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Exhibit 10(b)
AGREEMENT
between
OHIO BUREAU OF WORKERS' COMPENSATION
and
CompManagement Health Systems, Inc.
This is an Agreement by and between CompManagement Health Systems, Inc.
(hereinafter referred to as the "MCO"), and the State of Ohio, Bureau of
Workers' Compensation (hereinafter referred to as the "Bureau"), having offices
at ▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, entered into the day, month
and year set out below.
Whereas, the Bureau is required to administer a health partnership
program (hereinafter referred to as "HPP") under the provisions of Revised Code
Section 4121.44 and the Rules promulgated under the authority of Revised Code
Section 4121.441; and,
Whereas, the Bureau desires to obtain the services of one or more
managed care organizations to provide health care management services to Ohio
employers and injured workers in accordance with the health partnership program;
and,
Whereas, the MCO desires to provide services in support of this
endeavor:
Now, therefore, the parties hereto mutually agree to the following:
1. SCOPE OF SERVICES. The MCO, in consideration of the Bureau's promise to
pay remuneration, shall undertake the work and activities enumerated, defined,
and described as follows:
The MCO shall provide medical management services for all workers'
compensation cases as a result of injuries to employees arising out of
the course and scope of employment as provided by law. The MCO services
shall include provision of a health care provider network; treatment
guidelines and utilization review to evaluate the necessity or
effectiveness of medical care; peer review and quality assurance;
procedures for sanctioning and terminating providers; medical and
vocational case management; utilization management; medical ▇▇▇▇
adjudication and payment; dispute resolution; provider, employer and
employee relations and education programs; and health care fraud
detection and applicable reporting to the Bureau. The MCO hereby agrees
to perform the services required by this Agreement in accordance with
said guidelines, standards and procedures submitted with the MCO
Application and approved by the Bureau. The MCO's Application to be a
certified MCO for the HPP is incorporated in this Agreement by
reference. The MCO hereby acknowledges that it has provided the Bureau
with a list of Certified Providers which are enrolled as its provider
panel and will notify the Bureau, enrolled employers, and employees of
any changes to the panel in accordance with the requirements of the HPP
rules. The MCO agrees to review the treatment rendered by all providers
and assist its providers in any manner or means necessary to return the
injured worker to work and to close the case. The MCO shall pay all
providers for services provided to injured workers in accordance with
the HPP rules. The MCO shall establish a quality improvement program
which shall include a peer review panel. The MCO shall profile
providers and compare treatment practices and use the information to
educate its providers and shall continually monitor its providers to
improve the services rendered to injured workers.
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The MCO further agrees to abide by all rules established for the Health
Partnership Program (HPP) as set forth Sections 4123-6-01, et seq. of
the Ohio Administrative Code (HPP rules), as may be amended during the
term of this Agreement. These rules are attached as "Appendix A" and
incorporated herein by reference. The MCO hereby acknowledges that as
part of the application process to become certified as a Bureau managed
care organization under the HPP, it has provided the Bureau with the
internal guidelines, standards and procedures established for medical
management of workers' compensation cases and that such procedures are
in accordance with all applicable Federal and Ohio laws.
Bureau policies and MCO reporting requirements are set forth in
"Appendix B: BWC Policy Overview Reference". as may be modified during
the term of this Agreement. This Appendix is attached hereto and is
incorporated herein by reference. The MCO agrees to perform the
services according to reasonable best business practices. The MCO is
responsible for communication with the Bureau Customer Service Teams
and medical management of employers' cases for employers that have
selected them and for employers that have been assigned to them.
The MCO agrees to adhere to the "CARE Systems Trading Partnership
Agreement," the receipt of which is hereby acknowledged. The MCO agrees
to perform in accordance with the electronic interface procedures
contained in the "Bureau Magnetic Media Instructions For Bureau and
Employer Data and MCO Panel Provider Data," the receipt of which is
hereby acknowledged. The MCO agrees to perform in accordance with the
provisions of the "EDI Implementation Guide" regarding the capture,
storage and transmission of case data, and the receipt of which
publication is hereby acknowledged. The MCO further agrees to indemnify
the Bureau or its contractors for or any and all costs incurred to
recover or reconstruct any data lost as a result of the MCO's failure
to adhere to said EDI procedures. EDI terminology is explained by
definition in the "EDI Data Element Dictionary," the receipt of which
is hereby acknowledged. The MCO shall adhere to the following time
period requirements for data transmissions defined in the "EDI Data
Element Dictionary". Mandatory data elements shall be reported via the
148 transaction to the Bureau within 24 hours after the injury is
reported to the MCO. Case information data elements are required to be
reported to the Bureau within 48 hours after being reported to the MCO.
Medical information data elements shall be reported to the Bureau
within 48 hours after initial treatment of the injured worker. The MCO
shall adhere to all data reporting and data accuracy requirements as
defined by the Bureau. The MCO acknowledges and agrees that the Bureau
owns all data transmitted pursuant to this Agreement.
