PROVIDER AGREEMENT BETWEEN STATE OF OHIO DEPARTMENT OF JOB AND FAMILY SERVICES AND WELLCARE OF OHIO, INC. Amendment No. 2
Exhibit
10.3
BETWEEN
STATE OF OHIO
DEPARTMENT
OF JOB AND FAMILY SERVICES
AND
WELLCARE
OF OHIO, INC.
Amendment
No. 2
Pursuant
to Article IX.A. the Provider Agreement between the State of Ohio, Department
of
Job and Family Services, (hereinafter referred to as "ODJFS") and WELLCARE
OF
OHIO, INC. (hereinafter referred to as "MCP") for the Covered Families and
Children (hereinafter referred to as "CFC") population dated November 1,
2006,
is hereby amended as follows:
1.
Baseline and Appendix J are modified as attached.
2.
All
other terms of the provider agreement are hereby affirmed.
The
amendment contained herein shall be effective January 5, 2007.
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WELLCARE
OF OHIO, INC.:
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|
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BY:
/s/
Xxxx X. Xxxxx
XXXX
X. XXXXX, PRESIDENT & CEO
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DATE:
1/3/2007
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|
OHIO
DEPARTMENT OF JOB AND FAMILY SERVICES:
|
|
|
BY:
/s/
Xxxxxxx Xxxxx
XXXXXXX
X. XXXXX, DIRECTOR
|
DATE:
1/5/2007
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Covered
Families and Children (CFC) population
OHIO
DEPARTMENT OF JOB AND FAMILY SERVICES
OHIO
MEDICAL ASSITANCE PROVIDER AGREEMENT
FOR
MANAGED CARE PLAN
CFC
ELIGIBLE POPULATION
This
provider agreement is entered into this first day of November, 2006, at
Columbus, Franklin County, between the State of Ohio, Department of Job and
Family Services, (herein referred to as ODJFS) whose principal offices are
located in the City of Columbus County of Franklin, State of Ohio, and WellCare
of Ohio, Inc, Managed Care Plan (hereinafter referred to as MCP), an Ohio
for-profit corporation, whose principal office is located in the city of
Beechwood, County of Cuyahoga, State of Ohio.
MCP
is
licensed as a Health Insuring Corporation by the State of Ohio, Department
of
Insurance (hereinafter referred to as ODI), pursuant to Chapter 1751. of
the
Ohio Revised Code and is organized and agrees to operate as prescribed by
the
Chapter 5101:3-26 of the Ohio Administrative Code (hereinafter referred to
as
OAC), and other applicable portions of the OAC as amended from time to
time.
MCP
is an
entity eligible to enter into a provider agreement in accordance with 42
CFR
438.6 and is engaged in the business of providing prepaid comprehensive health
care services as defined in 42 CFR 438.2 through the managed care program
for
the Covered Families and Children (CFC) eligible population described in
OAC
rule 5101:326-02 (B).
ODJFS,
as
the single state agency designated to administer the Medicaid program under
Section 5111.02 of the Ohio Revised Code and Title XIX of the Social Security
Act, desires to obtain MCP services for the benefit of certain Medicaid
recipients. In so doing, MCP has provided and will continue to provide proof
of
MCP’s capability to provide quality services, efficiently, effectively and
economically during the term of this agreement.
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This
provider agreement is a contract between the ODJFS and the undersigned Managed
Care Plan (MCP), provider of medical assistance, pursuant to the federal
contracting provisions of 42 CFR 434.6 and 438.6 in which the MCP agrees
to
provide comprehensive medical services through the managed care program as
provided in Chapter 5101:3-26 of the Ohio Administrative Code, assuming the
risk
of loss, and complying with applicable state statutes, Ohio Administrative
Code,
and Federal statutes, rules, regulations and other requirements, including
but
not limited to title VI of the Civil Rights Act of 1964; title IX of the
Education Amendments of 1972 (regarding education programs and activities);
the
Age Discrimination Act of 1975; the Rehabilitation Act of 1973; and the
Americans with Disabilities Act.
ARTICLE
I
- GENERAL
A.
MCP
agrees to report to the Chief of Bureau of Managed Health Care (hereinafter
referred to as BMHC) or their designee as necessary to assure understanding
of
the responsibilities and satisfactory compliance with this provider
agreement.
B.
MCP
agrees to furnish its support staff and services as necessary for the
satisfactory performance of the services as enumerated in this provider
agreement.
C.
ODJFS
may, from time to time as it deems appropriate, communicate specific
instructions and requests to MCP concerning the performance of the services
described in this provider agreement. Upon such notice and within the designated
time frame after receipt of instructions, MCP shall comply with such
instructions and fulfill such requests to the satisfaction of the department.
It
is expressly understood by the parties that these instructions and requests
are
for the sole purpose of performing the specific tasks requested to ensure
satisfactory completion of the services described in this provider agreement,
and are not intended to amend or alter this provider agreement or any part
thereof.
