EXHIBIT 10.25
SECOND AMENDMENT
TO THE FACILITY PROVIDER AGREEMENT
BETWEEN
OPTION CARE, INC.
AND
FOUNDATION HEALTH SYSTEMS AFFILIATE(S)
This Amendment to the original Facility Provider Agreement entered into by and
between Option Care, Inc. (PROVIDER) and the Foundation Health Corporation
Affiliate(s) ("Foundation") now known as Foundation Health Systems Affiliate(s)
("FHS"), shall be effective May 1, 1998. This Amendment is an integral part of
the Agreement and shall supersede any contractual provisions to the contrary as
of the effective date.
NOW THEREFORE, in consideration of the mutual considerations contained in this
Amendment, PROVIDER and FHS agree to amend the Agreement as follows:
1. The following Addenda are hereby deleted and replaced in its entirety:
A, B, C, E, G.
2. The First Amendment to the Agreement is hereby deleted in its entirety.
3. Section 2.8, QUALITY MANAGEMENT PROGRAM of Article II, PERFORMANCE
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PROVISIONS is deleted in its entirety and replaced with the following:
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PROVIDER shall be solely responsible for the quality of Contracted
Services rendered to Beneficiaries. The quality of Contracted Services
rendered to Beneficiaries shall be monitored under the Quality
Management Program applicable to the particular Benefit Program.
PROVIDER agrees to participate in and cooperate in all respects with
the applicable Quality Management Program. PROVIDER also agrees to
comply with all such medical and other records within 10 days of
written notice, and such review data and other information as may be
required or requested under a Quality Management Program, including
outcome reporting in accordance with, but not limited to, the Health
Plan Employer Data and Information Set (HEDIS), Version 3.0, or its
successor. In the event that the standard or quality of care furnished
by PROVIDER is found to be unacceptable under any Quality Management
Program, FHS shall give written notice to PROVIDER to correct the
specified deficiencies within the time period specified in the notice.
PROVIDER shall correct such deficiencies within that time period.
PROVIDER shall satisfactorily revise the preliminary Corrective Action
Plan (CAP), attached hereto as Exhibit 1, for Quality Improvement,
Utilization Management, Medical Records, Member Rights and
Responsibilities and Credentialing standards to reflect all necessary
actions as determined by FHS to enable achievement of those standards
cited in the Standardized Health Delivery Organization (HDO) audit
tool.
PROVIDER and FHS shall finalize and execute a Joint Action Plan for
Patient Care Transition with tasks starting March 1, 1998 through June
1, 1998, and a Joint Action Plan for Transition of Full Delegation of
UM, QI, and other above designated functions, with tasks starting May
1, 1998 and concluding no later than October 31, 1998. Those
preliminary plans are attached hereto, as Exhibits 2 and 3.
PROVIDER shall comply with the Transition of Care Arrangement as
defined, and attached hereto, as Exhibit 4
PROVIDER agrees that the CAP and the two Joint Action Plans, attached
hereto as Exhibits 1, 2, and 3, are critical to the successful
transition of patient care and to the smooth interaction between
PROVIDER, FHS and Participating Physician Groups (PPGs). PROVIDER
shall, therefore, commit to complete and appropriate allocation of
resources to fulfill its obligations under these Plans and shall agree
to achieve those critical milestones as set forth in Exhibit 5.
PROVIDER shall agree to financial penalties as set forth in Exhibit 5,
for any failure to achieve those critical milestones.
PROVIDER agrees to achieve and maintain those performance standards set
forth in the Operations Manual. Notwithstanding the above, PROVIDER
agrees to financial penalties for failure to achieve certain key
performance standards; those key performance standards and the
associated financial penalties are contained in Exhibit 6, attached
hereto and incorporated herein.
4. Section 4.1, TERM of Article IV, TERM AND TERMINATION, shall be
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amended to read:
The term of this Agreement shall commence on April 1, 1998 and shall
continue for an initial period of three (3) years. This Agreement shall
automatically renew for successive one year periods, unless one party
notifies the other in writing of its intent not to renew this Agreement
at least one hundred twenty (120) days prior to the next scheduled
renewal date. Any and all negotiations must be completed thirty (30)
days prior to the anniversary date of the contract. The renewal date of
the term of this Agreement shall remain the same for all Benefit
Programs covered hereunder, even if this Agreement becomes effective
with respect to a particular Benefit Program after the initial or any
renewal date of this Agreement, due to the licensure, contract award or
other reason.
During the initial term, either party has the right to request
reconsideration of significant terms and conditions by giving notice of
proposed Amendment provisions in writing by December 1 of each year,
and the parties commit to finalize negotiations by March 1 of the
subsequent year. Should the parties fail to reach mutual agreement
through those discussions, one of the parties shall be expected, by the
March 1 deadline, to give a ninety (90) day notice of termination.
Notwithstanding the terms set forth in the above Amendment, PROVIDER
shall have the right at any time during this Agreement to provide FHS
with one hundred five (105) days prior written notice of termination if
the PROVIDER's reason for termination results from a major
subcontractor giving PROVIDER one hundred and twenty days (120) days
notice of termination of the contractor.
IN WITNESS WHEREOF, the parties have executed this Amendment to be effective on
the first day of the month after FHS has executed this Amendment. All other
terms and conditions of the Agreement remain in full force and effect.
OPTION CARE, INC., A CALIFORNIA CORPORATION FOUNDATION HEALTH SYSTEMS AFFILIATES
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▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President & CEO Senior Vice President, Provider Network Management
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Date Date
ADDENDUM A
AFFILIATES AND BENEFIT PROGRAMS
I. AFFILIATES
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Upon execution of this Agreement, the Affiliates primarily using this Agreement
include, but are not limited to, the following: Health Net; Foundation Health, a
California Health Plan; Health Net Life Insurance Company; Qualmed Life and
Health Insurance Company; Foundation Health National Life Insurance Company;
Business Insurance Group, Inc.; Business Insurance Company; California
Compensation Insurance Company; Combined Benefits Insurance Company; Commercial
Compensation Insurance Company; Foundation Health Federal Services; California
Compensation Insurance Company (Cal Comp); and, Preferred Health Network.
