to waive a requirement if, in Anthem's discretion, such
exception Is in the best interest of the Member or the Plan, or is in furtherance of the provision of
cost effective services under this Agreement.
2. Perform case management to identify short and long term treatment programs in cases of severe
or chronic illness or injury. Anthem may, but is not required to, customize benefits in limited
circumstances by approving otherwise non - Covered Services if, in the discretion of Anthem, such
exception is in the best interest of the Member and the Plan.
3. Provide access to a specialty network of Providers if the Plan includes a specialty
network. Anthem reserves the right to establish specialty networks for certain specialty or referral
care.
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4. Provide any other managed care services incident to or necessary for the performance of the
services set forth in this Article 2.
k. If applicable to the Plan benefits and as indicated in Schedule B of this Agreement, Anthem shall offer
wellness programs and other programs to help Employer effectively manage the cost of care, and Employer
shall pay fees for the programs selected by Employer only if such fees are indicated in Section 3(B) of
Schedule A. Employer shall abide by all applicable policies and procedures of the programs selected, which
may require Employer to provide requested information prior to Anthem initiating the service.
On behalf of Employer, Anthem shall produce and maintain a master copy of the Benefits Plan Design and
make changes and amendments to the master copy of the Benefits Plan Design and incorporate any
approved changes or amendments pursuant to Article 18(a) of this Agreement. Employer shall determine,
in its sole discretion, whether Anthem has accurately produced the Benefits Plan Design and has fully
implemented the approved changes or amendments. Until Employer has approved the Benefits Plan
Design, Anthem will administer the quoted benefits according to Anthem's most similar standard Benefits
Plan Design language.
m. Anthem will provide Employer with Plan data and assistance necessary for preparation of the Plan's
information returns and forms required by federal or state laws. Anthem shall prepare and mail all IRS
Form 1099's and any other similar form that is given to Providers or brokers.
n. Anthem shall administer unclaimed funds pursuant to unclaimed property or escheat laws and shall make
any required payment and file any required reports under such laws.
o. Unless otherwise agreed to by the Parties and specified in the Plan, Anthem's standard policies and
procedures, as they may be amended from time -to -time, will be used in the provision of services specified
in this Agreement. In the event of any conflict between this Agreement and any of Anthem's policies and
procedures, this Agreement will govern.
p. If applicable to the Plan benefits as indicated in Schedule B, Anthem shall provide conversion rights to
Members following termination of this Agreement, and Employer shall pay the fee indicated in Section 3(C)
of Schedule A.
q. Select state laws require Employers to finance health related initiatives through residency -based
assessments and /or surcharges added to certain Paid Claims. After Employer completes any applicable
forms, Anthem shall make all assessment and /or surcharge payments on behalf of Employer to the
appropriate pools administered by the respective states, based primarily upon Anthem's Paid Claims
information and Member information provided to Anthem by Employer. Examples of such assessments and
surcharges include, but are not limited to, the Massachusetts Health Safety Net Trust Fund, the New York
Health Care Reform Act and the Michigan Health Insurance Claims Assessment Act.
r. Anthem shall provide required notices describing Member's rights under the Women's Health and Cancer
Rights Act (WHCRA) upon a Member's enrollment and at least annually thereafter.
s. Anthem shall have the authority to build and maintain its Provider network. Nothing in this Agreement shall
be interpreted to require Anthem to maintain negotiated fees or reimbursement arrangements or other
relationships with certain Providers or Vendors. Anthem will be solely responsible for acting as a liaison
with Providers including, but not limited to, responding to Provider inquiries, negotiating rates with Providers
or auditing Providers.
t. If a catastrophic event (whether weather - related, caused by a natural disaster, or caused by war, terrorism,
or similar event) occurs that affects Members in one or more locations, and such catastrophic event
prevents or interferes with Anthem's ability to conduct its normal business with respect to such Members or
prevents or interferes with Members' ability to access their benefits, Anthem shall have the right, without
first seeking consent from Employer, to take reasonable and necessary steps to process Claims and
provide managed care services in a manner that may be inconsistent with the Plan in order to minimize the
effect such catastrophic event has on Members. As soon as reasonably practicable after a catastrophic
event, Anthem shall report its actions to Employer. Employer shall reimburse Anthem for reasonable
amounts paid in good faith and such amounts shall constitute Paid Claims, even if the charges incurred
were not for services otherwise covered under the Plan.
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u. Anthem shall submit any claim that is required to be fled under any stop loss policy issued by Anthem or an
Anthem Affiliate. Anthem shall have no obligation to prepare or file any claim for excess risk or stop loss
coverage under a policy not issued by Anthem or an Anthem Affiliate. Anthem shall provide Employer with
Claims data pursuant to Article 11 of this Agreement if Employer chooses to file a claim under a stop loss
policy issued by an entity other than Anthem or an Anthem Affiliate. Anthem shall assume no liability or
responsibility to Employer for inconsistencies between the determination of Covered Services under the
Plan and this Agreement and the determination of coverage by an unaffiliated stop loss carrier.
v. Anthem shall assist Employer in determining whether its Prescription Drug benefit constitutes "creditable
prescription drug coverage as that term is used under the Medicare Part D laws (specifically, 42 C.F.R.
423.56). Unless otherwise agreed to by the Parties, Employer shall be solely responsible for
communicating with Members regarding creditable prescription drug coverage matters.
w. If a Member is a Massachusetts resident, Anthem shall mail the Member any notices required by the
Massachusetts Health Care Reform Act ( "HCRA ") reflecting coverage during the current and prior
Agreement Period. If a Member works in Massachusetts for Employer, but resides in another State,
Anthem will only provide such notices if Employer notifies Anthem at least 60 days prior to any notice
deadline imposed by HCRA that such Member requires the HCRA notices.
x. Anthem is the responsible reporting entity ( "RRE ") for the Plan as that term is defined pursuant to Section
111 of the Medicare, Medicaid and SCHIP Extension Act of 2007. In order to fulfill its RRE obligation,
Anthem requires information from the Employer, including, but not limited to, Member Social Security
Numbers. Employer shall cooperate with Anthem and promptly respond to any reasonable request for
information made by Anthem.
Anthem will provide Employer with Plan information and assistance necessary for the preparation of the
Plan's Summary of Benefits and Coverage ( "SBC ") related to the elements of the Plan that Anthem
administers. Employer is solely responsible for ensuring that the SBC accurately reflects the benefits
Employer will offer and for finalizing and distributing the SBC to Subscribers. Notwithstanding the
provisions in Article 18(a), if Employer's open enrollment period is at a time other than 30 days prior to the
end of an Agreement Period, Employer agrees to provide Anthem with any changes to the benefits Anthem
administers at least 60 days prior to the start of the open enrollment period.
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ARTICLE 3 - OBLIGATIONS OF EMPLOYER
a. Employer shall furnish to Anthem initial eligibility information regarding Members. Employer is responsible
for determining eligibility of individuals and advising Anthem in a timely manner, through a method agreed
upon by the Parties, as to which employees, dependents, and other individuals are to be enrolled
Members. Anthem reserves the right to limit the effective date of retroactive enrollment to a date not earlier
than 60 days prior to the date notice is received. Such retroactive enrollments shall be subject to Anthem's
receipt of any applicable fees as indicated in Section 3 of Schedule A. Employer shall keep such records
and furnish to Anthem such notification and other information as may be required by Anthem for the
purpose of enrolling Members, processing terminations, effecting COBRA coverage elections, effecting
changes in single or family coverage status, effecting changes due to a Member becoming eligible or
ineligible for Medicare, effecting changes due to a leave of absence, or for any other purpose reasonably
related to the administration of eligibility under this Agreement. Employer acknowledges that prompt and
complete furnishing of the required eligibility information is essential to the timely, accurate, and efficient
processing of Claims.
Employer shall notify Anthem monthly of the Subscribers, dependents, or other individuals that will be or
have become ineligible for benefits under the Plan. Upon receipt of such notice, Anthem shall terminate
coverage effective as of the date specified in the Plan. Employer shall give Anthem advance notice, if
possible, of any Member's expected termination and /or retirement. Anthem reserves the right to limit
retroactive terminations to a maximum of 60 days prior to the date notice is received. Anthem shall credit
Employer any applicable fees for such retroactive terminations as indicated in Section 3 of Schedule A.
If Anthem has paid Claims for persons no longer eligible for reasons including, but not limited to, Anthem
having been provided inaccurate eligibility information, or Anthem having received notice of a retroactive
change to enrollment, then Employer shall reimburse Anthem for all unrecovered Paid Claim amounts to
the extent that the amounts have not already been paid by Employer.
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b. Employer has all discretionary authority and control over the management of the Plan, and all discretionary
authority and responsibility for the administration of the Plan except as delegated to Anthem in Article 2(c)
of this Agreement. Employer retains all final authority and responsibility for the Plan and its operation and
Anthem is empowered to act on behalf of Employer in connection with the Plan only as expressly stated in
this Agreement or as otherwise agreed to by the Parties in writing.
c. It is understood and agreed that the provision of any notice, election form, or communication and the
collection of any applicable premium or fees required by or associated with Title X of the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ( "COBRA "), or any other applicable law governing
continuation of health care coverage, shall be the sole responsibility of Employer and not Anthem, except
as otherwise agreed to in a written agreement between the Parties.
d. Employer is solely responsible for compliance with the Family and Medical Leave Act ( "FMLA ") and, to the
extent applicable to Employers' wellness program(s), for compliance with the Americans with Disabilities
Act, the Internal Revenue Code, federal and state nondiscrimination laws, and other federal and state laws
and regulations governing wellness programs.
e. Employer agrees to and shall collect those contributions from Subscribers that are required by Employer for
participation in the Plan. If Employer elects Anthem's stop loss coverage, Employer shall abide by
Anthem's participation and contribution guidelines.
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Unless otherwise agreed to by the Parties in writing, Employer shall prepare and distribute all notices or
summaries of changes or material modifications to the Plan. Employer shall ensure that if it creates any
documents that refer to benefits offered under the Plan, the documents will accurately reflect the terms of
the Plan.
To the extent that Medicare, Medicaid, the Veterans Administration or any other federal or state agency or
entity asserts a reimbursement right against Employer, the Plan, or Anthem pursuant to that agency's or
entity's rights under applicable law with respect to Claims processed by Anthem under this Agreement, the
Employer shall be responsible for reimbursing Anthem any such amounts determined to be owed.
h. Employer shall give notice to Anthem of the expected occurrence of any of the following events (including a
description of the event), with such notice to be given at least 30 days prior to the effective date of the
event, unless such advance notice is prohibited by law or contract in which case, notice will be provided as
soon as practicable:
1. Change of Employer's name; or
2. Any insolvency, receivership or inability of Employer to pay its debts as they become due.
The Employer shall have the sole responsibility, in accordance with state or federal law, to develop
procedures for determining whether a medical child support order is a "qualified" medical child support
order. The Employer shall provide notice to Anthem once it has made such determination.
The Employer may direct Anthem, on an exception basis, to process and pay Claims that were denied by
Anthem or take other actions with respect to the Plan that are not specifically set forth in this Agreement or
the Plan. In such cases, any payments shall not count toward the stop loss accumulators under a stop loss
agreement issued by Anthem, unless otherwise agreed to by Anthem. Anthem may charge Employer a
processing fee that has been mutually agreed to by the Parties prior to the processing of the
Claim. Anthem shall not be responsible for any liability associated with any act or omission undertaken at
the direction of, or in accordance with, instructions received from the Employer under this provision.
ARTICLE 4 - CLAIMS PAYMENT METHOD
a. Employer shall pay or fund Paid Claims according to the Claims payment method described in Section 4 of
Schedule A. Employer shall pay or fund such amounts by the Invoice Due Date. In addition, from time to
time, the Parties acknowledge that Employer may request a review of the appropriateness of a Claim
payment and, during the review period, Employer shall pay or fund such Claim.
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b. The Parties acknowledge that, from time to time, a Claims adjustment may be necessary as a result of
coordination of benefits, subrogation, workers' compensation, other third party recoveries, payment errors
and the like, and that the adjustment will take the form of a debit (for an additional amount paid by Anthem)
or a credit (for an amount refunded to Employer). The Parties agree that such Claims adjustment shall be
treated as an adjustment to the Claims payment made in the billing period in which the adjustment occurs,
rather than as a retroactive adjustment to the Claim in the billing period in which it was initially reported as
paid. Any Claims credit may be reduced by a fee as indicated in Schedule A of this Agreement. In
addition, a credit shall not be provided to Employer for a recovery related to a Claim that was covered under
stop loss coverage provided by Anthem.