If
the
MCP previously had a provider agreement with the ODJFS and the provider
agreement terminated more than two years prior to the effective date of any
new
provider agreement, such MCP will be considered a new plan in its first year
of
operation with the Ohio Medicaid managed care program.
ARTICLE
II - TIME OF PERFORMANCE
A.
Upon
approval by the Director of ODJFS this provider agreement shall be in effect
from the date entered through June 30, 2007, unless this provider agreement
is
suspended or terminated pursuant to Article VIII prior to the termination
date,
or otherwise amended pursuant to Article IX.
ARTICLE
III - REIMBURSEMENT
A.
ODJFS
will reimburse MCP in accordance with rule 5101:3-26-09 of the Ohio
Administrative Code and the appropriate appendices of this provider
agreement.
Covered
Families and Children (CFC) population
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ARTICLE
IV - MCP INDEPENDENCE
A.
MCP
agrees that no agency, employment, joint venture or partnership has been
or will
be created between the parties hereto pursuant to the terms and conditions
of
this agreement. MCP also agrees that, as an independent contractor, MCP assumes
all responsibility for any federal, state, municipal or other tax liabilities,
along with workers compensation and unemployment compensation, and insurance
premiums which may accrue as a result of compensation received for services
or
deliverables rendered hereunder. MCP certifies that all approvals, licenses
or
other qualifications necessary to conduct business in Ohio have been obtained
and are operative. If at any time during the period of this provider agreement
MCP becomes disqualified from conducting business in Ohio, for whatever reason,
MCP shall immediately notify ODJFS of the disqualification and MCP shall
immediately cease performance of its obligation hereunder in accordance with
OAC
Chapter 5101:3-26.
ARTICLE
V
- CONFLICT OF INTEREST; ETHICS LAWS
A.
In
accordance with the safeguards specified in section 27 of the Office of Federal
Procurement Policy Act (41 U.S.C. 423) and other applicable federal
requirements, no officer, member or employee of MCP, the Chief of BMHC, or
other
ODJFS employee who exercises any functions or responsibilities in connection
with the review or approval of this provider agreement or provision of services
under this provider agreement shall, prior to the completion of such services
or
reimbursement, acquire any interest, personal or otherwise, direct or indirect,
which is incompatible or in conflict with, or would compromise in any manner
or
degree the discharge and fulfillment of his or her functions and
responsibilities with respect to the carrying out of such services. For purposes
of this article, "members" does not include individuals whose sole connection
with MCP is the receipt of services through a health care program offered
by
MCP.
B.
MCP
hereby covenants that MCP, its officers, members and employees of the MCP
have
no interest, personal or otherwise, direct or indirect, which is incompatible
or
in conflict with or would compromise in any manner of degree the discharge
and
fulfillment of his or her functions and responsibilities under this provider
agreement. MCP shall periodically inquire of its officers, members and employees
concerning such interests.
C.
Any
person who acquires an incompatible, compromising or conflicting personal
or
business interest shall immediately disclose his or her interest to ODJFS
in
writing. Thereafter, he or she shall not participate in any action affecting
the
services under this provider agreement, unless ODJFS shall determine that,
in
the light of the personal interest disclosed, his or her participation in
any
such action would not be contrary to the public interest. The written disclosure
of such interest shall be made to: Chief, Bureau of Managed Health Care,
ODJFS.
Covered
Families and Children (CFC) population
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D.
No
officer, member or employee of MCP shall promise or give to any ODJFS employee
anything of value that is of such a character as to manifest a substantial
and
improper influence upon the employee with respect to his or her duties. No
officer, member or employee of MCP shall solicit an ODJFS employee to violate
any ODJFS rule or policy relating to the conduct of the parties to this
agreement or to violate sections 102.03, 102.04, 2921.42 or 2921.43 of the
Ohio
Revised Code.
E.
MCP
hereby covenants that MCP, its officers, members and employees are in compliance
with section 102.04 of the Revised Code and that if MCP is required to file
a
statement pursuant to 102.04(D)(2) of the Revised Code, such statement has
been
filed with the ODJFS in addition to any other required filings.
ARTICLE
VI - EQUAL EMPLOYMENT OPPORTUNITY
A.
MCP
agrees that in the performance of this provider agreement or in the hiring
of
any employees for the performance of services under this provider agreement,
MCP
shall not by reason of race, color, religion, sex, sexual orientation, age,
disability, national origin, veteran's status, health status, or ancestry,
discriminate against any citizen of this state in the employment of a person
qualified and available to perform the services to which the provider agreement
relates.
B.
MCP
agrees that it shall not, in any manner, discriminate against, intimidate,
or
retaliate against any employee hired for the performance or services under
the
provider agreement on account of race, color, religion, sex, sexual orientation,
age, disability, national origin, veteran's status, health status, or
ancestry.
