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* Employees and retirees of the NALC, the NALC Health Benefit Plan, the USLC
Mutual Benefit Assocation and Nalcrest and their eligible dependents are also
"Covered Persons" under this agreement.
EXHIBIT 10.84
UTILIZATION REVIEW
AGREEMENT
THIS AGREEMENT is entered into as of this 1st day of January, 1989, between
HealthCare COMPARE Corp., a Delaware corporation (hereinafter "COMPARE"), and
National Association of Letter Carriers Health Benefit Plan (hereinafter
"CARRIER").
WITNESSETH:
WHEREAS, COMPARE provides utilization review (professional evaluation of health
care services on a prospective, concurrent and retrospective basis) and other
health care cost containment consultative services to employers, insurance
companies, third party administrators, and other entities,
WHEREAS, CARRIER desires to contract with COMPARE to provide its services for
implementation and operation of certain of its Utilization Review Services
known as Hospital Review Services and Case Management Services for eligible
enrollees and dependents (hereinafter "Covered Persons") who are provided
health care benefits under the terms of contract #CS-1067 between the CARRIER
and the U.S. Office of Personnel Management (hereinafter "OPM").*
NOW, THEREFORE, in consideration of the mutual covenants and agreements set out
herein, one dollar and other good and valuable consideration, receipt of which
is hereby acknowledged, the parties hereto agree as follows:
1. SCOPE OF SERVICES.
A. COMPARE provides a system of Hospital Review, as described in Exhibit
IID-MA, and Case Management, as described in Exhibit IIF-S, for services
rendered in the United States which CARRIER will utilize. Said Hospital
Review services shall be provided with respect to Covered Persons under
group health programs maintained by CARRIER.
B. Based on Hospital Review activities, COMPARE shall provide advice to
CARRIER, and/or to such parties as CARRIER shall direct under CARRIER's
health care benefit plan, and with respect to CARRIER's determination as to
certification for medical necessity and/or appropriateness of hospital
services to be provided in the United States under the group health programs
maintained by CARRIER. COMPARE does not make recommendations as to the
payment or the denial of payment of any claim or the delivery of any health
care services. COMPARE recognizes that the determination as to payment
or denial of payment
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of any claim and/or the authorization of payment for any hospital service or
health care service will be made only by CARRIER and that the decision or
determination to obtain or deliver any health care service is always made
only by the Covered Person and/or his or her physician. Any decisions made
by COMPARE or the CARRIER, shall relate only to the obligation for payment
for any such service under the terms of the CARRIER's contract #CS-1067
with OPM.
2. PERFORMANCE.
A. CARRIER hereby agrees that COMPARE shall be CARRIER's provider to
perform, implement and operate its Hospital Review services with respect to
Covered Persons who are hospitalized in the United States. CARRIER
acknowledges that COMPARE and its affiliates, agents and subsidiaries may
provide services similar to those which COMPARE has agreed to provide
hereunder to other firms, companies, entities and persons, indirectly or
directly, as agent, or under COMPARE's name or xxxx, or the name or xxxx of
COMPARE's client or principal. Except as provided above, this Agreement
shall not be deemed to limit, restrict or prevent COMPARE from providing to
others services identical or similar to those offered by COMPARE in this
Agreement.
B. COMPARE agrees that during the term hereof, it will provide to CARRIER
Hospital Review Program services and Case Management Services, as described
in Exhibits IID-MA and IIF-s attached hereto and made a part hereof.
C. Covered Persons whose health care services will be covered by Medicare or
by State or Federal Workers' Compensation will not be included in the
category of persons for which review services are performed under this
Agreement.
D. COMPARE will advise CARRIER as to the medical necessity and/or
appropriateness of hospital services to Covered Persons in accordance with
the Section I.B. above.
3. CONDITIONS.
A. CARRIER agrees that this Agreement is subject to the following conditions:
(1) Nothing contained herein shall be construed as constituting CARRIER
as the agent, principal, employee, servant, joint venturer, partner, or
legal representative of COMPARE for any purpose whatsoever.
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Nothing contained herein shall be construed as constituting COMPARE as
the agent, principal, employee, servant, joint venturer, partner, or
legal representative of CARRIER for any purpose whatsoever. This
Agreement does not in any way create the relationship of joint venture,
partnership or agency between COMPARE and CARRIER. COMPARE is an
independent contractor and shall be deemed a contractor performing
services for or on behalf of CARRIER as such.
(2) CARRIER acknowledges the validity of COMPARE's service marks,
trademarks, copyrights, and other proprietary marks and that the same are
the sole property of COMPARE. CARRIER shall not in any way infringe upon
or harm the rights of COMPARE in its proprietary marks.
CARRIER shall protect the integrity of COMPARE's said service and
proprietary marks and copyrights to the extent they are used by CARRIER.
CARRIER shall not without the prior written approval of COMPARE, use any
xxxx or name in connection with providing its Hospital review under this
Agreement.
(3) CARRIER shall comply with all laws, rules and regulations that are now
or hereafter promulgated by any governmental authority or agency and that
govern or apply to the operation and/or use of the utilization review
services described herein.
(4) CARRIER shall be solely responsible for the direction control and
management of its agents and employees.
B. COMPARE agrees that this Agreement is subject to the following conditions:
(1) COMPARE shall comply with all laws, rules and regulations that are
now or hereafter promulgated by any governmental authority or agency and
that govern or apply to the use of the utilization review services
described herein.
(2) COMPARE shall be solely responsible for the direction, control and
management of its agents and employees.
(3) COMPARE acknowledges the validity of CARRIER's service marks,
trademarks, copyrights, and other
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proprietary marks and that the same are the sole property of CARRIER.
COMPARE shall not in any way infringe upon or harm the rights of CARRIER
in its proprietary marks.
4. FEES AND SERVICES.
A. COMPARE shall be paid a fee for each of its services rendered hereunder
which fee shall be as set out in the "Schedule of Fees" attached hereto.
COMPARE shall receive from CARRIER the fee set out in the Schedule of Fees
subject to the provision set forth therein. There shall be added to any
charges or fees due COMPARE amounts equal to any use or sales tax, or any
tax in lieu thereof, imposed by any governmental agency with respect to
services rendered by COMPARE hereunder. CARRIER has the option to renew this
Agreement, as provided in Section 12A below.