Notwithstanding the foregoing, PROVIDER further agrees that any other Affiliate
of FHS not listed above may access the rates set forth in this Agreement and
Addenda. Such affiliates would include Members of non-California based
Affiliates who access contracts on a fee for service basis.
II. BENEFIT PROGRAMS
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Benefit Program participation and reimbursement under this Agreement shall
include the following:
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FEE-FOR-
AFFILIATE AND BENEFIT PROGRAMS ADDENDUM SERVICE CAP
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HMO (Standard) B X
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Medicare Risk C X
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Medi-Cal D X
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Fee-for-Service E X
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CHAMPUS/Tricare and Other Government F X
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(Intentionally Left Blank) G X
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Occupationally Ill/Injured or Workers' H X
Compensation
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ADDENDUM B
COMMERCIAL HMO
PROVIDER understands and agrees that the obligations of FHS set forth on this
Addendum are only the obligations of Health Net and Foundation Health, a
California Health Plan, (hereafter "HMO") and not the obligations of FHS or any
other Affiliate of FHS. PROVIDER understands that HMO operates under two
separate administrative infrastructures: one for Health Net Members and another
for Foundation Health Members; HMO may continue to use separate administration
for different product segments. During term of this Agreement, PROVIDER may
receive capitation from both systems.
I. DESCRIPTION OF PROVIDER RISK SERVICES:
1. HOME HEALTH SERVICES. Those Covered Services customarily
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provided to Members in the home including, but not limited to, skilled
nursing services rendered by a registered professional nurse or
licensed vocational nurse; home health aide services; physical,
occupational, speech and respiratory therapy services; and medical
social services.
Contracted Services are services which are provided in a Member's home
to a homebound member, as defined herein. Except as provided below,
Contracted Services shall be included as Provider Risk Services only
when Members meet the home health requirements and such services are
authorized by a Participating Provider. The home health requirements
shall include: the Member is "homebound", under the care of a
Participating Provider, and requires medically necessary skilled
nursing services, short-term physical therapy, respiratory therapy,
speech therapy, occupational therapy, or medical social services.
Obstetrical patients in the early postpartum phase and Members
requiring (at least) daily or more frequent wound care visits may also
be eligible for home health services.
In order to be considered "homebound", Members shall meet the following
criteria:
a. Member is unable to leave home.
b. It takes a considerable and taxing effort to leave (such as
using special medical transportation and/or the Member
requires medication in order to be moved).
c. Absences from home are infrequent, of short duration, or are
to receive medical care. (Homebound eligibility is not
affected by frequent absences from home when the reason to
leave is to receive medical care.)
The following conditions shall be included as part of the Provider Risk
Services:
a. Member's medical condition is such that if the Member leaves
home, it creates a public health hazard.
b. Member has been discharged from the hospital post-partum and
services must be reasonable and medically necessary.
c. Member receives infusion services at school or work and has
additional medically necessary skilled nursing needs at home
such as respiratory monitoring for a ventilator dependent
Member. The hours and level of care for the Member's skilled
nursing needs at home will be reviewed and approved by HMO or
PROVIDER's Medical Director.
d. Home infusion therapy and durable medical equipment services
are not restricted to homebound Members.
2. SKILLED NURSING SERVICES. Skilled nursing services are those
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which require the technical skills of a nurse (i.e., specialized
training and knowledge). Examples would be catheter care, postural
drainage and percussion, NG tube insertion and feedings, manual removal
of fecal impactions and dressing changes requiring aseptic techniques.
A nurse may instruct the patient or family Members in performance of
the procedure. Nursing procedures performed during the course of
teaching are considered skilled. Services that can be safely and
effectively performed (or self administered) by the average
nonlicensed, non-medical person without the direct supervision of a
licensed nurse are not skilled nursing services, even though a licensed
nurse may provide the service.
Capitated Medical Groups/IPA (now referred to as "PPG") who authorize
skilled nursing services adhere to the following criteria:
a. PPG must determine the need for Skilled Nursing services;
formulate a treatment plan; and include the order for home
health services in the Member's treatment plan.
b. PPG must consider both the inherent complexity of the service
and the condition of the Member when weighing
the need for home health services.
c. A service is considered a skilled nursing service when it is
performed or directly supervised by a licensed nurse.
Skilled nursing observation and evaluation may be necessary if a change
(i.e. medications, therapies) is made in the treatment plan by the
Member Physician. Generally three (3) weeks is considered the maximum
limit on the skilled observation and evaluation if the Member is stable
and no changes have been made. The criteria for skilled nursing
observation and evaluation are as follows:
a. When the Member is medically unstable.
b. When the Member has frequent contact with a Participating
Provider for medical treatment.
c. When Member has changes in medications (date and reason).
d. When Member has a new diagnosis.
e. When Member is under a new treatment plan.
3. HOME INFUSION SERVICES. Home Infusion Services are services
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which involve the dispensing and administration of prescribed
intravenous substances and solutions, and patient education. All
equipment and supplies necessary to provide such services are also
covered. Infusion patients do not need to be homebound but must meet
the criteria for home health care and meet the requirements of the
Utilization Program to be included as Provider Risk services.
4. PHYSICAL, SPEECH, OCCUPATIONAL, RESPIRATORY THERAPY. These
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services must relate directly and specifically to a written treatment
plan established by a Member Physician usually after the Member
Physician has consulted with a qualified therapist. The therapy must be
medically necessary for the treatment of the Members illness or injury.
Member must meet the criteria for home health services as defined in
Section I, number 1, Home Health Services.
5. MEDICAL SOCIAL SERVICES. Medical social services are covered
-----------------------
if they are prescribed by a Member Physician, included in the Member's
treatment plan, and are medically necessary. Indication of social
problems must exist which are or will prevent the effective treatment
of either the Member's medical condition or recovery. Only licensed
medical social worker may perform medical social services. Member must
meet the criteria for home health services as defined in Section I,
number 1, Home Health Services.
6. HOME HEALTH AIDE SERVICES. A home health aide is authorized
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only in conjunction with skilled nursing services provided by a
licensed RN or LVN, or a Participating Provider or speech therapist.