The MCO agrees to identify and report any suspected fraudulent or
deceptive behavior as defined in O.R.C. Section 2913.01(A) and (B),
O.R.C. Section 2913.48 and the criteria and requirements attached
hereto as "Appendix C: Fraud/Special Investigations-MCO Fraud Reporting
and Referral Requirements", as may be modified during the term of this
Agreement, committed by injured workers, employers, providers or any
other person or entity to the Bureau's Fraud/Special Investigations
Department. The MCO agrees to report these incidents and shall supply
supporting preliminary documentation to the Bureau's Fraud/Special
Investigations Department within ten (10) working days of discovery.
The MCO and it agents, subcontractors and assignees agree to provide
the Bureau's Fraud/Special Investigations Department with immediate and
reasonable investigative access to any and all records, data,
electronic storage media, personnel and information relating to any
subjects of an investigation. The Bureau agrees to provide the MCO with
fraud reporting criteria, requirements and processes as defined in
Appendix C. The Bureau and MCO agree to jointly develop and provide
supportive training to the MCO and to the Bureau's Fraud/Special
Investigations Department
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personnel in the identification and detection of fraud or deceptive
behavior or patterns. The Bureau and the MCO agree to Jointly develop
and refine detection, reporting and recovery process as needed.
On or before June 30, 1998, the Bureau shall require an independent
auditor's report on the policies and procedures placed in operation at
the MCO and tests of operating effectiveness (Statement on Auditing
Standards ▇▇. ▇▇, ▇▇▇▇▇ ▇ Report). This report shall cover at a minimum
a ten-month period occurring between July 1, 1997, and June 30, 1998.
During the term of this Agreement the MCO shall submit such reports on
or before June 30 of each year covering at a minimum a ten-month period
occurring between July I of the preceding year and the filing deadline.
On or before June 30, 1998, the Bureau shall require independently
audited financial statements from the MCO. The audit report shall cover
a twelve month period ending between July 1, 1997, and June 30, 1998.
During the term of this Agreement, the MCO shall submit such reports on
or before June 30 of each year covering the MCO's most recent fiscal
year.
The parties agree that the cases subject to this Agreement shall be all
cases of employers that select the MCO and all cases of employers
assigned to the MCO, except that for cases involving injuries prior to
March 1, 1997, the groups of cases shall be managed in accordance with
the timeframes specified in "Appendix D: MCO Payment Methodology", as
may be modified during the term of this Agreement. This Appendix is
appended hereto and incorporated by reference.
In addition to managing the cases of employers that select the MCO, the
MCO agrees that the Bureau may assign other employers to the MCO and
the MCO shall service those employers in accordance with the provisions
of this Agreement. The MCO agrees that the Bureau may revoke such
assignment for good cause. Administrative error shall be considered to
be good cause for such revocation of assignment. In the event an
assignment is revoked, the MCO shall provide the Bureau with all
relevant information relating to the cases subject to the assignment
revocation.
It is agreed that the MCO shall have the right to limit assignment and
employer selection by providing the Bureau with written notice that it
is at capacity and that it will accept no further employer selections
or assignments as of the date identified in the notice. The request
should fully disclose and detail any and all reasons for the capacity
limitation request and it should detail the counties where capacity
will be limited. It is further agreed that the capacity limits will
remain in effect for a minimum of twelve (12) months.
2. AMOUNT AND METHOD OF PAYMENT
A. PREMIUM-BASED PAYMENTS. The parties agree to the payment
calculations and the payment schedules described in Appendix D.
B. REIMBURSEMENT FOR PROVIDERS' SERVICES. The MCO agrees to submit to
the Bureau electronic invoices for services performed by the providers in cases
it is managing pursuant to this Agreement. The Bureau agrees to pay properly
submitted electronic invoice(s), subject to approval by the Bureau's
Administrator, or designee, of the electronic invoice and the work represented
thereby, but such approval shall not unreasonably be withheld. The Bureau shall
only pay for authorized provider fees in accordance with the HPP rules. The
Bureau shall use its best efforts to pay the MCO within seven (7) calendar days
of receipt of any electronic invoice(s) by the MCO; however, the required
payment date of such electronic invoices shall be thirty (30) calendar days from
receipt of a proper invoice and such invoices shall accrue interest, in
accordance with the provisions of Revised Code Section 126.30. The MCO shall
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submit electronic invoices at a minimum of two times per week via the 837
transaction. The MCO agrees to follow the procedures in the "BWC Policy Overview
Reference" included in Appendix B.
3. TIME OF PERFORMANCE. The MCO and the Bureau agree that, contingent upon
compliance with any and all conditions precedent as provided for herein, all
services required to be performed pursuant to this Agreement shall commence in
accordance with the schedule attached hereto in Appendix D, and shall continue
for two (2) years.
