EXHIBIT 10
AMENDMENT TO
UNITED HEALTHCARE SERVICES, INC.
AND
UNITEDHEALTH NETWORKS, INC.
PHARMACY BENEFIT MANAGEMENT AGREEMENT
This Amendment is made to the agreement ("Agreement") between United
HealthCare Services, Inc. and UnitedHealth Networks, Inc., collectively
referred to as "United", and the entity named below ("MMMC"). The Agreement
currently sets forth the terms and conditions under which MMMC or an affiliate
shall provide or arrange for the provision of health care services to
individuals covered by a United's affiliated Health Plan pursuant to its
Medicare contract with the Health Care Financing Administration ("HCFA"). The
parties understand and agree that the Balanced Budget Act of 1997 ("BBA")
established a new program known as Medicare+Choice, which replaced Health
Plan's existing Medicare risk program. The purpose of this Amendment is to
incorporate all provisions necessary to meet the HCFA requirements for
Medicare+Choice. This Amendment is effective on August 1, 1999.
1. The Agreement shall be amended by the addition of the attached
Health Plan Medicare+Choice Requirements Addendum.
2. All other provisions of the Agreement shall remain in full force and
effect.
UNITED HEALTHCARE SERVICES, INC. MERCK MEDCO MANAGED CARE, L.L.C.
Signature /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Signature Illegible
-------------------- ------------------------
Title President Title Senior Vice President-
----------------------- Regulatory and Managed Care
Programs
---------------------------
Date 1/29/01 Date 1/24/01
------------------------ ----------------------------
UNITEDHEALTH NETWORKS, INC.
Signature /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
Title Secretary
------------------------
Date 1/26/01
------------------------
*** Represents text which has been redacted and filed separately with the
Securities and Exhange Commission pursuant to a confidentiality
treatment request pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934, as amended.
HEALTH PLAN
MEDICARE+CHOICE REQUIREMENTS ADDENDUM
In addition to PBM's obligations under the Agreement, PBM agrees, and shall
require PBM Contracting Providers to agree, as participating providers under a
United affiliated Health Plan's contract with HCFA to be a Medicare+Choice
managed care organization (hereafter the "M divided by C Contract"), to abide by
all applicable provisions of the M+C Contract and to fulfill PBM's and PBM
Contracting Provider's obligations under the Agreement in a manner consistent
with a United affiliated Health Plan's (hereafter the "Health Plan") obligations
under the M divided by C Contract. For purposes of this Addendum, "Medicare
Member" means a Health Plan's Member who is enrolled in a Medicare+Choice plan
through Health Plan. PBM and PBM Contracting Provider compliance with the M+C
Contract specifically includes, but is not limited to, the following
requirements:
1. Prompt Payment. Health Plan shall pay "clean" claims for Covered
Services within forty-five (45) days of receipt and approve or deny all
claims that are not "clean" claims within sixty (60) days from the date
of the request.
2. Medicare Compliance. PBM shall, and shall require PBM Contracting
Providers to, comply with all applicable Medicare laws and regulations
and HCFA instructions.
3. Audits and Information. In addition to PBM's and PBM Contracting
Provider's obligations under Section 5.3.2, PBM shall, and shall
require PBM Contracting Providers to, permit audits and inspection by
HCFA and/or its designees, and cooperate, assist and provide
information to HCFA and/or its designees as requested from time to
time. This provision shall survive termination of the Agreement.
4. Maintenance of Records. In addition to PBM's and PBM Contracting
Providers' obligations under Section 5.3.2, PBM shall, and shall
require PBM Contracting Providers to, retain books, contracts,
documents, papers and records, including without limitation, medical
records, patient care documentation, and other records that pertain to
any aspect of services performed, financial solvency, reconciliation of
benefit liabilities and determination of amounts payable under Health
Plan's M divided by C Contract for a minimum of six (6) years from the
end of the applicable one-year contract period in the M divided by C
Contract or the completion of an audit, or in certain instances
described in applicable Medicare+Choice regulations, for periods in
excess of six (6) years, if appropriate. PBM shall, and shall require
PBM Contracting Providers to, maintain such records accurately and
update them on a regular basis. PBM and PBM's employees and agents
shall, and shall require PBM Contracting Providers to, maintain the
confidentiality of all Medicare Member records in accordance with the
applicable laws and regulations, and shall safeguard Medicare Members'
privacy. This provision shall survive termination of the Agreement.