ARTICLE 5 - ADMINISTRATIVE SERVICES FEES
During the term of this Agreement, Employer shall pay Anthem the Administrative Services Fees, described in
Section 3 of Schedule A. Employer shall pay the Administrative Services Fees and other fees authorized under this
Agreement by the applicable Invoice Due Date according to the payment method described in Section 5 of Schedule
A.
ARTICLE 6 - RENEWAL SCHEDULES
If Anthem offers to renew this Agreement at the end of an Agreement Period, then Anthem shall provide Employer
with the terms and conditions of the proposed renewal in writing within the time period provided in Section 1 of
Schedule A. Employer shall notify Anthem in writing of its selection from the renewal options by indicating its
selection and signing Anthem's designated renewal form. If Anthem does not receive a signed acceptance of the
renewal from Employer prior to the start of the next Agreement Period, this Agreement shall terminate, subject to
Anthem's continuing obligations as set forth in Article 7 and elsewhere in this Agreement. Anthem shall provide a
revised Schedule A that will become part of this Agreement without the necessity of securing Employer's signature.
ARTICLE 7 - CLAIMS RUNOUT SERVICES
a. Claims Runout Services shall be provided for the period of time provided in Section 6 of Schedule A (the
"Claims Runout Period "), except such Claims Runout services shall not be provided in the event
that termination is due to non - payment pursuant to Article 19(a) of this Agreement. During the Claims
Runout Period, the terms of this Agreement shall continue to apply. Anthem shall have no obligation to
process or pay any Claims or forward Claims to Employer beyond the Claims Runout Period. Any amounts
recovered beyond the Claims Runout Period shall be retained by Anthem as reasonable compensation for
services under this Agreement. Anthem shall, however, return any recoveries for which Anthem had
received monies, but had not processed the recovery prior to the end of the Claims Runout Period. In
addition, Employer shall have no obligation to reimburse Anthem for any amounts paid by Anthem due to
adjustments to Claims after the end of the Claims Runout Period.
b. The Administrative Services Fee for the Claims Runout Period, if applicable, is provided in Section 6 of
Schedule A. Paid Claims and the Administrative Services Fee shall be invoiced and paid in the same
manner as provided in Sections 4 and 5 of Schedule A, unless otherwise provided or agreed to in writing by
the Parties.
ARTICLE 8 — LATE PAYMENT PENALTY
If Employer fails to timely pay or fund any amount due to Anthem under this Agreement, Employer agrees to pay a
late payment penalty for each day the payment is late. The late payment penalty shall be calculated at the rate of
12% simple interest per annum (365 days), and shall be included on a subsequent invoice and payable by the Invoice
Due Date. If applicable, Employer agrees to reimburse Anthem for any expenses charged to Anthem by a financial
institution, Provider or Vendor due to Employer's failure to maintain sufficient funds in a designated bank account.
Any acceptance by Anthem of late payments shall not be deemed a waiver of its rights to terminate this Agreement
for any future failure of Employer to make timely payments. Anthem will notify Employer in writing of the delinquency
before applying any late payment penalty as described in this provision.
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ARTICLE 9 - HEALTH INSURANCE PORTLABILITY AND ACCOUNTABILITY ACT
a. Anthem's duties and responsibilities in connection with the requirements imposed by the Health Insurance
Portability and Accountability Act ( "HIPAA ") and the privacy and security regulations promulgated
thereunder will be set forth in a separate business associate agreement between the Parties.
b. In the event the Plan submits Claims or eligibility inquiries or any other HIPAA covered transaction as
defined in 45 CFR Part 160 and 162 to Anthem through electronic means, the Plan and Anthem shall
comply with all applicable requirements of HIPAA and the Plan and Anthem shall require any of their
respective agents or subcontractors to comply with all applicable requirements of HIPAA.
ARTICLE 10 - PROPRIETARY AND CONFIDENTIAL INFORMATION
a. Each Party retains ownership of its Proprietary Information and Confidential Information (collectively
"Information ") and neither conveys ownership rights in its Information nor acquires ownership rights in the
other Party's Information by entering into this Agreement or performing its obligations hereunder. Nothing
in this Agreement shall impair or limit a Party's right to use and disclose its Information for its own lawful
business purposes.
b. Each Party shall maintain the other Party's Information in strict confidence, and shall institute commercially
reasonable safeguards to protect it.
c. Employer shall use and disclose Anthem's Information solely for the purpose of administering the
Plan. Employer shall not without Anthem's advance written consent, and except as permitted by Indiana
Code 5- 14 -3 -1, et seq., or court order, (1) use or disclose Anthem's Information, or reports or summaries
thereof, for any purpose other than administering the Plan; (2) combine Anthem's Information with other
data to create or add to an aggregated database that will or could be made available to any third party; (3)
combine Anthem's Information provided for a particular purpose with Anthem's Information provided for
another purpose; or (4) sell or disclose Anthem's Information to any other person or entity except as
expressly permitted by this Article 10.
d. Employer may disclose Anthem's Information, as reasonably necessary, to Employer's stop loss carriers,
consultants, auditors, and other third parties engaged by Employer (each a "Plan Contractor"), provided
that: (i) each such third party needs to know such Information in order to provide services to Employer; (ii)
the restrictions set forth in subsection c. of this Article 10 shall apply to each such third party as well as to
Employer; and (iii) prior to such disclosure, each such third party shall enter into a confidentiality
agreement (or an appropriate amendment to an existing one, as applicable) with Anthem, with respect to
the planned disclosure.
e. Upon termination of this Agreement, each Party shall return or destroy the other Party's Information or
retain the Information in accordance with its reasonable record retention policies and procedures; provided;
however that each Party shall continue to comply with the provisions of this Article 10 for as long as it
retains the other Party's Information.
f. This Agreement shall not be construed to restrict the use or disclosure of information that: (1) is public
knowledge other than as a result of a breach of this Agreement; (2) is independently developed by a Party
not in violation of this Agreement; (3) is made available to a Party by any person other than the other Party,
provided the source of such information is not subject to any confidentiality obligations with respect to it; or,
(4) is required to be disclosed pursuant to law, order, regulation or judicial or administrative process, but
only to the extent of such required disclosures and after reasonable notice to the other Party.
ARTICLE 11 - DATA REPORTS
a. Upon Employer's request and only as permitted by the business associate agreement entered into between
the Parties, Anthem will provide Anthem's standard account reporting package. Prior to Anthem providing
data or reports to Employer, the Parties must mutually agree to the types, format, content and purpose of
the reports requested. If Employer requests from Anthem information that is not part of Anthem's standard
account reporting package, and such request is approved by Anthem, Employer agrees to pay a mutually
agreed upon charge to Anthem for such additional reports.
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b. If Employer requests Anthem to provide a data extract or report to any Plan Contractor for use on
Employer's behalf and Anthem agrees to do so: (i) to the extent such extract or report includes protected
health information ("PHI ") as defined in HIPAA, Anthem's disclosure of the PHI and Plan Contractor's
subsequent obligations with respect to the protection, use, and disclosure of the PHI will be governed by
Employer's applicable business associate agreements with Anthem and the Plan Contractor; and (U) to the
extent such data or report includes Anthem's Proprietary Information and /or Anthem's Confidential
Information, Employer acknowledges and agrees that Plan Contractor shall be subject to the restrictions set
forth in Article 10 of this Agreement and shall enter into a confidentiality agreement with Anthem (or amend
an existing one, as applicable) prior to Anthem's release of the extract or report.
c. Employer agrees not to contact, or to engage or permit a Plan Contractor to contact on Employer's behalf,
any health care Provider concerning the information in any reports or data extracts provided by Anthem
unless the contact is coordinated by Anthem.
d. In addition to their unlimited rights to use Anthem's Proprietary Information and Confidential Information,
Anthem and Anthem Affiliates shall also have the right to use and disclose other Claim- related data
collected in the performance of services under this Agreement or any other agreement between the Parties,
so long as: (1) the data is de- identified in a manner consistent with the requirements of HIPAA; or (2) the
data is used or disclosed for research, health oversight activities, or other purposes permitted by law; or (3)
a Member has consented in writing to the release of his or her individually identifiable data. The data used
or disclosed shall be used for a variety of lawful purposes including, but not limited to, research, monitoring,
benchmarking and analysis of industry and health care trends. Anthem may receive remuneration for the
data only if permitted by HIPAA.
ARTICLE 12 - CLAIMS AUDIT
a. At Employer's expense, Employer shall have the right to audit Claims on Anthem's premises, during regular
business hours and in accordance with Anthem's audit policy, which may be revised from time to time. A
copy of the audit policy shall be made available to Employer upon request.
b. If Employer elects to utilize a third -party auditor to conduct an audit pursuant to this Agreement and
Anthem's audit policy, such auditor must be mutually acceptable to Employer and Anthem. Anthem
reserves the right to charge a reasonable fee to Employer for expenditure of time by Anthem's employees in
completing any audit. An auditor or consultant must execute a confidentiality and indemnification
agreement with Anthem pertaining to Anthem's Proprietary and Confidential Information prior to conducting
an audit.
c. Employer may conduct an audit once each calendar year and the audit may only relate to Claims
processed during the current year or immediately preceding calendar year (the "Audit Period ") and neither
Employer nor anyone acting on Employer's or the Plan's behalf, shall have a right to audit Claims
processed prior to the Audit Period. The scope of the audit shall be agreed to in writing by the Parties prior
to the commencement of the audit.
d. Employer shall provide to Anthem copies of all drafts, interim and /or final audit reports at such time as they
are made available by the auditor or consultants to Employer. Any errors identified as the result of the audit
shall be subject to Anthem's review reasonable acceptance prior to initiating any recoveries of Paid Claims
pursuant to Article 13 of this Agreement. Such acceptance shall not be unreasonably withheld. Anthem
reserves the right to terminate any audit being performed by or for Employer if Anthem reasonably
determines that the confidentiality of its information is not properly being maintained or if Anthem
reasonably determines that Employer or auditor is not following Anthem audit policy.
e. An audit performed pursuant to this Agreement shall be the final audit for the Audit Period and for any prior
Audit Period unless otherwise agreed to in writing by the Parties; however, Claims may be re- audited if
Employer is required to conduct the audit by a government agency with which it has a contractual
arrangement.
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ARTICLE 13 - RECOVERY SERVICES
a. Pursuant to the provisions of this Article 13(a), Anthem shall review Paid Claims processed under this
Agreement (including during any Claims Runout Period) to determine whether such Claims have been paid
accurately and identify recoveries that can be pursued. Employer will receive the entire amount of any
recovery obtained on its behalf. In performing these recovery services, Anthem shall not be obligated to
retain outside counsel or other third parties if Anthem's recovery efforts are not successful. The cost of
these services provided by Anthem for recovery efforts under this Article 13(a) is included in Anthem's
Administrative Services Fee, as set forth in Section 3(A) ( "Base Administrative Services Fee) of Schedule
A.
b. Anthem may become aware of additional recovery opportunities by means other than reviewing Paid
Claims processed under this Agreement. Employer grants Anthem the authority and discretion in those
instances to do the following: (1) determine and take steps reasonably necessary and cost - effective to
effect recovery; (2) select and retain outside counsel; (3) reduce any recovery obtained on behalf of the
Plan by its proportionate share of the outside counsel fees and costs incurred during litigation or settlement
activities to obtain such recovery; and (4) negotiate and effect any settlement of Employer's and Plan's
rights by, among other things, executing a release waiving Employer's and Plan's rights to take any action
inconsistent with the settlement.
c. During the term of this Agreement and any applicable Claims Runout Period, Anthem may pursue
payments to Members by any other person, insurance company or other entity on account of any action,
claim, request, demand, settlement, judgment, liability or expense that is related to a Claim for Covered
Services ( "Subrogation Services"). Anthem shall charge Employer a fee provided in Schedule A to this
Agreement ( "Subrogation Fee "). Any subrogation recoveries shall be net of the Subrogation
Fee. Subrogation Fees will not be assessed on subrogation recoveries until they are received by Anthem
and credited to Employer. Upon termination of this Agreement, and the end of any applicable Claims
Runout period, Anthem shall provide a list of all active subrogation case to Employer. Upon Employer's
request, Anthem shall provide all active subrogation case files to Employer, subject to applicable laws and
regulations, including but not limited to HIPAA. Anthem shall transfer such subrogation cases to Employer,
provided, however, Employer must first pay Anthem for all time spent working on such cases until such date
the case is transferred to Employer. For subrogation cases where Anthem worked in conjunction with
outside counsel, the amount due to Anthem shall be based on the hourly rate charged by the law firm
handling such cases plus fifteen percent (15 %) of any lien amount. For subrogation cases handled
internally by Anthem, the amount due to Anthem shall be fifteen percent (15 %) of any lien amount.
d. Anthem will engage third parties: (1) to conduct a review of Paid Claims processed under this Agreement
and perform other recovery related services that are in addition to the standard recovery services provided
under Article 13(a); and, (2) to conduct audits of Provider and Vendor contracts. The purpose of these
services is to determine whether Paid Claims processed under this Agreement have been paid accurately
and, if they have not been paid accurately, to pursue recoveries. If Anthem makes a recovery as a result of
the services described in this Article 13(d), then Anthem shall receive a fee provided in Schedule A as
compensation for its services, a portion of which shall be paid to third parties for their services, and
Employer will receive the remaining recovery amount.
e. In exercising its authority pursuant to Articles 13(a) through (d), Anthem shall determine which recoveries it
will pursue, and in no event will Anthem pursue a recovery if it reasonably believes that the cost of the
collection is likely to exceed the recovery amount or if the recovery is prohibited by law or an agreement
with a Provider or Vendor. Anthem will not be liable for any amounts it does not successfully recover.
