EXHIBIT 10.2
Prescription Drug Service Agreement
Between
ChoiceCare Long Island, Inc. d/b/a Vytra Healthcare
And
National Medical Health Card Systems, Inc.
THIS AGREEMENT, between ChoiceCare Long Island, Inc. d/b/a Vytra Healthcare, a
New York corporation hereinafter referred to as "Vytra Healthcare", and National
Medical Health Card Systems, Inc., a New York corporation, hereinafter referred
to as "Health Card", shall be effective for a period of three (3) years
commencing on December 1, 1995 and terminating on November 30, 1998, unless
sooner terminated pursuant to the terms hereof.
WHEREAS, Vytra Healthcare is a health maintenance organization; and
WHEREAS, Vytra Healthcare desires to obtain high quality Pharmacy Services for
its Members; and
WHEREAS, Health Card has developed a system for paying claims and furnishing
other related services through a network of pharmacies and mail order
facilities; and
WHEREAS, Health Card desires to arrange for quality Pharmacy Services to Vytra
Healthcare Members; and
WHEREAS, Health Card and Vytra Healthcare desire to set forth herein their
mutual agreement as to the terms and conditions under which Health Card will
arrange for pharmacy services to Vytra Healthcare Members, as well as the
delegation of credentialling and recredentialling of pharmacies and claims
processing related to the furnishing of such services to Members.
NOW, THEREFORE in consideration of the mutual promises and considerations to be
paid, the parties hereto agree and covenant with the other, as follows:
1. DEFINITIONS
(a) "Actual Costs" shall mean the total amounts paid to the
Participating Pharmacies or the Members for the Covered Products.
(b) "Base Rate" shall mean a dollar amount per member per month for
Covered Products based on a specified Utilization Rate. The initial
Base Rates for each calendar month during the term of this Agreement
is as set forth on Exhibit A.
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However, the Base Rates are subject to change pursuant to Paragraph
4 of this Agreement.
(c) "Capitation Rate" shall mean the Base Rate plus the amount, on a per
member per month basis, equal to Health Card's administrative fee
and profit, all as set forth on Exhibit A.
(d) "Claim" shall mean a request for payment received by Health Card
from a Participating Pharmacy or a Member for Pharmacy Services
rendered to a Member.
(e) "Copayment" shall mean the amount required by a Subscriber Agreement
for Pharmacy Services and paid to the Participating Pharmacy by the
eligible Member at the time the Covered Product is dispensed.
(f) "Covered Products" include those drugs that require Prescription by
federal law, dispensed in a maximum amount sufficient to treat an
acute phase of illness: (i) up to the greater of a maximum amount of
100 unit doses or a 34 day supply of medication per Copayment,
except certain maintenance medications that may be dispensed in a
quantity in excess of 100 unit doses or a 34-day supply through a
mail order provider; (ii) a 90-day supply for mail orders; (iii)
nutritional supplements (formulas) for the therapeutic treatment of
phenylketonuria, branched-chain ketonuria, galactosernia, and
homosystinurial ("Nutritional Supplement"); and (iv) insulin,
diabetic equipment, and other diabetic supplies obtained on the same
day for up to a 60 day supply per Copayment. Covered Products
exclude federal legend drugs with over-the-counter (OTC)
equivalents, except for those Members enrolled in Vytra Healthcare's
Medicaid HMO program, for whom such drugs are included, as set forth
in Paragraph 3(g).
(g) "Enrollee" shall mean an individual who, through an agreement with
Vytra Healthcare which is entered into by such individual or by a
group on his or her behalf, is entitled to receive benefits from
Vytra Healthcare pursuant to the terms of a Subscriber Agreement.
(h) "Generic Equivalent" shall mean a prescription drug available from
more than one drug manufacturer which has the same active
therapeutic ingredient as a brand or trade name innovator
prescription drug.
(i) "Member" or "Members" shall mean, in the case of family coverage,
the Enrollee, the Enrollee's spouse, and each of the Enrollee's
unmarried dependent children, if those persons are declared by the
Enrollee to be eligible for coverage in the Enrollee's application
for membership in Vytra Healthcare and have met the requirements of
eligible dependent under the Enrollee's Subscriber Agreement. In the
case of single coverage Member refers to the Enrollee only.
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(j) "Non-Participating Pharmacies" shall mean pharmacies which are not
Participating Pharmacies in the Health Card network of pharmacies.
(k) "Participating Pharmacies" shall mean those retail and mail order
licensed pharmacies which have been credentialed in accordance with
Health Card's credentialling program and criteria and which have
contracted with Health Card under the terms of the Health Card's
Pharmacy Provider Service Agreement to provide Pharmacy Services to
Members in accordance with the terms of this Agreement.
(l) "Health Card's credentialling program and criteria" shall be
applicable to all Participating Pharmacies and shall meet the
criteria defined in Exhibit B attached hereto and made part hereof.
(m) "Pharmacy Services" shall mean dispensing of Covered Products
pursuant to a Prescription written by a Prescriber, excluding
Covered Products dispensed by a Hospital or other inpatient
facility.
(n) "Prescriber" shall mean a licensed Physician or other person duly
licensed to prescribe drugs.
(o) "Prescription" shall mean a verbal or written order by a Prescriber
authorizing the dispensing of Covered Products which includes the
name and identification of the Member, the date and sufficient
information for compounding, labeling, and dispensing.
(p) "OTC Drug Equivalent" shall mean an adequate substitute for a
prescription medication i.e., a drug product that contains the same
therapeutic moiety (chemical entity) but may have a different salt
or ester, or is a different dosage form or strength. As a way of
example and illustration purposes only - the drug "Naprosyn" has an
OTC Drug Equivalent in the product "Aleve".
(q) "Subscriber Agreement" shall mean a written description of medical,
health and hospital services to which Members are entitled to
receive including each of the following: (i) the Agreement for
Comprehensive Health Services or other Certificate of Coverage
between a Member and Vytra Healthcare describing medical, hospital
and health benefits; (ii) the Vytra Healthcare Platinum Subscriber
Agreement or other document or description of services by which
Vytra Healthcare provides services to a Medicare beneficiary
enrolled in Vytra Healthcare's Medicare Risk HMO Program; (iii) the
Medicaid Services Members Benefit Package of Nassau County, Suffolk
County and Queens County or other document or description of
services by which Vytra Healthcare provides services to a Medicaid
recipient enrolled in Vytra Healthcare's Medicaid HMO program and
(iv) all applicable benefit amendments issued to Members under such
agreements, documents and description of services, whether now
existing or
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hereinafter adopted. Vytra Healthcare shall be responsible for
delivering to Health Card copies of the applicable Pharmacy Services
provisions of the Subscriber Agreements regarding the respective
benefit levels and coverages for the different categories of Members
and all amendments thereto.
(r) "Utilization Rate" shall mean the number of Pharmacy Services per
member per month.
(s) "Variance" shall mean the difference between the Base Rate and the
Actual Costs calculated on a per Member per month basis (e.g. Base
Rate minus Actual Costs).
(t) "Formulary" shall mean the therapeutic drug listing established from
time to time by Vytra Healthcare. No changes to the then existing
Formulary shall be effective unless and until Vytra Healthcare
notifies Health Card, in writing, of any such changes.
2. PROVISION OF PHARMACY SERVICES AND COVERED PRODUCTS
(a) In consideration for and subject to the payment of the Monthly Fee,
as hereinafter defined, and such other sums to be paid by Vytra
Healthcare to Health Card hereunder, Health Card shall arrange and
pay for the provision of Pharmacy Services to Members in accordance
with the benefit levels and coverages set forth in the Members'
Subscriber Agreements, provided complete copies of the provisions of
the Subscriber Agreements containing such benefit levels and
coverages have been delivered to Health Card. Health Card
understands that the benefit levels and coverage (including the
amount of Copayments) for Pharmacy Services may vary based upon a
particular Member's respective Subscriber Agreement and that Health
Card shall arrange for Pharmacy Services to be provided to Members
in accordance with the applicable benefit level and coverage
described within the applicable provisions, delivered to Health
Card, of each such Subscriber Agreement. In the event of a Material
Change, as hereinafter defined, in the cost of providing Pharmacy
Services, other than a Material Change resulting from a change in
the credentialling obligations of Health Card as set forth in
Paragraph 2(g), either party may request an adjustment to the
Capitation Rates by written notice to the other, which notice shall
contain the proposed new Capitation Rates. For purposes hereof, a
"Material Change" shall have occurred if the Actual Costs equal 115%
or more of the Base Rate for any three (3) consecutive months or any
two quarters in any one year. If, within ten (10) business days
after delivery of such notice the parties cannot agree upon the
Capitation Rates, the requesting party shall have the right to
obtain and submit to the disputing party, within thirty (30) days
after the expiration of such ten (10) business days' period, a
report prepared by a nationally recognized actuarial firm retained
by the requesting party at the requesting party's expense providing
the basis for such requested changes. The disputing party may
thereupon dispute such report by submitting, within thirty (30) days
after receipt of the requesting party's report,
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a written report prepared by a nationally recognized actuarial firm
retained by the disputing party at the disputing party's expense. In
the event that the actuaries cannot reach an agreement within ten
(10) business days after the submission of the disputing party's
report, the two actuaries shall within ten (10) days after the
expiration of such ten (10) business days' period select a mutually
acceptable third nationally recognized actuarial firm to submit a
report within thirty (30) days after the expiration of such ten (10)
business day's period, the findings of which shall bind the parties,
but which shall not exceed the greater or be less than the lesser of
the findings of the original actuaries. The fees of the third
actuary shall be equally borne by the parties. The final, binding
decision of the actuaries shall be effective retroactively to the
date of the notice sent by the party requesting the change in the
Capitation Rates as set forth above.