5. Data Collection. PBM shall submit to Health Plan, upon request, all
data necessary for Health Plan to fulfill its reporting obligations
pursuant to 42 C.F.R.SS.422.516. PBM must submit to Health Plan all
data, including medical records, necessary to characterize the content
and purpose of each encounter with a Medicare Member. PBM must certify
(based
1
on best knowledge, information and belief) the accuracy, completeness and
truthfulness of such data on certification forms provided by Health Plan.
PBM shall hold harmless and indemnify Health Plan for any fines or penalties
it may incur due to PBM's submission of inaccurate or incomplete data.
6. Accountability. PBM acknowledges, and shall require PBM Contracting
Providers to acknowledge, that Health Plan oversees and is responsible to
HCFA for any functions or responsibilities provided or performed by PBM or
PBM Contracting Providers pursuant to the M+C Contract, as applicable.
7. Delegation. If any service or activity to be performed by PBM under this
Agreement is delegated, to the extent permitted by and in accordance with
this Agreement, to a downstream entity, such entity shall enter into a
contract with PBM obligating such entity to perform such service or activity
consistent with and in compliance with the terms of this Agreement and the
M+C Contract.
8. Continued Care. In addition to PBM's and PBM Contracting Providers'
obligations pursuant to Section 3.8 of the Agreement, PBM shall, and shall
require PBM Contracting Providers to, provide Covered Services to Medicare
Members (i) for all Medicare Members, for the duration of the M+C Contract
period for which HCFA payments have been made; and (ii) for Medicare Members
who are hospitalized on the date the M+C Contract terminates or in the event
of Health Plan's or PBM's insolvency, through discharge. This provision
shall survive termination of the Agreement.
9. Compliance with Pharmacy Services Manual. PBM shall require PBM Contracting
Providers to comply with PMB's Pharmacy Services Manual, including, without
limitation, the Medicare Plus Choice Requirements addendum (the "Pharmacy
Attachment"). PBM shall comply with those requirements of the Pharmacy
Attachment applicable to the performance of PBM's obligations under this
Agreement, including, without limitation, where an obligation is placed upon
PBM Contracting Providers but such obligation may be performed or could be
violated by PBM. In the event of a conflict between any provision in this
ADDENDUM and the Pharmacy Attachment, this ADDENDUM shall govern.
2
AMENDMENT TO
UNITED HEALTHCARE SERVICES, INC.
PHARMACY BENEFIT MANAGEMENT AGREEMENT
This Amendment is made to the Pharmacy Benefit Management Agreement
("Agreement") between United HealthCare Services, Inc., UnitedHealth Networks,
Inc. (collectively "United") and Merck-Medco Managed Care, L.L.C. ("PBM") dated
November 11, 1998.
WHEREAS, the Agreement sets forth the obligations of the parties in order for
United to make available pharmacy benefit management and related services to
Health Plans and other non-Health Plan business and PBM agreed to provide such
services; and
WHEREAS, the parties desire to amend the Agreement in order to add PAID
Prescriptions, L.L.C. ("PAID") as a signatory to the Agreement.
NOW THEREFORE, in consideration of the terms and conditions set forth in this
Addendum, the parties agree as follows:
1. PAID is a subsidiary of PBM and acts as a Third Party Administrator
("TPA") for PBM on behalf of United. PAID is licensed in certain states
as a TPA as required by applicable law.
2. The parties agree that PAID is added as a signatory to the Agreement
shall perform the TPA functions in the Agreement.
3. All other provisions of the Agreement shall remain in full force and
effect.
United HealthCare Services, Inc. Marck-Medco Managed Care, L.L.C.
Signature: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Signature: Illegible
-------------------- --------------------
Title: COO Title: Vice President
------------------------ -----------------------
Date: 3/28/01 Date: 4/12/01
------------------------- -----------------------
United HealthNetworks, Inc. PAID Prescriptions, L.L.C.