C.
In
addition to requirements imposed upon subcontractors in accordance with OAC
Chapter 5101:3-26, MCP agrees to hold all subcontractors and persons acting
on
behalf of MCP in the performance of services under this provider agreement
responsible for adhering to the requirements of paragraphs (A) and (B) above
and
shall include the requirements of paragraphs (A) and (B) above in all
subcontracts for services performed under this provider agreement, in accordance
with rule 5101:3-26-05 of the Ohio Administrative Code.
ARTICLE
VII - RECORDS, DOCUMENTS AND INFORMATION
A.
MCP
agrees that all records, documents, writings or other information produced
by
MCP under this provider agreement and all records, documents, writings or
other
information used by MCP in the performance of this provider agreement shall
be
treated in accordance with rule 5101:3-26-06 of the Ohio Administrative Code.
MCP must maintain an appropriate record system for services provided to members.
MCP must retain all records in accordance with 45 CFR 74.
B.
All
information provided by MCP to ODJFS that is proprietary shall be held to
be
strictly
Covered
Families and Children (CFC) population
Page
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confidential
by ODJFS. Proprietary information is information which, if made public, would
put MCP at a disadvantage in the market place and trade of which MCP is a
part
[see Ohio Revised Code Section 1333.61(D)]. MCP is responsible for notifying
ODJFS of the nature of the information prior to its release to ODJFS. ODJFS
reserves the right to require reasonable evidence of MCP's assertion of the
proprietary nature of any information to be provided and ODJFS will make
the
final determination of whether this assertion is supported. The provisions
of
this Article are not self-executing.
C.
MCP
shall not use any information, systems, or records made available to it for
any
purpose other than to fulfill the duties specified in this provider agreement.
MCP agrees to be bound by the same standards of confidentiality that apply
to
the employees of the ODJFS and the State of Ohio. The terms of this section
shall be included in any subcontracts executed by MCP for services under
this
provider agreement. MCP must implement procedures to ensure that in the process
of coordinating care, each enrollee's privacy is protected consistent with
the
confidentiality requirements in 45 CFR parts 160 and 164.
ARTICLE
VIII - SUSPENSION AND TERMINATION
A.
This
provider agreement may be canceled by the department or MCP upon written
notice
in accordance with the applicable rule(s) of the Ohio Administrative Code,
with
termination to occur at the end of the last day of a month.
B.
MCP,
upon receipt of notice of suspension or termination, shall cease provision
of
services on the suspended or terminated activities under this provider
agreement; suspend, or terminate all subcontracts relating to such suspended
or
terminated activities, take all necessary or appropriate steps to limit
disbursements and minimize costs, and furnish a report, as of the date of
receipt of notice of suspension or termination describing the status of all
services under this provider agreement.
C.
In the
event of suspension or termination under this Article, MCP shall be entitled
to
reconciliation of reimbursements through the end of the month for which services
were provided under this provider agreement, in accordance with the
reimbursement provisions of this provider agreement.
D.
ODJFS
may, in its judgment, suspend, terminate or fail to renew this provider
agreement if the MCP or MCP's subcontractors violate or fail to comply with
the
provisions of this agreement or other provisions of law or regulation governing
the Medicaid program. Where ODJFS proposes to suspend, terminate or refuse
to
enter into a provider agreement, the provisions of applicable sections of
the
Ohio Administrative Code with respect to ODJFS' suspension, termination or
refusal to enter into a provider agreement shall apply, including the MCP's
right to request a public hearing under Chapter 119. of the Revised
Code.
Covered
Families and Children (CFC) population
Page
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E.
When
initiated by MCP, termination of or failure to renew the provider agreement
requires written notice to be received by ODJFS at least 75 days in advance
of
the termination or renewal date, provided, however, that termination or
non-renewal must be effective at the end of the last day of a calendar month.
In
the event of non-renewal of the provider agreement with ODJFS, if MCP is
unable
to provide notice to ODJFS 75 days prior to the date when the provider agreement
expires, and if, as a result of said lack of notice, ODJFS is unable to
disenroll Medicaid enrollees prior to the expiration date, then the provider
agreement shall be deemed extended for up to two calendar months beyond the
expiration date and both parties shall, for that time, continue to fulfill
their
duties and obligations as set forth herein. If an MCP wishes to terminate
or not
renew their provider agreement for a specific region(s), ODJFS reserves the
right to initiate a procurement process to select additional MCPs to serve
Medicaid consumers in that region(s).
ARTICLE
IX - AMENDMENT AND RENEWAL
A.
This
writing constitutes the entire agreement between the parties with respect
to all
matters herein. This provider agreement may be amended only by a writing
signed
by both parties. Any written amendments to this provider agreement shall
be
prospective in nature.
B.
This
provider agreement may be renewed one or more times by a writing signed by
both
parties for a period of not more than twelve months for each
renewal.