(b) Special Requirements for Medicare. Health Card acknowledges that a
portion of the Members receiving Pharmacy Services pursuant to this
Agreement are enrolled in the Medicare Risk HMO program of Vytra
Healthcare, and that, to the extent applicable and subject to any
applicable adjustment in the Capitation Rates pursuant to Paragraph
2(a), Health Card shall, upon receipt of same from Vytra Healthcare,
comply with the agreements between Vytra Healthcare and Health Care
Financing Administration ("HCFA") governing the operation of Vytra
Healthcare's Medicare Risk HMO program and Health Card shall, as
applicable to Health Card, comply with all applicable laws, rules
and regulations, governing the provision of Pharmacy Services to
Medicare recipients and the operation of Vytra Healthcare's Medicare
Risk program, including but not limited to, laws and regulations
commonly known as the Medicare Anti-Kickback Statute and Xxxxx I and
Xxxxx II. Vytra Healthcare will provide Health Card with copies of
all of such agreements and amendments thereto and shall also provide
Health Card with such laws, rules and regulations and amendments
thereto which come to its attention in the normal course of
business.
(c) Special Requirements for Medicaid. Health Card acknowledges that a
portion of the Members receiving Pharmacy Services pursuant to this
Agreement are enrolled in Vytra Healthcare's HMO program for New
York Medicaid recipients, and that to the extent applicable to
Health Card and subject to any applicable adjustment in the
Capitation Rates pursuant to Paragraph 2(a), Health Card shall, upon
receipt of same from Vytra Healthcare, provide or arrange for the
provision of the Pharmacy Services in accordance with the following
documentation and requirements as the same may be amended from time
to time, copies of which are attached hereto as Exhibit C: (i)
Memorandum of Understanding; (ii) the NYS Department of Health
Reporting Requirements, including any modifications that may be
imposed on HEDIS type reporting; (iii) Network requirements,
including those necessary in order to avoid any financial penalties
or reductions in the amount of payment available for Medicaid HMO
Enrollees and Health Card shall comply with same as applicable to
Health Card; and (iv) Site visits and record reviews (to be provided
in accordance with Health Card's auditing procedures
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discussed below) imposed by any County government, the City of New
York, and/or the State of New York by law, rule, regulation,
contract or guideline for the provision of Pharmacy Services for
Members enrolled in Vytra Healthcare's HMO program for New York
Medicaid recipients. Vytra Healthcare will provide Health Card with
copies of all of such agreements and amendments thereto and shall
also provide Health Card with such laws, rules and regulations and
amendments thereto which come to its attention in the normal course
of business.
(d) Availability of Pharmacy Services. Health Card shall maintain and
make available an adequate and accessible delivery system for
Pharmacy Services for Members in accordance with the terms of this
Agreement. For purposes of this Agreement, the obligation to
maintain an adequate and accessible delivery system will be met if
there is one or more Participating Pharmacy located in each zip code
in the Vytra Healthcare Service Area (which, as of the date of this
Agreement, consists of Nassau, Suffolk and Queens Counties in New
York State), except when there is no pharmacy within a zip code or a
pharmacy has chosen not to participate due to circumstances beyond
the reasonable control of Health Card. Each of the Participating
Pharmacies shall provide all Pharmacy Services and Covered Products
to Members according to the benefit levels and coverages set forth
in the copies of the applicable provisions, delivered to Health
Card, of the Subscriber Agreements. A Participating Pharmacy shall
not be obligated to provide Pharmacy Services and Covered Products
subject to this Agreement unless and until the Participating
Pharmacy satisfies itself that the person requesting the
prescription products is an eligible Member and the Participating
Pharmacy has received the applicable Copayment required by the
applicable Subscriber Agreement from the eligible Member.
Notwithstanding any provision herein to the contrary, the
Participating Pharmacy shall not be required to provide Pharmacy
Services or Covered Products to a Member if the dispensing
pharmacist determines, based on his or her professional judgment,
that such Pharmacy Services and Covered Products should not be
provided.
(e) Health Card shall pay for Pharmacy Services rendered to a Member
from a Non-Participating Pharmacy if Health Card shall reasonably
determine that such services are not available from a Participating
Pharmacy or in the event of a medical emergency such that a Member
is unable to obtain Pharmacy Services from a Participating Pharmacy.
In such event, a Member shall be required to submit to Health Card a
Direct Reimbursement claim form and will be reimbursed at the
incurred cost of the prescription minus the Copayment required by
the applicable Subscriber Agreement.
(f) Participating Pharmacies shall dispense Generic Equivalent Covered
Products to Members, subject to applicable state law and Health
Card's generic price list. Should a Prescription provide for a trade
name product when a Generic Equivalent drug is available, then a
Member whose Subscriber Agreement so provides shall be required to
pay the Participating Pharmacy the price difference at the
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contracted rate between the Generic Equivalent drug and the trade
name product, plus the applicable Copayment required by the
applicable Subscriber Agreement.
(g) Delegation of Credentialling. Health Card understands and
acknowledges that Vytra Healthcare has delegated to Health Card the
obligations of recruiting, credentialling and recredentialling
Participating Pharmacies (the "Delegated Programs"). Health Card
shall perform the Delegated Programs in the manner described in
Exhibit B, as the same may be amended as hereinafter provided. Vytra
Healthcare shall give Health Card written notice of any changes
Vytra Healthcare desires to the manner in which Health Card performs
the Delegated Programs. In the event any such changes shall result
in an increase in costs to Health Card, as reasonably determined by
Health Card, such costs shall result in a like increase to the
administrative fee portion of the Capitation Rates. Health Card
shall notify Vytra Healthcare of the amount of such increase before
implementing any changes requested by Vytra Healthcare. In the event
Vytra Healthcare disputes the amount of the resulting increase in
costs to Health Card, and the parties cannot agree upon an
acceptable increase to the administrative costs portion of the
Capitation Rates within ten (10) business days after Health Card
notifies Vytra Healthcare of such increase, either party may refer
the matter to binding arbitration before an arbitrator selected by
the President of the American Arbitration Association and conducted
in Suffolk County, New York, in accordance with the commercial
arbitration rules of the American Arbitration Association then in
effect, including the expedited procedures if applicable. The
arbitrator shall be an individual experienced in the field of
credentialling pharmacies. The unsuccessful party shall pay the full
cost of the arbitrator and the American Arbitration Association in
connection with the matter. Until the final decision of the
arbitrator, the amount of the increase to the Capitation Rates
determined by Health Card shall apply, unless Vytra Healthcare shall
have directed Health Card, in writing within two (2) business days
after Vytra Healthcare's receipt of Health Card's notice, not to
implement such changes. In such event, Health Card shall not be
obligated to implement such changes until the sooner of the parties
agreeing on the increase in costs of implementing such changes or
the final and binding decision of the arbitrator. Vytra Healthcare
shall have the right to periodically audit Health Card's performance
of the Delegated Programs.
3. RESPONSIBILITIES AND RIGHTS OF HEALTH CARD
(a) In consideration for, and subject to the payment of the Monthly Fees
and such other sums to be paid by Vytra Healthcare to Health Card
hereunder, Health Card shall perform Claims processing,
administrative drug services, disbursements to Participating
Pharmacies and Members, reconciliation of Participating Pharmacy
disbursements, provider relations, credentialling of Participating
Pharmacies as outlined in Exhibit B, and periodic reporting of drug
utilization and other
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management information provided in Health Card standard report
format as described in Exhibit D attached hereto and made part of
this Agreement.