Signature: Illegible Signature: Illegible
-------------------- --------------------
Title: Vice President Title: Vice President
------------------------ -----------------------
Date: 3/28/01 Date: 4/12/01
------------------------- -----------------------
LETTER AGREEMENT
United HealthCare Services, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Re: Pharmacy Benefit Management Management Agreement (the "Agreement")
between United HealthCare Services, Inc., on behalf of itself and its
affiliates from time to time, ("United HealthCare") and Merck-Medco
Managed Care, LLC, ("PBM").
United HealthCare and PBM agree to make the following changes to the
Agreement:
1. Trend Guarantee.
For the *** Period *** the parties agree that, notwithstanding
the actual PMPM, the PMPM for the *** Period shall be deemed to have
exceeded the PMPM for the Base Period by no more than ***%.
2. Conditions to Trend Guarantee.
(a) For the *** Periods *** full implementation and compliance
with the programs described in Exhibit A of this Letter
Agreement shall constitute full compliance with subsections
(iii) and (iv) of Section 5F of the Financial Appendix to the
Agreement. "Full implementation" shall mean that on a
weighted average basis at least ***% of the lives used for
calculating the PMPM will be subject to all of the Programs.
Should the Health Plans in aggregate fall below this
threshold, then United Healthcare will no longer qualify for
the Trend Guarantee until the threshold is again met.
(b) For the *** Periods ***, the effect on PMPM of the Programs
described in Exhibit A for (i) ▇▇▇-II Inhibitors, (ii)
Angiotensin Receptor Blockers and (iii) Proton Pump
Inhibitors will be measured vs the effect on drug utilization
of such Programs across *** where such Programs are in place.
The PMPM will be adjusted downward to reflect the variance,
if any, between the effectiveness of these Programs on the
PMPM and for *** where these Programs are in place.
(c) It shall be a condition to the application of the Trend
Guarantee for *** Periods *** that Prescriber Panel Edits be
reinstalled by *** and that UHG use its best efforts to
maintain Prescriber Panel Edits for the same proportion of
lives used to calculate PMPM for which the Prescriber Panel
Edits were in effect prior to ***.
3. Rebate Contracting.
(a) PBM agrees to work with United HealthCare to negotiate new or
amended rebate agreements with drug manufacturers by June 30,
2002 that will result in United HealthCare earning *** of
incremental rebates (from amounts that would have been earned
from manufacturers absent such new or amended agreements) on
an annualized basis. As a condition to PBM's guarantee of
such incremental rebates, United HealthCare agrees to use its
best efforts to coordinate its formulary initiates with PBM's
negotiations with drug manufacturers for PBM's book of
business generally.
(b) The *** included in (a) above shall be increased to *** in
the event that United HealthCare *** in a preferred status by
January 1, 2002 and maintains it on the PDL in a preferred
status until at least June 30, 2003.
(c) To the extent United HealthCare receives incremental rebates,
such rebates will reduce the calculated trend exposure.
(d) If requested by United HealthCare, PBM will prepay the
amounts set forth in (a) or (b) above by December 31, 2001.
4. Payment/Satisfaction of Trend Guarantee.
Upon execution of this Letter Agreement, PBM shall pay United
HealthCare *** which shall constitute full payment and satisfaction of
all amounts due under the Trend Guarantee for Trend Periods ending
prior to June 1, 2001.
5. Effect of this Letter Agreement.
Except as specifically modified by this Letter Agreement, the
Agreement and the letter agreement between the parties dated September
9, 1998 shall remain in effect.
6. Defined Terms.
Except as otherwise defined in this Letter Agreement,
capitalized terms shall have the meanings set forth in the Agreement.
*** Represents text which has been redacted and filed separately with the
Securities and Exchange Commission pursuant to a confidentiality
treatment request pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934, as amended.
Except as otherwise defined in this Letter Agreement,
capitalized terms shall have the meanings set forth in the Agreement.
ACCEPTED AND AGREED:
UNITED HEALTHCARE MERCK-MEDCO MANAGED
SERVICES, INC. CARE, LLC.
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------- ----------------------------------
(signature) (signature)
NAME: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ NAME: ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------- ------------------------------
TITLE: President, United Health Networks TITLE: President -- United
--------------------------------- Health Group Division
-----------------------------
DATE: June 29, 2001 DATE: June 29, 2001
--------------------------------- -----------------------------
EXHIBIT A
▇▇▇-II Inhibitors
Prescriptions will be stopped at the point of sale, except for members who can
be identified as high risk by reviewing their drug history or demographic
information.
