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EXHIBIT 10.15
ADMINISTRATIVE SERVICES AGREEMENT
HEALTHCARE SERVICES SUPPORT
Client: The Prudential Insurance Company of America (herein referred to as
"Client")
Effective Date: Xxxxx 0, 0000
Xxxxxxxxxx Service Bureau, Inc., (herein referred to as "PSBI"), agrees to
perform for the Client the services described in Section A, as further detailed
in the Schedule of Service Specifications attached hereto and made a part of
this Agreement. The Client, in consideration of the performance of these
services, agrees to pay PSBI the compensation provided in Sections A and B
hereof.
This Agreement, including Sections A through G, constitutes the entire agreement
between the parties hereto with respect to the services described herein. Any
modification of this Agreement is to be made only by a formal amendment executed
by each of the parties.
The parties hereto have caused this Agreement to be executed in duplicate by
their respective officers duly authorized to do so.
Client: The Prudential Insurance Company of America
(Signature)
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Accepted by: Prudential Service Bureau, Inc.
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Section A. SERVICES AND FEES.
PSBI shall provide the services listed below (the "Healthcare Support
Services"), to the Client for the respective periods set forth below,
on such terms and in such manner that is consistent with the standard
of service provided from PSBI to the Client prior to the date hereof.
1. Healthcare Support Services Provided:
(a) Long-term Care: Enrollment and database administration for
the Client's Long-term Care insurance offering plus
on-site assessment as requested. This service includes
enrolling employees in the coverage, maintaining the
participant databases, preparing billing files and
managing customer service questions. The charge basis will
remain the same as it is shown in the most recent
(January, 1998) Cross- Business Unit Billing report
provided by PSBI to the Client. The xxxxxxxx based upon a
cost plus 5% for costs incurred by PSBI in providing the
services contemplated by this Section A.1.a. Such service
will be provided until September 30, 1998 and monthly
billing reports will continue to be provided consistent
with past practice.
(b) Optical Character Recognition: Optical Character
Recognition ("OCR") services are provided by PSBI to
support the Client's on- going managed dental encounter
from processing and customer service survey effort and to
facilitate automated enrollment into Prudential Healthcare
health plans. Such services will be provided until
December 31 1998 an monthly billing reports will continue
to be provided. Monthly fees for the OCR services will be
calculated as set forth on the attached Schedule 1(b).
(c) Prudential Dental Organization: Prudential Dental
Organization is the Client's preferred provider dental
product. In support of this product, PSBI shall maintain
the database of participating dentists. The database
contains demographic data for each dental office in the
network nationwide and is used to produce directories for
Prudential Dental Organization clients companies and plan
participants. PSBI shall maintain individual files on each
participating dental office that include the applications
and credentialling information received from each office.
PSBI staffs a toll-free telephone hot-line for dental
offices to field inquiries about the Prudential Dental
Organization program. The charge basis will remain the
same as it is shown in the most recent (January, 1998)
Cross-Business Unit Billing report provided by PSBI to the
Client. The billing is based upon a cost plus 5% for costs
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incurred by PSBI in providing the services contemplated by
this Section A.1.c. Such service will be provided until
December 31, 1998 and monthly billing reports will
continue to be provided consistent with past practice.
With respect to PDO database, upon execution of this
Agreement, such database shall be considered a work made
for hire owned by the Client and if for any reason such
database is not considered a work made for hire and owned
by the Client, PSBI hereby irrevocably assigns and
transfers all of its right, title and interest therein to
the Client and all ownership rights therein shall
immediately vest with the Client. The PDO database shall
be considered proprietary and confidential information to
the Client and may not be disclosed or revealed to any
third party or used for any purpose other than for the
benefit of the Client. The PDO database shall be licensed
to PSBI (i) for so long as the services contemplated by
the Section A.1.c. are required to be provided, or (ii)
until the earlier termination of such license by the
Client or upon the Client's request, and such license is
extended for use in performing services for the benefit of
the Client only and may not be used by PSBI for the
benefit of any party other than the Client.
(d) Dental Maintenance Organization: PSBI maintains a call and
processing center for participating Dental Maintenance
Organization dental offices who need Dental Maintenance
Organization program supplies. PSBI also performs special
eligibility services for the Federated Department Stores'
DMO plan, processes DMO limiting age letters, prints and
distributes patient rosters to DMO dental offices and
accepts "after-hours" rollover calls from DMO's nationwide
membership services call centers from 5PM to 11 AM E.T.