(b) Health Card shall notify a Participating Pharmacy of any denial, in
whole or in part, of a Claim, and shall, as necessary, advise such
Participating Pharmacy that the Member may not be billed for any
Pharmacy Services or for monies in excess of the permitted
reimbursement, except to the extent permitted by subparagraph of
this Paragraph 3.
(c) Health Card shall notify Members by way of an explanation of
benefits, in such form as Health Card may use, from time to time,
regarding Claims submitted directly by such Member to Health Card (a
Direct Reimbursement Claim). Health Card shall forward, to Vytra
Healthcare, a copy of any such explanation of benefits upon request
therefor by Vytra Healthcare.
(d) Health Card shall maintain current and complete files of all Claims
received and of payments made to Participating Pharmacies and
Members under this Agreement. Such files shall be available for
review and copying by Vytra Healthcare pursuant to subparagraph (aa)
of this Paragraph 3.
(e) Health Card will provide Vytra Healthcare with standard utilization
and management information reports and standard drug utilization
review (DUR) reports, the format and schedule for delivery of such
reports are attached hereto as Exhibit D. During the first six (6)
months of the term of this Agreement (the "Transition Period"),
Health Card shall allocate sum of ** Dollars
(the "Transition Costs") to pay the costs incurred by Health Card in
revising and producing such reports at Vytra Healthcare's request,
which revised additional reports, shall be incorporated in Exhibit
D. All requests directed to Health Card for revisions or additions
to such reports shall be made only by the Vice President for
Professional Services or the Senior Director for Business Operations
or such other representative or representatives designated by Vytra
Healthcare in writing from time to time ("Account Representatives").
Health Card shall provide Vytra Healthcare with an estimate of the
costs to be incurred in revising or preparing the reports prior to
commencing any such services. The costs incurred by Health Card in
providing such services shall be at the rates scheduled in Exhibit
H. The parties agree that the costs incurred by Health Card in
revising or producing such reports shall be the costs incurred in
design and programming, including all ancillary costs. No costs
shall incur for time expended by other Health Card personnel. At the
end of each month during the Transition Period, Health Card shall
deliver to Vytra Healthcare a statement indicating the services
provided during that month and the costs associated therewith. Any
costs incurred during the Transition Period in excess of the
Transition Costs shall be paid to Health Card by Vytra Healthcare.
** Confidential portion filed separately with the Commission.
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(f) Health Card will instruct the Participating Pharmacies to collect
the Copayment required by a Subscriber Agreement from each Member
for Covered Products dispensed pursuant to a Prescription.
(g) Health Card will instruct the Participating Pharmacies that, except
for Medicaid Members, no over-the-counter (OTC) drug, except
Nutritional Supplements or insulin, including otherwise prescription
drugs with OTC equivalents, shall be provided to a Member unless the
OTC drug has been especially included in the Vytra Healthcare
Formulary. However, the foregoing shall not apply to those Members
covered by Medicaid, to whom OTC drugs may be provided, regardless
of their inclusion in the Vytra Healthcare Formulary.
(h) Health Card shall provide Pharmacy Services in accordance with the
then applicable benefit levels and coverages provided in the
Subscriber Agreements, provided copies of the applicable provisions
of such Subscriber Agreements setting forth the benefit levels and
coverages have theretofore been delivered by Vytra Healthcare to
Health Card.
(i) Health Card shall contract with Participating Pharmacies to fill
Prescriptions for Pharmacy Services and Covered Products for the
quantity prescribed by the Prescriber, up to a maximum of the
greater amount of 100 Unit doses or a 34-day supply per Prescription
at a retail Participating Pharmacy or up to a 90 day supply by a
mail order Participating Pharmacy. In the event that either of the
above quantity limitations significantly exceed the Member's
remaining period of eligibility, as shown on the identification card
or as determined through other eligibility information, the
Participating Pharmacy may provide a supply limited to five (5) days
beyond the indicated term of eligibility.
(j) Health Card shall include in all of its Health Card Pharmacy
Provider Service Agreements a requirement that, except for
collecting the applicable Copayment from Members, the Participating
Pharmacy shall look solely to Health Card for any other sums due the
Participating Pharmacy in connection with Pharmacy Services and the
Participating Pharmacy shall not xxxx, charge, collect a deposit
from, attempt to obtain compensation or reimbursement from or have
any recourse against the Members. Health Card agrees to take all
reasonable steps necessary to protect the Members and Vytra
Healthcare from any such claims. Notwithstanding the foregoing, the
Participating Pharmacy may seek payment from a Member provided that
Health Card has previously agreed that the drug is not a Covered
Product, the Participating Pharmacy has informed the Member that the
drug is not a Covered Product and the Member understands that he or
she is solely responsible for the Participating Pharmacy's fee for
such service, or if a Member is ineligible for coverage. In
connection therewith, should a dispute arise, Health Card agrees to
take all steps necessary to protect Vytra Healthcare from a
Participating Pharmacy or Member who may seek redress against Vytra
Healthcare, except in connection with disputes resulting from the
design of
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benefits provided by Vytra Healthcare or Vytra Healthcare's decision
to not cover a specific item or to hold a specific member ineligible
for benefits, for which no indemnity is provided hereunder.
Notwithstanding anything to the contrary contained herein, the
forgoing indemnity shall in no way affect the validity or
enforceability of any claims Health Card may have against the
Members or Vytra Healthcare, including, but not limited to claims
against Vytra Healthcare for nonpayment of sums due or other
defaults, if any, by Vytra Healthcare, pursuant to this Agreement.
(k) Health Card shall receive Vytra Healthcare's approval of all
communications regarding the Vytra Healthcare Formulary prior to
distribution. Health Card shall provide Vytra Healthcare with copies
of all communications that it provides to its network of
Participating Pharmacies from time to time regarding management and
operation of the Participating Pharmacy network and Pharmacy
Services for Vytra Healthcare.
(l) Health Card shall perform fraud review and maintain a drug
utilization management program. In administering the drug
utilization management program, Health Card shall:
(i) produce and provide to Vytra Healthcare quarterly drug
utilization management reports including exception screening
of high-use Members, by number or dollars; Members using
multiple pharmacies; and Members with greater than four (4)
Prescriptions for controlled substances in a quarter;
(ii) provide to Vytra Healthcare Prescriber profiles, including
incidence of generic prescribing and DUR alerts and Formulary
Compliance reports within 60 days of the Vytra Healthcare
Formulary being finalized and receipt of readable physician
file data with all required data elements. Such reports shall
be delivered to Vytra Healthcare pursuant to the time periods
noted on each report listed in Exhibit D.
(iii) provide Vytra Healthcare with clinical reviews used in Health
Card P&T Committee and provide support in conjunction and
cooperation with Vytra Healthcare case management team. During
the Transition Period, Health Card shall provide one thousand
(1,000) hours of clinical support to assist Vytra Healthcare
in managing drug utilization. Following the Transition Period,
Health Card shall provide Vytra Healthcare each month fifty
(50) hours of clinical support for the services to be provided
herein. Any services rendered by Health Card in excess of the
foregoing respective amounts shall be provided at the clinical
rate outlined in Exhibit H attached hereto and made part
hereof.
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(iv) pay for mailings concerning formulary management to
Participating Pharmacies.
(m) Health Card shall perform periodic audits of the prescription
records of a percentage of Participating Pharmacies to review
compliance with coverage limitation as set forth in this Agreement
and professional practice standards and to confirm that proper
documentation is maintained pursuant to federal and state law, rule
and regulation. Upon request by Vytra Healthcare, Health Card shall
perform on-site audits of specific Participating Pharmacies to
review compliance with this Agreement up to 20 per quarter. A
description of Health Card's Participating Pharmacy audit process,
including the frequency and selection process, is attached hereto as
Exhibit E.
(n) Health Card shall provide Vytra Healthcare with a magnetic tape of
encounter information, two times per month, with the following
information for each Prescription dispensed by Participating
Pharmacies: store identification, Member identification, date of
service, prescription number, designation of new or refill
Prescription, quantity, drug identification (NDC number and/or drug
name), Prescriber identification, total price, Copayment and net
cost.
(o) Health Card shall be the exclusive provider to Vytra Healthcare of
Pharmacy Services and Covered Products as defined in this Agreement.
However, notwithstanding the foregoing, up to ** per annum of the
number of Claims by Members for Pharmacy Services may be arranged or
provided by other pharmacy service providers, by individual
physicians or groups of physicians associated with Vytra Healthcare.
If more than ** per annum of the number of such Claims are
contracted to other pharmacy providers, Health Card shall have the
right to terminate this Agreement upon ninety (90) days' prior
notice to Vytra Healthcare or to renegotiate with Vytra Healthcare
the Capitation Rate per Member.
