PROVIDER AGREEMENT BETWEEN STATE OF OHIO
Exhibit
10.1
BETWEEN
STATE
OF
OHIO
DEPARTMENT
OF JOB AND FAMILY SERVICES
AND
WELLCARE
OF OHIO, INC.
Amendment
No. 1
Pursuant
to Article IX.A. the Provider Agreement between the State of Ohio, Department
of
Job and Family Services, (hereinafter referred to as "ODJFS") and WELLCARE
OF
OHIO, INC. (hereinafter referred to as "MCP") for the Aged, Blind or Disabled
(hereinafter referred to as "ABD") population dated December 1, 2006, is hereby
amended as follows:
1.
Appendix J is modified as attached.
2.
All
other terms of the provider agreement are hereby affirmed.
The
amendment contained herein shall be effective February 15, 2007.
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WELLCARE
OF OHIO, INC.
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BY:
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/s/
▇▇▇▇ ▇▇▇▇▇
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DATE:
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2/12/2007
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▇▇▇▇
▇. ▇▇▇▇▇, PRESIDENT & CEO
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OHIO
DEPARTMENT OF JOB AND FAMILY SERVICES
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BY:
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/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇-▇▇▇▇▇, Director
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DATE:
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2/15/2007
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▇▇▇▇▇
▇. ▇▇▇▇▇-▇▇▇▇▇▇, DIRECTOR
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APPENDIX
J
FINANCIAL
PERFORMANCE
ABD
ELIGIBLE POPULATION
MCP
:
WellCare of Ohio, Inc.
1.
SUBMISSION OF FINANCIAL STATEMENTS AND REPORTS
MCPs
must
submit the following financial reports to ODJFS:
a.
The
National Association of Insurance Commissioners (NAIC) quarterly and annual
Health Statements (hereafter referred to as the "Financial Statements"), as
outlined in Ohio Administrative Code (OAC) rule 5101:3-26-09(B). The Financial
Statements must include all required Health Statement filings, schedules and
exhibits as stated in the NAIC Annual Health Statement Instructions including,
but not limited to, the following sections: Assets, Liabilities, Capital and
Surplus Account, Cash Flow, Analysis of Operations by Lines of Business,
Five-Year Historical Data, and the Exhibit of Premiums, Enrollment and
Utilization. The Financial Statements must be submitted to BMHC even if the
Ohio
Department of Insurance (ODI) does not require the MCP to submit these
statements to ODI. A signed hard copy and an electronic copy of the reports
in
the NAIC-approved format must both be provided to ODJFS;
b.
Hard
copies of annual financial statements for those entities who have an ownership
interest totaling five percent or more in the MCP or an indirect interest of
five percent or more, or a combination of direct and indirect interest equal
to
five percent or more in the MCP;
c.
Annual
audited Financial Statements prepared by a licensed independent external auditor
as submitted to the ODI, as outlined in OAC rule 5101:3-26-09(B);
d.
Medicaid Managed Care Plan Annual Ohio Department of Job and Family Services
(ODJFS) Cost Report and the auditor's certification of the cost report, as
outlined in OAC rule 5101:3-26-09(B);
e.
Annual
physician incentive plan disclosure statements and disclosure of and changes
to
the MCP's physician incentive plans, as outlined in OAC rule
5101:3-26-09(B);
f.
Reinsurance agreements, as outlined in OAC rule 5101:3-26-09(C);
g.
Prompt
Pay Reports, in accordance with OAC rule 5101:3-26-09(B). A hard copy and an
electronic copy of the reports in the ODJFS-specified format must be provided
to
ODJFS;
Appendix
J
Page
2
h.
Notification of requests for information and copies of information released
pursuant to a tort action (i.e., third party recovery), as outlined in OAC
rule
5101:3-26-09.1;
i.
Financial, utilization, and statistical reports, when ODJFS requests such
reports, based on a concern regarding the MCP's quality of care, delivery of
services, fiscal operations or solvency, in accordance with OAC rule
5101:3-26-06(D);
j.
In
accordance with ORC Section 5111.76 and Appendix C, MCP Responsibilities, MCPs
must submit ODJFS-specified franchise fee reports in hard copy and electronic
formats pursuant to ODJFS specifications.
2.