The charge basis will remain the same as it is shown in
the most recent (January, 1998) Cross-Business Unit
Billing report provided PSBI to the Client. The billing is
based upon a cost plus 5% for costs incurred by PSBI in
providing the services contemplated by this Section
A.1.d.; provided, however, that the parties acknowledge
the existed negotiated rates currently in place for the
"after hours" rollover calls. Such service will be
provided until December 31, 1998 and monthly billing
reports will continue to be provided consistent with past
practice.
(e) Prudential Healthcare Services Hotline: The Prudential
Healthcare services Hotline allows for Prudential
Healthcare members to call a 24 hour telephone hotline
when they are not in their local service area and need
assistance to find a network physician or hospital or to
gain approval for emergency care. The charge basis will
remain the same as it is shown in the most recent
(January, 1998) Cross-Business Unit
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Billing report provided by PSBI to the Client. The billing
is based upon fee of $.04 per each insured member in the
managed medical networks per month (3,835,246 members as
of January, 1998) plus existing, negotiated fees for
roll-over of membership services calls "after hours" from
Client to PSBI from toll-free 800 numbers supplied by
Client for its managed medical members who are employees
of Prudential Securities, Incorporated, Sears, Prudential
and Time. Such service will be provided until December 31,
1998 and monthly billing reports will continue to be
provided consistent with past practice. The parties
acknowledge that PSBI's source for managed medical network
member counts is the Client's Lotus Notes database
entitled PHC National Metrics (PAERCN).
(f) Fulfillment Services: Fulfillment services are provided by
PSBI to facilitate enrollment into Prudential Healthcare
health plans. The charge basis will remain the same as
documented in the pending contract between PSBI and Client
for these services attached hereto as Exhibit A. Such
service will be provided until June 30, 1998 and monthly
billing reports will continue to be provided consistent
with past practice.
(g) Pharmacy Services: Client Pharmacy unit is located in
PSBI's Bluegrass Parkway facility. PSBI currently provides
office space, information systems and telecommunications
and other requested support for the unit. The charge basis
will remain the same as it is shown in the most recent
(January, 1998) Billing report provided by PSBI to the
Client. The billing is based upon a cost plus 5% for costs
incurred by PSBI for the provision of services as
contemplated by this Section A.1.g. Such service will be
provided until April 1, 1999 and monthly billing reports
will continue to be provided.
2. Healthcare Support Services Monthly Fees
The Healthcare Support Services shall be provided to the
Client at the charge basis applicable to each service as set
forth in Section A.(1) hereof.
3. Records
During the continuance of this Agreement PSBI shall maintain
records, files and data coming into its possession by reason
of the operation of this Agreement in accordance with the
provisions of applicable laws concerning the administration of
employee benefit programs, including any applicable
confidentiality standards and/or minimum retention
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periods. Furthermore, the Client and PSBI may mutually agree
to extend retention periods beyond the minimum required by
law.
Section B. PAYMENT AND TERMS OF SERVICE FEES.
The following terms shall apply to the payment of services by the
Client to PSBI:
Fees for services shall be paid as soon as practicable after the end of
each month and PSBI shall report to the Client the total amount of fees
due PSBI for services performed under this Agreement since the last
such report (Fee Report). Payment of services are due upon receipt of
the Fee Report. Any fees received after thirty (30) days will be
assessed an additional one percent (1%) late fee per month, compounded
monthly.
The Client may dispute any Fee Report provided that the Client shall
notify PSBI in writing (Dispute Notice) of each disputed item,
specifying the amount thereon in dispute and setting forth, in detail,
the basis for such dispute, within 10 business days of the Client's
receipt of such disputed Fee Report. In the event of such a dispute,
PSBI and the Client shall attempt to reconcile their differences and
any resolution by them as to any disputed amounts shall be final,
binding and conclusive on the parties hereto. If PSBI and the client
are unable to reach a resolution with such effect within 5 business
days of PSBI's receipt of such Dispute Notice, PSBI and the Client
shall submit the items remaining in dispute for resolution to an
independent accounting firm of national reputation, as may be mutually
acceptable to PSBI and the Client (Independent Accounting Firm), which
shall, within 15 business days of such submission, determine and report
to PSBI and the Client upon such remaining disputed items, and such
report shall have the legal effect of an arbitral award and shall be
final, binding and conclusive on PSBI and the Client. The fees and
disbursements of the Independent Accounting Firm shall be allocated
between PSBI and the Client in the same proportion that the aggregate
amount of such remaining disputed items so submitted to the Independent
Accounting Firm which is unsuccessfully disputed by each such party (as
finally determined by the Independent Accounting Firm) bears to the
total amount of such remaining disputed items so submitted.