The home health aide provides personal care to the Member. Such
services must be medically necessary. The Member's medical condition
and need will dictate the frequency and duration of home health aide
services (per day, etc.). Custodial care, as defined in the Medical
Policy Manual is not a Covered Service. Member must meet the criteria
for home health services as defined in Section I, number 1, Home Health
Services.
7. DURABLE MEDICAL EQUIPMENT. Durable Medical Equipment (DME) and
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supplies are covered subject to the Member's Coverage Certificate. If
the Member's Plan does not provide coverage for DME, but provides
coverage for home health care, such equipment when determined to be
medically necessary shall be paid by HMO based on the fee-for-service
rates described in the applicable Addendum.
8. MEDICAL SUPPLIES. All supplies used in conjunction with a home
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health service and/or for teaching of a Member until Member becomes
independent, are considered as part of the home health benefit.
9. HOME HOSPICE CARE. Hospice services include all services as
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defined in the Medicare hospice program.
10. WOUND CARE. Wound care is covered when a homebound Member
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requires one or more dressing changes per day and the Member is not
able to perform the dressing change. If three or more wound care
changes per day are required, HMO will use best efforts to refer care
to an appropriate facility; however, if such referral is not possible,
PROVIDER will be responsible for authorized wound care. Member must
meet the criteria for home health services as defined in Section I,
number 1, Home Health Services. PROVIDER is not responsible for
dressing changes for non-homebound Members. Any disputes regarding
wound care will be determined by an HMO Medical Director.
11. DIABETIC SUPPLIES. PROVIDER shall be responsible for diabetic
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supplies only (chem strips, lancets, and syringes) for those HMO
Members without a pharmacy benefit and the provision of those
diabetic supplies shall be covered under the DME benefit.
II. NON-CONTRACTED AND EXCLUDED SERVICES:
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The following services are those services which PROVIDER is not
responsible for rendering under this Agreement or which HMO is not
responsible for providing under an applicable Benefit Program:
1. MEDICAL SUPPLIES. PROVIDER shall not be responsible for
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providing Medical Supplies when Member is not receiving home health,
home infusion, or hospice services. All supplies used in conjunction
with a nursing visit which meets home health requirements are included
as Provider Risk Services.
2. BONE GROWTH STIMULATORS. PROVIDER shall not be responsible for
-----------------------
providing Bone Growth Stimulators. This item is covered under the
surgical supply benefit and is usually billed under a hospital claim.
In the event PROVIDER is asked to provide this item, PROVIDER may ▇▇▇▇
HMO and HMO shall pay PROVIDER based on the Fee for Service rates in
The applicable Addendum.
3. SELF INJECTIBLE MEDICATIONS. Self Injectible Medications,
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excluding human growth hormones and antihemophic factors, are a medical
benefit and are the financial responsibility of the PPG. In the event
that PROVIDER is asked to provide such medications, PROVIDER shall ▇▇▇▇
the Member's PPG directly.
4. OUT OF AREA. PROVIDER is not responsible for providing
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emergency and out of area skilled nursing care provided to Members who
are out of the Service Area. However, for a limited duration of one
month, planned out-of-area nursing and infusion services shall be
considered PROVIDER Risk Services as long as reasonable notification is
given by the Member or PPG for such occurrences.
5. CUSTODIAL HOMEMAKER CARE. PROVIDER shall not be responsible
for custodial homemaker care.
6. NOT-COVERED SERVICES. Services which are not covered by Plan
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includes, but are not limited to, the following:
a. Food, housing, homemaker services, and home-delivered
meals.
b. Home hemodialysis services, including the purchase or
rental of equipment required for renal dialysis
procedures.
c. Supportive environmental equipment such as handrails,
ramps, etc., as defined in the Medicare guidelines.
d. Services deemed not to be medically necessary or
appropriate by the PPG and HMO.
e. Exercise devices (Exercycles), gravitonic devices,
treadmill, room air purifier, air conditioner and
similar types of devices.
f. Experimental drugs.
III. HMO REIMBURSEMENT PROGRAMS
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1. COMPENSATION FOR PROVIDER RISK SERVICES. Effective April 1,
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1998, as compensation for providing Provider Risk Services HMO shall
pay PROVIDER $1.40 Per Member Per Month (PMPM) for each Commercial HMO
Member eligible to receive such services from PROVIDER during any
particular month. Capitation shall be increased to $1.42 PMPM at such
time Health Net's Quality Improvement Committee approves PROVIDER for
full delegation. Capitation shall be computed on the basis of the most
current information available in the eligibility file of Health Net or
the former Foundation Health Plan. Member eligibility rules may vary by
eligibility system until such time as the HMO can consolidate all
members onto a single operating system. Capitation payment shall be
paid by the HMO by wire transfer on or before the fifteenth (15th) day
of each month or the first business day following the fifteenth if the
fifteenth is a holiday or on a weekend. Each Capitation payment shall
be accompanied by a remittance summary. The remittance summary
identifies the total Capitation payable and those Commercial HMO
Members for whom Capitation is being paid. In the event of a Capitation
error, resulting in an overpayment or underpayment to PROVIDER, HMO
shall adjust subsequent Capitation to offset such error. (Member
eligibility rules may vary by eligibility system until such time as the
HMO can consolidate all members onto a single operating system.)
2. GENERAL STOP LOSS PROGRAM. PROVIDER's Stop Loss threshold
-------------------------
shall be $50,000.00 per Commercial HMO Member during the contract year
of the Agreement (each May 1st through each April 30th). If the
PROVIDER projects the costs of providing services to a Member will
reach the $50,000.00 threshold, PROVIDER shall refer the Member to
HMO's Care Management Department, at point of determination. PROVIDER
shall submit claims under the applicable stop loss program no later
than sixty (60) calendar days at the conclusion of service which occur
beyond the threshold or at the end of the month in which services were
rendered. Failure to submit claims in a timely manner may result in
forfeiture of PROVIDER's right to reimbursement. For purposes of
determining if the stop loss threshold has been reached, the
compensation schedule set forth in the applicable Addendum shall be the
source rates for calculation. HMO shall compensate PROVIDER for claims
in excess of the stop loss threshold at eighty percent (80%) of the
Fee-for-Service rates in The applicable Addendum, except for drugs
which will be reimbursed at AWP minus ten percent (10%), less
applicable Copayments, coinsurance, deductibles and payments from third
parties or coordination of benefits.
