Common use of Penalties for Failure to Correct Clause in Contracts

Penalties for Failure to Correct. A. Civil Money Penalties Following failure on the part of the Contractor to cure a default in accordance with a plan of correction under Section 40.4 “Requirement of Corrective Action,” Finance or the Department may impose civil money penalties in the circumstances and the amounts set forth below if the Contractor does any of the following: (1) Fails substantially to provide Medically Necessary items and services that are required under law and under this Contract ($25,000); (2) Imposes excess premiums and charges; (doubles the excess amount charged); (3) Acts to discriminate among Members; (an amount not to exceed $100,000); (4) Misrepresents or falsifies information; (an amount not to exceed $100,000); (5) Fails to comply with the requirements for physician incentive plans, as set forth (for Medicare) in 42 CFR §§422.208 and 422.210 ($25,000); (6) Violates marketing guidelines ($10,000); (7) Prompt Pay Violations ($1,000 per infraction); (8) Finding of substantial non-compliance that affects member’s access to services ($5,000); (9) Network Program Adequacy/ Capacity ($10,000); (10) Failure to respond sufficiently to an LOC ($1,000); (11) Failure to respond sufficiently to a Corrective Action Plan request ($5000); (12) Failure to submit correct data ($1000) except for encounter submission or if otherwise addressed in the contract; or (13) Repeated contractual violation: a. 1st Offense ($5,000); b. 2nd Offense ($10,000); and, c. 3rd Offense and each subsequent offense (S25,000).

Penalties for Failure to Correct. A. Civil Money Penalties Following failure on the part of the Contractor to cure a default in accordance with a plan of correction under Section 40.4 “Requirement of Corrective Action,” Finance or the Department may impose civil money penalties in the circumstances and the amounts set forth below if the Contractor does any of the following: (1) Fails substantially to provide Medically Necessary items and services that are required under law and under this Contract ($25,000); (2) Imposes excess premiums and charges; (doubles the excess amount charged); (3) Acts to discriminate among Members; (an amount not to exceed $100,000); (4) Misrepresents or falsifies information; (an amount not to exceed $100,000); (5) Fails to comply with the requirements for physician incentive plans, as set forth (for Medicare) in 42 CFR §§422.208 and 422.210 ($25,000); (6) Violates marketing guidelines ($10,000); (7) Prompt Pay Violations ($1,000 per infraction); (8) Finding of substantial non-compliance that affects member’s access to services ($5,000); (9) Network Program Adequacy/ Capacity ($10,000); (10) Failure to respond sufficiently to an LOC ($1,000); (11) Failure to respond sufficiently to a Corrective Action Plan request ($5000); (12) Failure to submit correct data ($1000) except for encounter submission or if otherwise addressed in the contractContract; or (13) Repeated contractual violation: a. 1st Offense ($5,000); b. 2nd Offense ($10,000); and, c. 3rd Offense and each subsequent offense (S25,000). B. Withholding, Penalty and Forfeiture Upon the issuance of a Written Deficiency Notice requiring a corrective action plan, the Department shall withhold one quarter of one (0.25%) percent of one monthly Capitation Payment for Type B deficiencies until the corrective action has been completed. The Department shall impose a nonrefundable penalty of $10,000 for each Type B infraction. The Department shall withhold one-half of one (0.5%) percent of one monthly Capitation Payment for Type A deficiencies until the corrective action has been completed. The Department shall impose a nonrefundable penalty of $50,000 for each Type A infraction. If the deficiency is not remedied within three (3) months from acceptance of the corrective action plan, one-half of the funds withheld shall be forfeited in addition to the nonrefundable penalty referenced above. If the deficiency is not remedied within six (6) months from acceptance of the corrective action plan, all of the funds withheld shall be forfeited in addition to the nonrefundable penalty referenced above. Type A deficiencies shall be a written deficiency in the requirements in the following sections: 23 through 37, inclusive. Type B deficiencies shall be a written deficiency in the requirements in the following sections: 3-15, 17-22, 38 and 41.