Section C. RELIANCE ON CLIENT PLAN DETAILS AND OTHER DATA.
PSBI shall rely on the Client according to the following terms:
1. Empowerment to Act on Behalf of the Client
It is understood and agreed that the Client retains all final
authority for the Healthcare Support Services, and that PSBI
is empowered to act on
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behalf of the Client in connection with the Healthcare Support
Services only as provided in this Agreement.
2. Standard of Service
PSBI shall provide the Healthcare Support Services to the
Client on such terms and in such a manner that is consistent
with the standard of service provided from PSBI to the Client
prior to the date hereof.
3. Reliance on Client for Current Employee Data
The Client will periodically report to PSBI any additions to,
deletions from and changes in the participant data base for
each of the services. In the event that there is a
re-enrollment of participants, PSBI will update the data base
to reflect all changes, to and including the changes resulting
from the re-enrollment, and will furnish the Client with a
report of all relevant data with respect to all current
participants. The Client will then review that report, and
either indicate any further changes that are required, or will
countersign the report to indicate its approval. PSBI shall at
all times be entitled to rely on the most recent participant
data furnished or approved by the Client in the performance of
its obligations under this Agreement.
4. Reliance on Client for Identity of Person Authorized to Act
for the Client
As of the effective date of this Agreement, and from time to
time thereafter, the Client shall notify PSBI of the identity
of those individuals who will be authorized to act for the
Client in connection with this Agreement, together with any
limitations which the Client may wish to impose on the
authority of such individuals. PSBI shall always be entitled
to rely on instructions and directions given to it by such
individuals acting within the scope of their authority.
5. Reliance on Client for Accurate Information and Data
PSBI shall have no responsibility for any error in the
administration of the Plan which results from its reliance on
information or data furnished or approved by the Client in
accordance with the provisions of this Agreement.
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Section D. INDEMNIFICATION.
The following terms shall apply regarding Indemnification:
1. Tax Indemnification
In the event that the federal government or any state,
province or other governmental body shall have assessed any
tax against PSBI or any of its subcontractors under this
Agreement with respect to any feature of or transaction under
the Healthcare Support Services or this Agreement, including
(without limiting the generality of the foregoing) any
benefits payable or enrollment under the Healthcare Support
Services or any services provided or fees payable under this
Agreement (but excluding any tax on income earned by PSBI or
any of its subcontractors), the Client shall, upon demand,
reimburse PSBI to the extent of such taxes plus any expenses
incurred by PSBI in connection therewith, including (without
limiting the generality of the foregoing) any penalties or
interest assessed with such taxes.
The Client further agrees to hold harmless and indemnify PSBI
from any levy, assessment, penalties, interest, expenses or
tax arising from a benefit under the Healthcare Support
Services or any service or transaction under this Agreement,
but excluding any tax on earnings or capital gains.
2. General Indemnification
PSBI agrees to hold harmless and indemnify the Client from
Indemnifiable Losses arising out of the establishment and
administration of the Healthcare Support Services, provided
that the liability therefor was the direct consequence of
violation of applicable laws, negligence, criminal conduct or
fraud on the part of PSBI.
Except as described in the preceding paragraph, the Client
agrees to hold harmless and indemnify PSBI from any
Indemnifiable Losses arising out of or in connection with this
Agreement including but not limited to any Indemnifiable
Losses arising in connection with the release of any
information or data relating this Agreement by PSBI to the
Client, or to a third party at the request of the Client.
The Client agrees to hold harmless and indemnify PSBI from any
overpayment for which attempted recovery has been
unsuccessful, which PSBI at its sole discretion has determined
to abandon.
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As used in this Agreement, the term "Indemnifiable Losses"
shall include any claim, damage, lawsuit, settlement, judgment
or penalty, including attorney's fees and other expenses in
connection therewith.
3. Survival of Provisions on Termination of Agreement
The termination of this Agreement shall not operate to vacate
the effect of the provisions of this Section D with respect to
services provided and actions taken under this Agreement prior
to such termination.
Section E. EMPLOYMENT OF COUNSEL AND RESOLUTION OF LITIGATION.