C.
In the
event that changes in State or Federal law, regulations, an applicable waiver,
or the terms and conditions of any applicable federal waiver, require ODJFS
to
modify this agreement, ODJFS shall notify MCP regarding such changes and
this
agreement shall be automatically amended to conform to such changes without
the
necessity for executing written amendments pursuant to this Article of this
provider agreement.
ARTICLE
X
- LIMITATION OF LIABILITY
A.
MCP
agrees to indemnity the State of Ohio for any liability resulting from the
actions or omissions of MCP or its subcontractors in the fulfillment of this
provider agreement.
B.
MCP
hereby agrees to be liable for any loss of federal funds suffered by ODJFS
for
enrollees resulting from specific, negligent acts or omissions of the MCP
or its
subcontractors during the term of this agreement, including but not limited
to
the nonperformance of the duties and obligations to which MCP has agreed
under
this agreement.
C.
In the
event that, due to circumstances not reasonably within the control of MCP
or
ODJFS, a major disaster, epidemic, complete or substantial destruction of
facilities, war, riot or civil insurrection occurs, neither ODJFS nor MCP
will
have any liability or obligation on account of reasonable delay in the provision
or the arrangement of covered
Covered
Families and Children (CFC) population
Page
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services;
provided that so long as MCP's certificate of authority remains in full force
and effect, MCP shall be liable for the covered services required to be provided
or arranged for in accordance with this agreement.
ARTICLE
XI - ASSIGNMENT
A.
ODJFS
will not allow the transfer of Medicaid members by one MCP to another MCP
unless
this membership has been obtained as a result of an MCP selling their entire
Ohio corporation to another health plan. MCP shall not assign any interest
in
this provider agreement and shall not transfer any interest in the same (whether
by assignment or novation) without the prior written approval of ODJFS and
subject to such conditions and provisions as ODJFS may deem necessary. Any
such
assignments shall be submitted for ODJFS' review 120 days prior to the desired
effective date. No such approval by ODJFS of any assignment shall be deemed
in
any event or in any manner to provide for the incurrence of any obligation
by
ODJFS in addition to the total agreed-upon reimbursement in accordance with
this
agreement.
B.
MCP
shall not assign any interest in subcontracts of this provider agreement
and
shall not transfer any interest in the same (whether by assignment or novation)
without the prior written approval of ODJFS and subject to such conditions
and
provisions as ODJFS may deem necessary. Any such assignments of subcontracts
shall be submitted for ODJFS' review 30 days prior to the desired effective
date. No such approval by ODJFS of any assignment shall be deemed in any
event
or in any manner to provide for the incurrence of any obligation by ODJFS
in
addition to the total agreed-upon reimbursement in accordance with this
agreement.
ARTICLE
XII - CERTIFICATION MADE BY MCP
A.
This
agreement is conditioned upon the full disclosure by MCP to ODJFS of all
information required for compliance with federal regulations as requested
by
ODJFS.
B.
By
executing this agreement, MCP certifies that no federal funds paid to MCP
through this or any other agreement with ODJFS shall be or have been used
to
lobby Congress or any federal agency in connection with a particular contract,
grant, cooperative agreement or loan. MCP further certifies compliance with
the
lobbying restrictions contained in Section 1352, Title 31 of the U.S. Code,
Section 319 of Public Law 101-121 and federal regulations issued pursuant
thereto and contained in 45 CFR Part 93, Federal Register, Vol. 55, No. 38,
February 26, 1990, pages 6735-6756. If this provider agreement exceeds $100,000,
MCP has executed the Disclosure of Lobbying Activities, Standard Form LLL,
if
required by federal regulations. This certification is material representation
of fact upon which reliance was placed when this provider agreement was entered
into.
C.
By
executing this agreement, MCP certifies that neither MCP nor any principals
of
MCP (i.e., a director, officer, partner, or person with beneficial ownership
of
more than 5% of the MCP's equity) is presently debarred, suspended, proposed
for
debarment, declared ineligible, or otherwise excluded from participation
in
transactions by any Federal
Covered
Families and Children (CFC) population
Page
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agency.
The MCP also certifies that the MCP has no employment, consulting or any
other
arrangement with any such debarred or suspended person for the provision
of
items or services or services that are significant and material to the MCP's
contractual obligation with ODJFS. This certification is a material
representation of fact upon which reliance was placed when this provider
agreement was entered into. If it is ever determined that MCP knowingly executed
this certification erroneously, then in addition to any other remedies, this
provider agreement shall be terminated pursuant to Article VII, and ODJFS
must
advise the Secretary of the appropriate Federal agency of the knowingly
erroneous certification.
D.
By
executing this agreement, MCP certifies compliance with Article V as well
as
agreeing to future compliance with Article V. This certification is a material
representation of fact upon which reliance was placed when this contract
was
entered into.