3. CUSTOM EQUIPMENT STOP LOSS. PROVIDER shall be responsible for
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the first $6,000 in incurred cost per Commercial HMO Member during the
contract year (each May 1st through each April 30th) for: (1) custom
and power wheelchairs and (2) custom and power scooters. Subsequent to
reaching the $6,000 threshold, the HMO shall assume the financial
responsibility for the custom equipment cost for that Member. PROVIDER
shall submit to HMO evidence of PROVIDER's cost plus ten percent (10%)
within sixty (60) calendar days following the day of delivery.
Reimbursement from HMO to PROVIDER shall be less applicable copayments,
deductibles, and recoveries from third parties and coordination of
benefits. Failure to submit invoices timely may result in forfeiture of
PROVIDER's right to reimbursement.
PROVIDER shall notify HMO of any authorization for custom equipment
whose cost is projected to exceed the threshold, prior to arranging for
the product. Notification requirements shall be as stated in the
Operations Manual.
4. BLOOD FACTOR PRODUCTS STOP LOSS. Blood Factor products include
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antithrombin III, factor 8 (VIII), factor 9 (IX), factor 11 (XI), and
factor 13 (XIII). PROVIDER shall be responsible under Capitation for
the first $400,000.00 in calculated cost for all Commercial HMO Members
assuming 700,000 Members (or for the first $57,142.00 in calculated
costs for each 100,000 Members subject to Capitation.) After this
threshold has been reached, the HMO shall assume all financial
responsibility for such products for any Commercial HMO Member.
The threshold shall be determined on a contract year basis (each May
March 1st through each April 30th) and shall be calculated using the
compensation schedule set for in The applicable Addendum. HMO shall
compensate PROVIDER for claims in excess of this stop loss threshold at
eighty percent (80%) of the fee-for-service rates in The applicable
Addendum for services and at AWP minus 10% for medications, less
applicable copayments, coinsurance, deductibles, and recoveries from
third parties and coordination of benefits.
PROVIDER shall notify HMO's Care Management department of each Member
receiving blood factor products and shall work cooperatively with HMO
on care management. Notification shall be according to the requirements
in the Operations Manual. Additionally, PROVIDER shall provide HMO on a
monthly basis the total accumulated Member costs under this stoploss
provision. Failure to notify of inform HMO accordingly may result in
the loss of reimbursement to PROVIDER.
5. LONG TERM SHIFT CARE EXCLUSION. PROVIDER shall not be
------------------------------
responsible for Long Term Shift Care. Such shift care is defined as
those Medically Necessary home health skilled nursing services, which
is not hospice care, for four (4) or greater continuous hours per day
for a period of more than thirty (30) days. If, at the point of acute
hospital discharge, the attending physician and HMO determine that
shift care will be Medically Necessary for a period of thirty (30) days
or more, the case will be deemed to be Long Term Shift Care and HMO
shall be financially responsible for all such Long Term Shift Care from
the first day of patient care. Furthermore, if such Long Term Shift
Care is identified after care has been initiated, HMO shall be
financially responsible from the onset of such services. PROVIDER shall
be responsible for shift care for patients whose care requirements are
less than thirty (30) days.
6. CAPITATION DEDUCTIONS. PMPM deductions shall be made to
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PROVIDER's monthly capitation as adjustment for items covered under a
PPG's Professional Capitation. In the event PPG has been assigned the
risk for Durable Medical Equipment, a deduction of .42 PMPM can be made
in PROVIDER capitation for Members assigned to such PPG. HMO shall
notify PROVIDER on a monthly basis of such PPG. HMO shall notify
PROVIDER on a monthly basis of any such PPGs.
ADDENDUM C
MEDICARE RISK BENEFIT PROGRAM
This Addendum sets forth additional terms which shall only apply to Members who
are enrolled in HMOs Medicare Risk Benefit Programs. PROVIDER understands and
agrees that the obligations set forth in this Addendum are only the obligations
of Health Net and Foundation Health, a California Health Plan, (hereafter
"HMO"), and not the obligations of HMO or any other Affiliate of HMO.
A. DEFINITIONS:
------------
For purposes of this Addendum, the definitions included herein shall
have the meaning required by law to applicable Medicare Risk Programs.
1. HCFA. The Health Care Financing Administration which is the
----
agency of the federal government responsible for
administration of the Medicare program.
2. MEDICARE RISK SERVICE AREA. The area approved by HCFA and the
--------------------------
State regulatory agency as the area in which HMO may market
and enroll Medicare HMO Members. At any given time during the
term of this Agreement, the Medicare Risk Service Area
consists of the list of zip codes currently approved by HCFA
and/or the State regulatory agency as the Medicare Risk
Service Area.
3. PMPM. For purposes of this Addendum, any per Member per
----
month ("PMPM") calculation shall be based on Medicare HMO
Members only.
B. STANDARD BENEFIT RISK PROGRAMS:
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Contracted Services shall be those Medically Necessary Covered Services
as defined by HCFA for home health services, home infusion services,
hospice care, and durable medical equipment provided to Medicare
eligibles. All benefit administration shall be defined by HCFA. The
only exceptions to standard HCFA service or administrative guidelines
shall be as follows:
1. SELF INJECTIBLE MEDICATIONS. Self Injectible Medications,
---------------------------
excluding human growth hormones and antihemophic factors, are a
medical benefit and are the financial responsibility of the PPG. In
the event that PROVIDER is asked to provide such medications, PROVIDER
shall ▇▇▇▇ the Member's PPG directly.
2. OUT OF AREA. PROVIDER is not responsible for providing
-----------
emergency and out of area skilled nursing care provided to Members who
are out of the Service Area. However, for a limited duration of one
month, planned out-of-area nursing and infusion services shall be
considered PROVIDER Risk Services as long as reasonable notification is
given by the Member or PPG for such occurrences.
