Exhibit 10.4
Confidential portions of this Exhibit have been deleted and
filed separately with the Securities and Exchange Commission
pursuant to a claim of confidential treatment.
AMENDMENT TO
UNITED HEALTHCARE SERVICES, INC.
AND
UNITEDHEALTH NETWORKS, INC.
PHARMACY BENEFIT MANAGEMENT AGREEMENT
This Amendment is made to the agreement ("Agreement") between United
HealthCare Services, Inc. and UnitedHealth Networks, Inc., collectively referred
to as "United", and the entity named below ("MMMC"). The Agreement currently
sets forth the terms and conditions under which MMMC or an affiliate shall
provide or arrange for the provision of health care services to individuals
covered by a United's affiliated Health Plan pursuant to its Medicare contract
with the Health Care Financing Administration ("HCFA"). The parties understand
and agree that the Balanced Budget Act of 1997 ("BBA") established a new program
known as Medicare+Choice, which replaced Health Plan's existing Medicare risk
program. The purpose of this Amendment is to incorporate all provisions
necessary to meet the HCFA requirements for Medicare+Choice. This Amendment is
effective on August 1, 1999.
1. The Agreement shall be amended by the addition of the attached Health Plan
Medicare+Choice Requirements Addendum.
2. All other provisions of the Agreement shall remain in full force and
effect.
UNITED HEALTHCARE SERVICES, INC. MERCK MEDCO MANAGED CARE, L.L.C.
Signature Illegible Signature Illegible
-------------------- -----------------------
Title President Title Senior Vice President-
Regulatory and Managed
Care Programs
Date 1/29/01 Date 1/24/01
UNITEDHEALTH NETWORKS, INC.
Signature /s/ Illegible
--------------------
Title Secretary
Date 1/26/01
HEALTH PLAN
MEDICARE+CHOICE REQUIREMENTS ADDENDUM
In addition to PBM's obligations under the Agreement, PBM agrees, and shall
require PBM Contracting Providers to agree, as participating providers under
aUnited affiliated Health Plan's contract with HCFA to be a Medicare+Choice
managed care organization (hereafter the "M divided by C Contract"), to abide by
all applicable provisions of the M+C Contract and to fulfill PBM's and PBM
Contracting Provider's obligations under the Agreement in a manner consistent
with a United affiliated Health Plan's (hereafter the "Health Plan") obligations
under the M divided by C Contract. For purposes of this Addendum, "Medicare
Member" means a Health Plan's Member who is enrolled in a Medicare+Choice plan
through Health Plan. PBM and PBM Contracting Provider compliance with the M+C
Contract specifically includes, but is not limited to, the following
requirements:
1. Prompt Payment. Health Plan shall pay "clean" claims for Covered Services
within forty- five (45) days of receipt and approve or deny all claims that
are not "clean" claims within sixty (60) days from the date of the request.
2. Medicare Compliance. PBM shall, and shall require PBM Contracting Providers
to, comply with all applicable Medicare laws and regulations and HCFA
instructions.
3. Audits and Information. In addition to PBM's and PBM Contracting Provider's
obligations under Section 5.3.2, PBM shall, and shall require PBM
Contracting Providers to, permit audits and inspection by HCFA and/or its
designees, and cooperate, assist and provide information to HCFA and/or its
designees as requested from time to time. This provision shall survive
termination of the Agreement.
4. Maintenance of Records. In addition to PBM's and PBM Contracting Providers'
obligations under Section 5.3.2, PBM shall, and shall require PBM
Contracting Providers to, retain books, contracts, documents, papers and
records, including without limitation, medical records, patient care
documentation, and other records that pertain to any aspect of services
performed, financial solvency, reconciliation of benefit liabilities and
determination of amounts payable under Health Plan's M divided by C
Contract for a minimum of six (6) years from the end of the applicable
one-year contract period in the M divided by C Contract or the completion
of an audit, or in certain instances described in applicable
Medicare+Choice regulations, for periods in excess of six (6) years, if
appropriate. PBM shall, and shall require PBM Contracting Providers to,
maintain such records accurately and update them on a regular basis. PBM
and PBM's employees and agents shall, and shall require PBM Contracting
Providers to, maintain the confidentiality of all Medicare Member records
in accordance with the applicable laws and regulations, and shall safeguard
Medicare Members' privacy. This provision shall survive termination of the
Agreement.
5. Data Collection. PBM shall submit to Health Plan, upon request, all data
necessary for Health Plan to fulfill its reporting obligations pursuant to
42 C.F.R.SS.422.516. PBM
must submit to Health Plan all data, including medical records, necessary
to characterize the content and purpose of each encounter with a Medicare
Member. PBM must certify (based on best knowledge, information and belief)
the accuracy, completeness and truthfulness of such data on certification
forms provided by Health Plan. PBM shall hold harmless and indemnify Health
Plan for any fines or penalties it may incur due to PBM's submission of
inaccurate or incomplete data.