Except for the obligations, promises, covenants and indemnities set
forth in Sections 1,2 and 27 of this Agreement, the obligations, promises,
covenants and indemnities set forth in the remainder of this Agreement and any
documents or portions thereof referenced herein or any subsequent modifications
thereto shall survive termination of this Agreement by either party for any
reason. It is agreed that the Bureau will reimburse the MCO for providers'
services in accordance with Section 2 (B) of this Agreement only if such
invoices are submitted within sixty (60) days of the termination date and only
if such payment is not subject to deduction in accordance with the provisions of
Sections 5 and 6.
This Agreement shall become effective upon the execution by all parties
to the Agreement, and on compliance with any and all conditions precedent.
Subject to mutual agreement, the period covered by this Agreement under the same
terms and conditions stated herein may be renewed for one (1) additional period
of two (2) years, not to exceed a total of four years. All renewals are
conditioned upon the MCO meeting any and all re-certification requirements in
effect at the time of the renewal.
4. EXPENSES. The Bureau shall not be required to pay for or reimburse
the MCO for any other expenses incurred or paid by the MCO in connection with
the performance of services, including publication, travel and staffing
requirements, pursuant to this Agreement. The payment of such expenses is the
sole responsibility of the MCO and not the responsibility of the Bureau.
5. TERMINATION. The Bureau may cancel this Agreement at any time prior
to the commencement of services. Furthermore, the MCO shall have the right to
cancel this Agreement upon ninety (90) days written notice. In the event that
the MCO executes its right to terminate this Agreement, the MCO will develop
with the Bureau a transition plan for the transfer of services to a new MCO
selected by employers or assigned by the Bureau. The transition plan shall
include but not limited to the following: transfer of services, transfer of case
information to a new MCO, uninterrupted service to injured workers, ▇▇▇▇
adjudication information for providers, payment plan and refund of overpayment
by the Bureau. In the event the MCO executes its right to terminate this
agreement, the MCO shall not be relieved of any liability for damages sustained
by the Bureau, and the Bureau may withhold further payment due to the MCO
pursuant to this Agreement or otherwise, for the purpose of set-off until such
time as damages due to the Bureau are determined.
The MCO may cancel its duties and obligations under this Agreement at
any time prior to the commencement of services upon notice to the Chief of
Medical Management and Cost Containment of the Bureau, provided that such
termination is without prejudice to the State of Ohio.
The rights of cancellation to which reference is made in this Agreement
are not intended to be exclusive and are in addition to any other rights and
remedies available to either party at law or in equity.
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6. DEFAULT. The Bureau declares, and the MCO acknowledges, that the
Bureau may suffer damages due to the failure of the MCO to act in accordance
with the specification, terms and conditions of the Agreement. The MCO agrees
that if the Bureau does not give prompt notice of such failure the Bureau has
NOT WAIVED any of its rights or remedies concerning the failure of performance
by the MCO.
The parties understand that the Bureau may begin proceedings to
decertify the MCO if it fails to perform satisfactorily under this Agreement.
Unless the failure is a result of a force majeure as defined herein, the failure
shall constitute an event of default on the part of the MCO and the Bureau shall
begin proceedings to decertify the MCO.
In the event that a MCO is decertified, the MCO shall be in default and
may be held liable for any additional costs the Bureau incurs in seeking
replacement services. In addition, the MCO may be held liable for liquidated
damages prior to cancellation if the MCO has failed to deliver the service. The
Bureau reserves the right to deduct from any payments due to the MCO liquidated
damages of five percent (5%) of the total annual premium of all employers
covered by this Agreement with the MCO.
MCO acknowledges and agrees that in the event of a breach by the MCO of
the terms of this Agreement, the damages which will be sustained by the Bureau
are not capable of reasonable estimation and the liquidated damages for which
provision is made herein are reasonable under the circumstances. The MCO agrees
that it may be held liable for liquidated damages in addition to the other
remedies available to the Bureau for which provision is made in this Agreement.
7. FORCE MAJEURE. Except as otherwise provided herein, neither the MCO
nor the Bureau shall be liable to the other for any delay or failure of
performance of any provisions contained herein, nor shall any such delay or
failure of performance constitute default hereunder, to the extent that such
delay or failure is caused by force majeure. The term force majeure, as used
herein shall mean without limitation: acts of God, such as epidemics; lightning;
earthquake; fire; storms; tornadoes; floods; washouts; droughts, or other severe
weather disturbances; explosions; arrests; restraint of government and people;
and other such events or any other cause which could not be reasonably foreseen
in the exercise of ordinary care, and which is beyond the reasonable control of
the party affected and said party is unable to prevent.