Anthem shall retain any recoveries it obtains as a result of its recovery services or audits if the cost to
administer the refund is likely to exceed the amount of the refund, but in such case, shall not charge
Employer any fee for its recovery services. Employer further understands and agrees that Anthem shall
have authority to enter into a settlement or compromise on behalf of Employer and Plan regarding these
recovery, subrogation and audit services, including, but not limited to, the right to reduce future
reimbursement to Provider or Vendor in lieu of a lump sum settlement. Anthem may have contracts with
Network Providers or Vendors or there may be judgments, orders, settlements, applicable laws or
regulations that limit Anthem's right to make recoveries under certain circumstances. Anthem may, but is
not required to, readjudicate Claims or adjust Members' cost share payments related to the recoveries
made from a Provider or a Vendor. Anthem shall credit Employer net recovery amounts after deduction of
fees and costs as set forth in this Article 13 as soon as practicable consistent with Anthem's business
practices, and not later than 150 days following the receipt of the total recovery amount. If Anthem does
not credit Employer within 150 days of its receipt of the total recovery amount, Anthem shall pay Employer
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interest calculated at the Federal Reserve Funds Rate in effect at the time of the payment. In no event,
however, will Anthem be liable to credit Employer for any recovery after the termination date of this
Agreement and any Claims Runout Period, and Employer acknowledges and agrees that such sums shall
be retained by Anthem as reasonable compensation for recovery services provided by Anthem.
ARTICLE 14 - PHARMACY BENEFITS AND SERVICES
a. If applicable to Plan benefits and as indicated in Schedule B of this Agreement, Anthem, through PBM, shall
provide the following Prescription Drug management services:
1. Anthem shall offer Employer access to a network of pharmacies that have entered into contractual
arrangements with PBM under which such pharmacies agree to provide pharmacy services to
Members and accept negotiated fees for such services ( "Network Pharmacies"). Anthem shall
determine, in its sole discretion, which pharmacies shall be Network Pharmacies, and the
composition of Network Pharmacies may change from time to time.
2. Anthem will furnish and maintain a drug formulary for use with the Plan, and Anthem shall
periodically review and update its formulary. The Employer shall adopt such formulary as part of
the design of the Plan. Unless mutually agreed to in writing by the Parties, upon termination of the
Agreement, the Employer shall cease adoption and use of Anthem's formulary as part of its
Plan. The drug formulary will be made available to Members on Anthem's web site and upon
request may be provided to Employer in a mutually acceptable format for Employer's distribution
to Members.
3. Anthem shall offer Employer a home delivery pharmacy program, through which Members may
receive home delivery prescription services. Additional fees for express mail, shipping or handling
may be charged to Members. Anthem shall also offer Employer a specialty pharmacy program,
through which Members may receive specialty pharmacy prescription services. Anthem shall
provide all necessary information and forms to Members to obtain these services.
4. Anthem shall arrange for the processing of Prescription Drug Claims in accordance with the Plan.
b. PBM has negotiated programs with pharmaceutical manufacturers under which rebates for certain
Prescription Drugs dispensed to Members are made directly to PBM ( "Drug Rebate Programs "). Such
Drug Rebate Programs are not based on the drug utilization of any one Employer Plan, but rather are
based on the drug utilization of all individuals enrolled in PBM managed programs. In many cases the
rebates are conditioned on certain Prescription Drugs being included on the formulary that Anthem requires
Employer to adopt as part of the Plan. PBM will pay Anthem a portion of the rebates it receives (such
portion being referred to in this Agreement as "Drug Rebates "). Anthem shall pay Employer an amount
attributable to its actual or estimated receipt of the Drug Rebates as described in Section 3(A) of Schedule
A.
c. Anthem may receive and retain administrative fees from PBM or directly from pharmaceutical
manufacturers. In addition, Anthem may receive and retain service fees from pharmaceutical
manufacturers for providing services (e.g., Provider and Member education programs that promote clinically
appropriate and safe dispensing and use of Prescription Drugs). For purposes of this Agreement,
administrative fees and service fees received by Anthem or PBM shall not be considered Drug Rebates.
d. If Employer terminates the pharmacy benefits portion of its Plan with Anthem at any time, then Anthem shall
have the right to amend the Base Administrative Services Fee indicated in Section 3(A) of Schedule A.
ARTICLE 15 - INTER -PLAN PROGRAMS
(THE LANGUAGE IN THIS ARTICLE IS REQUIRED BY BCBSA.)
a. Out of Area Services. Anthem has a variety of relationships with other Blue Cross and /or Blue Shield
Licensees referred to generally as "Inter -Plan Programs." Claims for certain services may be processed
through one of these Inter -Plan Programs and presented to Anthem for payment in accordance with the
rules of the Inter -Plan Programs policies then in effect. The Inter -Plan Programs available to Members
under this Agreement are described generally below. Typically, Members' Claims are processed through an
Inter -Plan Program when Members obtain care from health care Providers that have a contractual
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agreement (i.e., are "Network Providers") with a local Blue Cross and /or Blue Shield Licensee ("Host Blue ").
In some instances, Members may obtain care from non - Network Providers. Anthem's payment practices in
both instances are described below.
b. BlueCard® Program. Under the BlueCard® Program, when Members access Covered Services within the
geographic area served by a Host Blue, Anthem will remain responsible to Employer for fulfilling Anthem's
contractual obligations. However, in accordance with applicable Inter -Plan Programs policies then in effect,
the Host Blue will be responsible for providing such services as- contracting and handling substantially all
interactions with its Network Providers. The financial terms of the BlueCard Program are described
generally below. Individual circumstances may arise that are not directly covered by this description;
however, in those instances, Anthem's action will be consistent with the spirit of this description.
1. Liability Calculation Method Per Claim. The calculation of the Member liability on Claims for
Covered Services processed through the BlueCard Program will be based on the lower of the
Network Provider's Billed Charges or the negotiated price made available to Anthem by the Host
Blue.
The calculation of Employer liability on Claims for Covered Services processed through the
BlueCard Program will be based on the negotiated price made available to Anthem by the Host
Blue. Sometimes, this negotiated price may be greater than Billed Charges if the Host Blue has
negotiated with its Network Provider(s) an inclusive allowance (e.g., per case or per day amount)
for specific health care services. Host Blues may use various methods to determine a negotiated
price, depending on the terms of each Host Blue's health care Provider contracts. The negotiated
price made available to Anthem by the Host Blue may represent a payment negotiated by a Host
Blue with a health care Provider that is one of the following:
i. an actual price. An actual price is a negotiated payment without any other increases or
decreases, or
ii. an estimated price. An estimated price is a negotiated payment reduced or increased by a
percentage to take into account certain payments negotiated with the Provider and other
Claim- and non - Claim- related transactions. Such transactions may include, but are not limited
to, anti -fraud and abuse recoveries, Provider refunds not applied on a Claim - specific basis,
retrospective settlements, and performance - related bonuses or incentives, or
iii an average price. An average price is a percentage of Billed Charges representing the
aggregate payments negotiated by the Host Blue with all of its health care Providers or a
similar classification of its Providers and other Claim- and non - Claim- related transactions. Such
transactions may include the same ones as noted above for an estimated price.
Host Blues using either an estimated price or an average price may, in accordance with Inter -Plan
Programs policies, prospectively increase or reduce such prices to correct for over- or
underestimation of past prices (i.e., prospective adjustments may mean that a current price
reflects additional amounts or credits for Claims already paid to Providers or anticipated to be paid
to or received from Providers). However, the amount paid by the Member and Employer is a final
price; no future price adjustment will result in increases or decreases to the pricing of past
Claims. The BlueCard Program requires that the price submitted by a Host Blue to Anthem is a
final price irrespective of any future adjustments based on the use of estimated or average
pricing. If a Host Blue uses either an estimated price or an average price on a Claim, it may also
hold some portion of the amount that Employer pays in a variance account, pending settlement
with its Network Providers. Because all amounts paid are final, neither variance account funds
held to be paid, nor the funds expected to be received, are due to or from Employer. Such
payable or receivable would be eventually exhausted by health care Provider settlements and /or
through prospective adjustment to the negotiated prices. Some Host Blues may retain interest
earned, if any, on funds held in variance accounts.
A small number of states require Host Blues either (i) to use a basis for determining Member
liability for Covered Services that does not reflect the entire savings realized, or expected to be
realized, on a particular Claim, or (ii) to add a surcharge. Should the state in which health care
services are accessed mandate liability calculation methods that differ from the negotiated price
methodology or require a surcharge, Anthem would then calculate Member liability and Employer
liability in accordance with applicable law.
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2. Return of Overpayments. Under the BlueCard Program, recoveries from a Host Blue or its
Network Providers can arise in several ways, including, but not limited to, anti -fraud and abuse
recoveries, health care Provider /hospital audits, credit balance audits, utilization review refunds,
and unsolicited refunds. In some cases, the Host Blue will engage a third party to assist in
identification or collection of recovery amounts. The fees of such a third party may be netted
against the recovery. Recovery amounts determined in this way will be applied in accordance with
applicable Inter -Plan Programs policies, which generally require correction on a Claim -by -Claim or
prospective basis.
c. Negotiated National Account Arrangements. As an alternative to the BlueCard Program, Member Claims
for Covered Services may be processed through a negotiated National Account arrangement with a Host
Blue. For purposes of this Article, a "National Account" is an Employer that has membership in more than
one state.
If Anthem and Employer have agreed that (a) Host Blue(s) shall make available a custom health care
Provider network(s) in connection with this Agreement, then the terms and conditions set forth in Anthem's
negotiated National Account arrangement(s) with such Host Blue(s) shall apply. In negotiating such
arrangement(s), Anthem is not acting on behalf of or as an agent for Employer, the Plan or Members.
Employer agrees that Anthem will not have any responsibility in connection with the processing and
payment of Claims when Members access such network(s), except as may be set forth in the relevant
participation agreement.
Member Liability Calculation. Member liability calculation will be based on the lower of either Billed
Charges or negotiated price made available to Anthem by the Host Blue that allows Members access to
negotiated participation agreement networks of specified Network Providers outside of Anthem's service
area.
d. Non - Network Providers Outside Anthem's Service Area.
1. Member Liability Calculation. When Covered Services are provided outside of Anthem's service
area by non - Network Providers, the amount a Member pays for such services will generally be
based on either the Host Blue's non - Network Provider local payment or the pricing arrangements
required by applicable state law. In these situations, the Member may be responsible for the
difference between the amount that the Non - Network Provider bills and the payment Anthem will
make for the Covered Services as set forth in this paragraph.