B. The "base fee" set out in the Schedule of Fees is for the first year of
this Agreement. For each year after the first year of the term, COMPARE
shall have the right to increase the fee charged CARRIER. Such base fee for
Hospital Review Services shall not, without the specific written approval of
CARRIER, be increased over the base fee by more than the percentage of
increase fee by which the Consumer Price Index (CPI) on December 31 of the
last preceding year exceeded the CPI from December 31, 1988. For the
purposes of the Agreement, the term "Consumer Price Index" means the
consumer price Index - U.S. City averages for Urban Wage Earners and
Clerical Workers, All Items, of the United States Bureau of Labor
Statistics. The Consumer Price Index for any year shall be determined by
averaging the monthly All Items Indices for that year. If the manner in
which such Consumer Price Index as determined by the Bureau of Labor
Statistics shall be substantially revised, an adjustment shall be made in
such revised index which, would produce results equivalent, as nearly as
possible, to those which would have been obtained if the Consumer Price
Index had not been so revised. If the 1967 average shall no longer be used
as an index of 100, such change shall constitute a substantial revision.
C. CARRIER agrees to pay COMPARE the fee in the amount specified each month
on or before the l5th day of such month. CARRIER shall report to COMPARE the
total number of enrollees for the previous calendar month subject to this
Agreement and along with said report shall pay to COMPARE the total fee due
COMPARE for the current month. CARRIER shall periodically provide a report
to COMPARE with the
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actual number of enrollees for each month and shall include any payment
adjustments. COMPARE shall have the right to inspect CARRIER's books and
records during normal business hours and upon seven (7) days advance written
notice to verify the number of enrollees for which fees are or should be
paid to COMPARE.
With respect to services provided by COMPARE for the Case Management Program
or other hourly services, CARRIER shall pay COMPARE the fees due within 20
days of receipt by CARRIER of monthly billing by COMPARE itemizing the
amount due for services rendered to each Covered Person during the
preceding calendar month.
D. CARRIER recognizes that COMPARE has no obligation to communicate,
disseminate, distribute and educate enrollees as to program requirements. It
is the responsibility of CARRIER to advise its eligible enrollees of the
Hospital Review services and distribute to them the appropriate tollfree
numbers.
E. COMPARE and CARRIER mutually agree to the performance provisions set out
in Exhibit A attached hereto and made a part hereof.
5. ASSISTANCE.
A. Subject to Paragraph 7 hereof, in addition to and without limiting the
access to records provided for in Subparagraph B. of this paragraph of this
Agreement, COMPARE agrees that at its office, during normal business hours,
and upon reasonable advance notice, CARRIER shall have access to and the
right to examine records which COMPARE has kept which relate directly to
CARRIER. Such access and right of examination shall continue to be provided
to CARRIER for a period of not less than forty-eight (48) months after the
date of discharge, end of the treatment, or the end of the review of the
Covered Person's hospitalization or other health care service. COMPARE and
CARRIER shall agree upon the documentation to be retained by COMPARE
consistent with CARRIER's obligations under Contract #CS-1067.
B. In the event legal action is brought against CARRIER to collect benefits
for which CARRIER has denied payment and for which COMPARE has not
recommended the certification of the medical necessity or appropriateness of
services provided or to have been provided, or in the event of any other
legal or administrative proceedings at the written
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request of CARRIER, COMPARE will provide CARRIER and its legal counsel:
(1) access during normal business hours upon reasonable advance notice
including photocopies if requested by CARRIER at COMPARE's actual cost
therefor, to those of COMPARE's records relating to services provided to
the Covered Person in question, which are directly related to the subject
matter of such litigation.
(2) to the extent they are still employed by COMPARE, and if requested in
writing by CARRIER, COMPARE will make available to testify directly as to
such matter and to assist CARRIER in preparing to defend or respond to
any legal or administrative hearing, the appropriate physician reviewers,
or any other employee(s) directly involved in such matter. COMPARE shall
be reimbursed by CARRIER for its actual out-of-pocket expenses in
providing such personnel, including expenses incurred by COMPARE for said
persons' services, travel expenses, lodging and meals. CARRIER will pay
reasonable and customary witness fees for all expert witnesses. In the
event either party is validly and properly served with subpoena,
discovery request for production of documents or other legal process,
(all hereinafter referred to as "legal process"), such party shall
immediately notify the other party so that such other party may determine
whether any of its confidential or proprietary data, reports, or other
printed material may be included in the data. Such other party may, at
its own expense, take such legal action as it deems necessary to preserve
the confidentiality of its data. Neither party hereto shall have an
obligation to contest any such subpoena or legal process.
6. INDEPENDENT CHART REVIEW.
COMPARE further agrees to establish, operate and maintain, in accordance
with uniform criteria established from time to time by COMPARE, an adequate
mechanism for use by affected Covered Persons seeking additional review of
COMPARE's certification recommendation referred to in Paragraph 8 following.
7. CONFIDENTIALITY.
A. CARRIER and COMPARE agree to abide by applicable federal or state
statutes and regulations concerning the
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confidentiality of all information (in whatever form) exchanged between the
parties pursuant to this Agreement. The respective forms, methods, system,
procedures, business systems, data format, data gathering and retrieval
system and methods of use thereof of each party are proprietary and
confidential to each party to this Agreement; CARRIER and COMPARE agree that
they shall maintain these as proprietary and confidential. CARRIER and
COMPARE shall not disseminate or distribute the other's material in any
manner to affect adversely the proprietary nature of the material. Neither
party shall in any way attempt to market or use the data, documents,
reports, systems, specifications, manuals, data information or material of
any kind of the other party in competition directly or indirectly with the
other, nor shall either party attempt to use any such information and
material or derivation thereof directly or indirectly except in the
performance of this Agreement. The parties recognize that no remedy of law
may be adequate to compensate either party for a breach of the provisions of
this paragraph and, therefore, both parties agree that either party shall be
entitled to temporary and permanent injunctive relief against the other, in
addition to all other remedies which either party shall be otherwise
entitled to, and this paragraph shall in no way limit such other remedies of
the parties. Such temporary or permanent injunctive relief may be granted
without bond which each party does hereby waive.