FINANCIAL PERFORMANCE MEASURES AND STANDARDS
This
Appendix establishes specific expectations concerning the financial performance
of MCPs. In the interest of administrative simplicity and nonduplication of
areas of the ODI authority, ODJFS' emphasis is on the assurance of access to
and
quality of care. ODJFS will focus only on a limited number of indicators and
related standards to monitor plan performance. The three indicators and
standards for this contract period are identified below, along with the
calculation methodologies. The source for each indicator will be the NAIC
Quarterly and Annual Financial Statements.
Report
Period:
Compliance will be determined based on the annual Financial
Statement.
a.
Indicator:
Net Worth as measured by Net Worth Per Member
Definition:
Net
Worth = Total Admitted Assets minus Total Liabilities divided by Total Members
across all lines of business
Standard:
For the
financial report that covers calendar year 2006, a minimum net worth per member
of $156.00, as determined from the annual Financial Statement submitted to
ODI
and the ODJFS.
The
Net
Worth Per Member (NWPM) standard is the Medicaid Managed Care Capitation amount
paid to the MCP during the preceding calendar year, excluding the at-risk
amount, expressed as a per-member per-month figure, multiplied by the applicable
proportion below:
0.75
if
the MCP had a total membership of 100,000 or more during that calendar
year
0.90
if
the MCP had a total membership of less than 100,000 for that calendar
year
Appendix
J
Page
3
If
the
MCP did not receive Medicaid Managed Care Capitation payments during the
preceding calendar year, then the NWPM standard for the MCP is the average
Medicaid Managed Care capitation amount paid to Medicaid-contracting MCPs during
the preceding calendar year, excluding the at-risk amount, multiplied by the
applicable proportion above.
b.
Indicator:
Administrative Expense Ratio
Definition:
Administrative Expense Ratio = Administrative Expenses minus Franchise Fees
divided by Total Revenue minus Franchise Fees
Standard:
Administrative Expense Ratio not to exceed 15%, as determined from the annual
Financial Statement submitted to ODI and ODJFS.
c. Indicator:
Overall Expense Ratio
Definition:
Overall
Expense Ratio = The sum of the Administrative Expense Ratio and the Medical
Expense Ratio
Administrative
Expense Ratio =
Administrative Expenses minus Franchise Fees divided by Total Revenue minus
Franchise Fees
Medical
Expense Ratio = Medical Expenses divided by Total Revenue minus Franchise
Fees
Standard:
Overall
Expense Ratio not to exceed 100% as determined from the annual Financial
Statement submitted to ODI and ODJFS.
Penalty
for noncompliance:
Failure
to meet any standard on 2.a., 2.b., or I.e.
above
will result in ODJFS requiring the MCP to complete a corrective action plan
(CAP) and specifying the date by which compliance must be demonstrated. Failure
to meet the standard or otherwise comply with the CAP by the specified date
will
result in a new membership freeze unless ODJFS determines that the deficiency
does not potentially jeopardize access to or quality of care or affect the
MCP's
ability to meet administrative requirements (e.g., prompt pay requirements).
Justifiable reasons for noncompliance may include one-time events (e.g., MCP
investment in information system products).
If
the
financial statement is not submitted to ODI by the due date, the MCP continues
to be obligated to submit the report to ODJFS by ODI's originally specified
due
date unless the MCP requests and is granted an extension by ODJFS.
Appendix
J
Page
4
Failure
to submit complete quarterly and annual Financial Statements on a timely basis
will be deemed a failure to meet the standards and will be subject to the
noncompliance penalties listed for indicators 2.a., 2.b., and I.e.,
including the imposition of a new membership freeze. The new membership freeze
will take effect at the first of the month following the month in which the
determination was made that the MCP was non-compliant for failing to submit
financial reports timely.
In
addition, ODJFS will review two liquidity indicators if a plan demonstrates
potential problems in meeting related administrative requirements or the
standards listed above. The two standards, 2.d and 2.e, reflect ODJFS' expected
level of performance. At this time, ODJFS has not established penalties for
noncompliance with these standards;
however,
ODJFS will consider the MCP's performance regarding the liquidity measures,
in
addition to indicators 2.a., 2.b., and 2.e., in determining whether to impose
a
new membership freeze, as outlined above, or to not issue or renew a contract
with an MCP. The source for each indicator will be the NAIC Quarterly and annual
Financial Statements.