2. Exceptions. In some exception cases, Anthem may pay Claims from non - Network Providers
outside of Anthem's service area based on the Provider's Billed Charges, such as in situations
where a Member did not have reasonable access to a Network Provider, as determined by
Anthem in Anthem's sole and absolute discretion or by applicable state law. In other exception
cases, Anthem may pay such a Claim based on the payment it would make if Anthem were paying
a non - Network Provider inside of Anthem's service area as described elsewhere in this
Agreement, where the Host Blue's corresponding payment would be more than Anthem's in-
service area non - Network Provider payment, or in its sole and absolute discretion, Anthem may
negotiate a payment with such a Provider on an exception basis. In any of these exception
situations, the Member may be responsible for the difference between the amount that the non -
Network Provider bills and the payment Anthem will make for the Covered Services as set forth in
this paragraph.
e. Inter -Plan Program Fees and Compensation. Employer understands and agrees to reimburse Anthem for
certain fees and compensation which it is obligated under BlueCard or any other Inter -Plan Program, to pay
to the Host Blues, to the BCBSA, and /or to BlueCard or Inter -Plan Program vendors, as described below.
Fees and compensation under BlueCard and other Inter -Plan Programs may be revised in accordance with
the specific Program's standard procedures for revising such fees and compensation, which do not provide
for prior approval by any groups. Such revisions typically are made annually as a result of Program policy
changes and /or vendor negotiations. These revisions may occur at any time during the course of a given
calendar year, and they do not necessarily coincide with the Agreement Period. With respect to Negotiated
National Account Arrangements, the participation with the Host Blue may provide that Anthem must pay an
administrative and /or network access fee to the Host Blue. For this type of negotiated participation
arrangement, any such administrative and /or network access fee will not be greater than the comparable
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fees that would be charged under the BlueCard Program. Anthem will charge these fees as described in
Section 7 of Schedule A.
f. Value -Based Programs.
1 Definitions. For the purposes of this Article 15.(f), the following definitions apply:
a. Accountable Care Organization (ACO): A group of healthcare Providers who agree to deliver coordinated
care and meet performance benchmarks for quality and affordability in order to manage the total cost of
care for their member populations.
b. Care Coordination: Organized, information - driven patient care activities intended to facilitate the
appropriate responses to a Member's healthcare needs across the continuum of care.
c. Care Coordinator: An individual within a Provider organization who facilitates Care Coordination for
patients.
d. Care Coordinator Fee: A fixed amount paid by a Blue Cross and /or Blue Shield Licensee to Providers
periodically for Care Coordination under a Value -Based Program.
e. Global Payment/Total Cost of Care: A payment methodology that is defined at the patient level and
accounts for either all patient care or for a specific group of services delivered to the patient such as
outpatient, physician, ancillary, hospital services, and prescription drugs.
f. Negotiated National Account Arrangement: An agreement negotiated between a Home Licensee and one
or more Host Licensees for any National Account that is not delivered through the BlueCard Program.
g. Patient - Centered Medical Home (PCMH): A model of care in which each patient has an ongoing
relationship with a primary care physician who coordinates a team to take collective responsibility for
patient care and, when appropriate, arranges for care with other qualified physicians.
h. Provider Incentive: An additional amount of compensation paid to a healthcare Provider by a Blue Cross
and /or Blue Shield Licensee, based on the Provider's compliance with agreed -upon procedural and /or
outcome measures for a particular population of covered persons.
Shared Savings: A payment mechanism in which the Provider and payer share cost savings achieved
against a target cost budget based upon agreed upon terms and may include downside risk.
Value -Based Program (VBP): An outcomes -based payment arrangement and /or a coordinated care
model facilitated with one or more local Providers that is evaluated against cost and quality metrics /factors
and is reflected in Provider payment.
2. BlueCard® Program
Value -Based Programs Overview
In some cases, Members may access Covered Services from certain Host Blue participating Network Providers
that have entered into specific, Value -Based Programs with a Host Blue. These Value -Based Programs consist
of Accountable Care Organizations, Global Payment/Total Cost of Care arrangements, Patient Centered Medical
Homes and Shared Savings arrangements.
Value -Based Programs Administration
Under Value -Based Programs, a Host Blue may pay Providers for reaching agreed -upon cost/quality goals in the
following ways: retrospective settlements, Provider Incentives, a share of target savings, Care Coordinator Fees
and /or other allowed amounts. The Host Blue may pass these Provider payments to Anthem, which Anthem will
pass on to Employer in the form of either an amount included in the price of the Claim or an amount charged
separately in addition to the Claim.
When such amounts are included in the price of the Claim, the Claim may be billed using one of the following
pricing methods:
• Actual Pricing
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o Claim Based (Actual Pricing): The charge to accounts for Value -Based Programs
incentives /Shared Savings settlements is part of the Claim. These charges are passed via an
enhanced fee schedule.
• Estimated /Average Pricing
o Claim Based (Estimated Pricing): The charge to accounts for Value -Based Programs
incentives /Shared - Savings settlements is included in the Claim as an amount based on a
supplemental factor.
o In such cases, Anthem will pass any supplemental amounts on to Employer as follows: it will
be included as part of the Claims charge on the invoice.
When such amounts are billed in addition to the Claim, they may be billed as follows:
o Per Member Per Month (PMPM) Billings: Per Member Per Month billings for
incentives /Shared- Savings settlements to accounts are outside of the Claim system. Anthem
will pass these Host Blue charges through to Employer as a separately identified amount on
the invoice.
The amounts used to calculate either the supplemental factors or PMPM billings are estimates. This means that
Host Blues cannot determine final amounts for these arrangements at the time when Members incur Claims for
Covered Services. Consequently, Host Blues may hold some portion of the amounts Employer pays under such
arrangements until the end of the applicable Value -Based Program payment and /or reconciliation measurement
period.
At the end of the Value -Based Program payment and /or reconciliation measurement period for these
arrangements, Host Blues will take one of the following actions:
• Use any surplus in funds to fund Value -Based Program payments or reconciliation amount in the next
measurement period.
• Address any deficit in funds through an adjustment to the per- member - per -month billing amount or the
reconciliation billing amount for the next measurement period.
The measurement period for determining these surpluses or deficits may differ from the term of this Agreement.
Such surpluses or deficits would be eventually exhausted through prospective adjustment to the settlement
billings in the case of Value -Based Programs.
Note: Members will not bear any portion of the cost of Value -Based Programs except when Host Blues use
either average pricing or actual pricing to pay Providers under Value -Based Programs.
Care Coordinator Fees
For certain Value -Based Programs, Host Blues may also bill Anthem for Care Coordinator Fees which we will
pass on to Employer. Based on the methods that Host Blues use to pass these fees on to Anthem, Anthem will
invoice Employer through:
(1) PMPM billings
Or
(2) Individual Claim billings through applicable care coordination codes from the most current
editions of either Current Procedural Terminology (CPT) published by the American Medical
Association (AMA) or Healthcare Common Procedure Coding System (HCPCS) published by
the US Centers for Medicare and Medicaid Services (CMS).
Anthem and Employer will not impose Member cost sharing for Care Coordinator Fees.
3. Negotiated National Account Arrangements
If Anthem has entered into a Negotiated National Account Arrangement with a Host Blue to provide Value -Based
Programs to Members, Anthem will follow the same procedures for Value -Based Programs administration and
Care Coordination Fees as noted in the BlueCard Program section.
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ARTICLE 16 - CLAIMS LITIGATION
a. Claims Against Anthem. Anthem shall defend against any legal action or proceeding brought against
Anthem to recover a claim for benefits under the Plan as administered by Anthem. With the exception of
reimbursement disputes brought by Providers, if a demand for benefits under the Plan is asserted, or
litigation, investigation, or other proceedings are commenced against Anthem by a Member in connection
with the Plan, Anthem shall provide notice to Employer as soon as practicable. In such instances, Anthem
will select and retain counsel. Except as otherwise provided in Article 16(b), Employer will assume liability
for payment of reasonable attorneys' fees and costs in connection with the litigation, proceeding, or
investigation.
Claims Against Anthem and Employer /Plan. If Employer or Plan are also named in the legal action or
proceeding, Employer reserves the right to retain separate counsel for itself, in its sole discretion and at its
own expense, and separate counsel for the Plan. If during such litigation, investigation or proceedings
Employer and Anthem are both represented by the same counsel selected by Anthem and a conflict of
interest arises, the selected counsel shall continue to represent Anthem's interests. Employer shall waive
any conflict for such representation and retain its own counsel, or separate counsel for the Plan, at its own
expense. Each Party will provide the other with reasonable cooperation in the defense of any such matter.
Settlement of Claims. Anthem is authorized to settle or compromise any claim to recover benefits under the
Plan arising out of a course of legal action with the approval of Employer, which approval shall not be
unreasonably withheld. Notwithstanding the above, settlements of reimbursement disputes brought by
Providers do not require the approval of Employer.
b. Notwithstanding the above in this Article 16, if Anthem fails to perform its responsibility to review and
determine Claims for benefits under the Plan in a manner that is consistent with the standard of care in
Article 17 of this Agreement, Anthem will assume liability for payment of its and Employer's reasonable
legal fees and costs. However, Anthem is not an insurer of benefits under the Plan nor does it underwrite
the risk or otherwise assume any risk for the payment of benefits under the Plan. Under all circumstances,
Employer shall be liable to pay Plan benefits awarded or paid by settlement, judgment, or otherwise.
c. In the event of any legal action or proceeding against the Employer or Plan pertaining to Covered Services
described in the Plan, Anthem shall make available to Employer, the Plan, and their respective counsel,
such evidence that is not privileged or otherwise confidential and is relevant to such action or proceeding.
ARTICLE 17 - INDEMNIFICATION
Except for legal actions or proceedings seeking benefits under the Plan, which are governed by Article 16 of this
Agreement, Anthem and Employer shall each indemnify, defend and hold harmless the other Party, and its directors,
officers, employees, agents and affiliates, from and against any and all losses, claims, damages, liabilities, costs and
expenses (including without limitation, reasonable attorneys' fees and costs) resulting from direct actions between
the Parties or actions brought by a third party asserting liability for: (1) the indemnifying Party's or its subcontractor's
negligence or willful misconduct in the performance of the obligations under this Agreement, and /or (2) the
indemnifying Party's failure to provide information required under this Agreement or otherwise required by law that
results in a sanction or penalty being assessed against the other Party, and /or (3) the indemnifying Party's or its
subcontractor's breach of fiduciary duties. "Negligence as used in this Article 17 means the indemnifying Party's
failure to perform its obligations under this Agreement using the same skill and care under the circumstances that a
reasonably prudent Party acting in a like capacity would use in conducting its business and providing services. The
obligation to provide indemnification under this Agreement shall be contingent upon the Party seeking
indemnification: (i) providing the indemnifying Party with prompt written notice of any claim for which indemnification
is sought, (ii) allowing the indemnifying Party to control the defense and settlement of such claim; provided, however,
that the indemnifying Party agrees not to enter into any settlement or compromise of any claim or action in a manner
that admits fault or imposes any restrictions or obligations on an indemnified Party without that indemnified Party's
prior written consent, which will not be unreasonably withheld; and, (iii) cooperating fully with the indemnifying Party
in connection with such defense and settlement.
Enterprise Administrative Services Agreement — November 2014 Master Template 17
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ARTICLE 18 - CHANGES IN BENEFITS PLAN DESIGN AND AGREEMENT
a. Either Party reserves the right to propose changes to the provisions described in the Benefits Plan Design
by giving written notice to the other Party not less than 90 days prior to the start of an Agreement Period
and such changes will be made to the Benefits Plan Design as mutually agreed to in writing by the
Parties. Either Party may also propose changes to the Benefits Plan Design at a time other than the start of
an Agreement Period and such changes will be made to the Benefits Plan Design if mutually agreed to in
writing by the Parties. Anthem's incorporation of the requested changes into the Benefits Plan Design shall
constitute Anthem's acceptance of the Employer's requested changes. If Anthem initiates the proposed
changes, provides Employer with no less than thirty (30) days advance written notice of the proposed
changes and does not receive written notice from Employer prior to the effective date of the proposed
changes that such changes are unacceptable, the changes shall be deemed approved by Employer and
Anthem shall incorporate such changes into the Benefits Plan Design.
b. If changes to the provisions of the Benefits Plan Design are mandated as a result of a change to any
applicable state or federal law, Anthem shall have the right to make such changes to the Benefits Plan
Design to comply with the law and shall provide written notice to Employer at least 30 days prior to the
effective date of the change, unless the effective date specified in the law is earlier.
c. Anthem also reserves the right to change the Base Administrative Services Fee provided in Section 3(A) of
Schedule A at a time other than the start of an Agreement Period upon the occurrence of one or more of
the following events: (1) a change to the Plan benefits initiated by Employer that results in a substantial
change in the services to be provided by Anthem; (2) a change in ownership as described in Article 3(h) of
this Agreement; (3) a change in the total number of Members resulting in either an increase or decrease of
10% or more of the number of Members enrolled for coverage on the date the Base Administrative Services
Fee was last modified; (4) a change in Employer contribution as described in Article 3(e) of this Agreement;
(5) a change in nature of Employer's business resulting in a change in its designated Standard Industrial
Classification ( "SIC ") code; or (6) a change in applicable law that results in an increase in the cost or
amount of administrative services from those currently being provided by Anthem under this Agreement.