6. Accountability. PBM acknowledges, and shall require PBM Contracting
Providers to acknowledge, that Health Plan oversees and is responsible to
HCFA for any functions or responsibilities provided or performed by PBM or
PBM Contracting Providers pursuant to the M+C Contract, as applicable.
7. Delegation. If any service or activity to be performed by PBM under this
Agreement is delegated, to the extent permitted by and in accordance with
this Agreement, to a downstream entity, such entity shall enter into a
contract with PBM obligating such entity to perform such service or
activity consistent with and in compliance with the terms of this Agreement
and the M+C Contract.
8. Continued Care. In addition to PBM's and PBM Contracting Providers'
obligations pursuant to Section 3.8 of the Agreement, PBM shall, and shall
require PBM Contracting Providers to, provide Covered Services to Medicare
Members (i) for all Medicare Members, for the duration of the M+C Contract
period for which HCFA payments have been made; and (ii) for Medicare
Members who are hospitalized on the date the M+C Contract terminates or in
the event of Health Plan's or PBM's insolvency, through discharge. This
provision shall survive termination of the Agreement.
9. Compliance with Pharmacy Services Manual. PBM shall require PBM Contracting
Providers to comply with PMB's Pharmacy Services Manual, including, without
limitation, the Medicare Plus Choice Requirements addendum (the "Pharmacy
Attachment"). PBM shall comply with those requirements of the Pharmacy
Attachment applicable to the performance of PBM's obligations under this
Agreement, including, without limitation, where an obligation is placed
upon PBM Contracting Providers but such obligation may be performed or
could be violated by PBM. In the event of a conflict between any provision
in this ADDENDUM and the Pharmacy Attachment, this ADDENDUM shall govern.
AMENDMENT TO
UNITED HEALTHCARE SERVICES, INC.
PHARMACY BENEFIT MANAGEMENT AGREEMENT
This Amendment is made to the Pharmacy Benefit Management Agreement
("Agreement") between United HealthCare Services, Inc., UnitedHealth Networks,
Inc. (collectively "United") and Merck-Medco Managed Care, L.L.C. ("PBM") dated
November 11, 1998.
WHEREAS, the Agreement sets forth the obligations of the parties in order for
United to make available pharmacy benefit management and related services to
Health Plans and other non-Health Plan business and PBM agreed to provide such
services; and
WHEREAS, the parties desire to amend the Agreement in order to add PAID
Prescriptions, L.L.C. ("PAID") as a signatory to the Agreement.
NOW THEREFORE, in consideration of the terms and conditions set forth in this
Addendum, the parties agree as follows:
1. PAID is a subsidiary of PBM and acts as a Third Party Administrator ("TPA")
for PBM on behalf of United. PAID is licensed in certain states as a TPA as
required by applicable law.
2. The parties agree that PAID is added as a signatory to the Agreement shall
perform the TPA functions in the Agreement.
3. All other provisions of the Agreement shall remain in full force and effect.
United HealthCare Services, Inc. Marck-Medco Managed Care, L.L.C.
Signature: Illegible Signature: Illegible
-------------------- -------------------
Title: COO Title: Vice President
Date: 3/28/01 Date: 4/12/01
United HealthNetworks, Inc. PAID Prescriptions, L.L.C.
Signature: Illegible Signature: Illegible
-------------------- -------------------
Title: Vice President Title: Vice President
Date: 3/28/01 Date: 4/12/01
Confidential portions of this Exhibit have been deleted and filed
separately with the Securities and Exchange Commission pursuant to
a claim of confidential treatment.
Letter Agreement
----------------
United HealthCare Services, Inc.
0000 Xxxx Xxxx Xxxx,
X.X. Xxx 0000 Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Re: Pharmacy Benefit Management Agreement (the "Agreement") between
United HealthCare Services, Inc., on behalf of itself and its
affiliates from time to time, ("United HealthCare") and
Merck-Medco Managed Care, LLC, ("PBM").
United HealthCare and PBM agree to make the following changes to the
Agreement:
1. ***
2. ***
3. Rebate Contracting.
(a) PBM agrees to work with United HealthCare to negotiate new or
amended rebate agreements with drug manufacturers by June 30,
2002 that will result in United HealthCare earning *** of
incremental rebates (from amounts that would have been earned
from manufacturers absent such new or amended agreements) on an
annualized basis. As a condition to PBM's guarantee of such
incremental rebates, United HealthCare agrees to use its best
efforts to coordinate its formulary initiatives with PBM's
negotiations with drug manufacturers for PBM's book of business
generally.