1. Responsibilities of Parties
In the event of litigation, to the extent the parties share an
interest in the defense and result of the litigation, each
party:
(a) Reserves the right to select and retain counsel to protect
its interest;
(b) Will notify the other party concerning the existence of
such litigation promptly upon learning such litigation;
(c) Will cooperate fully by providing the other party with all
relevant and unprivileged information and documents within
its possession or control; and
(d) Will reasonably assist the other party in preparation for
litigation and in the defense of such litigation.
2. Cooperation
In the event PSBI and Client are co-defendants in litigation,
the parties will cooperate in good faith with each other to
defend, settle, compromise, or otherwise resolve such
litigation consistent with the terms of this Agreement. In the
event PSBI is the sole named defendant in litigation, PSBI
shall have the discretion to defend, settle, compromise, or
otherwise resolve such litigation.
3. Survival of Terms
The provisions of this section shall survive the termination
of this Agreement.
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Section F. GENERAL PROVISIONS
1. Choice of Law
This Agreement and the obligations of the Parties hereto shall
be governed and construed in accordance with the laws of the
State of New York.
2. Standard of Care
PSBI will discharge its obligations under this Agreement in
good faith and without misconduct.
3. Amendment
This Agreement shall only be amended or modified by mutual
agreement of the parties. Notwithstanding the foregoing, PSBI
shall have the right to unilaterally amend the terms of this
Agreement, prospectively, on account of, and consistent with,
any change in the law, or any regulations issued thereunder.
4. Reservation of Right Not to Perform
PSBI, in its sole discretion, may refuse to act in accordance
with any request of the Client, if PSBI determines that
compliance with such request may result in the violation of
any law or regulation.
5. Entire Contract
This Agreement is entire and complete as to all of this terms
and supersedes all previous agreements, promises, proposals
and representations, whether oral or written. It may be
executed in duplicate counterparts, each of which may be
considered as original and fully enforceable. Except as
otherwise provided in this Agreement, no termination,
revocation, waiver, modification, or amendment of this
Agreement shall be binding unless agreed to in writing and
signed by all Parties to this Agreement.
6. Severability
The invalidity or unenforceability of any provision of this
Agreement shall not affect the other provisions hereof and
this Agreement shall be construed in all respects as if such
invalid or unenforceable provision were omitted.
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6a. Assignments and Sub-contracts
This Agreement, being intended to secure the services of PSBI,
shall not be assigned, subcontracted, sub-let, delegated or
transferred by PSBI without the prior written consent of the
Client. The Client may, in it sole and absolute discretion,
assign this Agreement or may delegate any of its rights or
obligations without the consent of PSBI but will provide 30
days advance written notice to PSBI.
7. Notices
All notices, certificates or other communications hereunder
shall be sufficiently given and shall be deemed given when
mailed by certified or registered mail, postage prepaid, with
proper address indicated below. PSBI and the Client may, by
written notice given by each to the other, designate any
address or addresses to which notices or other communications
to them shall be sent when required as contemplated by this
Agreement. Until otherwise provided by the respective Parties,
all notices, certificates and communications to each of them
shall be addressed as follows:
To Prudential Service Bureau, Inc.: Prudential Service Bureau,
Inc.
00000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
To Client: Prudential HealthCare
00 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxx
Section G. TERMINATION AGREEMENT
The following terms shall apply regarding the termination of this
Agreement.
1. Effective Date of Termination
This Agreement shall terminate as of December 31, 1998, or as
of the effective date of any modification entered into
pursuant to Section F.(3.) hereof. Any services defined in
Section A.1. may be terminated by either party within 60 days
advanced, written notice.
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2. Termination Due to Failure to Remit Fee
This Agreement shall also terminate as of the date specified
in a written notice of termination from PSBI to the Client
because of the Client's failure to remit service fees within
the time frame specified in Section B of this Agreement.
3. Written Notice of Termination
Furthermore this Agreement may be terminated by either the
Client or PSBI as of the expiration of the day prior to the
first of any month, provided that the terminating party has
furnished the other party written notice, at least 90 days
prior to the proposed date of termination, of its intent to
terminate on that date.
4. Continuance of Service Upon Termination
Upon termination of this Agreement PSBI shall forward to the
Client, or to another party designated by the Client, such
records, files and data as the Client may reasonably require
for the continued operation of the Healthcare Support
Services. PSBI will transmit an invoice to Client for services
rendered following termination of this Agreement, this invoice
shall be payable upon receipt of such invoice.
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