B. COMPARE's forms, methods, system, procedures, data format, data gathering
and retrieval system and methods, all COMPARE data, computer software,
computer hardware, computer courseware, program name, design and manuals,
and all data, reports and printed material furnished or developed by COMPARE
(all herein collectively called "COMPARE Data, Systems and Proprietary
Rights") which is marked as being "Confidential" or "Proprietary" or "Not
for Public Disclosure" or which shall be copyrighted, registered or
otherwise protected, are confidential and/or proprietary information owned
by and proprietary to COMPARE and any use, furnishing, disclosure,
dissemination, publication, or revealing in any way by CARRIER of COMPARE
Data, Systems and Proprietary Rights, furnished by CARRIER or its employees,
agents and officers to any person, organization, firm, or government agency
contrary to law or to the provisions and terms of this Agreement shall
obligate CARRIER and the party failing to hold said data on a confidential
basis to indemnify and hold harmless COMPARE from any damages, litigation,
liability or claimed liability, claims, and any expenses, including
reasonable attorneys' fees, and incidental expenses resulting from any such
improper use,
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furnishing, disclosure or revealing of said COMPARE Data, Systems and
Proprietary Rights occurring during the term of this Agreement or
thereafter, except to the extent any such loss or damage was caused or
contributed to by COMPARE. To the extent that CARRIER furnishes COMPARE
with any CARRIER Data, Systems and Proprietary Rights, COMPARE agrees that
all of the above and foregoing obligations and agreements in this
Subparagraph B shall be reciprocal and mutual upon COMPARE as relates to
such CARRIER Data, Systems and Proprietary Rights.
C. Confidentiality of Medical Information
(i) CARRIER and COMPARE hereby acknowledge that, in order for COMPARE to
perform its duties and obligations pursuant to this Agreement,
participating providers shall be required to furnish COMPARE with medical
information reasonably required by COMPARE regarding covered services
provided by such participating providers to Covered Persons. COMPARE
agrees to maintain the confidentiality of such information for use only
in connection with the Scope of Services provided by COMPARE to CARRIER.
(ii) CARRIER hereby warrants and represents that each Covered Person, or
other person authorized to release medical records of any Covered Person
on behalf of such Covered Person, has executed or will execute and
CARRIER maintains or will maintain a valid authorization, properly
executed and then currently in effect, which shall authorize COMPARE to
release records or copies thereof to CARRIER for purposes of claims
payment, audit or any other purposes set forth in such authorization.
(iii) In addition to the foregoing, CARRIER shall provide to COMPARE, upon
the request of COMPARE at any time and in its sole discretion, a copy of
a valid authorization or COMPARE may request that any Covered Person, or
other person authorized to release medical records of a Covered Person,
execute and deliver to COMPARE a valid authorization as required by law
authorizing the release of medical information from COMPARE to CARRIER.
(iv) CARRIER shall indemnify, defend and hold COMPARE harmless from and
against any and all liabilities, damages, claims, actions and costs
(including, without limitation, attorneys' fees and expert witnesses'
fees)
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which may arise out of the disclosure of such medical records by COMPARE
to CARRIER in reliance upon Section 7(C)(ii).
8. NOTICE OF DETERMINATION.
The following parties will be notified in writing or through electronic
medium mutually agreeable to COMPARE and CARRIER by COMPARE of its advice
with respect to COMPARE's certification or non-certification for payment
of benefits for admission or extension of stay of a Covered Person based
upon medical necessity or appropriateness of stay thereof, to wit:
(a) CARRIER,
(b) The Covered Person,
(c) The appropriate attending physician,
(d) The hospital.
9. REPORTS.
A. Basic Reports.
COMPARE will provide CARRIER with written reports of its performance
activities under this Agreement for each program purchased. Said reports
will be provided as listed in Section C of the Exhibit IIs attached
hereto. These reports will be provided no later than sixty (60) days
after the close of the period set forth in the Exhibit IIs.
B. Special Reports.
On written request of CARRIER, for matters of special interest to
CARRIER, COMPARE will provide such special reports as it is capable of
providing and which are requested in writing by CARRIER. If
additional expense will be incurred by COMPARE in preparing such reports,
COMPARE will promptly provide a written cost estimate and schedule and
obtain CARRIER's approval of such costs prior to preparing any such
reports.
10. INSURANCE AND INDEMNIFICATION.
A. On the effective date of this Agreement, COMPARE will have professional
liability insurance in the amount of
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$5,000,000 per claim and aggregate. COMPARE agrees to advise CARRIER of any
changes in the amounts of professional liability insurance. To the extent
the insurance carrier will do so, CARRIER shall be added as an additionally
insured, provided if there is any charge therefor, CARRIER shall reimburse
COMPARE.
B. INDEMNIFICATION.
1. Should the CARRIER be caused to pay monies or damages to any Covered
Person or Estate or incur legal fees and other reasonable costs of
litigation, whether in settlement which COMPARE approves (whether or not
suit has been filed) or as a result of an order of a court of competent
jurisdiction because of bodily injury, sickness, death, mental or
emotional suffering, caused by or arising from any negligent act or
omission or willful misconduct of COMPARE in the course of performing its
services under the Utilization Review Agreement, COMPARE agrees to
indemnify and hold harmless the CARRIER to the extent of any such payment
of damages with the following exceptions:
(a) This agreement to indemnify and hold harmless does not apply to
any act to which the CARRIER itself is liable independent of any act
of COMPARE, provided however, this exception shall not apply to the
liability of CARRIER resulting solely from its act of denial of a
claim based on COMPARE's advice that said medical service not be
certified as medically necessary or appropriate.
(b) This agreement to indemnify and hold harmless shall become
effective only as to any amounts paid by the CARRIER which are not
otherwise covered by any policy of insurance under which the CARRIER
may be covered;
(c) This agreement does not apply unless COMPARE has received notice
from the CARRIER of the pendency of any such claim within a reasonable
time after the CARRIER has received notice or become aware of any such
claim or threatened claim;
(d) This agreement to indemnify and hold harmless shall be effective
if such payment does not arise from, or was not caused by or did not
result from
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the negligence, intentional or willful misconduct of the CARRIER or its
employees or agents other than COMPARE;
(e) This agreement does not apply unless COMPARE or its insurer has been
given a timely opportunity to defend the CARRIER against any claim.