It is understood that in the event physician groups associated with
Vytra Healthcare arrange to have Pharmacy Services provided or
arranged by another provider, Health Card can no longer perform DUR,
case management or reporting functions for Members using the
services of such physician groups. Health Card would not be
responsible for the analyses and reporting of prescribing habits of
any physician group providing pharmacy prescription benefits to
Members independently or through another pharmacy vendor.
(p) Health Card shall exercise its best efforts to maintain network
pharmacy participation at no less than the number of pharmacies
available on the first day of this contract period. Health Card will
not be deemed responsible for shrinkage of the network due to
pharmacy closings, consolidations, or changes in the reimbursement
schedule, provided however, that in such event, Vytra Healthcare may
elect to terminate this Agreement upon ninety (90) days' prior
notice to Health Card if a sufficient network is not maintained, as
provided in
** Confidential portion filed separately with the Commission.
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subparagraph (d) of Paragraph 2 of this Agreement. Health Card
agrees not to terminate a major chain of Participating Pharmacies
participating in the Health Card pharmacy network as of the date of
this Agreement without the prior approval of Vytra Healthcare,
provided however, if Vytra Healthcare withholds its consent and the
continued inclusion of any such pharmacy as a Participating Pharmacy
results in an increase to Actual Costs, Vytra Healthcare shall pay
the amount of such increase in Actual Costs, quarterly, to Health
Card. Vytra Healthcare shall have the right during the term of this
Agreement to request, in writing, that Health Card add specific
pharmacies as Participating Pharmacies, provided however, if the
inclusion of such pharmacy or pharmacies results in an increase to
Actual Costs, Vytra Healthcare shall pay the amount of increase in
Actual Costs, quarterly to Health Card. Health Card shall notify
Vytra Healthcare of the amount of such increase before adding such
pharmacies as Participating Pharmacies. In the event of a dispute as
to the amount of the increase to the Actual Costs, as set forth
above, either party may avail itself of the procedure set forth in
Paragraph 2(a). Until the final decision of the actuaries, the
amount of the increase to the Actual Costs determined by Health Card
shall apply, unless Vytra Healthcare shall have directed Health
Card, in writing within two (2) business days after Vytra
Healthcare's receipt of Health Card's notice, not to add such
pharmacies as Participating Pharmacies. In such event, Health Card
shall not be obligated to add such pharmacies as Participating
Pharmacies until the sooner of the parties agreeing on the increase
in Actual Costs of adding such pharmacies as Participating
Pharmacies or the final and binding decision of the actuaries.
(q) Health Card shall continue to maintain a Pharmacy and Therapeutics
Committee.
(r) Health Card shall exercise best efforts to assist Vytra Healthcare
in developing physicians' profiles and identifying and implementing
cost-effective disease management programs
(s) In addition to the reports described in Exhibit D, Health Card
shall, from time to time following the Transition Period, provide
such additional reports as Health Card and Vytra Healthcare shall
mutually agree (the "Additional Reports"), in accordance with
procedures agreed upon by Health Card and Vytra Healthcare. In
addition to the compensation set forth herein, Vytra Healthcare
shall compensate Health Card for the Additional Reports as set forth
in the rate schedule in Exhibit H attached hereto and made part of
this Agreement. All requests for Additional Reports must be made by
a designated Account Representative.
(t) Health Card shall process 90% of all Claims submitted within 10 days
and 99% within 15 days of receipt by Health Card of a completed
claim form, provided the claim form contains all the information
necessary for Health Card to process such claim. Health Card shall
make all reasonable efforts to process each Claim within 30 days of
receipt of such Claim form and shall answer telephone calls from
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Members or Participating Pharmacies within an average of 30 seconds
or less. Health Card shall reimburse to Vytra Healthcare the sum of
fifty ($0.50) cents for each Claim not processed as provided above.
Vytra Healthcare shall be permitted to audit Health Card's
conformance with the foregoing requirements pursuant to the
provisions of Paragraph 3(aa).
(u) Health Card shall ensure that 95% of mail order prescriptions, which
do not require pharmacy or physician intervention, for Covered
Products be dispensed to the Member within 48 hours and 99% within
72 hours of receipt of a complete Prescription setting forth all
information necessary to fulfill the Prescription. Health Card shall
make all reasonable efforts to ensure that all mail order
prescriptions are dispensed within 120 hours of receipt of a
complete Prescription.
(v) Health Card will maintain a reasonable disaster recovery program
with respect to computer malfunctions.
(w) Health Card shall provide additional support services to Vytra
Healthcare which may be agreed upon between Health Card and Vytra
Healthcare at rates mutually agreed upon between Vytra Healthcare
and Health Card.
(x) Health Card shall be responsible for performing those administrative
services which are directly related to the arrangement of Pharmacy
Services to Members under this Agreement. Such services shall
include but not be limited to: (i) maintenance of an adequate
pharmacy network as required by Paragraph 2(d), (ii) member services
customer relations staff to answer Participating Pharmacies,
Member's and Vytra Healthcare's questions, (ii) data collection and
report generation, and (iii) the services of operational staff to
coordinate and administer the payment or reimbursement of all
Claims.
(y) Health Card shall require each Participating Pharmacy to be
licensed, certified or otherwise duly authorized to operate as a
pharmacy in accordance with all applicable federal and state law and
Health Card's credentialling program and criteria outlined in
Exhibit B. Upon request of Vytra Healthcare, pursuant to Paragraph
5(j), Health Card shall remove a pharmacy as a Participating
Pharmacy for provision of Pharmacy Services to Members.
(z) Health Card will be assisted by Integrated Pharmaceutical Services
("IPS") (or a successor/replacement organization) in providing
formulary management services to Members. All inquiries regarding
such services shall be directed to Health Card's Director of DUR or
such other person designated by Health Card. If Health Card
determines same is necessary or is otherwise unable to answer any
such inquiry to Vytra Healthcare's reasonable satisfaction, Health
Card shall refer such inquiries, within one (1) business day of
receipt of such inquiry or notice from Vytra Healthcare that Health
Card's response is unsatisfactory, to IPS and shall notify Vytra
Healthcare of IPS' response. If such response is not
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satisfactory, Health Card shall either seek clarification or, in its
discretion, use reasonable efforts to arrange for direct
communication between Vytra Healthcare and IPS as to such inquiry.
(aa) Upon request, but not more than once every quarter, Health Card
agrees to provide Vytra Healthcare and its authorized
representatives access to all information, records and other
documents relating to Health Card's performance of its
responsibilities under this Agreement for Vytra Healthcare's audit,
inspection or copying, without cost to Vytra Healthcare, during
regular business hours. Use and disclosure of such documents by
Vytra Healthcare shall be subject to Paragraph 17 of this Agreement.
Vytra Healthcare's audit results may be used to measure Health
Card's compliance with its obligations under this Agreement,
including but not limited to, Health Card's conformance with the
Delegated Program and for quality assurance purposes. The parties
agree that this Paragraph 3(aa) shall survive the termination of
this Agreement.
4. COMPENSATION
(a) The parties agree that for purposes of the calculations and other
determinations required hereunder, and as is otherwise necessary for
purposes of this Agreement, each Member shall be deemed assigned to
one of the following categories of Members, as applicable: (i) those
Members enrolled in Vytra Healthcare's Medicare Risk HMO program;
(ii) those Members enrolled in Vytra Healthcare's HMO program for
New York Medicaid recipients; and (iii) all other Members. The
calculations and determinations required hereunder, and as is
otherwise necessary for purposes of this Agreement shall be made
separately for each of the foregoing categories of Members using
such category's applicable components and other information (e.g.
each category of Members shall have its own Monthly Fee, Capitation
Rate, Risk Sharing Amount, Base Rate, Utilization Rate, Variance,
Actual Costs, etc.)
(b) Vytra Healthcare shall pay to Health Card during the term of this
Agreement, without any set-off, prior to demand therefor or any
deductions whatsoever, in advance on the first day of each and every
calendar month during the term of this Agreement, a fee (the
"Monthly Fee") equal to the product obtained by multiplying the then
applicable Capitation Rate times the total number of Members
enrolled on the first day of such month. The initial Capitation
Rates are as set forth on Exhibit A attached hereto and made a part
hereof and are subject to change as herein provided.
(c) Effective as of December 1, 1996 and as of the first day of each and
every December thereafter, the Base Rate (and as a result, the
applicable Capitation Rate) shall change by applying to the
calculation of the Base Rate a new Utilization Rate equal to the
actual Utilization Rate for the previous Fiscal Year, as mutually
agreed to by the parties. If by December 10 of the applicable Fiscal
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Year, the parties have not agreed upon the Utilization Rate for such
Fiscal Year, either party may immediately refer the dispute to
resolution pursuant to the procedure set forth in Subparagraph 2(a).