Anthem shall provide notice to Employer of the change in the Base Administrative Services Fee at least 30
days prior to the effective date of such change. If such change is unacceptable to Employer, either Party
shall have the right to terminate this Agreement by giving written notice of termination to the other Party
before the effective date of the change. If Employer accepts the proposed Base Administrative Services
Fee, Anthem shall provide a revised Schedule A that will then become part of this Agreement without the
necessity of securing Employer's signature on the Schedule.
d. In the event any action of any department, branch or bureau of the federal, state or local government is
initiated or taken ( "Action ") against a Party to this Agreement and such Action materially and adversely
affects that Party's performance of the obligations under this Agreement, the affected Party shall notify the
other Party of the nature of the Action and provide copies of pertinent documents supporting the reason(s)
for the Action. If a modification to the Agreement is needed as a result of the Action, the Parties shall meet
within 30 days of the notice by the affected Party to the other Party and shall, in good faith, attempt to
negotiate a modification to this Agreement that minimizes or eliminates the impact of the Action. If the
Parties are unable to minimize or eliminate the impact of the Action, then either Party may terminate this
Agreement by giving at least 90 days notice of termination. This Agreement may be terminated sooner if
agreed to by the Parties or required by the government entity initiating or taking the Action.
e. No modification or change in any provision of this Agreement shall be effective unless and until approved in
writing by an authorized representative of Anthem and evidenced by an amendment or new Schedule
attached to this Agreement. If either Party proposes such a modification or change, such Party shall
provide written notice to the other Party at least thirty (30) days prior to the effective date of such
change. The modification or change will be deemed accepted by the non - proposing Party unless the
proposing Party receives written notice from the non - proposing Party prior to the effective date that such
change is unacceptable. If the non - proposing Party does not accept the proposed change, the Parties will
meet and confer to reach agreement prior to implementation of such change.
ARTICLE 19 - TERMINATION AND /OR SUSPENSION OF PERFORMANCE
a. Notwithstanding any other provision of this Article, this Agreement automatically suspends if Employer fails
to pay or fund any amount due under this Agreement within 7 days of the date of Anthem's written notice to
the Employer of a delinquent amount owed. This Agreement automatically terminates without further notice
Enterprise Administrative Services Agreement — November 2014 Master Template 18
City of Carmel 11/24/2014
or action if Employer fails to pay or fund any amount due under this Agreement within 30 days of the date of
Anthem's written notice to Employer of a delinquent amount owed. Such termination shall be effective as of
the last period for which full payment was made. In addition, this Agreement automatically terminates,
without further notice or action, at the end of each Agreement Period unless Anthem offers to renew this
Agreement and Employer accepts such offer of renewal pursuant to Article 6 of this Agreement. Upon
termination of this Agreement, Employer shall remain liable for all payments due to Anthem under the terms
of this Agreement. Notwithstanding the above, Anthem shall have no obligation to pay any Claims under
the Agreement until all required payments have been paid in full.
b. If either Party fails to comply with any material duties and obligations under this Agreement other than
payment of amounts due under this Agreement, the other Party shall have the right to: (1) terminate this
Agreement by giving the non - compliant Party at least 60 days prior written notice of termination; or (2) upon
written notice to the other Party, suspend performance of its obligations under this Agreement. Employer
acknowledges and agrees that in the event it is the non - compliant Party, Anthem shall have no liability to
any Member. Either Party, at its option, may allow the non - compliant Party to cure a breach of this
Agreement and, upon acceptance in writing by that Party that a breach is cured, this Agreement may be
reinstated retroactive to the date of the breach or suspension of performance. Notwithstanding any other
provision of this Agreement, a Party may seek injunctive or other equitable relief from a court of competent
jurisdiction should there be any unauthorized use or disclosure of Proprietary Information or Confidential
Information by the other Party.
c. If there shall occur any change in the condition (financial or otherwise) of Employer or an Employer Affiliate
that, in the reasonable opinion of Anthem, has a material adverse effect upon the validity, performance, or
enforceability of this Agreement, on the financial condition or business operation of Employer (or Employer
Affiliate), or on the ability of Employer to fulfill its obligations under this Agreement, then Anthem shall have
the right to require Employer to provide adequate assurance of future performance, which may include a
payment of a cash deposit, letter of credit, or other method of assurance acceptable to Anthem. Examples
of such a change could include, but would not be limited to the actual, or Anthem's reasonable anticipation
of: (1) any voluntary or involuntary case or proceedings under bankruptcy law with respect to Employer or
an Employer Affiliate; (2) any receivership, liquidation, dissolution, reorganization or other similar case or
proceeding with respect to Employer or an Employer Affiliate; (3) any appointment of a receiver, trustee,
custodian, assignee, conservator or similar entity or official for Employer or an Employer Affiliate; or (4) any
assignment for the benefit of creditors or sale of all or substantially all of Employer's assets or a key
Employer Affiliate's assets.
Any deposit amount shall be paid to Anthem within 30 days of the request or in such shorter time as agreed
to by the Parties. The deposit amount shall not be paid with Plan assets, shall not be funded in any part by
Member contributions, and shall not be paid from any segregated fund or from funds in which the Plan or
any Member has a beneficial interest. The deposit amount shall be the property of Anthem, may be held in
Anthem's general account, may be subject to satisfy the claims of Anthem's general creditors, and does not
govern or limit the benefits available under the terms of the Plan. At the termination of this Agreement and
designated Claims Runout Period, if any, the deposit amount, net of any outstanding fees or Claims
amounts payable to Anthem, shall be returned to Employer. Any deposit amount returned to Employer
under this Article 19(c) shall not include interest. Neither Employer, the Plan, nor any Member shall have
any beneficial or legal ownership interest in any deposit amount paid pursuant to this Section.
If such further assurance is required by Anthem, Anthem may, at any time after the date of notice to
Employer of such requirement, suspend performance of its obligations under this Agreement until the date
of receipt by Anthem of such adequate assurance without being liable to the Employer, the Plan or any
Member for such suspension. If such adequate assurance is not received within 30 days of the request,
Anthem may terminate this Agreement.
d. Subject to the provisions of Article 7 of this Agreement, if this Agreement terminates and Anthem makes
payment of any Claim that would otherwise have been payable under the terms of this Agreement after the
termination date, Employer shall be liable to reimburse Anthem for such Claim to the extent that the
amounts have not already been paid by Employer. Employer also agrees to cooperate with Anthem in the
coordination of pharmacy Claims with any successor pharmacy benefit manager.
e. Employer may terminate this Agreement at any time other than at the end of an Agreement Period by giving
Anthem 90 days written notice of its intent to terminate.
Enterprise Administrative Services Agreement — November 2014 Master Template 19
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In connection with the termination of this Agreement and upon Employer's request, Anthem shall provide
reports that are part of Anthem's standard account reporting package at no extra charge. However Anthem
shall have no obligation to provide the reports after the termination date of this Agreement if such
termination is due to non - payment pursuant to Article 19(a) of this Agreement. Upon Employer's request,
Anthem shall also provide data extract files to Employer for an additional fee mutually agreed to by the
Parties. In no event shall Anthem be obligated to produce more than two sets of reports following the
termination date of this Agreement.
ARTICLE 20 - LIMITATION ON ACTIONS AND GOVERNING LAW
a. No action by either Party alleging a breach of this Agreement may be commenced after the expiration of 5
years from the date on which the claim arose.
b. This Agreement shall be governed by, and shall be construed in accordance with the laws of Indiana but
without giving effect to that state's rules governing conflict of laws.
ARTICLE 21 - NO WAIVER
No failure or delay by either Party to exercise any right or to enforce any obligation herein, and, no course of dealing
between Employer and Anthem, shall operate as a waiver of such right or obligation or be construed as or constitute
a waiver of the right to enforce or insist upon compliance with such right or obligation in the future. Any single or
partial exercise of any right or failure to enforce any obligation shall not preclude any other or further exercise, or the
right to exercise any other right or enforce any other obligation.
ARTICLE 22 - ASSIGNMENT AND SUBCONTRACTING
a. Unless it has first obtained the written consent of an officer of the other Party, neither Party may assign this
Agreement to any other person. Notwithstanding the foregoing, Anthem may, with advance written notice
to Employer, assign or otherwise transfer its rights and obligations hereunder, in whole or in part, to: (i) any
affiliate of Anthem; or (11) any entity surviving a transaction involving the merger, acquisition, consolidation,
or reorganization of Anthem, or in which all or substantially all of Anthem's assets are sold. Additionally,
Employer may, with advance written notice to Anthem, assign, delegate, or otherwise transfer its rights and
obligations hereunder, in whole, to (i) any affiliate of Employer; or (ii) any entity surviving a transaction
involving the merger, acquisition, consolidation or reorganization of Employer, or in which all or substantially
all of Employer's assets are sold, provided that such affiliate or other assignee presents, in Anthem's
opinion, an equivalent or better financial status and credit risk. Either Party is required to provide advance
written notice under this provision only to the extent permissible under applicable law and the reasonable
terms of the agreement(s) governing such merger, acquisition, consolidation, reorganization, or asset sale.
If advance written notice is not allowed, notice shall be provided as soon as practicable. Upon receipt of
notice of an assignment of this Agreement, the other Party may terminate this Agreement by providing the
assigning Party with 30 days advance written notice of termination. Any assignee of rights or benefits
under this Agreement shall be subject to all of the terms and provisions of this Agreement.
b. Either Party may subcontract any of its duties under this Agreement without the prior written consent of
other Party; however, the Party subcontracting the services shall remain responsible for fulfilling its
obligations under this Agreement.
ARTICLE 23 - NOTICES
a. Any notice or demand pursuant to Articles 19 and 22 of this Agreement shall be deemed sufficient when
made in writing as follows: to Employer, by first class mail, personal delivery, or electronic mail or overnight
delivery with confirmation capability, to its principal office shown upon the records of Anthem; to Anthem, by
first class mail, personal delivery, electronic mail or overnight delivery with confirmation capability, to the
designated Anthem sales representative.
Enterprise Administrative Services Agreement — November 2014 Master Template 20
City of Carmel 11/24/2014
b. A notice or demand shall be deemed to have been given as of the date of deposit in the United States mail
with postage prepaid or, in the case of delivery other than by mail, on the date of actual delivery at the
appropriate address.
c. Employer shall be obligated to provide all notices to Members as may be necessary to effectuate any
change in or termination of the Agreement.
ARTICLE 24 - ADMINISTRATION
a. Employer, on behalf of itself and its Members, hereby expressly acknowledges its understanding that this
Agreement constitutes a contract solely between Employer and Anthem, that Anthem is an independent
corporation operating under a license with BCBSA permitting Anthem to use the Blue Cross and Blue
Shield Service Marks in Indiana and that Anthem is not contracting as the agent of BCBSA. Employer
further acknowledges and agrees that it has not entered into this Agreement based upon representations by
any person other than Anthem and that no person, entity, or organization other than Anthem shall be held
accountable or liable to it for any of Anthem's obligations to Employer created under this Agreement. This
paragraph shall not create any additional obligations whatsoever on the part of Anthem other than those
obligations created under other provisions of this Agreement.
b. Anthem is providing administrative services only with respect to the portion of the Plan described in the
Benefits Plan Design. Anthem has only the authority granted it pursuant to this Agreement. Anthem is not
the insurer or underwriter of any portion of the Plan. Anthem has no responsibility or liability for funding
benefits provided by the Plan, notwithstanding any advances that might be made by Anthem. Employer
retains the ultimate responsibility and liability for all benefits and expenses incident to the Plan, including
but not limited to, any applicable taxes that might be imposed relating to the Plan.
c. This provision has been intentionally deleted in its entirety.
d. Employer shall ensure that sufficient amounts are available to cover Claims payments, the monthly
Administrative Services Fees, and other fees or charges.