C. REIMBURSEMENT
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1. COMPENSATION FOR PROVIDER RISK SERVICES. Effective April 1,
---------------------------------------
1998, as compensation for providing PROVIDER Risk Services, HMO shall
pay PROVIDER $6.77 Per Member Per Month (PMPM) for each Medicare HMO
Member eligible to receive such services from PROVIDER during any
particular month. Capitation shall be computed on the basis of the most
current information available in the eligibility files of Health Net or
the former Foundation Health Plan and shall be paid by HMO wire
transfer on or before the fifteenth (15th) day of each month or the
first business day following the fifteenth if the fifteenth is a
holiday or is on a weekend or within two (2) days of HCFA's payment to
HMO, whichever is later. Each Capitation payment shall be accompanied
by a remittance summary. The remittance summary identifies the total
Capitation payable and those Medicare Risk HMO Members for whom
Capitation is being paid. In the event of a Capitation error, resulting
in an overpayment or underpayment to PROVIDER, HMO shall adjust
subsequent Capitation to offset such error. (Member eligibility rules
may vary by eligibility system until such time as the HMO can
consolidate all members onto a single operating system.)
2. STOP LOSS PROGRAM. PROVIDER's Stop Loss threshold shall be
-----------------
$50,000.00 per Medicare Risk Member during the contract year of the
Agreement (each April 1st through each March 31st). If the PROVIDER
projects the costs of providing services to a Member will reach the
$50,000.00 threshold, PROVIDER shall refer the Member to HMO's Care
Management Department, at point of determination. PROVIDER shall submit
claims under the applicable stop loss program no later than sixty (60)
calendar days following those days of service which occur beyond the
threshold. Failure to submit claims in a timely manner may result in
forfeiture of PROVIDER's right to reimbursement. For purposes of
determining if the stop loss threshold has been reached, the
compensation schedule set forth in Fee-For-Service Addendum shall be
the source rates for calculation. HMO shall compensate PROVIDER for
claims in excess of the stop loss threshold at eighty percent (80%) of
the Fee-for-Service rates in the applicable Addendum, except for drugs
which will be reimbursed at AWP minus ten percent (10%), less
applicable Copayments, coinsurance, deductibles and payments from third
parties or coordination of benefits.
3. CUSTOM EQUIPMENT STOP LOSS. PROVIDER shall be responsible for
--------------------------
the first $6,000 in incurred cost per Commercial HMO Member during the
contract year (each May 1st through each April 30th) for: (1) custom
and power wheelchairs and (2) custom and power scooters. Subsequent to
reaching the $6,000 threshold, the HMO shall assume the financial
responsibility for the custom equipment cost for that Member. PROVIDER
shall submit to HMO evidence of PROVIDER's cost plus ten percent (10%)
within sixty (60) calendar days following the day of delivery.
Reimbursement from HMO to PROVIDER shall be less applicable copayments,
deductibles, and recoveries from third parties and coordination of
benefits. Failure to submit invoices timely may result in forfeiture of
PROVIDER's right to reimbursement.
PROVIDER shall notify HMO of any authorization for custom equipment
whose cost is projected to exceed the threshold, prior to arranging for
the product. Notification requirements shall be as stated in the
Operations Manual.
4. BLOOD FACTOR PRODUCTS STOP LOSS. Blood Factor products include
-------------------------------
antithrombin III, factor 8 (VIII), factor 9 (IX), factor 11 (XI), and
factor 13 (XIII). PROVIDER shall be responsible under Capitation for
the first $400,000.00 in calculated cost for all Medicare Risk HMO
Members up to 70,000 Members (or for the first $57,142.00 in calculated
costs for each 10,000 Members subject to Capitation). After this
threshold has been reached, the HMO shall assume all financial
responsibility for such products for any Medicare HMO Member.
The threshold shall be determined on a contract year basis (each May
1st through each April 30th) and shall be calculated using the
compensation schedule set for in the applicable Addendum. HMO shall
compensate PROVIDER for claims in excess of this stop loss threshold at
eighty percent (80%) of the fee-for-service rates in the applicable
Addendum for services and at AWP minus 10% for medications, less
applicable copayments, coinsurance, deductibles, and recoveries from
third parties and coordination of benefits.
PROVIDER shall notify HMO's Care Management department of each Member
receiving blood factor products and shall work cooperatively with HMO
on care management. Notification shall be according to the requirements
in the Operations Manual. Additionally, PROVIDER shall provide HMO on a
monthly basis the total accumulated Member costs under this stoploss
provision. Failure to notify of inform HMO accordingly may result in
the loss of reimbursement to PROVIDER.
5. LONG TERM SHIFT CARE EXCLUSION. PROVIDER shall not be
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responsible for Long Term Shift Care. Such shift care is defined as
those Medically Necessary home health skilled nursing services, which
is not hospice care, for four (4) or greater continuous hours per day
for a period of more than thirty (30) days. If, at the point of acute
hospital discharge, the attending physician and HMO determine that
shift care will be Medically Necessary for a period of thirty (30) days
or more, the case will be deemed to be Long Term Shift Care and HMO
shall be financially responsible for all such Long Term Shift Care from
the first day of patient care. Furthermore, if such Long Term Shift
Care is identified after care has been initiated, HMO shall be
financially responsible from the onset of such services. PROVIDER shall
be responsible for shift care for patients whose care requirements are
less than thirty (30) days.
6. CAPITATION DEDUCTIONS. PMPM deductions shall be made to
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PROVIDER's monthly capitation as adjustment for items covered under a
PPG's Professional Capitation. In the event PPG has been assigned the
risk for Durable Medical Equipment, a deduction of $3.17 PMPM can be
made in PROVIDER capitation for Members assigned to any such PPGs. HMO
shall notify PROVIDER on a monthly basis of any such PPGs.
7. COMPENSATION TO OTHER PROVIDERS OF PROVIDER RISK SERVICES.
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PROVIDER shall compensate all Participating Providers of Provider Risk
Services to Members assigned to PROVIDER. In the event that PROVIDER
does not process and pay eligible claims submitted by Participating
Providers for Provider Risk Services within timeframes required by law,
after verification with the PROVIDER that the claim was not paid for
some valid reason, HMO may pay such claims at the lesser of HMO's
contract rate, the PROVIDER's subcontract terms, or the PROVIDER's
billed charges, and shall deduct such amounts paid from PROVIDER's
Capitation as set forth in the Operations Manual.