The new Utilization Rate shall then be in effect for the entire
Fiscal Year commencing as of such first day of December. For
purposes hereof, Fiscal Year shall mean the one year period
commencing December 1 and expiring on the immediately following
November 30. The parties agree that to account for the effect of
mail order Pharmacy Services on the actual Utilization Rate, when
determining the actual Utilization Rate, Health Card shall determine
and add to the total number of Pharmacy Services per Member, the
additional number of Pharmacy Services that would have been filled
if such mail order Pharmacy Services were for a 30 day maximum
supply of the respective Covered Product.
(d) The parties acknowledge that due to circumstances beyond their
control, Actual Costs may exceed Base Rate during any given period
of time and, as a result thereof, the parties are at risk of bearing
an unintentioned financial burden. Accordingly, the parties have
agreed to share the risk of such an occurrence by calculating, on a
quarterly basis, the sum of the Variances for the three (3) months
comprising the previous calendar quarter (the "Aggregate Variance)
and the appropriate party making a lump-sum payment to the other of
the Risk Sharing Amount, as hereinafter defined, if any. Such
payment will be due and payable ten (10) days after the Risk Sharing
Amount is determined.
(i) The "Risk Sharing Amount", shall be calculated at the
beginning of each and every calendar quarter during the term
of this Agreement and shall equal the product obtained by
multiplying the total number of Members enrolled during each
month of the previous calendar quarter by the sum of the
following amounts
(1) 50% of the following: The Aggregate Variance up to the
amount of the First Risk Sharing Corridor, as defined
below.
(2) 75% of the following: The Aggregate Variance, less the
amount of the First Risk Sharing Corridor, up to the
amount of the Second Risk Sharing Corridor, as defined
below.
(3) 85% of the following: The Aggregate Variance, less the
amount of the First and Second risk sharing corridors,
up to the amount of the Third Risk Sharing Corridor, as
defined below.
(4) 90% of the following: The Aggregate Variance, less the
amount of the First, Second and Third Risk Sharing
Corridors, up to the amount of the Fourth Risk Sharing
Corridor, as defined below.
(ii) For purposes of calculating the Risk Sharing Amount:
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* First Risk Sharing Corridor shall be 10% of the Base Rate.
* Second Risk Sharing Corridor shall be 5% of the Base Rate.
* Third Risk Sharing Corridor shall be 5% of the Base Rate.
* Fourth Risk Sharing Corridor shall be 80% of the Base Rate.
(iii) If: (x) the Aggregate Variance for the previous calendar
quarter is a positive number, then Health Card shall pay the
Risk Sharing Amount to Vytra Healthcare or at Vytra
Healthcare's option offset such amount against the next
amounts to be paid by Vytra Healthcare to Health Card under
this Agreement, and if (y) the Aggregate Variance for the
previous quarter is a negative number, then Vytra Healthcare
shall pay the Risk Sharing Amount to Health Card.
Payments of Risk Sharing Amount shall account for retroactive terminations and
additions effective during the previous quarter. All rebates actually received
by Health Card for Pharmacy Services received by Members shall be delivered by
check to Vytra Healthcare.
Any decrease or reduction to the Actual Costs which is attributable to the
utilization of mail order Pharmacy Services by Members shall be for Vytra
Healthcare's sole benefit. Health Card shall monitor mail order utilization and
calculate the savings, if any. The savings resulting from mail order Pharmacy
Services that have been remitted to Health Card as a result of the Risk Sharing
Amount calculation shall be paid to Vytra Healthcare on a quarterly basis.
Except as specifically provided in this Agreement, Vytra Healthcare shall have
no obligation to pay to Health Card any other amounts or payments for costs or
expenses incurred by Health Card in providing or arranging the Pharmacy
Services; it being understood by the parties that any other amounts shall be the
sole obligation and responsibility of Health Card.
(e) Retroactive Member eligibility additions are permitted. Payment by
Vytra Healthcare to Health Card for permitted retroactive additions
shall be made at the applicable Capitation Rate for each month or a
portion of a month, as applicable, of retroactivity. Retroactive
terminations of Members are permitted. In the event of a retroactive
termination, Health Card shall promptly refund to Vytra Healthcare
(or, at Vytra Healthcare's option, such amount may be offset against
other payments due to Health Card under this Agreement) the
Capitation Rate applicable to a Member for each month of retroactive
termination; provided however, that in the event a Member has been
provided Pharmacy Services during any months subject to retroactive
termination, then Health Card shall be entitled to retain an amount
equal to the Actual Cost incurred by Health Card, but shall, in no
event include any amount attributable to administrative expenses or
profit.
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(f) Vytra Healthcare shall pay the Capitation Rate to Health Card for
Members who first become eligible to receive Pharmacy Services on a
day other than the first day of the month on a prorated basis. By
way of example and illustration only, if a Member becomes eligible
to receive or becomes no longer eligible to receive Pharmacy
Services on the fifteenth (15th) day of the month, Vytra Healthcare
shall pay to Health Card or Health Card shall pay to Vytra
Healthcare, as the case may be, fifty (50%) percent of the
Capitation Rate attributable to such Member for that month. At Vytra
Healthcare's option, Vytra Healthcare shall be entitled to make an
appropriate adjustment in the next month's payment of the Capitation
Rate.
(g) (i) In the event Health Card grants, to any health maintenance
organization, health insurer, self-insured fund or trust, or
any other similar type of organization (1) whose plan is
substantially similar to Vytra Healthcare's in design and
demographic; (2) whose service area is substantially similar
to Vytra Healthcare; and (3) who will receive substantially
similar services to those received by Vytra Healthcare
hereunder (hereinafter after a "Comparable Insurer") more
favorable capitation rates than those provided in this
Agreement, Health Card shall promptly notify Vytra Healthcare
and: (x) if the number of members enrolled with the Comparable
Insurer is greater than, but does not exceed twice the number
of Vytra Healthcare Members and Vytra Healthcare and Health
Card does not offer such better capitation rates to Vytra
Healthcare, Vytra Healthcare shall have the right, within ten
(10) days of receipt of such notice to terminate this
Agreement; and (y) if the number of members enrolled with the
Comparable Insurer is equal to or less than the number of
Vytra Healthcare Members, Vytra Healthcare shall thereupon
receive the more favorable capitation rates on a prospective
basis to the date such prices and terms were implemented for
such Comparable Insurer and if requested by Vytra Healthcare,
Health Card shall amend this Agreement to contain the more
favorable capitation rates.
(ii) Failure by Health Card to promptly deliver to Vytra Healthcare
the notice required in (i) above shall be considered a
material breach of this Agreement entitling Vytra Healthcare
to immediately terminate this Agreement and/or to receive from
Health Card the difference between the Capitation Rates paid
by Vytra Healthcare and the more favorable capitation rates
commencing on the date the more favorable capitation rate were
implemented for such Comparable Insurer.
(iii) Notwithstanding (i) and (ii) above, Health Card shall have no
responsibility or obligations to Vytra Healthcare with regard
to capitation rates implemented for a Comparable Insurer with
enrolled members in excess of twice the number of Vytra
Healthcare Members.
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5. RESPONSIBILITIES AND RIGHTS OF Vytra Healthcare
For all purposes of this Agreement, Vytra Healthcare shall have the
following responsibilities and rights:
(a) Vytra Healthcare shall provide Health Card with a list of all
eligible Members for each month, including designation of current
additions and deletions, in the electronic format mutually agreed
upon.
(b) Vytra Healthcare shall designate one representative to serve on the
Health Card P & T Committee.
(c) The Vice President for Professional Services of Vytra Healthcare, or
others as designated by Vytra Healthcare, will have the assistance
of Health Card in the education of Prescribers as indicated by DUR
exception reports and other drug utilization review activities, in
the pursuit of proper and appropriate drug utilization. Vytra
Healthcare will be responsible for all communications, including
formulary information, to its physicians.
(d) Vytra Healthcare will electronically deposit the Monthly Fee into a
bank account designated by Health Card by the 7th day of each month
during the term of this Agreement. If the Monthly Fee is not so
deposited by 5:00 p.m. on the 15th day of the month in which such
payment is due, Vytra Healthcare shall pay to Health Card a late fee
in an amount equal to the greater of one thousand ($1,000.00)
dollars per day from the first day of such month date due or
interest at the rate of one and one-half percent (1.5%) per month,
both calculated from the first day of the calendar month in which
such payment was due to the date of payment. The payment of any such
late fee shall not be deemed a cure of any default hereunder or act
as a waiver by Health Card of any of its rights hereunder.