The prescribing physician would be contacted to discuss the possibility of
using a generic NSAID.
Angiotensin Receptor Blockers
Each script would be stopped unless there was a history of prior use of an ACE
inhibitor. The conversation with the physician would focus on the possibility
of using a generic ACE inhibitor.
Proton Pump Inhibitors
The rule will use dose-duration logic to identify users of high dose therapy
that may be outside of generally recognized guidelines. This would trigger a
call to the physician to discuss dose reduction options and generic
alternatives.
Anti-influenza Therapy
The first prescription in a six-month period would process with the appropriate
quantity. The second prescription would be stopped and the criteria for
approval would be a contraindication to vaccination and an indication for
preventative therapy.
Anti-fungal Therapy for Onychomycosis
Prescriptions for Lamisil and Sporanox would process if there was concomitant
therapy for diabetes, immunosuppressive drugs, or anti-retrovirals. Otherwise,
the prescription would be stopped and the subsequent criteria would assess the
presence of one of the above three conditions or pain. If any of these are
present the prescription is approved, otherwise the prescription it is denied
as a cosmetic indication.
Human Growth Hormones
All prescriptions are stopped, diagnosis of GH deficiency or Prader-Willi
syndrome is confirmed. Approval provided for these diagnoses, otherwise coverage
is denied as experimental.
Regranex
Prescriptions with concomitant anti-diabetic therapy would process, all others
would be stopped and the diagnosis of diabetic ulcers confirmed. In the absence
of this diagnosis coverage would be denied as experimental.
Alzheimers Therapy
All prescriptions would be stopped. The diagnosis is confirmed as Alzheimer
rather than other causes of dementia, and the severity is confirmed as
mild-moderate. If either of these conditions are not met, the prescription is
denied as experimental therapy.
Anti-emetics
Quantity duration rule 7 days of therapy in a rolling 30 day period.
Provigil
All prescriptions are stopped, and the diagnosis is confirmed. Coverage is
denied for use with other CNS stimulants and for diagnoses outside of FDA
approved uses.
Interferons
All prescriptions are stopped, diagnosis is established, coverage provided for
FDA approved indications and those in which there is consensus among
professional societies that the agents are safe and efficacious. All other
indications are stopped as experimental therapy.
Other Merck-Medco rules
The remainder of Merck-Medco's standard rules and rules to be developed during
the term of the PBM Agreement will undergo analysis and modification as needed.
United HealthCare will use its best efforts to approve the installation of
rules that are consistent with providing coverage for FDA approved indications
and where there is consensus among professional societies that the agents are
safe and efficacious.
AMENDMENT
United HealthCare Services, Inc. ("United HealthCare") and Merck-Medco Managed
Care, LLC ("PBM") hereby agree to amend that certain letter agreement, executed
June 29, 2001 by and between the parties, a copy of which is attached to this
amendment as Attachment I (the "Letter Agreement"), as follows:
1. United Healthcare shall not be required to reinstall Prescriber Panel
Edits, and such reinstallation shall not be a condition to the Trend
Guarantee for *** Periods ***. Accordingly, PBM hereby waives section 2(c)
of the Letter Agreement.
2. The programs relating to ▇▇▇-II Inhibitors, Angiotensin Receptor Blockers
and Proton Pump Inhibitors (collectively, the "Programs") set forth on
Exhibit A to the Letter Agreement are hereby deleted. Accordingly, the
attached Exhibit A Restatement dated October 26, 2001 hereby replaces
Exhibit A to the Letter Agreement.
3. No PMPM adjustment relating to the Programs shall be made for *** Periods
***. Accordingly, PBM hereby waives Section 2(b) of the Letter Agreement.
4. For purposes of the *** Period *** "PMPM" for such *** Period shall mean
(i) *** of the sum of (a) the Ingredient Cost, minus (b) Copayments if
Copayments have been excluded from Ingredient Costs, minus (c) Earned PDL
Rebates, divided by (ii) the Covered Person months for the *** Period. The
PMPM adjustment set forth in the preceding sentence is a one-time
adjustment for the *** Period *** and shall not affect any succeeding ***
Periods.