ADDENDUM E
FEE-FOR-SERVICE COMPENSATION SCHEDULE
PROVIDER understands that Affiliates of FHS or Payors contracted with FHS who
are qualified may provide PPO, EPO and POS Benefit Programs. FHS shall provide
PROVIDER with a listing of all such Payors, as updated from time to time by FHS.
Notwithstanding any provision in this Agreement, PROVIDER and Participating
Provider understand and agree that each Payor is solely responsible for paying
PROVIDER and/or Participating Provider for those individuals to whom Payor
provides health care coverage. In no event shall FHS or any FHS Affiliate be
responsible for any payment which is the financial responsibility of a Payor and
PROVIDER shall seek compensation for such services only from Payor.
For designated Benefit Programs offered by FHS Affiliates or Payors, PROVIDER
shall be compensated for non-capitated, authorized Contracted Services, less
applicable Copayments, in an amount equal to the rates described in this
Addendum:
A. BENEFIT PROGRAM REQUIREMENTS:
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PROVIDER agrees:
1. To comply with the terms and conditions of this Addendum, the terms
of the applicable Benefit Programs, and of the Operations Manual.
2. To comply with FHS efforts to provide Case Management. PROVIDER
agrees to provide a written treatment plan within five (5) working days of
receipt of request from FHS. A treatment plan includes a statement of diagnosis,
current patient condition, current or proposed treatment, and anticipated
outcomes.
3. FHS shall not be obligated to pay all or any portion of any PROVIDER
claim on a Payor's behalf unless and until FHS has received sufficient funds
from the applicable Payor to cover such claim but shall require prompt funding
in its Agreement with payors and shall assist PROVIDER in receiving payment. In
the event such Payor fails to provide funds to FHS, PROVIDER may seek payment
from Member up to the rates specified in this Addendum, unless prohibited by
applicable law.
B. COMPENSATION:
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PROVIDER shall be compensated for services rendered under this Addendum
according to the following rates and payment guidelines. Such
compensation shall be paid subject to the billing requirements set
forth in the Agreement. FHS shall pay all claims within thirty (30)
calendar days from day of receipt by FHS or within parameters set forth
by state or federal law, whichever is the shorter timeframe.
I. HOME INFUSION THERAPY SERVICES:
All aspects of PROVIDER's comprehensive services are covered under one
of several therapy specific prices. The therapy services listed within
are inclusive of the following:
1. Clinical and nursing services, including 24 hour per day,
7 days a week on call availability for pharmacy, nursing,
and delivery.
2. Initial nurse assessment, two nursing visits a week, and
pharmacy and clinical monitoring;
3. All therapy related IV solutions/sets, needleless system,
solutions, diluent, minibags, dressings, nursing/medical
supplies and equipment;
4. Support services related to delivery and transportation,
equipment rental of infusion pumps and IV poles and other
related equipment, line maintenance, obtaining of laboratory
specimens (exception: lab draws
ordered for purposes unrelated to authorized therapies),
pharmacy compounding and dispensing, and hazardous/infectious
waste management, waste disposal, and equipment cleaning;
5. Support services facilitating patient access and care,
including precertification and/or preauthorization services,
education and training, and other customer services;
6. Information services that monitor, track and report
utilization by a variety of both clinical and financial
criteria, including prescription tracking and record keeping,
utilization reporting, administration and overhead.
7. All medications shall be reimbursed at Average Wholesale Price
(AWP) minus ten percent (10%).
a. ANTIBIOTIC, ANTIVIRAL, AND ANTIFUNGAL THERAPY
The antibiotic, antiviral, and antifungal therapy rate is composed of the daily
per diem rate, determined by the dosing schedule, plus the AWP minus 10% of the
drug used. (This rate is applicable for central or peripheral lines.)
Dosing Schedule Per Diem Rate/Code
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Every 24 hours, q24 $ 70.00/ AB241
Every 12 hours, q12 $ 80.00/ AB121
Every 8 hours, q8 $ 90.00/ AB081
Every 6 hours, q6 $ 95.00/ AB061
Every 4 hours, q4 $105.00/ AB041
Every 3 hours, q3 $105.00/ AB031
b. MULTIPLE REGIMENS (BOTH PERIPHERAL AND CENTRAL LINES):
For multiple drug regimens, the per diem for each of the lower cost dosing
regimen will be paid at 50% of the overall lower cost procedures per diem plus
the AWP minus 10% of any antibiotic, antiviral, and antifungal drugs being
administered.
c. TOTAL PARENTERAL NUTRITION (TPN) THERAPY
TPN therapy consists of amino acid/dextrose; including electrolytes, vitamins
(excluding Vitamin K), trace elements, insulin and heparin. The TPN therapy
service is composed of the daily per diem rate, determined by the daily volume
of TPN solution. The per diem rate for TPN therapy INCLUDES the TPN solutions.
There is NOT a separate rate for the AWP of the solutions. Lipids will be paid
at a separate rate, as detailed below. Any additionally authorized additives
(except renal & hepatic) will be paid at AWP minus 10%. The pump is included in
the per diem rates.
Standard TPN Solution Per Diem Rate/Code
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Solution 1.0 liters or less per day $135.00/TP101
Solution 1.1 to 2.0 liters per day $155.00/TP201
Solution 2.1 to 3.0 liters per day $175.00/TP301
Solution 3.1 liters or greater per day $185.00/TP401
Lipids will be paid in addition to the standard per diem for Solution:
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10% up to 500 ml $ 35.00/TP050
20% up to 500 ml $ 45.00/TP060
d. CHEMOTHERAPY
The per diem service is composed of the daily per diem rate plus the AWP minus
10% of the chemotherapeutic agent.
Per Diem Rate/Code
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Chemotherapy, one or more drugs $ 70.00/CH001
e. HYDRATION THERAPY
Hydration therapy consists of fluids with electrolytes. The hydration therapy
service is composed of the daily per diem rate. The per diem rate for Hydration
therapy INCLUDES the charge for the fluids and electrolytes. There is NOT a
separate rate for the AWP of the solutions.