ARTICLE 25 - ENTIRE AGREEMENT
a. The following documents will constitute the entire Agreement between the Parties: this Agreement,
including any amendments and Schedules thereto, and the portion of the SPD that describes the Plan
Anthem administers.
b. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument.
c. This Agreement supersedes any and all prior agreements between the Parties, whether written or oral, and
other documents, if any, addressing the subject matter contained in this Agreement.
d. If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under
applicable law, order, judgment or settlement, such provision shall be excluded from the Agreement and the
balance of this Agreement shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.
ARTICLE 26 - DISPUTE RESOLUTION
This Article is intentionally omitted in its entirety.
ARTICLE 27 - MISCELLANEOUS
a. Employer and Anthem are separate legal entities. Anthem is strictly an independent contractor. Nothing
contained in this Agreement shall cause either Party to be deemed a partner, member, agent or
representative of the other Party, nor shall either Party have the expressed or implied right or authority to
assume or create any obligation on behalf of or in the name of the other Party through its actions,
omissions or representations.
Enterprise Administrative Services Agreement — November 2014 Master Template 21
City of Carmel 11/24/2014
b. Except as may be explicitly set forth in this Agreement, nothing herein shall be construed as an implied
license by a Party to use the other Party's name, trademarks, domain names, or other intellectual
property. Neither Party shall use the name, trademarks, domain names, or any other name or mark of the
other Party in any press release, printed form, advertising or promotional materials or otherwise, without the
prior written consent of the other Party. In addition, Employer has no license to use the Blue Cross and /or
Blue Shield trademarks or derivative marks (the 'Brands ") and nothing in the Agreement shall be deemed to
grant a license to Employer to use the Brands. Any references to the Brands made by Employer in its own
materials are subject to prior review and approval by Anthem.
c. Nothing contained herein shall cause either Party to be deemed an agent for service of legal process for the
other Party.
d. This provision is intentionally omitted.
e. The Parties acknowledge that Anthem, in making decisions regarding the scope of coverage of services
under the Plan, is not engaged in the practice of medicine. Providers are not restricted in exercising their
independent medical judgment by contract or otherwise and do not act on behalf of, or as agents for,
Anthem or the Plan.
f. In addition to any other provision providing for survival upon termination of this Agreement, the Parties'
rights and obligations under Articles 10, 11, 12, 13, 16, 17, 19, 23, 24, 25(a) and 25(c) shall survive the
termination of this Agreement for any reason.
g. Each Party shall comply with all laws and regulations applicable to their respective duties and obligations
assumed under this Agreement.
h. Anthem and Employer agree to the performance standards set forth in Schedule C.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by affixing the signatures of duly
authorized officers.
CITY OF CARMEL, INDIANA
By and through its Board of Public Works • 1d Sa ty
,dames Brainard, Presiding 0 icer
Date: 42 /Y -/
Lice
I Mary Ann
Date:
5v- -/
Anthem Insurance Companies, Inc. dba Anthem Blue Cross and Blue Shield
By: Robert W. Hillman— IN
Title: President- Anthem Blue Cross Blue Shield
Date: December 10, 2014
ATTEST
Tana Cordray, IM
/Date:
Cle - Treasurer
Wilson, ember
Date: i a_ f 17 / 14
Sandra M Johnson
puty Clerk For
Enterprise Administrative Services Agreement — November 2014 Master Template 22
City of Cannel 11/24/2014
SCHEDULE A
TO
ADMINISTRATIVE SERVICES AGREEMENT
WITH
CITY OF CARMEL
This Schedule A shall govern the Agreement Period from January 1, 2015 through December 31, 2015. For
purposes of this Agreement Period, this Schedule shall supplement and amend the Agreement between the
Parties. If there are any inconsistencies between the terms of the Agreement including any prior Schedules, and this
Schedule A, the terms of this Schedule A shall control.
Section 1. Effective Date and Renewal Notice
This Agreement Period shall be from 12:01 a.m. January 1, 2015 to the end of the day of December 31,
2015.
Paid Claims shall be processed pursuant to the terms of this Agreement when incurred and paid as follows:
Incurred from January 1, 2015 through December 31, 2015 and
Paid from January 1, 2015 through December 31, 2015.
Anthem shall provide any offer to renew this Agreement at least 120 days prior to the end of an Agreement
Period.
Section 2. Broker or Consultant Base Compensation
Medical
Broker or Consultant Fee is $2.50 per Subscriber per month. Upon receipt of payment from Employer,
Anthem shall remit payment to the broker or consultant designated by Employer.
Section 3. Administrative Services Fees
A. Base Administrative Services Fee*
Medical Plan #1 - HSA Composite $20.00 per Subscriber per month
Medical Plan #2 - PPO Composite $20.00 per Subscriber per month
'(1) Admin waiver - $100,000 transition fee; (2) 1st year renewal: admin - no more than 3% of full admin
(Med /Rx) fee - with continuation of Shared Discount; (3) Year 2 renewal (01/01/2017- 12/31/2017) full admin
(med /rx) fee to increase no more than 3 %; (4) year 2 renewal (1/1/2017- 12/31/2017 - eliminate Shared
discount & extend Discount Guarantee Plus arrangement with network claims guaranteed at 46.0% with up
to $160,000.00 at risk.
Prescription Drug Rebates: Anthem will pay to Employer 100.00% of the Drug Rebates collected from PBM
and attributable to Employer's Plan subject to Anthem's timely receipt of payment and accompanying data
from PBM. On a quarterly basis, Anthem shall credit Employer the Drug Rebates it has collected from PBM.
Anthem shall have the right to collect from Employer any rebate amount that Anthem is required to pay PBM
as a result of a pharmaceutical manufacturer audit or for any other reason. Anthem shall continue to provide
Employer its share of the Drug Rebates under this provision until the termination of this Agreement and any
applicable Claims Runout period. Anthem shall provide a final report of the Drug Rebates received
attributable to Employer's Plan after the end of any applicable Claims Runout period.
Shared Discount. Administrative Services Fees shall also include a network access fee that will be charged
monthly. Such fee shall be based on all Claims paid to Network Providers for the Agreement Period. The
fee shall be calculated on each Claim paid to Network Providers by taking the difference between the actual
discount rate negotiated by Anthem less 46.0% and multiplying that percentage by the amount of the Billed
Charge. The network access fee shall not exceed $57.83 per Subscriber per month for the Agreement
Period. The calculation of the network access fee shall not include Prescription Drug Claims or Claims paid
on a capitated basis.
Enterprise Administrative Services Agreement — November 2014 Master Template 23
City of Carmel 11/24/2014
Article 3(a) Retroactive Adjustments to Enrollment.
Anthem will not credit Employer Administrative Services Fees that relate to retroactive deletions and
conversely, Anthem will not charge, and Employer shall not pay, Administrative Services Fees that relate to
retroactive additions to enrollment.
B. Health and Wellness Program Fees
AIM
Integrated Imaging
Sleep Medicine
Oncology
Condition Care Core
Asthma
Chronic obstructive Pulmonary Disease
Congestive Heart Failure
Coronary Artery Disease
Diabetes
End Stage Renal Disease
24/7 NurseLine
C. Other Fees or Credits
$1.84 per Subscriber per month
$1.50 per Subscriber per month
$0.52 per Subscriber per month
Fee for Subrogation Services. The charge to Employer is 25% of gross subrogation recovery, or, if outside
counsel is retained, 15% of the net recovery after a deduction for outside counsel fees.
Fee for Provider Audit Performed by External Vendors. The charge to Employer is 25% of the amount
recovered from Vendor audits of Provider activity, including but not limited to credit balance, hospital bill
audits, DRG readmissions and high -cost drug audits.
Fee for Overpayment Identification Provided by External Vendors. The charge to Employer is 25% of the
amount recovered from review of Claims and membership data to identify overpayments, including but not
limited to COB, duplicates, contract compliance and eligibility.
Fee for Collection Services Provided by External Vendors. The charge to Employer is 25% of the amount
recovered by a Vendor in collecting receivables.
Fee for Independent Claims Review: $550.00 per independent review
Section 4. Paid Claims, Billing Cycle and Payment Method
A. Paid Claims
Paid Claims are described in Article 1 -Paid Claims Definition of the Agreement.
B. Billing Cycle
Weekly
Anthem shall notify Employer of the amount due to Anthem as a result of Claims processed and paid by
Anthem according to the billing cycle described above. The actual date of notification of Paid Claims and
the Invoice Due Date will be determined according to Anthem's regular business practices and systems
capabilities.
C. Payment Method
ACH or Wire Transfer Reimbursement for Paid Claims. Employer shall deposit the amount due in a
designated Anthem bank account by the Invoice Due Date. The deposit shall be made in accordance with
any policies and regulations of the bank necessary to assure that the deposit is credited to Anthem's
account no later than the next business day.
Enterprise Administrative Services Agreement — November 2014 Master Template 24
City of Carmel 11/24/2014
Section 5. Administrative Services Fee Billing Cycle and Payment Method
A. Billing Cycle
Monthly List Bill (pay as billed)
Anthem shall notify Employer of the amount due to Anthem pursuant to Section 3 of Schedule A according
to the billing cycle described above. The actual date of notification of amounts due and the Invoice Due
Date will be determined according to Anthem's regular business practices and systems capabilities.
B. Payment Method
ACH or Wire Transfer Reimbursement. Employer shall deposit the amount due in a designated Anthem
bank account by the Invoice Due Date. The deposit shall be made in accordance with any policies and
regulations of the bank necessary to assure that the deposit is credited to Anthem's account no later than
the next business day.
Section 6. Claims Runout Services
A. Claims Runout Period
Claims Runout Period shall be for the 12 months following the date of termination of this Agreement.
B. Claims Runout Administrative Services Fees
Medical:
Claims Runout Administrative Services Fee will be equal to 11% of Claims processed and paid by Anthem
or through the Inter -Plan Programs.
Section 7. Other Amendments. The Administrative Services Agreement is otherwise amended as
follows:
Inter -Plan Programs Fees
As described in Article 15, certain fees and compensation may be charged each time a Claim is processed
through Inter-Han Programs, which include the BlueCard Program, Negotiated National Account
Arrangements, and non - Network Provider Claims pricing arrangements. (Non- Network Provider Claims fees
include, but are not limited to administrative expense allowance fees, Central Financial Agency fee and ITS
transaction fee). The extent to which these fees and compensation are (i) included in the Base
Administrative Services Fee; or (ii) included in Paid Claims or separately billed to Employer is as follows:
Included in Base Administrative Services Fee:
Central Financial Agency fee
ITS transaction fee
BlueCard Program toll -free number fee
BlueCard Program PPO health care provider directory fee. If Employer requests paper copies of PPO
directories from a non - Anthem state, a fee may be charged by the Host Blue for those directories and
charged to the Employer. All other fees related to PPO directories are included in the Administrative
Services Fee.
Included in Paid Claims or separately billed to Employer:
Access fee, which is a percentage of the discount/differential Anthem receives from the Host Blue, based on
the current rate in accordance with the BlueCard Program's standard procedures for establishing the access
fee rate. The access fee will not exceed $2,000 for any Claim.
Administrative expense allowance fee ( "AEA ")
Enterprise Administrative Services Agreement — November 2014 Master Template 25
City of Carmel 11/24/2014
Negotiated National Account Arrangement administrative and /or network access fee. It may be based on
either a per Claim, per Subscriber per month or per Member per month basis.
Anthem Insurance Companies, Inc. dba Anthem Blue Cross and Blue Shield
By: Robert W. Hillman — IN
Title: President- Anthem Blue Cross Blue Shield
Date: December 10, 2014
Enterprise Administrative Services Agreement — November 2014 Master Template 26
City of Carmel 11/24/2014
SCHEDULE B
TO
ADMINISTRATIVE SERVICES AGREEMENT
WITH
CITY OF CARMEL
This Schedule B shall govern the Agreement Period from January 1, 2015 through December 31, 2015. For
purposes of this Agreement Period, this Schedule B shall supplement and amend the Agreement between the
Parties. If there are any inconsistencies between the terms of the Agreement including any prior Schedules and this
Schedule B, the terms of this Schedule B shall control.