2. Should COMPARE be caused to pay monies or damages to any Covered Person or
Estate or incur legal fees and other reasonable cost of litigation, whether in
settlement which the CARRIER approves (whether or not suit has been filed) or
as a result of an order of a court of competent jurisdiction because of bodily
injury, sickness, death, mental or emotional suffering, caused by or arising
from any negligent act or omission or willful misconduct of the CARRIER during
the course of performing their services under the Utilization Review Agreement,
CARRIER agrees to indemnify and hold harmless COMPARE to the extent of any such
payment of damages with the following exceptions:
(a) This agreement to indemnify and hold harmless does not apply to any
act to which COMPARE itself is liable independent of any act of
CARRIER;
(b) This agreement to indemnify and hold harmless shall be effective
only as to any amounts paid by COMPARE which are not otherwise
reimbursed under any policy of insurance under which COMPARE is
covered;
(c) This agreement does not apply unless CARRIER has received notice
from COMPARE of the pendency of any such claim within a reasonable time
after COMPARE has received notice or become aware of any such claim or
threatened claim;
(d) This agreement to indemnify and hold harmless shall be effective
only if such payment does not arise from, or was not caused by or did
not result from the negligence, intentional or willful misconduct of
COMPARE or its employees or agents other than CARRIER;
(e) This agreement does not apply unless CARRIER or its insurer has been
given a timely opportunity to defend COMPARE against any such claim.
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11. COMMUNICATIONS.
Any written or printed material prepared for general circulation by CARRIER
relating to COMPARE's services or obligations under this Agreement which
is to be published, disseminated, released or prepared for distribution by
CARRIER to physicians, hospitals, medical personnel, enrollees, or to the
general public will be released only after consultation with and approval
by COMPARE which shall not be unreasonably withheld.
12. TERM AND TERMINATION.
A. This Agreement shall commence on January 1, 1989, conditioned upon OPM
approval of the terms of this Agreement. This Agreement shall end on
December 31, 1989. At CARRIER's option, it shall be renewable for two
successive annual periods at the fee as outlined in Section 4(B) of this
Agreement. Should either party desire to modify the Agreement, said party
shall give written notice of such intent as soon as practicable upon
CARRIER's notice of intent to renew.
B. This Agreement may be terminated by CARRIER upon thirty (30) days
written notice if any one of the following occurs, but in no event shall
such termination relieve COMPARE from any of its obligations incurred under
this Agreement:
(l) Failure of COMPARE to meet any material covenant, agreement, or
obligation provided for in this Agreement if it has not commenced to
cure any such default within twenty (20) days after written notice
thereof to COMPARE by CARRIER.
(2) COMPARE becomes insolvent, or is adjudicated as bankrupt, or its
business comes into possession or control, even temporarily, of any
trustee in bankruptcy, or a receiver is appointed for it, or it makes a
general assignment for the benefit of creditors. If any one of these
events occurs, no interest in this Agreement shall be deemed an asset of
creditors. No interest in this Agreement shall be deemed an asset or
liability of COMPARE, nor shall any interest in this Agreement pass by
operation of law without the consent of CARRIER.
C. This Agreement may be terminated by COMPARE upon thirty (30) days
written notice if any of the following occurs, but
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in no event shall such termination relieve CARRIER from any of its
obligations incurred under this Agreement:
(1) Failure of CARRIER to meet any material covenant, agreement, or
obligation provided for in this Agreement if it has not commenced to
cure any such default within twenty (20) days after written notice
thereof to CARRIER by COMPARE.
(2) Failure of CARRIER to make payment provided for under this Agreement
or under any Agreement executed under the provisions of this Agreement
when due, and if payment is not made within fifteen (15) days following
written notice of non-payment sent by COMPARE to CARRIER.
(3) CARRIER ceases to operate or has its approval to operate revoked by
OPM, or becomes insolvent, or is adjudicated as bankrupt, or its
business comes into possession or control, even temporarily, of any
trustee in bankruptcy, or a receiver is appointed for it, or it makes a
general assignment for the benefit of creditors. If any one of these
events occurs, no interest in this Agreement shall be deemed an asset of
creditors. No interest in this Agreement shall be deemed an asset or
liability of CARRIER, nor shall any interest in this Agreement pass by
operation of law without the consent of COMPARE.
D. Upon the effective date(s) of the termination of this Agreement for any
reason:
(1) CARRIER or COMPARE will promptly pay to the other party all monies
due hereunder.
(2) CARRIER will immediately cease to represent that COMPARE is its
Hospital Review provider and will cease to use COMPARE's documents,
systems, logo-types, service marks, trademarks, trade names, methods and
techniques in any form, and all covenants, agreements, and obligations
of the parties under this Agreement shall thereupon end.
(3) COMPARE will be paid a one time administrative fee equal to one-half
of the final monthly fee as reimbursement for post-termination
activities,
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including the continuing access to information regarding reviews, final
data reporting and analyses and other termination activities. Prior to
the effective date of termination, CARRIER shall use its best efforts to
advise Covered Persons of said termination of Hospital Review services.
13. ASSIGNMENT.
Neither CARRIER nor COMPARE shall assign or transfer their respective
rights or obligations hereunder without the specific prior written approval
of the other party, provided, however, this shall not be deemed to limit
COMPARE from subcontracting, or employing other entities or parties, or
from assigning its rights and obligations hereunder to a subsidiary or
affiliate of COMPARE.
14. SUBCONTRACTOR COST OR PRICING DATA.
A. Should OPM require and CARRIER request, COMPARE shall submit, actually
or by specific identification in writing if actual submission of the data
is impracticable, to CARRIER cost or pricing data prior to the CARRIER's
execution of this Agreement and prior to the pricing of any modification to
this Agreement which involves aggregate increases or decreases in costs,
plus applicable profits, expected to exceed $100,000, except where the
price is based on adequate price competition, established catalog or market
prices of commercial items sold in substantial quantities to the general
public, or prices set by law or regulation.
B. COMPARE shall certify in writing to the CARRIER that to the best of its
knowledge and belief, the cost or pricing data submitted under subsection
(A) above is accurate, complete and current as of the date of agreement on
the negotiated price of this Agreement or change or modification thereto.
COMPARE shall make this certification by using the following form:
Certificate of Current Cost or Pricing Data
-------------------------------------------
This is to certify that, to the best of my
knowledge and belief, cost or pricing data,
submitted in writing, or specifically
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identified in writing if actual submission of the data
is impracticable, to in
------------------
support of [insert description] are accurate,
------------------------
complete, and current as of [insert date] .
-----------------
Firm
------------------------
Name
------------------------
Title
-----------------------
---------------------------
Date of Execution
C. COMPARE shall insert the substance of this subsection, including this
subsection (C), in each subcontract hereunder which exceeds $100,000 when
entered into, except where the price thereof is based on adequate price
competition, established catalog or market prices of commercial items sold
in substantial quantities to the general public, or prices set by law or
regulation. In each excepted subcontract hereunder in excess of $100,000,
COMPARE shall insert the substance of the "Subcontractor Cost or Pricing
Data - Price Adjustments" clause, recited in Contract #CS-1067.
