Common use of Pharmacy Rebate Program Clause in Contracts

Pharmacy Rebate Program. The Pharmacy Rebate Program, as set forth in the Operations Manual, permits the sharing of calendar year pharmaceutical rebates (“Annual Rebates”). HMO shall multiply the Annual Rebates by an annually-determined percentage (“Rebate Percentage”) to establish the Rebate Fund. HMO shall divide the Rebate Fund by the total number of Commercial HMO Members eligible for a pharmacy benefit to determine the Rebate PEMPM. On or before December 15th of each year, HMO shall notify PPG of the Rebate Percentage. PPG is eligible for a lump sum award as determined and identified below. Such sum is payable in April following the calendar year of the Rebate Fund, beginning April 1999. PPG’s PEMPM award shall be determined by PPG’s cost performance relative to other participating physician groups. Cost performance shall be determined by the normalized pharmacy cost for each calendar year for each participating physician groups. Three performance tiers shall be established; each tier shall represent approximately one-third of the total Commercial HMO Members, provided, however, that any participating physician group with assigned Commercial HMO Members less than *** or exceeding *** annual Member months shall be excluded from the tier determination. PPG’s PEMPM award for eligible Commercial HMO Members shall be as follows based upon PPG’s tier ranking: Tier Award Lowest Normalized Pharmacy Costs *** of Rebate PEMPM Middle Normalized Pharmacy Costs *** of Rebate PEMPM Highest Normalized Pharmacy Costs *** of Rebate PEMPM ADDENDUM B.1 AGE, SEX AND BENEFIT PLAN FACTORS The age, sex and benefit plan factors shall be developed by HMO based upon actuarial assumptions consistent with existing actuarial assumptions and HMO’s utilization experience. Such factors, as updated approximately every three years to reflect changing demographic and utilization patterns, shall be forwarded to PPG and are incorporated into this Agreement by reference.

Pharmacy Rebate Program. The Pharmacy Rebate Program, as set forth in the Operations Manual, permits the sharing of calendar year pharmaceutical rebates (“Annual Rebates”). HMO shall multiply the Annual Rebates by an annually-determined percentage (“Rebate Percentage”) to establish the Rebate Fund. HMO shall divide the Rebate Fund by the total number of Commercial HMO Members eligible for a pharmacy benefit to determine the Rebate PEMPM. On or before December 15th of each year, HMO shall notify PPG of the Rebate Percentage. PPG is eligible for a lump sum award as determined and identified below. Such sum is payable in April following the calendar year of the Rebate Fund, beginning April 1999. PPG’s PEMPM award shall be determined by PPG’s cost performance relative to other participating physician groups. Cost performance shall be determined by the normalized pharmacy cost for each calendar year for each participating physician groups. Three performance tiers shall be established; each tier shall represent approximately one-third of the total Commercial HMO Members, provided, however, that any participating physician group with assigned Commercial HMO Members less than *** 7200 or exceeding *** 600,000 annual Member months shall be excluded from the tier determination. PPG’s PEMPM award for eligible Commercial HMO Members shall be as follows based upon PPG’s tier ranking: Tier Award Lowest Normalized Pharmacy Costs *** of Rebate PEMPM Middle Normalized Pharmacy Costs *** of Rebate PEMPM Highest Normalized Pharmacy Costs *** of Rebate PEMPM ADDENDUM B.1 AGE, SEX AND BENEFIT PLAN FACTORS The age, sex and benefit plan factors shall be developed by HMO based upon actuarial assumptions consistent with existing actuarial assumptions and HMO’s utilization experience. Such factors, as updated approximately every three years to reflect changing demographic and utilization patterns, shall be forwarded to PPG and are incorporated into this Agreement by reference.

Pharmacy Rebate Program. The Pharmacy Rebate Program, Program as set forth in the Operations Manual, permits the sharing of calendar year pharmaceutical rebates (“Annual Rebates”). HMO shall multiply the Annual Rebates by an annually-determined percentage (“Rebate Percentage”) to establish the Rebate Fund. HMO shall divide the Rebate Fund by the total number of Commercial HMO Members eligible for a pharmacy benefit to determine the Rebate PEMPM. On or before December 15th of each year, HMO shall notify PPG of the Rebate Percentage. PPG is eligible for a lump sum award as determined and identified below. Such sum is payable in April following the calendar year of the Rebate Fund, beginning April 1999. PPG’s PEMPM award shall be determined by PPG’s cost performance relative to other participating physician groups. Cost performance shall be determined by the normalized pharmacy cost for each calendar year for each participating physician groups. Three performance tiers shall be established; each tier shall represent approximately one-one third of the total Commercial HMO Members, provided, however, that any participating physician group with assigned Commercial HMO Members less than *** 7200 or exceeding *** 600,000 annual Member months shall be excluded from the tier determination. PPG’s PEMPM award for eligible Commercial HMO Members shall be as follows based upon PPG’s tier ranking: Tier Award Lowest Normalized Pharmacy Costs *** of Rebate PEMPM Middle Normalized Pharmacy Costs *** of Rebate PEMPM Highest Normalized Pharmacy Costs *** of Rebate PEMPM ADDENDUM B.1 AGE, SEX AND BENEFIT PLAN FACTORS The age, sex and benefit plan factors shall be developed by HMO based upon actuarial assumptions consistent with existing actuarial assumptions and HMO’s utilization experience. Such factors, as updated approximately every three years to reflect changing demographic and utilization patterns, shall be forwarded to PPG and are incorporated into this Agreement by reference.