E.
By
executing this agreement, MCP certifies compliance with the executive agency
lobbying requirements of sections 121.60 to 121.69 of the Ohio Revised Code.
This certification is a material representation of fact upon which reliance
was
placed when this provider agreement was entered into.
F.
By
executing this agreement, MCP certifies that MCP is not on the most recent
list
established by the Secretary of State, pursuant to section 121.23 of the
Ohio
Revised Code, which identifies MCP as having more than one unfair labor practice
contempt of court finding. This certification is a material representation
of
fact upon which reliance was placed when this provider agreement was entered
into.
G.
By
executing this agreement MCP agrees not to discriminate against individuals
who
have or are participating in any work program administered by a county
Department of Job and Family Services under Chapters 5101 or 5107 of the
Revised
Code.
H.
By
executing this agreement, MCP certifies and affirms that, as applicable to
MCP,
no party listed in Division (I) or (J) of Section 3517.13 of the Ohio Revised
Code or spouse of such party has made, as an individual, within the two previous
calendar years, one or more contributions in excess of $1,000.00 to the Governor
or to his campaign committees. This certification is a material representation
of fact upon which reliance was placed when this provider agreement was entered
into. If it is ever determined that MCP's certification of this requirement
is
false or misleading, and not withstanding any criminal or civil liabilities
imposed by law, MCP shall return to ODJFS all monies paid to MCP under this
provider agreement. The provisions of this section shall survive the expiration
or termination of this provider agreement.
I.
By
executing this agreement, MCP certifies and affirms that HHS, US Comptroller
General or representatives will have access to books, documents, etc. of
MCP.
J.
By
executing this agreement, MCP agrees to comply with the false claims recovery
requirements of Section 6032 of The Deficit Reduction Act of 2005 (also see
Section 5111.101
of the Revised Code). ARTICLE XIII - CNSTRUCTION
Covered
Families and Children (CFC) population
Page
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A.
This
provider agreement shall be governed, construed and enforced in accordance
with
the laws and regulations of the State of Ohio and appropriate federal statutes
and regulations. If any portion of this provider agreement is found
unenforceable by operation of statute or by administrative or judicial decision,
the operation of the balance of this provider agreement shall not be affected
thereby; provided, however, the absence of the illegal provision does not
render
the performance of the remainder of the provider agreement
impossible.
ARTICLE
XIV - INCORPORATION BY REFERENCE
A.
Ohio
Administrative Code Chapter 5101:3-26 (Appendix A) is hereby incorporated
by
reference as part of this provider agreement having the full force and effect
as
if specifically restated herein.
B.
Appendices B through P and any additional appendices are hereby incorporated
by
reference as part of this provider agreement having the full force and effect
as
if specifically restated herein.
C.
In the
event of inconsistence or ambiguity between the provisions of OAC 5101:3-26
and
this provider agreement, the provision of OAC 5101:3-26 shall be determinative
of the obligations of the parties unless such inconsistency or ambiguity
is the
result of changes in federal or state law, as provided in Article IX of this
provider agreement, in which case such federal or state law shall be
determinative of the obligations of the parties. In the event OAC 5101:3-26
is
silent with respect to any ambiguity or inconsistency, the provider agreement
(including Appendices B through P and any additional appendices), shall be
determinative of the obligations of the parties. In the event that a dispute
arises which is not addressed in any of the aforementioned documents, the
parties agree to make every reasonable effort to resolve the dispute, in
keeping
with the objectives of the provider agreement and the budgetary and statutory
constraints of ODJFS.
Covered
Families and Children (CFC) population
The
parties have executed this agreement the date first written above. The agreement
is hereby accepted and considered binding in accordance with the terms and
conditions set forth in the preceding statements.
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WELLCARE
OF OHIO, INC.:
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DATE:
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By:
_________________
XXXX
XXXXX, CEO
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OHIO
DEPARTMENT OF JOB AND FAMILY SERVICES:
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|
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BY:
_________________
XXXXXXX
X.
XXXXX, DIRECTOR
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DATE:
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APPENDIX
J
FINANCIAL
PERFORMANCE
CFC
ELIGIBLE POPULATION
1.
SUBMISSION OF FINANCIAL STATEMENTS AND REPORTS
MCPs
must
submit the following financial reports to ODJFS:
a.
The
National Association of Insurance Commissioners (NAIC) quarterly and annual
Health Statements (hereafter referred to as the "Financial Statements"),
as
outlined in Ohio Administrative Code (OAC) rule 5101:3-26-09(B). The Financial
Statements must include all required Health Statement filings, schedules
and
exhibits as stated in the NAIC Annual Health Statement Instructions including,
but not limited to, the following sections: Assets, Liabilities, Capital
and
Surplus Account, Cash Flow, Analysis of Operations by Lines of Business,
Five-Year Historical Data, and the Exhibit of Premiums, Enrollment and
Utilization. The Financial Statements must be submitted to BMHC even if the
Ohio
Department of Insurance (ODI) does not require the MCP to submit these
statements to ODI. A signed hard copy and an electronic copy of the reports
in
the NAIC-approved format must both be provided to ODJFS;
b.