15. OTHER PROVISIONS.
The following provisions of Contract #CS-1067 between the CARRIER and OPM
and its successor contracts are incorporated by reference in this Agreement
and shall be binding on COMPARE:
Section 4.2 Equal Opportunity
Section 4.6 Employment of the Handicapped
Section 4.7 Clean Air and Water
Section 4.8 Examination of Records by
Comptroller General
Section 4.10 Convict Labor
Section 4.11 Disabled Veterans and
Veterans of the Vietnam Era
Section 4.12 Preference for U.S. Flag Air
Carriers
Section 4.14 Audits and Records
Section 4.17 Administration of Cost Accounting
Standards
Section 4.20 Other Record Retention Requirements
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For purposes of this Agreement, all references in the foregoing provisions
of Contract #CS-1067 to the "contractor" shall be treated as references to
COMPARE, and all references to the "contract" or "prime contract" therein
shall be treated as references to this Agreement.
16. MISCELLANEOUS.
A. This Agreement shall be binding upon and inure to the benefit of the
respective parties hereto, and their successors and assigns. This Agreement
constitutes the entire agreement between the parties and supersedes any
prior agreement or understandings, whether oral or written, to the
contrary. Every change, amendment or alteration in this Agreement shall be
in writing and signed by the parties hereto. The paragraph headings are for
convenience only and shall not be deemed to limit, define, or restrict the
meaning or contents thereof. This Agreement is executed in the State of
Illinois, and will be controlled by and construed under the laws of the
State of Illinois except to the extent that it is governed by federal law.
B. The provisions of paragraphs 5, 7, 11, 12 and 16 shall survive the
termination of this Agreement.
C. All notices provided herein shall be in writing, and shall be sent
registered mail with return receipt requested to the following address or
to such other address as either party may hereafter furnish, to wit:
For COMPARE: (1) Xxxxx X. Xxxxx, President
HealthCare COMPARE Corp.
0000 X. Xxxxxxxx
Xxxxxxx Xxxxx, XX 00000-0000
(2) Copy Xxxxxx X. Xxxxxxxx
Vice President and General Counsel
000 X. Xxxxxxx, 00xx Xx.
Xxxxxxx, XX 00000
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For CARRIER: (1) Xxxxxxx X. Xxxxxxxxx, President
National Association of Letter
Carriers Health Benefit Plan
000 Xxxxxxx Xxx., X.X.
Xxxxxxxxxx, X.X. 00000
(2) National Association of Letter
Carriers Health Benefit Plan
00000 Xxxxxx Xxxxx Xxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx, Administrator
COPY Xxxxx X. Xxxxx, Esq.
Xxxxx, Xxxxx & Xxxxx
000 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
D. Neither the execution of this Agreement nor the performance of any of
its obligations constitutes an undertaking by COMPARE or CARRIER to
guarantee the results of health care provider services to Covered Persons
or that such will be rendered in accordance with generally accepted medical
standards or procedures; all such services and the results thereof are
determined by the physician or hospital.
E. In the event any provision of this Agreement conflicts with laws
applicable hereto or under which this Agreement is construed, or if any
provision of this Agreement shall be held illegal or unenforceable or
partially illegal or unenforceable by a court with jurisdiction over the
parties to this Agreement, then this Agreement shall be modified to conform
with said laws or judicial determination and such provision shall be
construed and enforced only to such extent as it may be a legal and
enforceable provision, and all other provisions of this Agreement shall be
given full effect separately therefrom and shall not be affected thereby.
17
18
F. This Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the
same instrument. The Exhibits and Schedules attached hereto are by
reference deemed incorporated herein.
IN WITNESS WHEREOF the parties have executed this Agreement the day and date
first above written by their duly authorized officers for and on behalf of said
corporation.
National Association of Letter HealthCare COMPARE Corp.
Carriers Health Benefit Plan
By: Xxxxx Xxxxxxx By: Xxxxx X. Xxxxx
-------------------------------- --------------------------
Title: Administrator President
-----------------------------
19
NATIONAL ASSOCIATION OF LETTER CARRIERS
HEALTH BENEFIT PLAN
Schedule of Fees
HOSPITAL REVIEW . . . . . . . . . $1.23 per employee per month
CASE MANAGEMENT . . . . . . . . . $160 per hour*
ADMINISTRATIVE
RUN-OFF FEE . . . . . . . . 50% of the final monthly fee
* The hourly charge is for time and services of case management personnel,
which may be a physician, registered nurse, or allied personnel.
12/9/88
19
20
EXHIBIT IID-MA
HOSPITAL REVIEW PROGRAM
FOR NATIONAL ASSOCIATION OF LETTER CARRIERS
HEALTH BENEFIT PLAN
A. SCOPE OF PROGRAM
The Hospital Review Program provides preadmission and continued stay review of
all hospitalizations unless the primary diagnosis is for a mental or nervous
disorder or substance abuse (MDC-l9 and MDC-20 codes). For purposes of this
Agreement only, admissions for substance abuse detoxification are considered to
be a substance abuse admission, not a medical admission. For other mental or
nervous or substance abuse admissions where the proximate cause of the
admission is medical, COMPARE will perform review until such time as treatment
for the medical problem is complete.
An admission is reviewed under this program if the hospitalization occurs in
the 00 Xxxxxx Xxxxxx, if the date of admission (rather than the notification
date to COMPARE) is during the term of this Agreement as described in Section
12 of this Agreement; and if COMPARE is notified of the admission before or
during the hospitalization unless the first such notification occurs on the day
of discharge. (In the event of emergency admissions, review will occur after
discharge only if COMPARE is notified within three business days of the
admission). Completion of review may require that the attending physician
provide medical information to COMPARE by telephone; failure of the attending
physician to do so may result in inability to complete review.
All conditions and terms of the Utilization Review Agreement are in full force
and effect.
Review of hospital admissions not in accordance with the definitions of scope
of program contained herein will occur at the request of CARRIER and at the
discretion of COMPARE, and CARRIER will be billed for such services at
COMPARE's then customary charges for such services.
For example, at the request of CARRIER, COMPARE may perform a retrospective
review for admissions not reviewed prior to, or during the hospitalization.
Such review may be requested by CARRIER for hospitalizations for which COMPARE
was not notified prior to discharge or for which the attending physician failed
to provide required information. Medical records of such hospital admissions
must be provided by CARRIER at its expense to COMPARE and such retrospective
review is not included in the fees listed in the Schedule of Fees.
21
CARRIER shall be charged at a rate of $160 per hour for retrospective review
requests.
