Common use of E SCOPE OF WORK Clause in Contracts

E SCOPE OF WORK. ▪ The Contractor must require any third party vendor providing claims adjudication services to provide all underlying data associated with MLR reporting to the Contractor within 180 days of the end of the MLR reporting year or within 30 days of being requested by the Contractor, whichever comes sooner. • The MLR report submitted by the Contractor for each reporting year must include the following elements, as defined in 42 CFR 438.8: ▪ Number of member months in the reporting year ▪ Premium revenue ▪ Taxes ▪ Licensing fees ▪ Regulatory fees ▪ Incurred claims ▪ Expenditures for Quality Improvement activities ▪ Expenditures for Fraud prevention activities as defined in 42 CFR 438.8(e)(4) ▪ Non-claims costs ▪ Any credibility adjustment applied ▪ Remittance owed to the State, if any ▪ A comparison of the information reported on the MLR with the audited financial report ▪ A description of the aggregation method used to calculate total incurred claims ▪ A description of the methodology used to allocate expenses ▪ An attestation as to the accuracy of the calculation, in accordance with MLR standards. • Incurred Claims: ▪ Incurred claims submitted for each reporting year should include total incurred claims for the reporting year, and should not include claims incurred in prior years, regardless of when they were paid. ▪ Incurred claims reported in the MLR should relate only to members who were enrolled with the Contractor on the dates of service, based on data and information available on the reporting date. (Claims for members who were retroactively disenrolled should be recouped from providers and excluded from MLR reporting). ▪ Under sub-capitated or sub-contracted arrangements, the Contractor may only include amounts actually paid to providers for covered services and supplies as incurred claims. The non-benefit portion of sub-capitated and sub-contracted payments should be excluded from incurred claims. The Contractor should ensure all subcontracts provide for sufficient transparency to allow for this required reporting. • Expenditures may not be duplicated across expense categories or contracts: ▪ Each expenditure must be reported under only one expense category, unless a portion of the expense fits under the definition of, or criteria for, one type of expense and the remainder fits into a different type of expense, in which case the expense must be pro-rated between types of expenses. ▪ Expenditures that benefit multiple contracts or populations must be reported on a pro rata basis. ▪ Shared expenses, including expenses under the terms of a management contract, must be apportioned pro rata to the contract incurring the expense. ▪ Expenses that relate solely to the operation of a reporting entity, such as personnel costs associated with the adjusting and paying of claims, must be borne solely by the reporting entity and are not to be apportioned to other entities. ▪ Expense allocation must be based on a generally accepted accounting method that is expected to yield the most accurate results. • Credibility adjustment: ▪ Contractors may not add a credibility adjustment to the calculated MLR if the reporting year experience under the Contract is fully credible. ▪ Contractors may add a credibility adjustment to the calculated MLR if the MLR reporting year experience under the Contract is partially credible. ▪ The credibility adjustment should be calculated using credibility factors published by CMS, as specified in 42 CR 438.8(h)(4). ▪ The credibility adjustment should be added to the reported MLR calculation before calculating the remittance, if any. ▪ If the Contractor’s experience under the contract is non-credible, it is presumed to meet or exceed the MLR calculation standards. The Contractor shall maintain, at minimum, a MLR of ninety percent (90%) for the Hoosier Care Connect line of business per 42 CFR 438.8(c). The Contractor is required to submit MLR reporting as described in the MCE Reporting Manual and the MCE Policies and Procedures Manual for Hoosier Care Connect. In any instance where the State makes a retroactive change to the capitation payments for the MLR reporting year where the MLR report has already been submitted, the Contractor must re-calculate the MLR for all reporting years affected by the change and submit a new MLR report meeting the applicable requirements per 42 CFR 438.8(m) and 42 CFR 438.8(k). FSSA shall recoup excess capitation paid to the Contractor in the event that the Contractor’s MLR is less than ninety percent (90%) for the Hoosier Care Connect line of business.