5. Except as otherwise defined in this Amendment, capitalized terms shall have
the meanings set forth in the Pharmacy Benefit Management Agreement between
United HealthCare and PBM that was executed by United HealthCare on
November 11, 1998 (the "Agreement"). Except as specifically modified by
this Amendment, the Agreement and the Letter Agreement shall remain in
effect.
ACCEPTED AND AGREED as of the 26th day of October 2001.
United HealthCare Services, Inc. Merck-Medco Managed Care, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------- ---------------------------------
Title: Vice President Title: Sr. Vice President
----------------------------- -----------------------------
*** Represents text which has been redacted and filed separately with the
Securities and Exchange Commission pursuant to a confidentiality
treatment request pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934, as amended.
EXHIBIT A RESTATEMENT
OCTOBER 26, 2001
Anti-influenza Therapy
The first prescription in a six-month period would process with the appropriate
quantity. The second prescription would be stopped and the criteria for
approval would be a contraindication to vaccination and an indication for
preventative therapy.
Anti-fungal Therapy for Onychomycosis
Prescriptions for Lamisil and Sporanox would process if there was concomitant
therapy for diabetes, immunosuppressive drugs, or anti-retrovirals. Otherwise,
the prescription would be stopped and the subsequent criteria would assess the
presence of one of the above three conditions or pain. If any of these are
present, the prescription is approved; otherwise, the prescription is denied
as a cosmetic indication.
Human Growth Hormones
All prescriptions are stopped; diagnosis of GH deficiency or Prader-Willi
Syndrome is confirmed. Approval is provided for these diagnoses; otherwise,
coverage is denied as experimental.
Regranex
Prescriptions with concomitant anti-diabetic therapy would process; all others
would be stopped and the diagnosis of diabetic ulcers confirmed. In the absence
of this diagnosis, coverage would be denied as experimental.
Alzheimers Therapy
All prescriptions would be stopped. The diagnosis is confirmed as Alzheimers
rather than other causes of dementia, and the severity is confirmed as
mild-moderate. If either of these conditions are not met, the prescription is
denied as experimental therapy.
Anti-emetics
Quantity duration rule 7 days of therapy in a rolling 30 day period.
Provigil
All prescriptions are stopped, and the diagnosis is confirmed. Coverage is
denied for use with other CNS stimulants and for diagnoses outside of FDA
approved uses.
Interferons
All prescriptions are stopped, diagnosis is established, coverage provided for
FDA-approved indications and those in which there is consensus among
professional societies that the agents are safe and efficacious. All other
indications are stopped as experimental therapy.
Other Merck-Medco Rules
The remainder of Merck-Medco's standard rules, and rules to be developed during
the term of the P8M Agreement, will undergo analysis and modification as needed.
UnitedHealthCare will use its best efforts to approve the installation of rules
that are consistent with providing coverage for FDA-approved indications and
where there is consensus among professional societies that the agents are safe
and efficacious.
AMENDMENT
United HealthCare Services, Inc., on behalf of itself and its affiliates from
time to time (collectively, "United HealthCare") and Merck-Medco Managed Care,
LLC ("PBM") hereby agree to make the following changes to the Pharmacy Benefit
Management Agreement between United HealthCare and PBM that was executed by
United HealthCare on November 11, 1998 (the "Agreement"):
1. Section 4.6 of the Agreement is hereby revised to read as follows:
"4.6 MINIMUM PDL ENROLLMENT. Effective as of December 11, 2001 and
continuing throughout the term of this Agreement, United HealthCare
agrees that it shall maintain a minimum of *** Covered Persons
(including, as a subset thereof, at least *** non-Health Plan
Covered Persons) receiving services under this Agreement including
participating in United HealthCare's PDL.***
2. Section 3.15 is hereby deleted from the Agreement.
3. Except as otherwise defined in this Amendment, capitalized terms shall have
the meanings set forth in the Agreement. Except as specifically modified by
this Amendment, the Agreement as heretofore amended shall remain in effect.
ACCEPTED AND AGREED as of the 19th day of December 2001.
United HealthCare Services, Inc. Merck-Medco Managed Care, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------- ------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------- ----------------------
Title: Vice President Title: Sr. Vice President
-------------------- ---------------------
*** Represents text which has been redacted and filed separately with the
Securities and Exchange Commission pursuant to a confidentiality
treatment request pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934, as amended.