The following is a list of services that Anthem will provide under this Agreement for the Base Administrative Services
Fee listed in Section 3(A) of Schedule A. These services will be furnished to Employer in a manner consistent with
Anthem's standard policies and procedures for self- funded plans. Anthem may also offer services to Employer that
have an additional fee. If Employer has purchased such services, those services and any additional fees are also
listed in Schedule A.
SERVICES INCLUDED IN THE BASE ADMINISTRATIVE SERVICES FEE IN SECTION 3A OF SCHEDULE A
Management Services
• Anthem Benefits and administration, unless otherwise noted below:
- Anthem definitions and exclusions
- Anthem complaint and appeals process
- Claims incurred and paid as provided in Schedule A
- Accumulation toward plan maximums beginning at zero on effective date
- Anthem Claim forms
- ID card
- Explanation of Benefits (Non- customized)
• Acceptance of electronic submission of eligibility information in HIPAA- compliant format
• Preparation of Benefits Plan Design
• Account reporting - standard data reports
• Billing and Banking Services
• Plan Design consultation
• Employer eServices
- Add and delete Members
- Download administrative forms
- View Member Benefits and request ID cards
- View eligibility
- View Claim status and detail
Claims and Customer Services
• Claims processing services
• Coordination of Benefits
• Recovery services performed internally by Anthem
• Medicare crossover processing
• Complaint and appeals processing
- One mandatory level of appeal, one voluntary level of appeal
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• Employer customer service, standard business hours
• Member customer service, standard business hours
• 1099s prepared and delivered to Providers
• Residency -based assessments and /or surcharges and other legislative reporting requirements
• Member eServices
Prescription Benefit Services
• Home delivery pharmacy
• Specialty Pharmacy Services
• Prescription eServices
- Pharmacy locator
- Online formulary
• Point of sale claims processing
• Horne delivery claims processing
• Horne delivery call center with toll free number
• Home delivery regular shipping and handling
• Standard management reports
• Ad hoc reports (subject to additional programming charge if required)
• Concurrent Drug Utilization Review (DUR) programs
• Retrospective DURs
• Administrative override (i.e., vacation, lost, stolen or spilled medications)
• Clinical review
• Pharmacy help desk with toll free number
• Pharmacy audits (desk and onsite; routine, in depth or focused) •
Health Care Management
• Care Management
- Referrals
- Utilization management
- Case management
- Anthem Medical Policy
• SpecialOffers
• HealthCare Advisor
• Care Comparison (where available)
• Transplant services - Blues Distinction
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• Healthy Solutions Newsletter (available online)
• MyHealth (Member Portal)
- Electronic Health Risk Assessment
- Personal Health Record
- Online Communities
- Member Alerts
Networks
• Access to networks
- Provider Network
- Mental Health /Substance Abuse Network
- Coronary Services Network
- Human Organ and Tissue Transplant Network
- Complex and Rare Cancer Network
- Bariatric Surgery Network
• Cost Management/Quality improvement program
- Credentialing
- Hospital audit program
- Anthem standard Claims bundling edits
• Anthem.com Provider directory
• Network Management
Health and Wellness Programs
• ComplexCare
Anthem Insurance Companies, Inc. dba Anthem Blue Cross and Blue Shield
By: Robert W. Hillman— IN
Title: President- Anthem Blue Cross Blue Shield
Date: December 10, 2014
Enterprise Administrative Services Agreement — November 2014 Master Template 29
City of Carmel 11/24/2014
SCHEDULE
TO
ADMINISTRATIVE SERVICES AGREEMENT
WITH
CITY OF CARMEL
This Schedule C provides certain guarantees pertaining to Anthem's performance under the Agreement between the
Parties ( "Performance Guarantees ") and shall be effective for the period from January 1, 2015 through December 31,
2015 (the "Performance Period "). Descriptions of the terms of each Performance Guarantee applicable to the Parties
are set forth in the Attachments (the "Attachments ") to this Schedule C and made a part of this Schedule C. This
Schedule shall supplement and amend the Agreement between the Parties. If there are any inconsistencies between
the terms of the Agreement including any prior Schedules and this Schedule C, the terms of this Schedule C shall
control.
Section 1. General Conditions
A. The Performance Guarantees described in the Attachments to this Schedule C shall be in effect only for
the Performance Period indicated above, unless specifically indicated otherwise in the Attachments. The
Performance Guarantees shall also contain a measurement period (the "Measurement Period ") for which
any Performance Guarantee will be calculated. If there are any inconsistencies between the terms
contained in this Schedule, and the terms contained in any of the Attachments to this Schedule C, the
terms of the Attachments to this Schedule C. shall control.
B. Anthem shall conduct an analysis of the data necessary to calculate any one of the Performance
Guarantees within the timeframes provided in the Attachments to this Schedule C. In addition, any
calculation of Performance Guarantees, reports provided, or analysis performed by Anthem shall be
based on Anthem's then current measurement methodology.
C. Any audits performed by Anthem to test compliance with any of the Performance Guarantees shall be
based on a statistically valid sample size with a 95% confidence level.
D. If the Parties do not execute the Agreement and any Amendment thereto, including this Schedule C,
Anthem shall have no obligation to make payment under these Performance Guarantees.
E. Unless otherwise specified in the Attachments to this Schedule C, the measurement of the Performance
Guarantee shall be based on: (1) the performance of any service team, business unit, or measurement
group assigned by Anthem; and (2) data that is maintained and stored by Anthem or its Vendors.
F. If Employer terminates the Agreement between the Parties prior to the end of the Performance Period,
or if the Agreement is terminated for non - payment, then Employer shall forfeit any right to collect any
further payments under any outstanding Performance Guarantees, whether such Performance
Guarantees are for a prior or current Measurement Period or Performance Period.
G. Anthem reserves the right to make changes to any of the Performance Guarantees provided in the
Attachments to this Schedule C upon the occurrence, in Anthem's reasonable determination, of either:
1. a change to the Plan benefits or the administration of the Plan initiated by Employer that
results in a substantial change in the services to be performed by Anthem or the
measurement of a Performance Guarantee; or
2. an increase or decrease of 10% or more of the number of Members that were enrolled for
coverage on the latter of the effective date or renewal date of this Agreement.
Should there be a change in occurrence as indicated above and these changes negatively impact
Anthem's ability to meet the Performance Guarantees, Anthem shall have the right to modify the
Performance Guarantees contained in the Attachments.
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City of Carmel 11)24/2014
H. For the purposes of calculating compliance with the Performance Guarantees contained in the
Attachments to this Schedule C, if a delay in performance of, or inability to perform, a service underlying
any of the Performance Guarantees is due to circumstances which are beyond the control of Anthem,
including but not limited to any act of God, civil riot, floods, fire, acts of terrorists, acts of war, or power
outage, such delayed or non - performed service will not count towards the measurement of the
applicable Performance Guarantee.
Section 2. Payment
A. If Anthem fails to meet any of the obligations specifically described in a Performance Guarantee, Anthem
shall pay Employer the amount set forth in the Attachment describing the Performance
Guarantee. Payment shall be in the form of a credit on Employees invoice for Administrative Services
Fees which will occur annually unless otherwise stated in the Performance Guarantee.
B. Notwithstanding the above, Anthem has the right to offset any amounts owed to Employer under any of
the Performance Guarantees contained in the Attachments to this Schedule C against any amounts
owed by Employer to Anthem under: (1) any Performance Guarantees contained in the Attachments to
this Schedule C; (2) the Agreement, or (3) any applicable Stop Loss Policy.
C. Notwithstanding the foregoing, Anthem's obligation to make payment under the Performance
Guarantees is conditioned upon Employer's timely performance of its obligations provided in the
Agreement in this Schedule C and the Attachments, including providing Anthem with the information
required by Anthem in the Attachments. Anthem shall not be obligated to make payment under the
Performance Guarantee if Employer fails to meet any of its obligations provided in the Attachments
related to such Performance Guarantee.
Section 3. Maximum Amount Payable Under the Performance Guarantees*
Notwithstanding any other provision contained in this Schedule or the Attachments to this Schedule, the maximum
amount Anthem shall be obligated to pay to Employer is equal to the sum of:
$150,000.00
The Maximum Amount Payable provisions above do not apply to Pharmacy related Performance Guarantees
Anthem Insurance Companies, Inc. dba Anthem Blue Cross and Blue Shield
des cy
By: Robert W. Hillman — IN
Title: President - Anthem Blue Cross Blue Shield
Date: December 10, 2014
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City of Carmel 11/24/2014
ATTACHMENT TO
SCHEDULE C
PERFORMANCE GUARANTEES
TO
ADMINISTRATIVE SERVICES AGREEMENT
WITH
CITY OF CARMEL
This Attachment is made part of Schedule C and will be effective for the Performance Period from January 1, 2015
through December 31, 2015. This Attachment is intended to supplement and amend the Agreement between the
Parties.
Operations Performance Guarantees
Performance
Category
Claims
Timeliness
(14 Calendar
Days)
Amount
at Risk
Year 1:
$25,000.00
Guarantee
A minimum of 90 % of Non - investigated
medical Claims will be processed timely.
Non - investigated Claims are defined as
medical Claims that process through the
system without the need to obtain
additional information from either the
Provider. Subscriber or other external
sources. Processed Timely is defined as
Non - investigated medical Claims that have
been finalized within 14 calendar days of
receipt.
This Guarantee will be calculated based
on the number of Non - investigated Claims
that Processed Timely divided by the total
number of Non- investigated Claims. The
calculation of this Guarantee does not
include Claim adjustments The calculation
of this Guarantee also excludes in any
quarter Claims for an Employer that
requests changes to Plan benefits, until all
such changes have been implemented.
This will be measured with Employer
specific data.
Penalty Calculation
Result Penalty
90.0% or Greater None
Measurement
and
Reporting
Period
Measurement
Period
88.0. % to 89.9% 25%
86.0% to 87.9%
50%
85.0% to 85.9%
75%
Less than 85.0%
100%
Annual
Reporting
Period
Annual
Claims Financial
Accuracy
Year 1:
$25,000.00
A minimum of 99% of medical Claim
dollars will be processed accurately. This
Guarantee will be calculated based on the
total dollar amount of audited medical
Claims paid correctly divided by the total
dollar amount of audited medical Paid
Claims. The calculation of this Guarantee
does not include Claim adjustments. The
calculation of this Guarantee also excludes
in any quarter Claims for an Employer that
requests changes to Plan benefits. until all
such changes have been implemented.
Result
99.0% or Greater
Penalty Measurement
None Period
98.0% to 98.9%
25%
Annual
97.0% to 97.9%
50%
96.0% to 96.9%
75%
Reporting
Period
Less than 96.0%
100%
Annual
Open Enrollment
ID Card
Issuance
Year 1:
$25,000.00
100% of ID cards will be mailed to Open
Enrollment participants no later than the
Employer's effective date provided that
Anthem receives an accurate eligibility file.
An Accurate Eligibility File is defined as
(1) an electronic eligibility file formatted in
a mutually agreed upon manner; (2)
received by Anthem no later than 30
calendar days prior to the Employer's
effective date; and, (3) contains an error
rate of less than 1%. This will be
measured with Employer specific data.
Result
Penalty
100%
None
9a9% to 99.0%
$100 per ID Card
not to exceed 25%
of amount at risk
for this measure
98.0% to 98.9%
50. %
97.0% to 97.9%
75%
Less than
97.0%
Enterprise Administrative Services Agreement — November 2014 Master Template
City of Cannel 11/24/2014
100%
Measurement
Period
Employer's
effective date.
Reporting
Period
60 calendar
days following
the Employer's
effective date.
32
Performance
Category
Average Speed
to Answer
Amount
at Risk
Year 1:
$25,000.00
Guarantee
The average speed to answer (ASA) will
be 45 seconds or less. ASA is defined as
the average number of whole seconds
members wait and /or are in the telephone
system before receiving a response from
a customer care representative (CCR) or
an interactive voice response unit
(IVR).This Guarantee will be calculated
based on the total number of calls
received in the customer service
telephone system.