8. PERFORMANCE BOND. The Bureau may require a performance bond or other
security acceptable to the Bureau in the amount of five percent (5%) of the
total annual premium of all employers covered by this Agreement with the MCO,
which bond shall be submitted by the MCO to the Bureau no later than sixty (60)
days from the execution of this Agreement. When the MCO begins management of the
group of cases incurred on or after October 20, 1993, and before March 1, 1997,
(the "Beta" cases as defined in Appendix D), the bond or other security
acceptable to the Bureau shall be increased to ten percent (10%) of the total
annual premium of all employers covered by this Agreement with the MCO, which
additional bond shall be submitted by the MCO to the Bureau prior to the
acceptance of the "Beta" cases.
The purpose of the bond is to ensure proper performance by the MCO. A
standard bond form from any company authorized to do business within the State
of Ohio is acceptable. The bond shall be made payable to the Treasurer, State of
Ohio, referencing this Agreement. The bond shall remain in effect for the
duration of the Agreement and any renewals thereto. Any action on the part of
the MCO or its bonding company to revoke or cancel the bond prior to the
expiration of the Agreement or any renewal thereto, will be considered as a
breach of this Agreement and will result in the immediate cancellation of this
Agreement. Should this occur, the MCO will be held liable for any additional
costs incurred by the Bureau in seeking replacement services.
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9. GENERAL AND PROFESSIONAL LIABILITY INSURANCE. The MCO shall maintain
general and professional liability insurance against claims for bodily injury,
personal injury, death or property damage arising from the services performed by
the MCO, its employees, agents, representatives, or subcontractors, under this
Agreement, effective March 1, 1997, and to continue for the duration of this
Agreement together with any renewals. The Bureau shall be named as an additional
insured under this insurance. Such insurance shall afford initial protection of
not less than three million ($3,000,000.00) for each occurrence with respect to
bodily injury, personal injury or death and not less than three million
($3,000,000.00) for each occurrence with respect to property damage.
10. AMENDMENTS, MODIFICATIONS, SUPPLEMENTS AND READINGS. The parties
may, by mutual agreement, amend, modify, supplement or rescind the terms of this
Agreement. The term "this Agreement" shall be deemed to include any such future
amendments, modifications, renewals, extensions, and supplements. Any such
amendment, modification, renewal, extension, supplement or rescission shall not
be effective unless expressed in writing and signed by the parties hereto.
Any change in the business organization of the MCO that affects its
organizational structure or financial structure must be immediately reported to
the Chief of Medical Management and Cost Containment of the Bureau.
1. MERGER CLAUSE. It is mutually understood and agreed that this
Agreement, with its appendices, and the MCO's Application, with any amendments,
and the "MCO Application & Requirements Training Manual" are incorporated by
reference into this Agreement, and together, represent the entire agreement
between the MCO and the Bureau. The parties have entered into no agreements,
express or implied, other than the Agreement set forth in this writing. It is
further agreed that no parole representation of any amendment, modification,
supplement or rescission of the terms set forth herein shall be given any force
or effect unless such amendment, modification, supplement or rescission shall
have been expressed in writing and signed by the parties and meet any and all
conditions precedent deemed applicable by the Bureau.
12. ORDER OF PRIORITIES. To the extent that the terms and provisions of
the MCO's Application, with any amendments, may be inconsistent with this
writing, and cannot be harmonized herewith, the terms and provisions of this
Agreement shall control followed in order of priority by the Application, with
any amendments, then the "MCO Application & Requirements Training Manual".
13 SEVERABILITY. If for any reason any provision or part of this
Agreement is declared void, invalid, or unenforceable, the validity of the rest
of this Agreement shall not be affected and the Agreement shall remain in full
force and effect with the void, invalid, or unenforceable provision(s)
eliminated.
14. WAIVER. No waiver of any provision of this Agreement shall be valid
unless it is in writing and signed by the party against whom the waiver is
sought to be enforced. Failure of a party to insist upon strict performance of
any provision of this Agreement in any one or more instances shall not be
construed as a waiver or relinquishment of the right to insist upon strict
compliance with such provision in the future.
15. ASSIGNABILITY AND TRANSFER OF RIGHTS AND RESPONSIBILITIES. The MCO
shall not assign, sell, or subcontract any rights, duties or obligations
acquired pursuant to this Agreement without prior written approval by the
Bureau. Such prior written approval by the Bureau shall not be construed to
modify or abrogate the MCO's responsibility and liability pursuant to this
Agreement. Any transfer of the ownership of the MCO shall require
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review and Bureau approval before any rights or liabilities of the MCO pursuant
to this Agreement may be assigned to or assumed by a transferee. In the event
that the MCO assigns or subcontracts its duties or obligations under this
Agreement, the MCO will develop with the Bureau a transition plan for the
transfer of services to a new MCO selected by employers or assigned by the
Bureau. The transition plan shall include but not limited to the following:
transfer of services, transfer of case information to a new MCO, uninterrupted
service to injured workers, ▇▇▇▇ adjudication information for providers, payment
plan and refund of overpayment by the Bureau. The MCO shall pay any related
expenses.