Hard
copies of annual financial statements for those entities who have an ownership
interest totaling five percent or more in the MCP or an indirect interest
of
five percent or more, or a combination of direct and indirect interest equal
to
five percent or more in the MCP;
c.
Annual
audited Financial Statements prepared by a licensed independent external
auditor
as submitted to the ODI, as outlined in OAC rule 5101:3-26-09(B);
d.
Medicaid Managed Care Plan Annual Ohio Department of Job and Family Services
(ODJFS) Cost Report and the auditor's certification of the cost report, as
outlined in OAC rule 5101 ;3-26-09(B);
e.
Annual
physician incentive plan disclosure statements and disclosure of and changes
to
the MCP's physician incentive plans, as outlined in OAC rule
5101:3-26-09(B);
f.
Reinsurance agreements, as outlined in OAC rule 5101:3-26-09(C);
g.
Prompt
Pay Reports, in accordance with OAC rule 5101:3-26-09(B). A hard copy and
an
electronic copy of the reports in the ODJFS-specified format must be provided
to
ODJFS;
Appendix
J
Page
2
h.
Notification of requests for information and copies of information released
pursuant to a tort action (i.e., third party recovery), as outlined in OAC
rule
5101:3-26-09.1;
i.
Financial, utilization, and statistical reports, when ODJFS requests such
reports, based on a concern regarding the MCP's quality of care, delivery
of
services, fiscal operations or solvency, in accordance with OAC rule
5101:3-26-06(D);
j.
In
accordance with ORC Section 5111.76 and Appendix C, MCP Responsibilities,
MCPs
must submit ODJFS-specified franchise fee reports in hard copy and electronic
formats pursuant to ODJFS specifications.
2.
FINANCIAL PERFORMANCE MEASURES AND STANDARDS
This
Appendix establishes specific expectations concerning the financial performance
of MCPs. In the interest of administrative simplicity and nonduplication
of
areas of the ODI authority, ODJFS' emphasis is on the assurance of access
to and
quality of care. ODJFS will focus only on a limited number of indicators
and
related standards to monitor plan performance. The three indicators and
standards for this contract period are identified below, along with the
calculation methodologies. The source for each indicator will be the NAIC
Quarterly and Annual Financial Statements.
Report
Period:
Compliance will be determined based on the annual Financial
Statement.
a.
Indicator: Net Worth as measured by Net Worth Per Member
Definition:
Net
Worth = Total Admitted Assets minus Total Liabilities divided by Total Members
across all lines of business
Standard:
For the
financial report that covers calendar year 2006, a minimum net worth per
member
of $156.00, as determined from the annual Financial Statement submitted to
ODI
and the ODJFS.
The
Net
Worth Per Member (NWPM) standard is the Medicaid Managed Care Capitation
amount
paid to the MCP during the preceding calendar year, including delivery payments,
but excluding the at-risk amount, expressed as a per-member per-month figure,
multiplied by the applicable proportion below:
0.75
if
the MCP had a total membership of 100,000 or more during that calendar
year
0.90
if
the MCP had a total membership of less than 100,000 for that calendar
year
Appendix
J
Page
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If
the
MCP did not receive Medicaid Managed Care Capitation payments during the
preceding calendar year, then the NWPM standard for the MCP is the average
Medicaid Managed Care
capitation
amount paid to Medicaid-contracting MCPs during the preceding calendar year,
including delivery payments, but excluding the at-risk amount, multiplied
by the
applicable proportion above.
b.
Indicator: Administrative Expense Ratio
Definition:
Administrative Expense Ratio = Administrative Expenses minus Franchise Fees
divided by Total Revenue minus Franchise Fees.
Standard:
Administrative Expense Ratio not to exceed 15%, as determined from the annual
Financial Statement submitted to ODI and ODJFS.
c.
Indicator: Overall Expense Ratio
Definition:
Overall
Expense Ratio = The sum of the Administrative Expense Ratio and the Medical
Expense Ratio.
Administrative
Expense Ratio = Administrative Expenses minus Franchise Fees divided by Total
Revenue minus Franchise Fees.
Medical
Expense Ratio = Medical Expenses divided by Total Revenue.
Standard:
Overall
Expense Ratio not to exceed 100% as determined from the annual Financial
Statement submitted to ODI and ODJFS.