Standard Hydration Solution Per Diem Rate/Code
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Any amount $ 55.00/HD101
Additives AWP-10%
f. PAIN MANAGEMENT THERAPY
The Pain Management therapy service rate is composed of the daily per diem rate
plus AWP minus 10% of the analgesic drug.
Per Diem Rate/Code
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Continuous or Intermittent pain $ 60.00/PA101
management, one drug or multiple drugs
g. ENTERAL NUTRITION THERAPY Code
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The Enteral therapy service is composed of AWP minus 10% of
the enteral solution PLUS $40.00 per delivery. EN100
h. AEROSOLIZED PENTAMIDINE THERAPY
The Pentamidine therapy service is composed of the daily per diem rate plus
AWP minus 10% of the drug, plus the compressor at the appropriate DME rate.
Per Diem Rate/Code
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Pentamidine $ 65.00/AP100
i. GROWTH HORMONE THERAPY
The Growth Hormone therapy rate is composed of the AWP minus 5% plus $20.00 per
vial of the growth hormone.
Rate/Code
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Growth Hormone $ 20.00 per vial + AWP-5%/GH100
j. NEUPOGEN, EPOGEN, & PROCRIT SUBCUTANEOUS THERAPIES
The Neupogen, Epogen & Procrit therapy service is composed of the AWP minus 5%
plus $40.00 per vial of the drug.
Rate/Code
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Neupogen $ 40.00 per vial + AWP-5%/NE100
Epogen $ 40.00 per vial + AWP-5%/EP100
Procrit $ 40.00 per vial + AWP-5%/PR100
k. CARDIAC (DOBUTAMINE) THERAPY
The Dobutamine therapy service is composed of the daily per diem rate plus the
AWP minus 10% of the drug.
Per Diem Rate/Code
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Dobutamine Therapy $ 80.00/CA101
l. INTRAVENOUS IMMUNE GLOBULIN THERAPY
The IV Immune Globulin therapy service is composed of the daily per diem rate
plus the AWP minus 10% of the drug.
Per Diem Rate/Code
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IV Immune Globulin Therapy $ 60.00/IM101
m. STEROID THERAPY
The Steroid Therapy service is composed of the daily per diem rate plus the AWP
minus 10% of the drug.
Per Diem Rate/Code
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Steroid therapy $ 60.00/ST101
n. SKILLED NURSING SERVICES
See home health nursing rates.
o. PICC LINE INSERTION SERVICE
The PICC Line Insertion Service consists of a charge for each PICC Line
Insertion. Verification of PICC placement via X-Ray is not included, and
PROVIDER is not responsible for the cost of the X-Ray.
Rate/Code
---------
PICC LINE INSERTION SERVICE $180.00/PC000
p. CENTRAL LINE MAINTENANCE
The central line maintenance rate is a per diem rate and includes supplies
needed to maintain a catheter but excludes the nursing visit. AWP minus 10% will
be paid for any medication and flushes used.
All Catheters $6.00 per diem/CL000
q. OTHER THERAPIES AND/OR SERVICES
Any therapies not included in the agreement will be negotiated on a case by case
basis.
Code for other therapies AD100
II. HOME HEALTH NURSING:
All rates are defined as visits up to two hours. Any services thereafter
will be charged at the hourly rate. The rates also include medical
supplies, travel, time and mileage. No additional payment will be made for
holidays.
1. RN Nursing Visit $ 68.00 per visit/HH000
$ 35.00 per hour/HH001
2. LVN Nursing Visit $ 48.00 per visit/HH010
$ 24.00 per hour/HH011
3. Physical Therapy $ 65.00 per visit/HH040
4. Occupational Therapy $ 65.00 per visit/HH060
5. Speech Therapy $ 65.00 per visit/HH050
6. Medical Social Worker $ 65.00 per visit/HH030
7. Home Health Aide or $ 39.00 per visit/HH020
Certified Nurses Aide $ 19.00 per hour
III. DURABLE (HOME) MEDICAL EQUIPMENT:
FHS shall reimburse PROVIDER at the fee schedule attached for all items, except
as noted for Oxygen and Respiratory equipment, and which shall be updated from
time to time at the mutual agreement of the parties.
The description of DME categories and terms are as follows:
1. CAPPED RENTAL ITEMS (CR). This category includes DME which is generally
rented monthly rather than purchased). Rental payment will be made for a maximum
of 12 months. PROVIDER must continue to supply the rented DME at no additional
charge after the maximum rental period is met. PROVIDER shall be paid a
maintenance servicing fee every six months for a capped rental item. The
maintenance and service fee shall be equal to one month rental rate for the
item.
2. FREQUENTLY SERVICED ITEMS (FS). This category includes items which require
frequent and substantial servicing in order to avoid risk to the patients health
(e.g. aspirators, IPPB machines, nebulizers). These items are rented monthly
with no rental cap as long as it is medically appropriate forthe Members
condition. FHS shall not pay a maintenance or servicing fee on these items.
3. INEXPENSIVE AND ROUTINELY PURCHASED ITEMS (IR). This includes DME whose
purchase price generally does not exceed $150.00 (Medicare rate) or DME which is
generally purchased at least 75% of the time. Payment for IR items shall be made
on a rental basis or in a lump-sum purchase amount. If rental rather than
lump-sum purchase is chosen, the total amount of rental payments may not exceed
the allowed lump-sum purchase amount.
4. OSTOMY, TRACHEOSTOMY AND UROLOGICALS (OS). These are also inexpensive
routinely purchased supplies that are required for surgically created opening,
urologic and tracheostomy care. Supplies will be limited to Usual Maximum
Quantity of Supplies as suggested on DMERC Region D Supplier Manual.
5. OXYGEN AND OXYGEN EQUIPMENT (OX). Included in this category are oxygen (both
gaseous and liquid) and all equipment and supplies used to deliver oxygen to the
patient. These items will be rented monthly with no rental cap for three months
at a time as long as it is medically appropriate. After three months rental, an
authorization extension request by the provider must be accompanied with a
follow up test of the initial indications, performed within the final 30 days of
that 90-day period. Payments for stationary oxygen system rentals and for oxygen
provided to members are included. The provider must ▇▇▇▇ on a monthly basis for
all covered oxygen equipment and/or oxygen contents furnished during a month,
regardless of the number of times delivery of oxygen or equipment was made in
that month. Because the monthly payment is all inclusive, the single monthly
▇▇▇▇ must show each reported HCPCS oxygen/equipment code only once. Further:
a. All stationary liquid oxygen systems shall include a portable liquid
oxygen set at no additional charge.
b. All oxygen concentrator and compressed oxygen stationary system
rentals must include a standby E tank at no additional charge.