16. NON-DISCRIMINATION. The hiring of employees for the performance of
work under this Agreement shall be done in accordance with Ohio Revised Code
Sections 153.59 and 153.591, and the Governor's Executive Order of January 27,
1972, and the Governor's amended Executive Order 84-9 of November 30, 1984. The
MCO shall not discriminate against or intimidate any person hired for the
performance of the work by reason of race, color, religion, national origin,
ancestry, sex, handicap; or disability as that term is defined by the Americans
with Disabilities Act (ADA). For any violation, the MCO shall suffer such
penalties as provided for in Ohio Revised Code Section 153.60 and the Governor's
Executive Order of January 27, 1972, or any applicable federal civil or criminal
penalties.
17. INDEPENDENT MCO RELATIONSHIP. It is mutually understood and agreed
that the MCO is at all times acting as an independent MCO in performing services
under this Agreement and shall be responsible for compliance with all laws,
rules, regulations involving, but not limited to, employment of labor, hours of
labor, health and safety, working conditions and payment of wages. The persons
provided by the MCO shall be solely the MCO's employees and subcontractors of
the MCO and shall not be considered employees of the Bureau. The MCO shall be
responsible for payment of federal, state, and municipal taxes and costs such as
social security, unemployment, workers' compensation, disability insurance, and
federal and state withholding with respect to its employees.
18. CONFIDENTIALITY. The MCO agrees that all work performed in
connection with the services performed hereunder shall be subject to the
confidentiality laws of this state. Such information may not be released to any
person other than authorized representatives of the Bureau, unless at the
Bureau's direction. The MCO agrees to keep confidential any knowledge acquired
in the course of performance of services hereunder of the contents of
confidential records of the Bureau. In addition to the foregoing prohibition,
the MCO, its officers, agents, employees, representatives, subcontractors and
assigns shall keep confidential all information, in whatever form obtained, in
the performance of this Agreement.
19. PROPRIETARY RIGHTS. Any and all documents and information released
by the Bureau to the MCO, or submitted by the MCO, pursuant to this Agreement
shall remain, at all times, the exclusive property of the Bureau.
20. INSPECTION OF MCO RECORDS. The MCO shall permit any authorized
representative of the Bureau to inspect, copy and audit such records, books,
vouchers, invoices, and medical ▇▇▇▇ payment information as is reasonably
required to substantiate the fees billed to or paid by the Bureau, upon prior
written notice, during normal working hours.
21. HOLD HARMLESS AND INDEMNIFICATION. The MCO shall hold the Bureau
harmless and indemnify the Bureau from and against any and all claims, demands,
losses, and causes of action asserted against or incurred by the Bureau which
result from or arise out of the work performed by the MCO, its agents,
employees, representatives, and subcontractors, under this Agreement, or any
errors, omissions, negligent conduct or intentional acts of the MCO, its agents,
employees, representatives, and subcontractors.
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22. LIMITATION OF LIABILITY. The Bureau's liability for damages for
services rendered pursuant to this Agreement, whether in contract or in tort,
shall not exceed the total amount of compensation payable to the MCO pursuant to
this Agreement, or the amount of direct damages incurred by the MCO, whichever
is less. The MCO'S sole and exclusive remedies for the Bureau's failure to
perform shall be as set forth herein. In no event shall the Bureau be liable for
any consequential, incidental, or punitive losses, damages, expenses, including
the loss of profits, even if the Bureau knew or should have known of the
possibility of such damages.
23. APPLICABLE STATE LAW. The terms and conditions contained herein
shall be construed and interpreted in accordance with the laws of the State of
Ohio. Any and all disputes arising from this Agreement shall be governed by the
laws of the State of Ohio, and the parties mutually agree to submit exclusively
to the jurisdiction of Ohio in any and all disputes arising from this Agreement.
24. COMPLIANCE WITH THE LAWS OF OHIO. The MCO agrees and covenants that
it at this time is and for the duration of this Agreement will not knowingly
violate the laws of Ohio specifically including, but not limited to, the
workers' compensation laws of Ohio, the corporate laws of Ohio, and all rules
and regulations promulgated under those laws.
25. CONFLICTS OF INTEREST. The MCO affirms that it presently has no
interest and shall not acquire any interest, direct or indirect, which would
conflict, in any manner or degree, with the performance of services which are
required to be performed under any resulting Agreement. In addition, the MCO
affirms that a person who is or may become an agent of MCO not having such
interest upon the execution of this Agreement shall likewise advise the Bureau
in the event it acquires such interest during the term of this Agreement.