Penalty/or
noncompliance:
Failure
to meet any standard on 2.a., 2.b., or 2.c. above will result in ODJFS requiring
the MCP to complete a corrective action plan (CAP) and
specifying
the date by which compliance must be demonstrated. Failure to meet the standard
or otherwise comply with the CAP by the specified date will result in a new
membership freeze unless ODJFS determines that the deficiency does not
potentially jeopardize access to or quality of care or affect the MCP's ability
to meet administrative requirements (e.g., prompt pay requirements). Justifiable
reasons for noncompliance may include one-time events (e.g., MCP investment
in
information system products).
If
the
financial statement is not submitted to ODI by the due date, the MCP continues
to be obligated to submit the report to ODJFS by ODI's originally specified
due
date unless the MCP requests and is granted an extension by ODJFS.
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Failure
to submit complete quarterly and annual Financial Statements on a timely
basis
will be deemed a failure to meet the standards and will be subject to the
noncompliance penalties listed for indicators 2.a., 2.b., and 2.c., including
the imposition of a new membership freeze. The new membership freeze will
take
effect at the first of the month following the month in which the determination
was made that the MCP was non-compliant for failing to submit financial reports
timely.
In
addition, ODJFS will review two liquidity indicators if a plan demonstrates
potential problems in meeting related administrative requirements or the
standards listed above. The two standards, 2.d and 2.e, reflect ODJFS' expected
level of performance. At this time, ODJFS has not established penalties for
noncompliance with these standards;
however,
ODJFS will consider the MCP's performance regarding the liquidity measures,
in
addition to indicators 2.a., 2.b., and 2.c., in determining whether to impose
a
new membership freeze, as outlined above, or to not issue or renew a contract
with an MCP. The source for each indicator will be the NAIC Quarterly and
annual
Financial Statements.
Long-term
investments that can be liquidated without significant penalty within 24
hours,
which a plan would like to include in Cash and Short-Term Investments in
the
next two measurements, must be disclosed in footnotes on the NAIC Reports.
Descriptions and amounts should be disclosed. Please note that "significant
penalty" for this purpose is any penalty greater than 20%. Also, enter the
amortized cost of the investment, the market value of the investment, and
the
amount of the penalty.
d.
Indicator: Days Cash on Hand
Definition:
Days
Cash on Hand = Cash and Short-Term Investments divided by (Total Hospital
and
Medical Expenses plus Total Administrative Expenses) divided by
365.
Standard:
Greater
than 25 days as determined from the annual Financial Statement submitted
to ODI
and ODJFS.
e.
Indicator: Ratio of Cash to Claims Payable
Definition:
Ratio of
Cash to Claims Payable = Cash and Short-Term Investments divided by claims
Payable (reported and unreported).
Standard:
Greater
than 0.83 as determined from the annual Financial Statement submitted to
ODI and
ODJFS.
3.
REINSURANCE REQUIREMENTS
Pursuant
to the provisions of OAC rule 5101:3-26-09 (C), each MCP must carry reinsurance
coverage from a licensed commercial carrier to protect against inpatient-related
medical expenses incurred by Medicaid members.
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The
annual deductible or retention amount for such insurance must be specified
in
the reinsurance agreement and must not exceed $75,000.00, except as provided
below. Except for transplant services, and as provided below, this reinsurance
must cover, at a minimum, 80% of inpatient costs incurred by one member in
one
year, in excess of $75,000.00.
For
transplant services, the reinsurance must cover, at a minimum, 50% of transplant
related costs incurred by one member in one year, in excess of
$75,000.00.
An
MCP
may request a higher deductible amount and/or that the reinsurance cover
less
than 80% of inpatient costs in excess of the deductible amount. If the MCP
does
not have more than 75,000 members in Ohio, but does have more than 75,000
members between Ohio and other states, ODJFS may consider alternate reinsurance
arrangements. However, depending on the corporate structures of the Medicaid
MCP, other forms of security may be required in addition to reinsurance.
These
other security tools may include parental guarantees, letters of credit,
or
performance bonds. In determining whether or not the request will be approved,
the ODJFS may consider any or all of the following:
a.
whether the MCP has sufficient reserves available to pay unexpected
claims;
b.
the
MCP's history in complying with financial indicators 2.a., 2.b., and 2.c.,
as
specified in this Appendix.
c.
the
number of members covered by the MCP;
d.
how
long the MCP has been covering Medicaid or other members on a full risk
basis.
e.
risk
based capital ratio greater than 2.5 calculated from the last annual ODI
financial statement.
f.
scatter diagram or bar graph from the last calendar year that shows the number
of reinsurance claims that exceeded the current reinsurance
deductible.
The
MCP
has been approved to have a reinsurance policy with a deductible amount of
$75,000 that covers 80% of inpatient costs in excess of the deductible amount
for non-transplant services.
Penalty
for noncompliance:
If it is
determined that an MCP failed to have reinsurance coverage, that an MCP's
deductible exceeds $75,000,00 without approval from ODJFS, or that the MCP's
reinsurance for non-transplant services covers less than 80% of inpatient
costs
in excess of the deductible incurred by one member for one year without approval
from ODJFS, then the MCP will be required to pay a monetary penalty
to
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ODJFS.