E SCOPE OF WORK. ▪ The Contractor must require any third party vendor providing claims adjudication services to provide all underlying data associated with MLR reporting to the Contractor within 180 days of the end of the MLR reporting year or within 30 days of being requested by the Contractor, whichever comes sooner. • The MLR report submitted by the Contractor for each reporting year must include the following elements, as defined in 42 CFR 438.8: ▪ Number of member months in the reporting year ▪ Premium revenue ▪ Taxes ▪ Licensing fees ▪ Regulatory fees ▪ Incurred claims ▪ Expenditures for Quality Improvement activities ▪ Expenditures for Fraud prevention activities as defined in 42 CFR 438.8(e)(4) ▪ Non-claims costs ▪ Any credibility adjustment applied ▪ Remittance owed to the State, if any ▪ A comparison of the information reported on the MLR with the audited financial report ▪ A description of the aggregation method used to calculate total incurred claims ▪ A description of the methodology used to allocate expenses ▪ An attestation as to the accuracy of the calculation, in accordance with MLR standards. • Incurred Claims: ▪ Incurred claims submitted for each reporting year should include total incurred claims for the reporting year, and should not include claims incurred in prior years, regardless of when they were paid. ▪ Incurred claims reported in the MLR should relate only to members who were enrolled with the Contractor on the dates of service, based on data and information available on the reporting date. (Claims for members who were retroactively disenrolled should be recouped from providers and excluded from MLR reporting). ▪ Under sub-capitated or sub-contracted arrangements, the Contractor may only include amounts actually paid to providers for covered services and supplies as incurred claims. The non-benefit portion of sub-capitated and sub-contracted payments should be excluded from incurred claims. The Contractor should ensure all subcontracts provide for sufficient transparency to allow for this required reporting. • Expenditures may not be duplicated across expense categories or contracts: ▪ Each expenditure must be reported under only one expense category, unless a portion of the expense fits under the definition of, or criteria for, one type of expense and the remainder fits into a different type of expense, in which case the expense must be pro-rated between types of expenses. ▪ Expenditures that benefit multiple contracts or populations must be reported on a pro rata basis. ▪ Shared expenses, including expenses under the terms of a management contract, must be apportioned pro rata to the contract incurring the expense. ▪ Expenses that relate solely to the operation of a reporting entity, such as personnel costs associated with the adjusting and paying of claims, must be borne solely by the reporting entity and are not to be apportioned to other entities. ▪ Expense allocation must be based on a generally accepted accounting method that is expected to yield the most accurate results. • Credibility adjustment: ▪ Contractors may not add a credibility adjustment to the calculated MLR if the reporting year experience under the Contract is fully credible. ▪ Contractors may add a credibility adjustment to the calculated MLR if the MLR reporting year experience under the Contract is partially credible. ▪ The credibility adjustment should be calculated using credibility factors published by CMS, as specified in 42 CR 438.8(h)(4). ▪ The credibility adjustment should be added to the reported MLR calculation before calculating the remittance, if any. ▪ If the Contractor’s experience under the contract is non-credible, it is presumed to meet or exceed the MLR calculation standards. The Contractor shall maintain, at minimum, a MLR of ninety percent (90%) for the Hoosier Care Connect line of business per 42 CFR 438.8(c). The Contractor is required to submit MLR reporting as described in the MCE Reporting Manual and the MCE Policies and Procedures Manual for Hoosier Care Connect. In any instance where the State makes a retroactive change to the capitation payments for the MLR reporting year where the MLR report has already been submitted, the Contractor must re-calculate the MLR for all reporting years affected by the change and submit a new MLR report meeting the applicable requirements per 42 CFR 438.8(m) and 42 CFR 438.8(k). FSSA shall recoup excess capitation paid to the Contractor in the event that the Contractor’s MLR is less than ninety percent (90%) for the Hoosier Care Connect line of business.