(e) Provided that such information is provided to Vytra Healthcare by
Health Card, Vytra Healthcare shall periodically publish and
distribute the names, addresses, and/or telephone numbers
Participating Pharmacies and such other information as desired by
Vytra Healthcare for purposes of informing Members and for Vytra
Healthcare marketing purposes.
(f) Vytra Healthcare will provide its Members with membership
identification cards or other identification of eligibility for
Pharmacy Services in a form that is approved by Health Card, which
approval shall not be unreasonably withheld.
(g) The parties will work cooperatively to contain unnecessary drug use,
waste, and over-utilization and to provide Members with a high
quality of care. The parties will support a drug utilization
management program. In connection therewith, Health Card will assist
Vytra Healthcare in communicating to Vytra Healthcare's
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physicians prior authorization standards for the use of those high
cost drugs listed on Exhibit F.
(h) Vytra Healthcare will pay for all costs in connection with any
mailings Vytra Healthcare elects to send to its Members concerning
formulary management or otherwise.
(i) Vytra Healthcare shall be entitled to audit the books and records of
Health Card pursuant to the terms of Paragraph 3(aa).
(j) Vytra Healthcare shall be entitled to request that a Participating
Pharmacy not provide Pharmacy Services to Members if in its
reasonable belief, the removal of such pharmacy as a Participating
Pharmacy is in the best interest of its Members. However, provided
such Participating Pharmacy satisfies Health Card's credentialling
criteria, Vytra Healthcare shall indemnify and hold Health Card
harmless from any claims resulting from Health Card's compliance
with such determination.
(k) Vytra Healthcare shall deliver, to Health Card, all information
regarding the respective benefit levels and coverages for the
different categories of Members as is necessary for Health Card to
provide Pharmacy Services to such Members in accordance with the
applicable provisions of such Members' Subscriber Agreements as same
may be amended from time to time.
6. REPRESENTATIONS AND WARRANTIES OF HEALTH CARD
Health Card represents and warrants to Vytra Healthcare as follows:
(a) It is duly organized as a New York corporation and validly existing
in the State of New York and has all right, power and authority to
enter into, execute and perform this Agreement.
(b) The execution and delivery of this Agreement and the performance of
the transactions contemplated hereby are duly authorized and
approved by all necessary corporate action and that the person
signing this Agreement on behalf of Health Card has the necessary
authority to bind Health Card. The execution and performance of this
Agreement and any agreement contemplated hereby, will not constitute
a breach or violation of (i) Health Card's Certificate of
Incorporation, (ii) any law, statute, ordinance, rule, regulation,
order or decree of any governmental authority to which Health Card
is subject or by which it is bound; or (iii) any mortgage, deed,
agreement or other instrument to which Health Card is subject or by
which it is bound.
(c) During the term of this Agreement, Health Card shall: (i) comply
with all applicable professional standards and criteria, as required
by the New York Public
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Xxxxxx Xxx, Xxx Xxxx Xxxxx licensure requirements and all federal
and state applicable laws, rules and regulations; (ii) maintain
appropriate prescription drug records for a Member receiving
Pharmacy Services; and (iii) participate in clinical, educational
and administrative meetings and activities, as appropriate.
(d) During the term of the Agreement Health Card shall comply with all
of the terms and conditions of the Delegated Program with regards to
credentialling of Participating Pharmacies.
7. REPRESENTATIONS AND WARRANTIES OF Vytra Healthcare
Vytra Healthcare represents and warrants to Health Card as follows:
(a) It is duly organized as a not-for-profit Individual Practice
Association Health Maintenance Organization and validly existing in
the State of New York and has all right, power and authority to
enter into, execute and perform this Agreement.
(b) The execution and delivery of this Agreement and the performance
contemplated hereby are duly authorized and approved by all
necessary corporate action and that the person signing this
Agreement on behalf of Vytra Healthcare has the necessary authority
to bind Vytra Healthcare. The execution and performance of the
Agreement and any agreements contemplated hereby, will not
constitute a breach or violation of; (i) Vytra Healthcare's
Certificate of Incorporation; (ii) any law, statute, ordinance,
rule, regulation, order or decree of any governmental authority to
which Vytra Healthcare is subject or by which it is bound; or (iii)
any mortgage, deed, agreement or other instrument to which Vytra
Healthcare is subject or by which it is bound.
8. INDEPENDENT RELATIONSHIP
The relationship between Health Card and Vytra Healthcare is a contractual
relationship between independent parties. Neither Health Card nor Vytra
Healthcare nor any employee of Health Card or Vytra Healthcare is an
agent, employee or representative of the other.
9. INSURANCE AND MUTUAL HOLD HARMLESS
(a) Health Card shall maintain and, upon the request of Vytra
Healthcare, provide documentation of, policies of adequate
comprehensive general liability insurance, in the amount of no less
than $1 million per occurrence with an umbrella policy of $5
million. Such insurance policy or policies shall include a provision
providing Vytra Healthcare with reasonable notice, and in any event
not less than sixty (60) days prior written notification of the
expiration and/or cancellation of such policies. In the event Health
Card fails to continuously maintain the insurance required by this
Paragraph 9(a), Vytra Healthcare may secure or pay the
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charges for such policy or policies and charge Health Card the cost
thereof. Securing or paying the charges for such policies shall not
affect Vytra Healthcare's option to terminate the Agreement pursuant
to Paragraph 10(b).
(b) Vytra Healthcare shall maintain and, upon the request of Health
Card, provide documentation of, policies of adequate comprehensive
general liability and professional liability insurance, such
professional liability to be in amounts no less than $3 million per
occurrence and $5 million in the aggregate. Such insurance policy or
policies shall include a provision providing Health Card with
reasonable notice, and in any event not less than sixty (60) days
prior written notification of the expiration and/or cancellation of
such policies. In the event Vytra Healthcare fails to continuously
maintain the insurance required by this Paragraph 9(b), Health Card
may secure or pay the charge for such policy or policies and charge
Vytra Healthcare the cost thereof. Securing or paying the charges
for such policies shall not affect Health Card's option to terminate
this Agreement pursuant to Paragraph 10(b).
(c) Vytra Healthcare and Health Card agree to indemnify, defend, and
hold harmless each other, including each other's agents, officers,
directors, shareholders, owners, members and employees from and
against any and all liability or expense, including defense costs
and legal fees, and claims for damages of any nature whatsoever,
including but not limited to, bodily injury, death, personal injury,
medical malpractice, property damage, breach of contract or any
worker's compensation suits, liability or expense arising from
their respective negligence or other wrongful act or omission or
breach or default of any obligation hereunder, or of any
representation, covenant or agreement contained herein.
10. TERMINATION
(a) The initial term of this Agreement shall commence as of December 1,
1995 and end at midnight on November 30, 1998. Thereafter, unless
this Agreement shall have terminated in accordance with the terms
and conditions of this Agreement, the term of this Agreement shall
be automatically extended for successive one (1) year periods, each
commencing from the expiration of the initial term or extended term,
as applicable, and running for the successive twelve (12) month
period. Notwithstanding the foregoing, either party may elect not to
extend the term of this Agreement by giving written notice thereof
on or before the date that is 180 days prior to the commencement of
the applicable extended term. Additionally, either party may
terminate this Agreement for a material breach by the other upon a
ninety (90) day notice of termination ("Termination Notice")
delivered by certified mail, provided that the Termination Notice
specifies the nature of the breach or failure to perform. If the
party upon whom the Termination Notice is served fails to cure such
default within thirty (30) days of receipt of the Termination Notice
then this Agreement shall terminate upon the ninety (90) day date
specified in the Termination Notice.
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(b) Notwithstanding subparagraph (a), either party may elect to
terminate this Agreement immediately upon written notice to the
other in the event the other party: (i) files a voluntary petition
for bankruptcy or reorganization; or (ii) makes a general assignment
in favor of creditors; or (iii) has an involuntary petition in
bankruptcy filed against it which petition is not dismissed within
ninety (90) days of the return date of said petition; or (iv) is the
subject of a reorganization, dissolution, liquidation or similar
proceeding; or (v) fails to continuously maintain the types and
amounts of insurance required by Paragraph 9 of this Agreement. In
addition, Vytra Healthcare may elect to immediately terminate this
Agreement in accordance with the provisions of Paragraph 4(g) or if
Health Card fails to render or stops providing or arranging for
Pharmacy Services to Members. The termination of this Agreement by a
party pursuant to this Subparagraph (b) shall not be deemed a
limitation or waiver of any of the other rights or remedies
available to such party pursuant to this Agreement.