Furthermore, any such person who is or may become an agent of MCO who
acquires an incompatible or conflicting personal interest, prior to, on or after
the effective date of this Agreement, or who involuntarily acquires any such
incompatible or conflicting personal interest, shall immediately disclose his or
her interest to the Bureau in writing. Thereafter, such person shall not
participate in any action affecting the work under this Agreement, unless the
Bureau shall determine that, in light of the personal interest disclosed, such
person's participation in any such action would not be contrary to the public
interest.
26. HEADINGS. The headings in this Agreement and its appendices are for
convenience only and are not intended to be part of, or to affect the
interpretation of, the terms of this Agreement.
27. CERTIFICATION. The MCO is certified for the counties listed in
Appendix E of this Agreement, as may be modified during the term of this
Agreement, subject to the conditions precedent herein described.
28. OHIO ELECTIONS LAW. The MCO affirms that, as applicable to the MCO,
no party listed in Division (1) or (J) of Section 3517.13 of the Revised Code,
or spouse of such party, has made, as an individual, within the two previous
calendar years, one or more contributions totaling in excess of $1,000.00 to the
Governor of Ohio or to his campaign committees.
IN WITNESS WHEREOF, the parties hereunto affix their signatures this
12th day of February, 1997.
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IN WITNESS WHEREOF, the parties hereunto affix their signatures this 12th day of
February, 1997.
CompManagement Health Systems, Inc. State of Ohio
Tax ID #▇▇-▇▇▇▇▇▇▇ Bureau of Workers' Compensation
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------- --------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President Administrator
RECEIPT FOR SIGNED MCO AGREEMENT
BWC's MCO Business Unit acknowledges that your signed MCO Agreement for
CompManagement Health Systems, Inc. was received on by 2-13-97 BWC staff member
. If you have not already completed your EDI testing, please note
that you must successfully complete testing on the 148 and 837 transactions
prior to 5:00 p.m. on Friday, February 14, 1997 in order to become certified.
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ADDENDUM
The following is an Addendum to the Agreement ("Agreement") as entered
into on CompManagement February 12, 1997, by and between CompManagement Health
Systems Inc. (the "MCO") with principal offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the
State of Ohio, Bureau of Workers' Compensation ("the Bureau"), having offices at
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
Whereas, the MCO and the Bureau have entered into this Agreement under
which the MCO is providing health care management services to Ohio employers as
a Managed Care Organization participating in the Health Partnership Program
("HPP); and
Whereas, under Section 2, "Amount and Method of Payment", and Appendix
D, "MCO -Payment Methodology" of this Agreement, the MCO is eligible to receive
Incentive and Performance Fees in an amount to be determined by its performance
during calendar years 1997 and 1998 as measured by certain enumerated criteria;
and
Whereas, the implementation of the HPP to date has demonstrated to the
MCO and the Bureau that utilizing the criteria initially set forth in Section 2
and Appendix D of this Agreement as the basis for establishing the MCO's right
to Incentive and Performance Fees for calendar years 1997 and 1998 would be both
impractical and inappropriate; and
Whereas, all fees to be paid to the MCO under Section 2 and Appendix D
of this Agreement, including Administrative, Incentive and Performance Fees, are
calculated on the basis of a percentage of the annual premiums of those
employers who have selected or been assigned to the MCO; and
Whereas, subsequent to the MCO and the Bureau entering into this
Agreement, the Workers' Compensation Oversight Commission approved premium rate
reductions for both public and private employers, and the implementation of
these premium rate reductions may result in a decrease in the fees to be paid to
the MCO under Section 2 and Appendix D of this Agreement; and
Whereas, the MCO and the Bureau both wish to replace the criteria
initially set forth in Section 2 and Appendix D of this Agreement for
establishing the MCO's right to Incentive and that the fees paid to the MCO
under Section 2 and Appendix D of this Agreement do not decrease due to the
employer premium rate reductions announced subsequent to the MCO and the Bureau
entering into this Agreement;
Now, therefore, the parties mutually agree that the following
modifications shall be made to the Agreement:
1. The MCO and the Bureau mutually agree that all provisions in Appendix D
regarding the calculation of the 1998 Performance Fee are hereby
revoked, and that the 1998 Performance Fee shall be calculated using
the following provisions:
1998 Performance Fee
* The Bureau shall pay to the MCO, in four (4) quarterly installments of
up to one-half of one percent (.5%) each quarter, a variable fee up to
a maximum total over the entire 1998 calendar year of two (2%) percent
of the premium of those employers who have selected or been assigned to
the MCO. The calculation of each quarterly payment shall be based on
the MCO's performance during the quarter on the following measurements,
11
which shall be equally weighted, each counting for one-fourth (1/4) of
the quarterly payment:
FROI Timing - Defined as the average number of calendar days
between Date of Injury (DOI) and Filing Date for all claims
(with a DOI of March 1, 1997 or later) filed during the
quarter, excluding the five percent (5%) of claims with the
longest lag time between DOI and Filing Date. The MCO's
eligibility for this portion of the quarterly payment shall be
prorated between low and high benchmarks (which are set forth
in Appendix H of this Agreement, which is attached hereto and
is incorporated herein by reference) according to the
following formula:
MCO score <= Low Benchmark = 100% of the 1/4 portion
MCO score > High Benchmark = 0% of the 1/4 portion
If MCO score between Low and High Benchmarks, then
((High Benchmark + .0000000000001) - MCO score) *
(100/(High Benchmark - Low Benchmark)/100) = % of the
1/4 portion
An example of the application of this formula is set forth in
Appendix I of this Agreement, which is attached hereto and is
incorporated herein by reference.