Measurement
and
Reporting
Penalty Calculation Period
Measurement
Period
Result
45 seconds or
less Annual
46 to 48 seconds 25%
Penalty
None
49 to 51 seconds 50%
Reporting
Period
52 to 54 seconds 75%
55 or more
seconds
100%
Annual
First Call
Resolution
Year 1:
$25,000.00
A minimum of 85% of member calls will be
resolved during the initial contact with no
further follow up required. First Call
Resolution is defined as member callers
receiving a response to their inquiry during
an initial contact with no further follow -up
required. This Guarantee will be
calculated based on the total number of
members who receive a First Call
Resolution divided by the total number of
calls received into the customer service
telephone system. This will be measured
with employer specific data.
Result
85.0% or Greater
Penalty
None
83.0% to 84.9% 25%
81.5% to 82.9% 50%
80.0% to 81.4% 75%
Less than 80.0% 100%
Measurement
Period
Annual
Reporting
Period
Annual
Account
Management
Satisfaction
Year 1:
$25,000.00
A minimum average score of 3 will be
attained on the Account Management
Satisfaction Survey (AMSS). A minimum
of 3 responses per Employer to the AMSS
is required to base the score on Employer-
specific responses only. If 3 responses are
received from the Employer, an average
score is calculated by adding the scores
from each respondent divided by the total
number of Employer respondents. If fewer
than 3 responses are received, the score
will be calculated as follows:
2 Employer responses: 2/3 of the score
will be based on Employer - specific AMSS
results and 1/3 of the score will be based
on the aggregate score of all AMSS results
received by the Account Management
Team.
1 Employer- response: 1/3 of the score will
be based on Employer- specific AMSS
results and 2/3 of the score will be based
on the aggregate score of all AMSS results
received by the Account Management
Team.
0 Employer responses: The score will be
based on the aggregate score of all AMSS
results received by the Account
Management Team.
Result
3.0 or higher
Penalty
None
2.5 to 2.9
25%
2.0 to 2.5
50%
Less than 2.0
Enterprise Administrative Services Agreement — November 2014 Master Template
City of Carmel 11/24/2014
100%
Measurement
Period
Annual
Reporting
Period
Annual
33
ATTACHMENT TO
SCHEDULE C
PERFORMANCE GUARANTEES
TO
ADMINISTRATIVE SERVICES AGREEMENT
WITH
CITY OF CARMEL
Pharmacy Performance Guarantees
This Attachment is made part of Schedule C and will be effective for the Performance Period from January 1, 2015
through December 31, 2015. This Attachment is intended to supplement and amend the Agreement between the
Parties.
Prescription Drug Rebate Guarantees
Minimum Drug Rebates:
(a) The Drug Rebates Employer receives from Anthem will not be less than the following amounts ( "Total Drug
Rebates Guarantee "):
BRAND NAME PRESCRIPTION DRUGS
(1) An amount equal to the sum of $30.66 (Yr1) $31.28 (Yr2) $33.84 (Yr3) per Paid Claim for Brand Name
Prescription Drugs dispensed at retail pharmacy Network Providers; plus
(2) An amount equal to the sum of $142.36 (Yr1) $142.94 (Yr2) $154.18 (Yr3) per Paid Claim for Brand Name
Prescription Drugs dispensed at home delivery Network Providers.
This Guarantee will be determined by comparing the Total Drug Rebates Guarantee to the Drug Rebates credited to
the Employer pursuant to Article 14 of the Agreement and Section 3(A) of Schedule A. If the Total Drug Rebates
Guarantee exceeds the Drug Rebates credited to the Employer, Anthem will credit Employer the difference.
Any payment due to Employer under a Rebate Guarantee will be offset by favorable results achieved in any other
Rebate Guarantee. Any payment due to Employer under this Guarantee will be offset by favorable results achieved in
the Prescription Drug Pricing Guarantee.
This will be measured with Employer - specific data.
(b) In addition to the provisions contained in Section 1(F) of Schedule C, Anthem reserves the right to make changes
to this Guarantee upon the occurrence, in Anthem's reasonable determination, of any of the following:
• a failure by Employer reasonably fulfill its noticed obligations under the clinical management programs that are part
of the Plan;
• a failure by Employer to adopt the Formulary;
• a change in the proportionate mix of Employer's retail and home delivery Prescription Drug Claims of more than
10 %;
• a change in pharmacy utilization patterns of more than 10 %;
• a change that results in Anthem no longer being the exclusive source of Drug Rebates for Employer's Plan; or
• the determination that Employer has an on -site pharmacy with 340b designation or any such designation where the
pharmacy receives upfront pricing discounts from pharmaceutical manufacturers, which was not disclosed or known
by Anthem as of the effective date of this Attachment to Schedule C.
(c) For purposes of these Guarantees, Specialty Drugs and 340b pharmacy Claims will not be included in the
calculation.
(d) For purposes of these Guarantees, the following terms have the following meanings:
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Brand Name Prescription Drug or Brand Drug is a Prescription Drug product that is not a Generic Drug.
Generic Prescription Drug or Generic Drug is a Prescription Drug, whether identified by its chemical, proprietary, or
non - proprietary name that is therapeutically equivalent and interchangeable with drugs having an identical amount of
the same active ingredient.
Formulary is a list of preferred Prescription Drugs and medical supplies developed, published, and periodically
revised by Anthem.
Specialty Drugs are drugs dispensed from a Specialty Service Pharmacy and /or high -cost, injected, infused, oral, or
inhaled medications (including therapeutic biological products) that are used to treat chronic or complex illnesses or
conditions. Specialty Drugs may have special handling, storage, and shipping requirements, such as temperature
control. Specialty Drugs may require nursing services or special programs to encourage patient compliance.
Prescription Drug Pricing Guarantees
Prescription Drug Pricing:
(a) The Prescription Drug Pricing Guarantees for Ingredient Cost Discount and Dispensing Fees will be the amounts
listed under the following Pricing Guarantee Categories:
RETAIL PHARMACY NETWORK PROVIDERS
The Guarantees for retail pharmacy Network Providers will be the following amounts:
1. Brand Discount: AWP minus 17.00% (Yr1) 17.00% (Yr2) 17.00% (Yr3)
2. Brand Dispensing Fee: $0.85 (Yr1) $0.85 (Yr2) $0.85 (Yr3)
3. Generic Discount: AWP minus 76.00% (Yr1) 76.50% (Yr2) 77.00% (Yr3)
4. Generic Dispensing Fee: $0.85 (Yr1) $0.85 (Yr2) $0.85 (Yr3)
HOME DELIVERY PHARMACY
The Guarantees for home delivery for a supply of 60 days or greater will be the following amounts:
1. Brand Discount: AWP minus 25.50 °7° (Yr1) 25.50% (Yr2) 25.50% (Yr3)
2. Brand Dispensing Fee: $0.00 (Yr1) $0.00 (Yr2) $0.00 (Yr3)
3. Generic Discount: AWP minus 61.00% (Yr1) 81.50% (Yr2) 82.00% (Yr3)
4. Generic Dispensing Fee: $0.00 (Yr1) $0.00 (Yr2) $0.00 (Yr3)
SPECIALTY SERVICE PHARMACY
The Guarantees for SPECIALTY SERVICE PHARMACY will be the following amounts:
1. Discount: AWP minus 15.00% (Yr1) 15.00% (Yr2) 15.00% (Yr3)
2. Dispensing Fee: $0.00 (Yr1) $0.00 (Yr2) $0.00 (Yr3)
To determine any payment due to Employer under these Prescription Drug Pricing Guarantees, each Guarantee is
calculated based on the Prescription Drugs that were paid during the Measurement Period for Retail Pharmacy,
Horne Delivery, and Specialty Service Pharmacy (each such subset of Paid Claims is referred to as a "Pricing
Guarantee Category"). Each Guarantee within a Pricing Guarantee Category is then compared to the sum of
appropriate portion of the Paid Claims for Prescription Drugs plus any Member cost shares associated with each
Guarantee within that Pricing Guarantee Category . Paid Claims for Prescription Drugs include Ingredient Costs plus
Dispensing Fees. Therefore, Paid Claims for Prescription Drugs dispensed by a retail pharmacy are separated into
Brand and Generic Ingredient Costs and Brand and Generic Dispensing Fees. These Ingredient Costs and
Dispensing Fees are compared against each identified Guarantee provided in this Agreement to determine if the
Guarantee is met.
Any payment due to Employer under any Guarantee within a Pricing Guarantee Category will be offset by favorable
results achieved in any other Guarantee within that same Pricing Guarantee Category or another Pricing Guarantee
Category, or any Rebate Guarantee.
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This will be measured with Employer - specific data.
(b) The following conditions apply to this Guarantee:
• This Guarantee applies to Claims submitted by Network Providers applicable to Employer's Plan.
• The following Claims will be excluded from this Guarantee:
• Prescriptions filled in Massachusetts, Alaska, Hawaii, or Puerto Rico, or filled in any state which imposes some form
of Most Favored Nations limitations on pharmacy reimbursement;
• Vaccines;
• Prescriptions filled through the Employer's on -site pharmacy;
• Specialty drugs dispensed from non - contracted specialty pharmacies;
• Single Source Generics will be included in the Brand Discount and Brand Dispensing Fee Guarantees and not in the
Generic Discount and Generic Dispensing Fee Guarantees.
(c) In addition to the provisions contained in Section 1(F) of Schedule C, Anthem reserves the right to make changes
to this Guarantee upon the occurrence, in Anthem's reasonable determination, of any of the following:
• a change in the proportionate mix of Employer's retail and home delivery Prescription Drug Claims of more than
10 %;
• a change in pharmacy utilization patterns of more than 10 %; or
• the determination that Employer has an on -site pharmacy with 340b designation or any such designation where the
pharmacy receives upfront pricing discounts from pharmaceutical manufacturers, which was not disclosed or known
by Anthem as of the effective date of this Attachment to Schedule C.
In the event that there are court or government imposed or industry wide or pricing source initiated changes in the
AWP reporting source or source changes in the methodology used for calculating AWP, including, without limitation,
changes in the mark -up factor used in calculating AWP (collectively, the "AWP Changes'), the terms of any financial
relationship between the Parties that relate to AWP will be modified by Anthem such that the value of AWP for the
purpose of such relationship(s) will have the same economic equivalence in the aggregate to the value used by the
Parties prior to the AWP Change. The intent of this provision is to preserve the relative economics of both Parties for
such financial relationships based upon AWP to that which existed immediately prior to the AWP Change.
In the event that the AWP pricing benchmark used by Anthem's PBM hereunder is replaced with another benchmark
calculation, Anthem may switch to such new pricing benchmark. If a change to pricing guarantees is deemed
necessary Anthem will provide written notice of new pricing terms at least 30 days before the effective date of the
change.
(d) For purposes of these Guarantees, the following terms have the following meanings:
Average Wholesale Price or AWP is the price of a prescription drug dispensed as established and reported by
MediSpan or other nationally recognized pricing source selected by PBM in its sole discretion from time to time.
AWP does not represent a true wholesale price, but rather is a fluctuating benchmark provided by third party pricing
sources.
Brand Name Prescription Drug or Brand Drug is a Prescription Drug product that is not a Generic Drug.
Dispensing Fee is the amount paid by Employer to Anthem for professional services rendered by a licensed
pharmacist in dispensing Prescription Drugs.
Generic Prescription Drug or Generic Drug is a Prescription Drug, whether identified by its chemical, proprietary, or
non - proprietary name that is therapeutically equivalent and interchangeable with drugs having an identical amount of
the same active ingredient.
Ingredient Cost is the ingredient cost portion of a Paid Claim for Prescription Drugs
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Most Favored Nations Limitations are government restrictions that preclude pharmacies from making pricing
agreements with PBMs or others that are more favorable than those afforded to state -run programs, such as
Medicaid.
Single Source Generics are those Generic Drugs which are provided by two or fewer Pharmaceutical Manufacturers
or such Generic Drugs that are in the market with supply limitations or competitive restrictions.
Specialty Drugs are drugs dispensed from a Specialty Service Pharmacy or high -cost, injected, infused, oral, or
inhaled medications (including therapeutic biological products) that are used to treat chronic or complex illnesses or
conditions. Specialty Drugs may have special handling, storage, and shipping requirements, such as temperature
control. Specialty Drugs may require nursing services or special programs to encourage patient compliance.
Specialty Service Pharmacy is the PBM -owned or contracted specialty pharmacy that primarily dispenses Specialty
Drugs, outside of the retail pharmacy Network and home delivery pharmacy.
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