Long-term
investments that can be liquidated without significant penalty within 24 hours,
which a plan would like to include in Cash and Short-Term Investments in the
next two measurements, must be disclosed in footnotes on the NAIC Reports.
Descriptions and amounts should be disclosed. Please note that "significant
penalty" for this purpose is any penalty greater than 20%. Also, enter the
amortized cost of the investment, the market value of the investment, and the
amount of the penalty.
d.
Indicator: Days Cash on Hand
Definition:
Days
Cash on Hand =
Cash and
Short-Term Investments divided by (Total Hospital and Medical Expenses plus
Total Administrative Expenses) divided by 365.
Standard:
Greater
than 25 days as determined from the annual Financial Statement submitted to
ODI
and ODJFS.
e.
Indicator: Ratio of Cash to Claims Payable
Definition:
Ratio of
Cash to Claims Payable = Cash and Short-Term Investments divided by claims
Payable (reported and unreported).
Standard:
Greater
than 0.83 as determined from the annual Financial Statement submitted to ODI
and
ODJFS.
3.
REINSURANCE REQUIREMENTS
Pursuant
to the provisions of OAC rule 5101:3-26-09 (C), each MCP must carry reinsurance
coverage from a licensed commercial carrier to protect against inpatient-related
medical expenses incurred by Medicaid members.
Appendix
J
Page
5
The
annual deductible or retention amount for such insurance must be specified
in
the reinsurance agreement and must not exceed $75,000.00, except as provided
below. Except for transplant services, and as provided below, this reinsurance
must cover, at a minimum, 80% of inpatient costs incurred by one member in
one
year, in excess of $75,000.00.
For
transplant services, the reinsurance must cover, at a minimum, 50% of transplant
related costs incurred by one member in one year, in excess of
$75,000.00.
An
MCP
may request a higher deductible amount and/or that the reinsurance cover less
than 80% of inpatient costs in excess of the deductible amount. If the MCP
does
not have more than 75,000 members in Ohio, but does have more than 75,000
members between Ohio and other states, ODJFS may consider alternate reinsurance
arrangements. However, depending on the corporate structures of the Medicaid
MCP, other forms of security may be required in addition to reinsurance. These
other security tools may include parental guarantees, letters of credit, or
performance bonds. In determining whether or not the request will be approved,
the ODJFS may consider any or all of the following:
a.
whether the MCP has sufficient reserves available to pay unexpected
claims;
b.
the
MCP's history in complying with financial indicators 2.a., 2.b., and
I.e.,
as
specified in this Appendix;
c.
the
number of members covered by the MCP;
d.
how
long the MCP has been covering Medicaid or other members on a full risk
basis;
e.
risk
based capital ratio of 2.5 or higher calculated from the last annual ODI
financial statement;
f.
graph/chart showing the claims history for reinsurance above the previously
approved deductible from the last calendar year.
The
MCP
has been approved to have a reinsurance policy with a deductible amount of
$75,000 that covers 80% of inpatient costs in excess of the deductible amount
for non-transplant services.
Penalty
for noncompliance:
If it is
determined that an MCP failed to have reinsurance coverage, that an MCP's
deductible exceeds $75,000.00 without approval from ODJFS, or that the MCP's
reinsurance for non-transplant services covers less than 80% of inpatient costs
in excess of the deductible incurred by one member for one year without approval
from ODJFS, then the MCP will be required to pay a monetary penalty to ODJFS.
The amount of the penalty will be the difference between the estimated
amount,
Appendix
J
Page
6
as
determined by ODJFS, of what the MCP would have paid in premiums for the
reinsurance policy if it had been in compliance and what the MCP did actually
pay while it was out of compliance plus 5%. For example, if the MCP paid
$3,000,000.00 in premiums during the period of non-compliance and would have
paid $5,000,000.00 if the requirements had been met, then the penalty would
be
$2,100,000.00.
If
it is
determined that an MCP's reinsurance for transplant services covers less than
50% of inpatient costs incurred by one member for one year, the MCP will be
required to develop a corrective action plan (CAP).
4.
PROMPT PAY REQUIREMENTS
In
accordance with 42 CFR 447.46, MCPs must pay 90% of all submitted clean claims
within 30 days of the date of receipt and 99% of such claims within 90 days
of
the date of receipt, unless the MCP and its contracted provider(s) have
established an alternative payment schedule that is mutually agreed upon and
described in their contract. The prompt pay requirement applies to the
processing of both electronic and paper claims for contracting and
non-contracting providers by the MCP and delegated claims processing
entities.