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HCPC CODE DESCRIPTION AMOUNT
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E0424-E0425 Gaseous Oxygen System, Stationary $220.64
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E0430-E0431 Gaseous Oxygen System, Portable $34.68
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E0434-E0435 Liquid Oxygen System, Portable $34.68
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E0439-E0440 Liquid Oxygen System, Stationary $220.64
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E0452 BiPAP-S $211.46
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E0480 Precussor - Variable Speed $37.09
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E0550 Humidifier Jar/Cover (Heated) $43.03
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EO560 Humidifier $17.25
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E0565 Compressor, Jar $52.38
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E0570 Nebulizer, w/ Compressor $16.94
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E0575 Nebulizer, Ultrasonic $88.23
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E0600 Suction Pump - Home Model $39.30
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E0601 CPAP (excluding accessories) $90.36
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E1400-E1404 Oxygen Concentrators (all) $220.64
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6. SURGICAL DRESSINGS (SD). This category include supplies required to care for
surgical and non-surgical wounds that shall be purchased. However, FHS will not
reimburse the provider for these items on the day of a visit provided by a home
health agency or other health care providers.
7. SUPPLIES (SU). This category include supplies such as blood glucose test
strips, lancets, etc. that shall be purchased. However, FHS will NOT reimburse
the provider for these items if the care is provided by a home health agency or
care providers.
8. TRANSCUTANEOUS ELECTRICAL NERVE STIMULATORS (TENS) (TE). This category
includes only E0720 and E0730. TENS is a device which utilizes electrical
current delivered through electrodes placed on the surface of the skin to
decrease the patients perception of pain by inhibiting the transmission of
afferent pain nerve impulses and/or stimulating the release of endorphins.
Unless TENS units are purchased, supplies for the unit are included in the
rental allowance - i.e., there is no additional allowance for electrodes
(A4558), lead wires, batteries (A4630) etc.
Conditions:
1. All purchased or rental equipment shall include all medically necessary
supplies and training, to ensure delivery of the treatment prescribed.
2. FHS shall not reimburse:
o For delivery and pick up of the rented/purchased item.
o For training of the patient and/or the family on the use of the item.
o For after hours, weekend, holiday availability for delivery of
o rental/purchased DME.
3. FHS shall reimburse PROVIDER at sixty five percent (65%) of billed charges
for any HCPCS codes that are not listed in the DME fee schedule.
4. PROVIDER agrees that in no event shall total rental reimbursement exceed
the purchase price of an item.
IV. PERINATAL SERVICES:
Included in the per diem rates are all supplies, medications, nursing,
and equipment. If additional services are indicated for pre-term labor
services, i.e. hydration therapy, TPN, antibiotics, or other IV
medications, PROVIDER will be reimbursed for such services in accordance
to the fee for service rate schedule in addition to the per diem rates
below:
1. Level I Intrauterine monitor with or without oral tocolytic therapy $ 75.00 per day
2. Level II Intrauterine monitor and subcutaneous tocolytic therapy $248.00 per day
subcutaneous tocolytic therapy
3. Perinatal Non-Stress Test (one fetus) $125.00 per test
Perinatal Non-Stress Test (two fetuses) $185.00 per test
V. HOSPICE CARE SERVICES:
FHS shall reimburse PROVIDER the lesser of: (a) the per diem rates indicated
below; or (b) the Medicare Allowable rates.
Level of Care Per Diem Rate
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Hospice ▇▇▇▇▇ ▇ $95.00
Hospice ▇▇▇▇▇ ▇ $45.00
Hospice ▇▇▇▇▇ ▇ $195.00
Hospice ▇▇▇▇▇ ▇ $300.00
1. The Hospice Levels shall include the following:
Hospice Level 1 - This is designed to meet the needs of the hospice patient who
has a primary care giver in the home. The attendant/home aide component has a
maximum of 20 hours a week.
Hospice Level 2 - This level is designed to meet the needs of the hospice
patient who has a primary care giver in the home. The attendant/home health aide
component has a maximum of 60 hours a week.
Hospice Level 3 - This level is designed to meet the needs of the hospice
patient who has a primary care giver in the home. The attendant/home health aide
component has a maximum of 80 hours a week.
Hospice Level 4 - This level is designed to meet the needs of the hospice
patient who has no primary care giver in the home environment. The attendant/
home component has a maximum of 168 hours a week.
2. Services included in the per diem include, but are not limited to:
o medical and skilled nursing care
o home health aid/home maker services/paraprofessional attendants
o medical social services
o spiritual care
o bereavement and other counseling services
o volunteer assistance
o physical therapy/occupational therapy/speech therapy
o pain control/IV pain control/hydration
o nutritional counseling
o services ordered by the physician
o medications related to the terminal diagnosis
o Durable Medical Equipment to provide a safe home environment
o supplies and ordinary dressings
o maintenance care and training
3. Physical, occupational, and speech therapy for hospice patients is limited to
skilled services when improvement is expected within 60 days. Frequency of these
and other services is based on the need of the individual as reflected by the
individualized plan of care developed by PROVIDER's interdisciplinary team,
under the attending physician and authorized by FHS. The individual plan may
include, but is not limited to:
o pain and symptom control
o teaching and assisting the family in caring for the patient at
o counseling to the family for coping with terminal illness and death
o help in arranging for equipment and supplies
VI. NOTES:
1. Therapies not listed will be negotiated on a case by case basis.
2. PROVIDER agrees that the rates listed in the fee schedule contained in this
exhibit are all-inclusive and that no additional charges for such services as
in-hospital or nursing assessments, travel time, supplies, training, case
management, forms and billing, weekend or evening differentials, overtime, or
other charges will be billed to or reimbursed by FHS.
CONFIDENTIAL, PROPRIETARY AND TRADE SECRET