12
Return to Work Rate - Defined as the ratio of the number of
claims where temporary total compensation has been stopped for
at least 90 days to the number of claims that received
temporary total compensation or had a return to work (RTW)
less death and permanent total disability claims. The MCO's
eligibility for this portion of the quarterly payment shall be
calculated based on all "Alpha" lost time claims (lost time
claims with a DOI of March 1, 1997 or later) for the year
prior to the quarter being measured, and shall be prorated
between high and low benchmarks (which are set forth in
Appendix H of this Agreement, which is attached hereto and is
incorporated herein by reference) according to the following
formula:
MCO score >= High Benchmark = 100% of the 1/4 portion
MCO score < Low Benchmark = 0% of the 1/4 portion
If MCO score between High and Low Benchmarks, then
(MCO score -(Low Benchmark - .0000000000001)) *
(100/(High Benchmark - Low Benchmark)/100) = % of the
1/4 portion
An example of the application of this formula is set forth in
Appendix I of this Agreement, which is attached hereto and is
incorporated herein by reference.
MCO ▇▇▇▇ Payment - Defined as the average number of days from
the date on which the MCO receives funds from BWC to pay a
provider to the date on which the MCO issues a check to the
provider, based on Bureau audit of a sample of those claims
administered by the MCO. The MCO's eligibility to receive this
portion of the quarterly payment shall be determined on an all
or nothing basis, with the MCO receiving this 1/4 portion of
the payment if its performance on this measure during the
quarter is less than or equal to the benchmark of 7.00
business days.
Turnaround of FROIs - MCO to Bureau - Defined as the average
number of days between FROI receipt by the MCO and the MCO's
filing of the FROI with the Bureau, based on all claims filed
during the quarter (with a DOI of March 1, 1997 or later) and
determined by Bureau audit of the MCO's FROI documentation.
The MCO's eligibility to receive this portion of the quarterly
payment shall be determined on an all or nothing basis, with
the MCO receiving this 1/4 portion of the payment if its
performance on this measure during the quarter is less than or
equal to the benchmark of 3.00 calendar days.
* The MCO's quarterly 1998 Performance Fee payments shall be calculated
for the following periods: 1st quarter -- January 1, 1998 to March 31,
1998; 2nd quarter -- April 1, 1998 to June 30, 1998; 3rd quarter --
July 1, 1998 to September 30, 1998; and 4th quarter -- October 1, 1998
to December 31, 1998. The Performance Fee payment for the 1st quarter,
1998 shall be calculated using the MCO's Administrative Fee Payment
premium base for April, 1998; the Performance Fee payment for the 2nd
quarter, 1998 shall be calculated using the MCO's Administrative Fee
payment premium base for July, 1998; and the Performance Fee payment
for the 3rd and 4th quarters, 1998 shall be calculated using the MCO's
Administrative Fee payment premium base for September, 1998.
* Payments earned by the MCO during each quarter shall be calculated and
paid to the MCO by the Bureau no later than 45 days after the end of
that quarter.
13
* The 1998 Performance Fee measurement criteria, including benchmark
performance levels, are more fully set forth in Appendix H of this
Agreement, which is attached hereto and is incorporated herein by
reference.
2. The MCO and the Bureau mutually agree that all provisions in Appendix D
regarding the calculation of the 1998 Incentive Fee are hereby revoked,
and that the 1998 Incentive Fee shall be calculated using the following
provisions:
1998 Incentive Fee
* The Bureau shall pay to the MCO, in four (4) quarterly installments of
up to one-quarter of one percent (.25%) each quarter, a variable
incentive fee up to a maximum total over the entire 1998 calendar year
of one percent (1%) of the premium of those employers who have selected
or been assigned to the MCO. The calculation of each quarterly payment
shall be based on the MCO's performance during the quarter on the
following measurements, which shall be equally weighted, each counting
for one-third (1/3) of the quarterly payment:
Employer Satisfaction - The MCO's eligibility for this portion
of the quarterly payment shall be based on the MCO's score on
an employer satisfaction survey (to be conducted by the
Bureau), and shall be prorated between high and low benchmarks
(which are set forth in Appendix H of this Agreement, which is
attached hereto and is incorporated herein by reference)
according to the following formula:
MCO score >= High Benchmark = 100% of the 1/3 portion
MCO score < Low Benchmark = 0% of the 1/3 portion
If MCO score between High and Low Benchmarks, then
(MCO score -(Low Benchmark - .0000000000001)) *
(100/(High Benchmark - Low Benchmark)/100) = % of the
1/3 portion
An example of the application of this formula is set forth in
Appendix I of this Agreement, which is attached hereto and is
incorporated herein by reference.