B. PROCESS
l. Prior to a proposed hospitalization, the attending physician contacts
COMPARE, and provides the information needed to perform review. At a minimum,
the attending physician supplies COMPARE with information that includes:
demographic information, the reason for hospitalization, any proposed treatment
plan or surgery, and the number of hospital days anticipated. If a person other
than the attending physician contacts COMPARE regarding pending
hospitalization, COMPARE will initiate a call to the attending physician to
obtain necessary information. Failure of attending physician to provide
information as outlined on a timely basis may result in inability to complete
review. COMPARE will make two attempts to obtain the information from the
attending physician before stopping review as an incomplete review. The
decision on whether or not to be admitted to, or remain in, the hospital is
made only by the Covered Person and his or her attending physician. Failure to
follow program procedures may affect benefit coverage.
2. If a Covered Person is admitted to a hospital on an emergency basis, the
attending physician calls COMPARE within three business days of the admission
and furnishes the information as is required for review of elective admissions.
3. COMPARE will evaluate the proposed admission for certification of medical
necessity and appropriateness under CARRIER's benefit plan. On behalf of
CARRIER, COMPARE will then send a letter documenting its certification
recommendation to the Covered Person, with copies to the attending physician,
hospital, and CARRIER or its claims payor. The letter will state COMPARE's
advice as to whether the requested admission can or cannot be certified for
payment of benefits as medically necessary under the terms of CARRIER's benefit
plan. If the admission is certified, the letter will also include a statement as
to the number of days of hospitalization which can initially be recommended for
certification. COMPARE and CARRIER will not make any decisions as to whether
the Covered Person should or should not be or remain hospitalized; that
decision is made by the Covered Person and attending physician only.
4. Prior to the expiration of this initial or any further assigned length of
stay, COMPARE will contact the attending physician by telephone to determine if
the Covered Person has been discharged or if review for continued
hospitalization is required. If review for continued hospitalization is
required, such review will be performed as outlined in No. 3. Such continued
stay reviews will be performed until discharge occurs
22
as long as adequate medical information is provided by the attending physician.
COMPARE will make two attempts to obtain the information from the attending
physician before stopping review as an incomplete review.
5. All nurses and physicians providing services set forth in this Exhibit are
currently licensed, registered, and/or certified in the appropriate states and
specialties. Such medical personnel will answer all incoming calls and shall be
primarily responsible for all other aspects of the review procedure. A
physician-reviewer is the only person who will make a recommendation for
non-certification of medical necessity under the terms of the benefit plan. Such
non-certification recommendation will be made only following discussion with,
or attempted discussion with, the attending physician.
C. REPORTS
COMPARE will provide CARRIER with written reports of its review activities
under this Agreement as follows:
Basic Reports Frequency
------------- ---------
(1) Review Activity Summary Reports (Quarterly and
Annually)
(2) Scheduled Admissions for Quarter (Quarterly)
(3) Emergency Admissions for Quarter (Quarterly)
(4) Hospitalization Analysis (Annually)
(5) Narrative Summary and Analysis (Annually)
COMPARE reserves the right to refine the style and content of the
above-referenced reports and to substitute such other reports as it
deems will provide comparable information to CARRIER.
23
EXHIBIT IIF-S
CASE MANAGEMENT PROGRAM
A. PROCESS
COMPARE's Case Management Program is a benefits case management system which
focuses on cases which involve certain high cost diseases/conditions/
procedures. This program is intended only to provide information
regarding additional benefit alternatives, along with the coverage levels of
such alternatives for consideration by the patient and attending physician.
Such alternatives may involve the use of certain "high tech" or home health
care providers. COMPARE will serve as a resource to identify such providers and
will continue its utilization review recommendations regarding these
services.
The patient and his/her physician determine the patient's care. The patient and
his/her physician may choose not to follow any of the alternatives identified
by COMPARE. However, such a choice may affect benefit coverages as determined
only by the CARRIER.
1. Potential cases are referred by the Claims Administrator. Claims
Administrator will verify that patient is eligible participant prior to the
referral.
2. Nurse Case-Management Specialist reviews all identified cases using broad
screens. Does the case warrant further case management activity?
Yes/Step #3
No/Case returned to Claims Administrator
3. A COMPARE Medical Director reviews the case information. The Nurse
Case-Management Specialist and Medical Director also review the medical
necessity of the hospital confinement and advise Claims Administrator,
patient, doctor and hospital, as to the number of days which can be
recommended for benefit certification of medical necessity under the Plans.
Does the case warrant further case management activity?
Yes/Step #4
No/Case returned to Claims Administrator
24
4. Nurse Case-Management Specialist notifies the CARRIER that a possible case
has been identified, and requests authorization from the CARRIER to proceed
with further activities.
Approval given/Step #6
No approval to proceed/Case returned to Claims
Administrator
5. The Medical Director reviews the case to determine if additional information
is needed. Information adequate for case management?
Yes/Step #6
No/Contacts attending physician for necessary
information - then Step #6
6. COMPARE's Physician Specialist reviews the case specifics and identifies
cost-effective sites and types of care. Cost-effective options available?
Yes/Options identified, then step #7
No/Stop process and case returned to Claims Administrator
7. Additional providers of health care services or durable medical equipment
required?
Yes/COMPARE contacts possible provider and obtains a
summary of projected costs which may include
significant COMPARE-negotiated discounts. Then to
step #8.
If no experienced provider can be identified patient's area, the process is
stopped and a summary of case management activity up to this point is
furnished to the payor.
No/Step #8
8. COMPARE submits a written summary of available options to the CARRIER and
requests information from the payor as to the coverage levels that will be
approved for these options. (At this time, the CARRIER may wish to make a
decision on coverage for the options on a "by exception" basis.)
CARRIER informs COMPARE that coverage equal at least to
hospital coverage will be approved for the identified
options/Step #9
CARRIER decides not to cover options or to cover
at a rate that will increase the out-of-pocket costs
25
for the patient/Case returned to Claims Administrator
9. COMPARE's Medical Director calls the attending physician and provides
information on benefit options identified for patient care and the
authorized coverage levels. If the attending physician has questions that he
or she wishes to address to a physician regarding the options, COMPARE will
have the Physician Specialist call the attending physician. (If the
Physician Specialist, COMPARE and the CARRIER agree that it is appropriate,
an on-site visit may be made by the Specialist to speak with the attending
physician. With the patient's consent, an on-site examination may also
be made.)