The amount of the penalty will be the difference between the estimated amount,
as determined by ODJFS, of what the MCP would have paid in premiums for the
reinsurance policy if it had been in compliance and what the MCP did actually
pay while it was out of compliance plus 5%. For example, if the MCP paid
$3,000,000.00 in premiums during the period of non-compliance and would have
paid $5,000,000.00 if the requirements had been met, then the penalty would
be
$2,100,000.00.
If
it is
determined that an MCP's reinsurance for transplant services covers less
than
50% of inpatient costs incurred by one member for one year, the MCP will
be
required to develop a corrective action plan (CAP).
4.
PROMPT PAY REQUIREMENTS
In
accordance with 42 CFR 447.46, MCPs must pay 90% of all submitted cleanclaims
within 30 days of the date of receipt and 99% of such claims within 90 days
of
the date of receipt, unless the MCP and its contracted provider(s) have
established an alternative payment schedule that is mutually agreed upon
and
described in their contract. The prompt pay requirement applies to the
processing of both electronic and paper claims for contracting and
non-contracting providers by the MCP and delegated claims processing
entities.
The
date
of receipt is the date the MCP receives the claim, as indicated by its date
stamp on the claim. The date of payment is the date of the check or date
of
electronic payment transmission. A claim means a xxxx from a provider for
health
care services that is assigned a unique identifier. A claim does not include
an
encounter form.
A
"claim"
can include any of the following: (1) a xxxx for services; (2) a line item
of
services; or (3) all services for one recipient within a xxxx. A "clean claim"
is a claim that can be processed without obtaining additional information
from
the provider of a service or from a third party.
Clean
claims do not include payments made to a provider of service or a third party
where the timing of the payment is not directly related to submission of
a
completed claim by the provider of service or third party (e.g., capitation).
A
clean claim also does not include a claim from a provider who is under
investigation for fraud or abuse, or a claim under review for medical
necessity.
Penalty
for noncompliance:
Noncompliance with prompt pay requirements will result in progressive penalties
to be assessed on a quarterly basis, as outlined in Appendix N of the Provider
Agreement.
5.
PHYSICIAN INCENTIVE PLAN DISCLOSURE REQUIREMENTS
MCPs
must
comply with the physician incentive plan requirements stipulated in 42 CFR
438.6(h). If the MCP operates a physician incentive plan, no specific payment
can be made directly or indirectly under this physician incentive plan to
a
physician or physician
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group
as
an inducement to reduce or limit medically necessary services furnished to
an
individual.
If
the
physician incentive plan places a physician or physician group at substantial
financial risk [as determined under paragraph (d) of 42 CFR 422.208] for
services that the physician or physician group does not famish itself, the
MCP
must assure that all physicians and physician groups at substantial financial
risk have either aggregate or per-patient stop-loss protection in accordance
with paragraph (f) of 42 CFR 422.208, and conduct periodic surveys in accordance
with paragraph (h) of 42 CFR 422.208.
In
accordance with 42 CFR 417.479 and 42 CFR 422.210, MCPs must maintain copies
of
the following required documentation and submit to ODJFS annually, no later
than
30 days after the close of the state fiscal year and upon any modification
of
the MCP's physician incentive plan:
a.
A
description of the types of physician incentive arrangements the MCP has
in
place which indicates whether they involve a withhold, bonus, capitation,
or
other arrangement. If a physician incentive arrangement involves a withhold
or
bonus, the percent of the withhold or bonus must be specified.
b.
A
description of information/data feedback to a physician/group on their: 1)
adherence to evidence-based practice guidelines; and 2) positive and/or negative
care variances from standard clinical pathways that may impact outcomes or
costs. The feedback information may be used by the MCP for activities such
as
physician performance improvement projects that include incentive programs
or
the development of quality improvement initiatives.
c.
A
description of the panel size for each physician incentive plan. If patients
are
pooled, then the pooling method used to determine if substantial financial
risk
exists must also be specified.
d.
If
more than 25% of the total potential payment of a physician/group is at risk
for
referral services, the MCP must maintain a copy of the results of the required
patient satisfaction survey and documentation verifying that the physician
or
physician group has adequate stop-loss protection, including the type of
coverage (e.g., per member per year, aggregate), the threshold amounts, and
any
coinsurance required for amounts over the threshold.
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6.
NOTIFICATION OF REGULATORY ACTION
Any
MCP
notified by the ODI of proposed or implemented regulatory action must report
such notification and the nature of the action to ODJFS no later than one
working day after receipt from ODI. The ODJFS may request, and the MCP must
provide, any additional information as necessary to assure continued
satisfaction of program requirements. MCPs may request that information related
to such actions be considered proprietary in accordance with established
ODJFS
procedures. Failure to comply with this provision will result in an immediate
membership freeze.