(c) In the event of the termination of this Agreement for any reason,
Health Card shall, at the option of Vytra Healthcare, continue to
arrange for the provision of Pharmacy Services for the Members
receiving Pharmacy Services from a Participating Pharmacy as of the
effective date of termination, until such time as the Members are
receiving Pharmacy Services from another appropriate provider. Vytra
Healthcare shall compensate Health Card for such services in
accordance with the prior agreement between the parties dated May 1,
1994.
11. COMPLAINTS AND GRIEVANCES
(a) Health Card shall maintain and make available to Members and
Participating Pharmacies an initial complaint and resolution
procedure for the purpose of fairly and expeditiously resolving a
complaint initiated by a Member or a Participating Pharmacy with
respect to the delivery of Pharmacy Services.
(b) Health Card agrees to cooperate with Vytra Healthcare in resolving
any grievance which a Member may have relating to the provision of
Pharmacy Services and Covered Products by a Participating Pharmacy.
In this regard, both parties agree to bring to the attention of the
other all Member grievances involving the provision of Pharmacy
Services. Health Card agrees to investigate promptly such grievances
and use its best efforts to resolve the grievance in accordance with
the Vytra Healthcare Grievance Procedure, a copy of which is
attached hereto as Exhibit G.
12. DISPUTE RESOLUTION
(a) Except as specifically provided elsewhere in this Agreement, with
respect to any dispute or controversy arising from or relating to
this Agreement between the parties, the issue shall be decided by a
single arbitrator chosen by the then President of the American
Arbitration Association and held in Suffolk County,
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New York, in accordance with the commercial arbitration rules of the
American Arbitration Association then in effect, including the
expedited procedures, if applicable. At the request of either Health
Card or Vytra Healthcare, arbitration proceedings will be conducted
in private with no information concerning the proceedings being
distributed or disseminated to the public; in such case, all
documents, testimony, and records shall be received, heard, and
maintained by the arbitrators in private, available for inspection
by Health Card or Vytra Healthcare and by their respective attorneys
and experts who shall agree, in advance and in writing, to receive
all such information confidentially unless otherwise required to be
disclosed by law or legal process and to maintain such information
in secrecy until such information shall become generally known.
(b) Notwithstanding the foregoing provisions of Subparagraph (a) above,
in the event that either party has initiated arbitration proceedings
alleging that the other party (i) is in violation of the provisions
of paragraph 17 hereof; or (ii) has violated the provisions of
Subparagraph 10 (c) hereof, the party initiating such arbitration
proceedings shall be entitled to seek, in any court having competent
jurisdiction, temporary injunctive relief in order to compel the
performance of said provisions in accordance with their terms. In
furtherance of the foregoing, the parties agree that the merits of
any such dispute shall be resolved in such arbitration proceeding.
13. AMENDMENT
This Agreement may be amended only by the written and mutual agreement of
the parties hereto. Notwithstanding the foregoing, it is understood that
any material amendment or change in payment methodology under this
Agreement is subject to the prior approval of the New York State
Commissioner of Health at least thirty (30) days in advance of their
anticipated implementation.
14. SEVERABILITY
If any provision of this Agreement is found to be void or illegal or
unenforceable, the validity or enforceability of any and all other
portions of this Agreement shall not be affected, provided however that if
the void, illegal or unenforceable provision is material to the overall
purpose and operation of the Agreement then the parties agree to attempt
to mutually resolve the provision which was found void, illegal or
unenforceable. In the event the parties are unable to mutually resolve the
void, illegal or unenforceable provisions, this Agreement may be
terminated by either party upon the date such provision is found to be
void, illegal or unenforceable.
15. GOVERNING LAW
In the event of any dispute hereunder, the laws of the State of New York
shall govern the validity, interpretation, performance, enforcement,
construction, and all other aspects of
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this Agreement, without giving effect to the principles of conflict of
laws. Should any of the provisions of this Agreement require
interpretation, whether by a court or by an arbitrator it is agreed that
the reviewing entity shall not apply a presumption that any provision
shall be more strictly construed against one party by reason of the rule
of construction that a document is to be construed more strictly against
the party who prepares or through its agent prepares the same, it being
agreed that all parties and their respective agents have participated in
the preparation of this Agreement and such other agreements and exhibits
attached hereto.
16. ATTACHMENTS, SCHEDULES AND APPENDICES
Any and all attachments to this Agreement, including any and all schedules
and appendices referred to in any such attachment, are incorporated
hereunder by reference and made a part thereof as if the same were fully
set forth in the body of this Agreement. In the event of a conflict
between any provision of any schedule or exhibit hereto, and any provision
contained in this Agreement, the provision of the schedule or exhibit
shall control.
17. CONFIDENTIALITY AND MEMBER'S RECORDS
(a) Vytra Healthcare and Health Card acknowledge a duty to maintain the
confidentiality of the payment terms of this Agreement, except (i)
where disclosure is required by law, or legal process and then only
after reasonable prior notice to the other party with sufficient
time to protest or (ii) where the disclosure is made on a need to
know basis to a parent, subsidiary, or affiliate corporation, and
where such parent, subsidiary, or affiliate agrees to maintain the
confidentiality obligations imposed by this paragraph.
(b) Each party may, in the course of the relationship established by
this Agreement disclose to the other party in confidence non-public
information concerning credentialling criteria Members' names and
addresses, patient treatment and/or finances, and such party's
earnings, volume of business, methods, systems, practices, plans and
other confidential or commercially valuable proprietary information
(collectively, "Confidential Information"). Each party acknowledges
that the disclosing party shall at all times be and remain the owner
of all Confidential Information disclosed by such party, and that
the party to which Confidential Information is disclosed shall use
its best efforts, consistent with the manner in which it protects
its own Confidential Information, to preserve the confidentiality of
any such Confidential Information which such party knows or
reasonably should know that the other party deems to be Confidential
Information. Neither party shall use for its own benefit or disclose
sell, transfer, publish or otherwise make available to third parties
any Confidential Information of the other party without such other
party's written consent except (i) as may be necessary for the
effective treatment of a Member, or (ii) as may be necessary to
provide such information to IPS or any such replacement organization
to provide formulary management services, or (iii) as may be
required by federal or state law, rule or regulation.
-24-
(c) The parties shall maintain the confidentiality of the medical and/or
prescription drug records of Members to the extent required by all
applicable Federal and State laws and regulations and applicable
professional standards regarding the confidentiality of patient
records, and the release of any information reflected in such
records to any third party shall require the consent of the Member
unless otherwise permitted or required under applicable law.
Notwithstanding the foregoing, Member prescription drug records
maintained by Health Card shall be made available: (i) to Vytra
Healthcare and the New York State Department of Health upon Vytra
Healthcare's or the Department of Health's request, or (ii) as may
be necessary for the effective treatment of a Member, or (iii) as
may be necessary to provide such information to IPS or any such
replacement organization to provide formulary management services,
or (iv) as may be required by federal or state or federal law, rule
or regulation. Neither party shall be in breach of this Agreement
for failure to supply information from medical and/or prescription
drug records to a third party which cannot be supplied due to
prevailing law or for supplying such information required or
permitted to be supplied under prevailing law. Consistent with the
standards of confidentiality and applicable law, Health Card and
Vytra Healthcare shall adopt procedures for the sharing of the
Member's prescription drug records with Vytra Healthcare as needed
for the continuity of care, peer review, HEDIS studies and as may be
necessary for Vytra Healthcare to perform its responsibilities
pursuant to this Agreement and as a health maintenance organization
and to receive and maintain accreditation from the NCQA. Health Card
shall include a provision in its Health Card Pharmacy Provider
Service Agreement executed in 1996 and thereafter during the term of
this Agreement, requiring the Participating Pharmacies maintain the
confidentiality of the Members' prescription drug records to the
extent required by all applicable Federal and State laws and
regulations and professional standards.
18. NOTICES
(a) Any xxxx, notice or other communication which either party may
desire or be required to give to the other under this Agreement
shall be deemed sufficiently given or served if in writing and
delivered personally or by registered or certified mail, return
receipt requested, or by recognized overnight carrier as follows:
(i) If to Health Card:
TO: National Medical Health Card Systems, Inc.
00 Xxxxxx Xxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx, President
(ii) If to Vytra Healthcare:
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TO: Vytra Healthcare
Corporate Center
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxx, Xx. Director for Business
Operations
The time of rendition of a xxxx and of the giving of such notice or other
communication shall be deemed to be the time when the same is personally
delivered to addressee, or three (3) business days after mailing or the first
business day after delivery to the recognized overnight carrier, as herein
provided.