Injured Worker Satisfaction - The MCO's eligibility for this
portion of the quarterly payment shall be based on the MCO's
score on an injured worker satisfaction survey (to be
conducted by the Bureau), and shall be prorated between high
and low benchmarks (which are set forth in Appendix H of this
Agreement, which is attached hereto and is incorporated herein
by reference) according to the following formula:
MCO score >= High Benchmark = 100% of the 1/3 portion
MCO score < Low Benchmark = 0% of the 1/3 portion
If MCO score between High and Low Benchmarks, then
(MCO score -(Low Benchmark - .0000000000001)) *
(100/(High Benchmark - Low Benchmark)/100) = % of the
1/3 portion
14
An example of the application of this formula is set forth in
Appendix I of this Agreement, which is attached hereto and is
incorporated herein by reference.
▇▇▇▇ Timing: DOS-BWC - Defined as the average lag time in
calendar days from the date that a medical service was
provided in a claim administered by the MCO ("Date of Service"
or DOS) to the date that the Bureau receives a ▇▇▇▇(s) for
that service from the MCO. The MCO's eligibility for this
portion of the quarterly payment shall be calculated on the
basis of all bills with a paid amount greater than $0.00
received by the Bureau from the MCO during the quarter, and
shall be prorated between low and high benchmarks (which are
set forth in Appendix H of this Agreement, which is attached
hereto and is incorporated herein by reference) according to
the following formula:
MCO score <= Low Benchmark 100% of the 1/3 portion
MCO score > High Benchmark = 0% of the 113 portion
If MCO score between Low and High Benchmarks, then
((High Benchmark + .0000000000001) - MCO score) *
(100/(High Benchmark - Low Benchmark)/100) = % of the
1/3 portion
An example of the application of this formula is set forth in
Appendix I of this Agreement, which is attached hereto and is
incorporated herein by reference.
* The MCO's quarterly 1998 Incentive Fee payments shall be calculated
for the following periods: 1st quarter -- January 1, 1998 to March 31,
1998; 2nd quarter -- April 1, 1998 to June 30, 1998; 3rd quarter --
July 1, 1998 to September 30, 1998; and 4th quarter -- October 1, 1998
to December 31, 1998. The Incentive Fee payment for the 1st quarter,
1998 shall be calculated using the MCO's Administrative Fee Payment
premium base for April, 1998; the Incentive Fee payment for the 2nd
quarter, 1998 shall be calculated using the MCO's Administrative Fee
payment premium base for July, 1998; and the Incentive Fee payment for
the 3rd and 4th quarters, 1998 shall be calculated using the MCO's
Administrative Fee payment premium base for September, 1998.
* Payments earned by the MCO during each quarter shall be calculated and
paid to the MCO by the Bureau no later than 45 days after the end of
that quarter.
* The 1998 Incentive Fee measurement criteria, including benchmark
performance levels, are more fully set forth in Appendix H of this
Agreement, which is attached hereto and is incorporated herein by
reference.
3. In consideration for the foregoing promises, the MCO and the Bureau
mutually agree that all provisions in Appendix D regarding the
calculation of the 1998 Administrative Fee are hereby revoked, and that
all administrative fee payments due to the MCO for calendar year 1998
shall be calculated as a fixed percentage of the applicable premium of
those employers who have selected or been assigned to the MCO, in
accordance with the provisions of Rule 4123-6-13 of the Ohio
Administrative Code, as follows:
For each of the months of January, February, March, April,
May, June, July, August, and September, 1998, the Bureau shall
pay to the MCO one-twelfth (1/12) of three percent (3%) of the
applicable premium of those employers who have selected or
been assigned to the MCO.
15
For each of the months of October, November and December,
1998, the Bureau shall pay to the MCO one-twelfth (1/12) of
that percentage (%) of the applicable premium of those
employers who have selected or been assigned to the MCO which
results in an amount equal to the Administrative Fee payment
made to the MCO for the month of September, 1998.
Administrative Fee payments shall be made to the MCO by the
Bureau not later than the 15th of each month.
In witness whereof, the parties hereto, each acting under due and
proper authority, have executed this Agreement as of this 2nd day of February,
1998.
CompManagement Health Systems,Inc. State of Ohio
Tax ID #▇▇-▇▇▇▇▇▇▇ Bureau of Workers' Compensation
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President Administrator