Physician and patient decide to take advantage of the
options available for coverage under the benefit
plan/Step #10
Physician and/or patient decide not to take advantage of
the options available for coverage under the benefit
plan/Step #10
10. COMPARE confirms to the patient and attending physician the information
previously provided including projected costs and coverage levels authorized
by the CARRIER in a letter.
Options adopted/Necessary patient and family training
started by providers
If the attending physician and patient decide to take advantage of the benefit
options identified through the Case Management Program, COMPARE continues its
review until:
(a) the patient no longer requires the services, or
(b) the patient's benefits are exhausted, or
(c) the patient's need for the services are determined
to be life-long.
When (a), (b), or (c) is reached, review is discontinued and a letter so noting
is issued to the patient, attending physician, and CARRIER, and Claims
Administrator.
B. REPORTS
COMPARE will provide CARRIER with written reports Of its review activities
under this Agreement as follows:
26
Basic Reports Frequency
------------- ---------
(1) Case Management Activity Report (Quarterly/
Annually)
(2) Case Management Case Report As Needed
(Analysis of Alternate
site options)
(3) Managed Cases Summary Report (Quarterly/
Annually)
COMPARE reserves the right to refine the style and content of the
above-referenced reports and to substitute such other reports as it deems will
provide comparable information to CARRIER.
27
Exhibit A
Performance Provisions
A. Conditions
COMPARE represents that the Hospital Review Services as described in Exhibit
IID-MA of this Agreement will reduce the number of days of hospitalization
in the first year of this Agreement to the "Target Performance" as
hereinafter defined. COMPARE agrees that if the Target Performance is not
met, it will reimburse CARRIER an amount equal to that portion of the "At
Risk Pool" calculated in Subsection E (Reimbursement Calculation) of this
Exhibit. COMPARE and CARRIER further agree:
1. The means of measuring this performance provision and for calculating any
amounts which may be owed CARRIER hereunder are described in this Exhibit A.
2. a. For purposes of its proposal to CARRIER for this Exhibit A, CARRIER has
provided COMPARE with certain original 1987 data. CARRIER agrees to
provide more detailed l987 baseline data to COMPARE no later than April
1, l989. The "baseline data" include (i) age/sex demographics of the
entire beneficiary population, (ii) age/sex demographics of patients with
inpatient care, (iii) utilization data concerning such inpatient care.
Such baseline data shall be provided in a mutually agreed format, and
shall be sufficient to support the Expected Days calculation described in
Subsection C of this Exhibit. The baseline data will also include a
description of the accounting conventions followed by CARRIER in its
reporting of the numbers of days and admissions. The l987 baseline data
will not be used as the 1987 basis for determining 1989 expected days as
described in Section C.
b. If, upon examination of this 1987 baseline data provided to COMPARE by
CARRIER, it becomes apparent that material differences exist between it
and the original 1987 data provided to COMPARE which COMPARE used in the
development of its proposal, and if such differences would have resulted
in material modification of COMPARE's initial proposal, then appropriate
modifications to the Target Performance shall be made upon the reasonable
mutual agreement of COMPARE and CARRIER.
3. CARRIER agrees that it will advise COMPARE of any changes in data
reporting or claims processing
28
conventions which could materially affect the calculations in Sections C, D,
and E of this Exhibit. If, upon evaluation of such changes, it becomes
apparent that these calculations are materially affected, then
appropriate modifications to the Target Performance or to calculations in
Sections C, D and E shall be made upon the reasonable mutual agreement of
COMPARE and CARRIER.
4. CARRIER agrees to provide the 1987 and 1989 data hereinafter required to do
the performance calculations as defined in Sections C, D and E of this
Exhibit no later than September 30, 1990. CARRIER shall do the calculations
defined in Sections C, D, and E, and provide COMPARE with their supporting
documentation no later than September 30, 1990.
5. COMPARE has the right to verify the accuracy of the data and calculations by
audits or other means it deems appropriate. If requested by COMPARE for the
purposes of its audit, CARRIER shall deliver to COMPARE valid, accurate and
sufficient data which were CARRIER's basis of calculating its performance
determinations, said data to be in such form as COMPARE requires so that
COMPARE can verify CARRIER's determination. If COMPARE is not reasonably
satisfied that the data provided it by CARRIER are valid accurate and
sufficient to perform its audit or if upon completing said audit, COMPARE's
performance calculations vary from CARRIER's performance calculations,
COMPARE shall not be obligated to reimburse CARRIER until appropriate data
have been provided to COMPARE or until a final determination has been made
relative to the differences in CARRIER's and COMPARE's
calculations.
6. Nothing herein shall create any liability of COMPARE to pay CARRIER as a
result of this performance provision more than the amount in the At-Risk
Pool" for l989.
B. Definitions
1. "Per Enrolle" Fee: The fee per enrollee will be $1.23 per
month for 1989.
2. At Risk Pool: The "at risk pool" will be 10% of the total Per
Enrollee Fees paid for the first twelve months
of the contract. This excludes any fees
or compensation paid for services other than
Hospital Review Services as described in
Exhibit IID-MA. The total Per Enrollee Fee
29
includes retroactive adjustments and is not
based on the estimated membership
3. Target
Performance: The Percentage Reduction is calculated in
Section E of this Exhibit and is identified as
"X%". The target performance is the achievement
of a Percentage Reduction (X%) at least equal
to 14%.
4. Admission: Overnight stay of a Covered Person in an acute
care general non-federal community hospital
(American Hospital Association definition).
5. Utilization Data: Utilization data includes diagnosis codes,
admission and length of stay information
pertaining to Covered Persons, sufficient to
complete the Calculation of Expected Days in
1989 as described in Section C of this Exhibit.
6. Cohort: The Cohort will consist of all Covered Persons
who are provided health care benefits by
CARRIER for both all of 1987 and all of 1989.
7. All Other: The utilization base will be all hospital
admissions in 1987 for the Cohort excluding
admissions for psychiatric care and substance
abuse where the proximate cause of the
admission is not medical, and excluding
admissions for deliveries and newborns. The
comparison will be all hospital admissions in
1989 for the Cohort, again excluding
psychiatric, substance abuse, delivery and
newborn admissions.
8. Delivery: The utilization base will be all delivery
admissions in 1987 for women in the Cohort. The
comparison will be all delivery admissions in
1989 to women in the Cohort. Separate
comparisons will be made for C-section
deliveries and vaginal deliveries.