The
date
of receipt is the date the MCP receives the claim, as indicated by its date
stamp on the claim. The date of payment is the date of the check or date of
electronic payment transmission. A claim means a ▇▇▇▇ from a provider for health
care services that is assigned a unique identifier. A claim does not include
an
encounter form.
A
"claim"
can include any of the following: (1) a ▇▇▇▇ for services; (2) a line item
of
services; or (3) all services for one recipient within a ▇▇▇▇. A "clean claim"
is a claim that can be processed without obtaining additional information from
the provider of a service or from a third party.
Clean
claims do not include payments made to a provider of service or a third party
where the timing of payment is not directly related to submission of a completed
claim by the provider of service or third party (e.g., capitation). A clean
claim also does not include a claim from a provider who is under investigation
for fraud or abuse, or a claim under review for medical necessity.
Penalty
for noncompliance;
Noncompliance with prompt pay requirements will result in progressive penalties
to be assessed on a quarterly basis, as outlined in Appendix N of the Provider
Agreement.
5.
PHYSICIAN INCENTIVE PLAN DISCLOSURE REQUIREMENTS
MCPs
must
comply with the physician incentive plan requirements stipulated in 42 CFR
438.6(h). If the MCP operates a physician incentive plan, no specific payment
can be made directly or indirectly under this physician incentive plan to a
physician or physician group
as
an inducement to reduce or limit medically necessary services furnished to
an
individual.
Appendix
J
Page
7
If
the
physician incentive plan places a physician or physician group at substantial
financial risk [as determined under paragraph (d) of 42 CFR 422.208] for
services that the physician or physician group does not furnish itself, the
MCP
must assure that all physicians and physician groups at substantial financial
risk have either aggregate or per-patient stop-loss protection in accordance
with paragraph (f) of 42 CFR 422.208, and conduct periodic surveys in accordance
with paragraph (h) of 42 CFR 422.208.
In
accordance with 42 CFR 417.479 and 42 CFR 422.210, MCPs must maintain copies
of
the following required documentation and submit to ODJFS annually, no later
than
30 days after the close of the state fiscal year and upon any modification
of
the MCP's physician incentive plan:
a.
A
description of the types of physician incentive arrangements the MCP has in
place which indicates whether they involve a withhold, bonus, capitation, or
other arrangement. If a physician incentive arrangement involves a withhold
or
bonus, the percent of the withhold or bonus must be specified.
b.
A
description of information/data feedback to a physician/group on their: 1)
adherence to evidence-based practice guidelines; and 2) positive and/or negative
care variances from standard clinical pathways that may impact outcomes or
costs. The feedback information may be used by the MCP for activities such
as
physician performance improvement projects that include incentive programs
or
the development of quality improvement initiatives.
c.
A
description of the panel size for each physician incentive plan. If patients
are
pooled, then the pooling method used to determine if substantial financial
risk
exists must also be specified.
d.
If
more than 25% of the total potential payment of a physician/group is at risk
for
referral services, the MCP must maintain a copy of the results of the required
patient satisfaction survey and documentation verifying that the physician
or
physician group has adequate stop-loss protection, including the type of
coverage (e.g., per member per year, aggregate), the threshold amounts, and
any
coinsurance required for amounts over the threshold.
Upon
request by a member or a potential member and no later than 14 calendar days
after the request, the MCP must provide the following information to the member:
(1) whether the MCP uses a physician incentive plan that affects the use of
referral services; (2) the type of incentive arrangement; (3) whether stop-loss
protection is provided; and
Appendix
J
Page
8
(4)
a
summary of the survey results if the MCP was required to conduct a survey.
The
information provided by the MCP must adequately address the member's
request.
6.
NOTIFICATION OF REGULATORY ACTION
Any
MCP
notified by the ODI of proposed or implemented regulatory action must report
such notification and the nature of the action to ODJFS no later than one
working day after receipt from ODI. The ODJFS may request, and the MCP must
provide, any additional information as necessary to assure continued
satisfaction of program requirements. MCPs may request that information related
to such actions be considered proprietary in accordance with established ODJFS
procedures. Failure to comply with this provision will result in an immediate
membership freeze.