(b) Any communication or notice regarding a dispute pursuant to this
agreement shall be deemed to have been duly made upon receipt of
Health Card or Vytra Healthcare at the address specified in
subparagraph (a) above with copies to:
National Medical Health Card Systems, Inc.
c/o Xxxxxx Xxxxxxxx, Esq.
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
and
Vytra Healthcare Long Island, Inc.
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxx, Corporate Counsel
(c) Either party shall have the right to substitute addresses for such
notices upon prior written notice to the other given in the manner
set forth above provided that notice of such change of address shall
be effective only upon receipt.
19. ENTIRE AGREEMENT
This Agreement and attachments embody the entire agreement and
understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter and there are no other
agreements relating to the subject matter hereof. The parties expressly
acknowledge that all understandings and agreements heretofore had between
the parties are merged into this Agreement and attachments, which alone
fully and completely expresses their agreement, and that the same is
entered into after full investigation, no party relying upon any other
statement or representation made by any party not embodied in this
Agreement. No party shall be liable in any manner whatsoever to any other
party for any promises, statements, representations or information
pertaining to the substance
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of this Agreement, except as expressly set forth herein. All schedules and
exhibits attached hereto shall constitute integral parts of this Agreement
and are specifically incorporated herein.
20. FURTHER ASSURANCES
Following the execution of this Agreement, each party hereto will, at any
time, as may be permitted by law, at the request of the other party,
execute, acknowledge and deliver to or upon the request of such other
party, such further instruments and take such other action as said party
may reasonably request, in order to effectuate this Agreement and the
transactions referred to herein or contemplated hereby.
21. NO WAIVER
No waiver by either party of any rights hereunder shall be effective
unless in writing signed by the party to be charged, and in any event
shall be effective only in the specific instance for which given and shall
not effect the meaning or interpretation of this Agreement or any other
waiver. The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law.
22. SECTION HEADINGS
The captions of the various sections of this Agreement have been included
for reference purposes only and shall not effect the meaning or
interpretation of this Agreement.
23. ASSIGNMENT
Except for the dispensing of prescription drugs by third party pharmacies
and formulary management, Health Card may not, in whole or in part,
assign, delegate, sublet or transfer this Agreement without the express
written consent of Vytra Healthcare, such consent shall not be
unreasonably withheld, except that Health Card may assign, delegate,
sublet or transfer this Agreement to an affiliate, subsidiary or related
entity. Vytra Healthcare may not assign, delegate, sublet or transfer this
Agreement without the express written consent of Health Card, such consent
shall not be unreasonably withheld, except that Vytra Healthcare may
assign, delegate, sublet or transfer this Agreement to an affiliate,
subsidiary, or related entity.
24. GENDER AND NUMBER
The use of the masculine, feminine or neuter gender and the use of
singular and plural shall not be given the effect of any exclusion or
limitation herein.
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25. GOVERNMENTAL ACTION
To the extent that state insurance or health regulators determine that any
provision in this Agreement fails to comply with applicable State law or
regulations, the parties agree to make the necessary and appropriate
amendments to the Agreement to bring it into compliance with such laws and
regulations.
26. COMPLIANCE WITH LAWS
In performing its obligations hereunder, Health Card and Vytra Healthcare
shall abide by all applicable State and Federal laws, rules and
regulations including but not limited to those laws, rules and regulations
governing a health maintenance organization's obligation to provide
services to its members.
27. FORCE MAJEURE
Either party shall not be held liable for any failure to perform caused by
force majeure events, including, but not limited to, industrial disputes,
strikes, lockouts, riots, mobs, fire, flood, wars (declared or
undeclared), civil strife, embargo, delivery delays, defects or shortages
of raw materials from suppliers, defects or delays in deliveries by
subcontractors which the party cannot reasonably remedy in any way, power
shortages, currency or other restrictions caused by reason of laws,
regulations, or orders by any government, governmental agency or by any
supervening unforeseeable circumstances whatsoever beyond the control of a
party.
28. TRADEMARKS AND COPYRIGHTS
The parties reserve the right to the control and use of their names and
all symbols, trademarks, or service marks presently existing or later
established. Neither party shall use the other party's name, symbol,
trademarks, or service marks or such marks as such party controls in
advertising or promotional materials or otherwise without the prior
written consent of such other party except that: Vytra Healthcare may list
the name, address, telephone number of all Participating Pharmacies in its
Medical Directory and inform others that it has an arrangement with Health
Card for the provision of Pharmacy Services. Any other use by a party,
without the approval of the other party, of the name, symbol, trademarks
or service marks of such other party shall cease immediately upon written
notice by the grieving party.
29. This Agreement shall only apply to the Vytra Healthcare Service Area. As of
the date hereof, the Vytra Healthcare Service Area is comprised of Nassau,
Suffolk and Queens Counties in New York. However, if the Vytra Healthcare
Service Area, as approved by applicable regulatory authorities, if necessary,
expands to any additional parts of New York State, or to any parts of New Jersey
or Connecticut, then Vytra Healthcare shall promptly so notify Health Card,
whereupon, the Vytra Healthcare Service Area, for purposes of this Agreement,
shall
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automatically include such other applicable areas and this Agreement shall be in
effect for such other areas.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed by
their duly authorized representatives, on the 15 day of April, 1996.
ChoiceCare Long Island, Inc., National Medical Health Card Systems, Inc.
d/b/a Vytra Healthcare
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxx Xxxxxxx
------------------------------ -------------------------------
Name: Xxxxx X. Xxxxxxxx, PhD. Name: Xxxxx Xxxxxxx
Title: President Title: President
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EXHIBITS
Exhibit A - Capitation Rates and Base Rates
Exhibit A1 - Example of computation to determine Compensation
Exhibit B - Health Card's Credentialling Program and Criteria
Exhibit C - Medicaid Protocols
Exhibit D - Format of Utilization and Management Information Reports, DUR
Reports
Exhibit E - Health Card's Audit Process of Participating Pharmacies
Exhibit F - High Cost Drugs Requiring Prior Authorization
Exhibit G - Vytra Healthcare's Grievance Procedure
Exhibit H - Additional Charges
Exhibit A
Rate Schedule
National Medical Health Card Systems, Inc.
Hcrate1 Rate Schedule Everyone Else, Medicaid, & Medicare
December 1995-November 1998
Everyone Else Medicaid Medicare*
Month Base Rate Base Rate Base Rate
----- --------- --------- ---------
December 1995 ** **
January 1996
February 1996
March 1996
April 1996
May 1996
June 1996
July 1996
August 1996
September 1996
October 1996
November 1996
December 1996
January 1997
February 1997
March 1997
April 1997
May 1997
June 1997
July 1997
August 1997
September 1997
October 1997
November 1997
December 1997
January 1998
February 1998
March 1998
April 1998
May 1998
June 1998
July 1998
August 1998
September 1998
October 1998
November 1998
*$1000 maximum per year.
** Confidential portion filed separately with the Commission.
National Medical Health Card Systems, Inc.
Hccapr1 Rate Schedule Everyone Else, Medicaid, & Medicare
December 1995-November 1998
Everyone Else Medicaid Medicare*
Month Capitation Rate Capitation Rate Capitation Rate
----- --------------- --------------- ---------------
December 1995 ** **
January 1996
February 1996
March 1996
April 1996
May 1996
June 1996
July 1996
August 1996
September 1996
October 1996
November 1996
December 1996
January 1997
February 1997
March 1997
April 1997
May 1997
June 1997
July 1997
August1997
September 1997
October 1997
November 1997
December 1997
January 1998
February 1998
March 1998
April 1998
May 1998
June 1998
July 1998
August 1998
September 1998
October 1998
November 1998
*$1000 maximum per year.
**Confidential portion filed separately with the Commission.
Exhibit I
Sample Rate Adjustment Calculation
ChoiceCare HealthCard
first 10% 50.00% 50.00%
next 5% 75.00% 25.00%
next 5% 85.00% 15.00%
remainder 90.00% 10.00%
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Example # 1 Example # 2 Example # 3
Base $15.00 $15.00 $15.00
actual $18.00 $11.00 $14.70
variance ($3.00) $4.00 $0.30
variance % -20.00% 26.67% 2.00%
10% = $1.50 $1.50 $1.50
5% = $0.75 $0.75 $0.75
ChoiceCare HealthCard ChoiceCare HealthCard ChoiceCare HealthCard
first 10% $0.75 $0.75 $0.75 $0.75 $0.15 $0.15
next 5% $0.56 $0.19 $0.56 $0.19 $0.00 $0.00
next 5% $0.64 $0.11 $0.64 $0.11 $0.00 $0.00
remainder $0.00 $0.00 $0.90 $0.10 $0.00 $0.00
Total $1.95 $1.05 $2.85 $1.15 $0.15 $0.15
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