9. Newborns: Newborn statistics will not be part of the All
Other admissions or of the performance
calculation. However, COMPARE will still review
these admissions. Once the exact nature of
30
the CARRIER data base coding for newborns is
determined, Xxxxx and COMPARE will agree on a
suitable definition (such as a minimum claimant
aqe on admission of 6 months) for exclusion
of newborn claims from the All Other pool.
10. DRG States: Admissions occurring in states with DRG-based
reimbursement systems will be included on the
same basis as any other admissions; Covered
Persons with these admissions will be
included in the Cohort.
11. Claim Runoff: For purposes of determining both the 1987 and
1989 actual days, claims paid through a period
6 months after the end of the calendar year
(and incurred in that calendar year) will be
included. Claims submitted to the CARRIER too
late to be paid during the 6 month runoff
period will be excluded from the calculation.
To be included, 1987 claims must be paid by
June 30, 1988; 1989 claims by June 30, l990.
C. Calculation of Expected Days in 1989:
The demographic adjustments described in Subsections l, 2, and 3 below
for delivery and all other claims will be based on the following
calculations, using 1987 data for the Cohort and performed
independently for delivery and all other claims.
All Other 1987 days/l000 for the Cohort will be calculated to the
nearest one tenth day, with separate days/1000 statistics being
calculated for each age and sex combination of the Covered Person. For
children, if necessary, Xxxxx and COMPARE will agree to appropriate
assumptions as to the distribution of the child enrollment population.
The 1987 days/1000 numbers for each age/sex cell will be multiplied by
the l989 enrollment by age/sex (for the Cohort). The sum of the products
of these multiplications, across all age/sex cells, is the total
expected number of All Other days for 1987.
Four delivery admissions, average 1987 length of stay for the Cohort
will be calculated to the nearest one tenth day, with separate average
length of stay (ALOS) statistics being calculated for each age of the
mother, separately for each of the delivery types. These 1987 ALOS
numbers for each age of the mother will be multiplied by the actual
number of
31
l989 deliveries (for the Cohort) by age of the mother and delivery type. The
sum of the products of these multiplications across all ages and
delivery types is the total expected number of delivery days for l989.
1. Obtain 1987 utilization and demographic data:
a. All Other: Obtain the 1987 actual days/1000 for the following age and sex
groups for Covered Persons still covered in 1989:
Male: l, 2, 3, 4, 5, ... 63, 64.
Female: l, 2, 3, 4, 5, ... 63, 64.
b. Delivery: Obtain the 1987 actual C-section and vaginal delivery ALOS for
the following age groups for women still covered in l989:
Female: less than or equal to 10, 11, 12, 13, ...
48, 49, 50 and older
Broader age groups may be required for either the All Other or Delivery
calculations in the interests of smoothing the data. This will be determined
at the time of the base year calculation by Xxxxx and COMPARE. Back up
information will be provided to COMPARE to substantiate the calculation.
2. Obtain 1989 utilization and population-parameters
a. All Other: For the cells listed in Subsection C(l)(a), obtain the
enrollment figures for l989, but including only Covered Persons who had been
members in 1987
b. Delivery: For the cells listed in Subsection C(l)(b), obtain the number
of C-section and vaginal delivery admissions in 1989, but including only
Covered Persons who had been members in 1987.
3. Expected Days Calculation
a. All Other: Multiply the l989 actual Cohort enrollment in each age/sex
cell times the respective 1987 days/1000 for that same cell and sum for the
products to obtain the total expected All Other days hospitalized for the
Cohort in l989.
b. Delivery: Multiply the 1989 actual delivery admissions in each
age/delivery type cell times the respectlve 1987 ALOS for that same cell and
sum for the products to obtain the total expected delivery days hospitalized
for the Cohort in l989.
32
D. Performance Formulas:
1. Categories of Days Used In Calculation:
In doing the performance calculation, actual Cohort hospital days in l989
must be divided into the following three components distinguishing with
each component between delivery days (by type) and All Other days:
Group A (Reviewed/Certified): Certified days for admissions that were
reviewed by COMPARE. In cases where the Covered Person stayed
in the hospital longer than the number of days
certified by COMPARE, only the days certified will be included
in this total. In cases where the actual stay was shorter than
the certified days, the actual number of days is used.
Group B (Reviewed/Uncertified): Uncertified days for admissions that
were reviewed by COMPARE. In cases where the Covered Person
stayed in the hospital longer than the number of days certified
by COMPARE, the excess days that were not certified will be
included in this total.
Group C (Unreviewed): All hospital days for unreviewed admissions.
Group B is necessary because the wording regarding the application of the
penalty for the extension of a stay beyond the certified number of days
is not clear on the brochure.
2. All Other:
The total expected 1989 All Other hospital days for the Cohort is first
determined as described in Subsection C(3)(a) of this Exhibit. Then the
actual 1989 hospital days for the Cohort is determined and
separated into Percentage reduction calculations the three components
(Groups A, B and C) above.
All Other Actual to Expected Ratio (R) =
Group A
----------------------------------------------
Total Expected 1989 Days - (Group B + Group C)
All Other Percentage Reduction (AO%) = 100% x (l-R)
33
3. Delivery:
The total expected 1989 delivery days for the Cohort is determined
as described in subsection c(3)(b) of this Exhibit, separated
into C-section and vaginal delivery days. Then the actual 1989
delivery days for the Cohort is determined and separated into six
components (C-section Groups A, B, and C; Vaginal Groups A,
B and Percentage Reduction Calculations.
Vaginal Actual to Expected Ratio (RV) =
Vaginal Group A
----------------------------------------------------------
Total Vaginal Expected 1989 Days - (Vaginal Group B +
Vaginal Group C)
C-section Actual to Expected Ratio (RC) =
C-section Group A
----------------------------------------------------------
Total C-section Expected 1989 Days - (C section Group B
+ C-section Group C)
Combined Delivery Percentage Reduction (M%) =
100% x [(1-RV) x Denominator RV + (1-RC) x Denominator RC]
----------------------------------------------------------
Denominator RV + Denominator XX
X. Reimbursement Calculation
Percentage Reduction (X%) =
AO% x Denominator R + M% x Denominator M%
-----------------------------------------
Denominator R & Denominator M%
If the decrease X% is less than 14.0%, then COMPARE would pay
CARRIER (14.0% - X%) x 10 of the At Risk Pool. No payment is
required if the decrease exceeds 14%.
For example, if the percentage reduction is 10.2%, a payment of
(14.0% - 10.2%) x 10 = 38% of the At Risk Pool to CARRIER would
result.