(b) The *** included in (a) above shall be increased to *** in the
event that United HealthCare *** in a preferred status by
January 1, 2002 and maintains it on the PDL in a preferred
status until at least June 30, 2003.
(c) ***
(d) If requested by United HealthCare, PBM will prepay the amounts
set forth in (a) or (b) by December 31, 2001.
4. ***
5. Effect of this Letter Agreement.
Except as specifically modified by this Letter Agreement, the
Agreement and the letter agreement between the parties dated
September 9, 1998 shall remain in effect.
6. Defined Terms.
Except as otherwise defined in this Letter Agreement, capitalized
terms shall have the meanings set forth in the Agreement.
Except as otherwise defined in this Letter Agreement, capitalized
terms shall have the meanings set forth in the Agreement.
ACCEPTED AND AGREED:
UNITED HEALTHCARE MERCK-MEDCO MANAGED
SERVICES, INC. CARE, LLC.
BY: /s/ Xxxxxxx X. Xxxxxxx BY: /s/ Xxxxx Xxxxxx
--------------------------------- -----------------------------
(signature) (signature)
NAME: Xxxxxxx X. Xxxxxxx NAME: Xxxxx Xxxxxx
TITLE: President, United Health Networks TITLE: President -
United Health Group Division
DATE: June 29, 2001 DATE: June 29, 2001
EXHIBIT A
***
*** Represents text deleted pursuant to a confidentiality treatment request
filed with the Securities and Exchange Commission.
Confidential portions of this Exhibit have been deleted and filed
separately with the Securities and Exchange Commission pursuant to
a claim of confidential treatment.
AMENDMENT
United HealthCare Services, Inc. ("United HealthCare") and Merck-Medco Managed
Care, LLC ("PBM") hereby agree to amend that certain letter agreement, executed
June 29, 2001 by and between the parties, a copy of which is attached to this
amendment as Attachment I (the "Letter Agreement"), as follows:
1. United Healthcare shall not be required to reinstall Prescriber Panel
Edits ***. Accordingly, PBM hereby waives section 2(c) of the Letter
Agreement.
2. The programs relating to *** (collectively, the "Programs") set forth on
Exhibit A to the Letter Agreement are hereby deleted. Accordingly, the
attached Exhibit A Restatement dated October 26, 2001 hereby replaces
Exhibit A to the Letter Agreement.
3. ***
4. ***
5. Except as otherwise defined in this Amendment, capitalized terms shall
have the meanings set forth in the Pharmacy Benefit Management Agreement
between United HealthCare and PBM that was executed by United HealthCare
on November 11, 1998 (the "Agreement"). Except as specifically modified
by this Amendment, the Agreement and the Letter Agreement shall remain
in effect.
ACCEPTED AND AGREED as of the 26th day of October 2001.
United HealthCare Services, Inc. Merck-Medco Managed Care, LLC
By: Illegible By: Xxxxx Xxxxxx
--------- ------------
Title: Vice President Title: Sr. Vice President
-------------- -------------------
EXHIBIT A RESTATEMENT
OCTOBER 26, 2001
***
*** Represents text deleted pursuant to a confidentiality treatment request
filed with the Securities and Exchange Commission.
Confidential portions of this Exhibit have been deleted and filed
separately with the Securities and Exchange Commission pursuant to
a claim of confidential treatment.
AMENDMENT
United HealthCare Services, Inc., on behalf of itself and its affiliates from
time to time (collectively, "United HealthCare") and Merck-Medco Managed Care,
LLC ("PBM") hereby agree to make the following changes to the Pharmacy Benefit
Management Agreement between United HealthCare and PBM that was executed by
United HealthCare on November 11, 1998 (the "Agreement"):
1. Section 4.6 of the Agreement is hereby revised to read as follows:
"4.6 Minimum PDL Enrollment. Effective as of December 11, 2001 and
continuing throughout the term of this Agreement, United HealthCare
agrees that it shall maintain a minimum of *** Covered Persons
(including, as a subset thereof, at least *** non-Health Plan Covered
Persons) receiving services under this Agreement including
participating in United HealthCare's PDL. ***
2. Section 3.15 is hereby deleted from the Agreement.
3. Except as otherwise defined in this Amendment, capitalized terms shall
have the meanings set forth in the Agreement. Except as specifically
modified by this Amendment, the Agreement as heretofore amended shall
remain in effect.
ACCEPTED AND AGREED as of the 19th day of December 2001.
United HealthCare Services, Inc. Merck-Medco Managed Care, LLC
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxx Xxxxxx
------------------------- --------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxx Xxxxxx
Title: Vice President Title: Sr. Vice President
*** Represents text deleted pursuant to a confidentiality treatment request
filed with the Securities and Exchange Commission.
