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Agree. Health Choices from ASCITY OF DUBUQUE, IOWA MEMORANDUM February 17, 2000 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Administrative Services Agreement between the City of Dubuque and Health Choices, Inc. Personnel Manager Randy Peck is recommending approval of the Administrative Services Agreement between the City of Dubuque and Health Choices, Inc. for services related to the administration of the City's medical, disability and cafeteria plans. I concur with the recommendation and respectfully request Mayor and City Council approval. Michael C. Van Milligen MCVM/dd Attachment cc: Barry Lindahl, Corporation Counsel Tim Moerman, Assistant City Manager Randy Peck, Personnel Manager O¿J/4ð ~/Ü'¿..ø¿,/?:.~ Ó ~ ~ é?:A-/ 0/ ~ ~ CITY OF DUBUQUE, IOWA MEMORANDUM February 9, 2000 To: Michael C. Van Milligen, City Manager From: Randy Peck, Personnel Manager Subject: Administrative Services Agreement between the City of Dubuque and Health Choices, Inc. On January 20, 2000, I received the attached Administrative Services Agreement between the City of Dubuque and Health Choices, Inc. for services related to the administration of the City's medical, disability and cafeteria plans, The effective date of this agreement is July 1, 1999. The administrative fee for processing medical and disability claims increased from $13.80 per covered employee per month to $14.65 per covered employee per month. This rate went into effect on July 1, 1999 and will remain in effect through June 30, 2000. The rate was approved by the Health Care Committee on May 27, 1999. The administrative fee for the cafeteria plan will remain at $3,25 per month per participating employee, This agreement has been reviewed by corporation counsel, Barry Lindahl and the Segal Company, our benefit and actuarial consultant, and they found the terms to be acceptable. The Health Care Committee has also approved the agreement, On behalf of the Health Care Committee, I request that the City Council approve a motion authorizing you to sign the agreement. If you have any questions, please feel free to call. cc: Health Care Committee Administrative Service Agreement This Agreement, made and entered into effective the 1st day of July, 1999 (the "Effective Date"), by and between the City of Dubuque (hereinafter referred to as "Purchaser"), and HMS Preferred Health Choices, Inc., a corporation organized under the laws of the State of Iowa (hereinafter "Health Choices"), WHEREAS, Purchaser desires to offer a preferred provider health care plan providing certain broad service benefits (hereafter "Covered Services") to its qualifying eligible employees and/or beneficiaries, and their dependents (hereafter "Covered Persons"); WHEREAS, Purchaser desires to purchase certain administrative and provider contracting services for operation of its preferred provider health care plan from Health Choices; WHEREAS, a description of the preferred provider health care plan (hereafter "the plan"), is attached hereto as Attachment A. NOW THEREFORE, in consideration of the promises and mutual covenants contained herein, it is hereby agreed by and between the parties as follows: I. Services and Compensation 1.1 Administrative Services. Health Choices shall perform for Purchaser the administrative services set forth in Attachment B hereto ("Administrative Services") for the operation of the Plan. Health Choices shall perform these services in accordance with the reasonable exercise of its business judgment and all applicable statutory and regulatory requirements, Purchaser shall at all times retain ultimate control over the assets and operations of the Plan and final responsibility for the obligations of the Plan imposed by law. Health Choices shall perform the functions described in this Agreement in accordance with such policies, directives, and controlling documents of the Plan as are provided to Health Choices by Purchaser, 1.2 Provider Contracting Services. Health Choices shall arrange, through contracts ("Provider Contracting Services") with physicians, hospitals and other health care providers or entities contracting on behalf of such providers, for the availability in the service area described in the Plan of Covered Services from health care providers ("Contracting Providers") to Covered Persons, on the preferred provider terms described in Attachment C hereto. Health Choices shall provide Purchaser with a list of Contracting Providers (including names, addresses, telephone numbers, and, when applicable, respective specialties), which list may be revised by Health Choices from time to time, Purchaser shall be responsible for compensating Contracting Providers for Covered Services in accordance with Attachment C, Purchaser shall make adequate funds available for payment of such amounts on its behalf by Health Choices. Pwchaser acknowledges that Medical Associates Clinic, P.C. and Mercy Health Center, Inc., affiliated companies of Health Choices, shall be Contracting Providers under this Agreement 1.3 Providers as Third Party Beneficiaries. Purchaser acknowledges and agrees that, with respect to its obligations to pay Contracting Providers as provided in Section 1.2, such providers of health care services to Covered Persons shall be intended third party beneficiaries of that obligation. 1.4 Health Choices. Purchaser shall pay Health Choices monthly as a fee for the Administrative Services and Provider Contracting Services it provides the amount specified in Attachment D hereof in the manner described therein. 1.5 List of Covered Persons. Purchaser will provide Health Choices with a list of Covered Persons who are eligible to receive benefits under the Plan and Health Choices may rely upon such list in performing its duties hereunder, Purchaser will notify Health Choices of any additions, changes, deletions or modifications to the list of Covered Persons as they occur. Purchaser shall hold Health Choices harmless for any inaccuracy in such information. 1.6 Promotion of the Plan. Purchaser agrees to be responsible for offering the Plan to eligible persons, Purchaser offers two plans, an HMO plan and an Indemnity plan. When the HMO plan is chosen, incentives in the design of the plan have been adopted by Purchaser to utilize contracting providers. The Indemnity plan offered has no such incentives. 1.7 Eligibility. Purchaser has established the eligibility requirements for participation of Covered Persons in the Plan which are described in Attachment A hereto. Any changes in such eligibility requirements for the purposes of this Agreement must be mutually agreed to by the parties in writing. 1.8 Access to Purchaser Records. All business and health services records relating to the operation of the Plan including, but not limited to, all books of account, enrollment records, generai administrative records and patient records, shall be and remain the sole property of the Purchaser. In addition, all information generated under and/or contained in Health Choice's information system pertaining to the Plan shall also be and remain the property of the Purchaser, however, Health Choices shall have the right to use such information on a confidential basis during the term of this Agreement. Health Choices shall establish, maintain and carry out procedures for the keeping and preservation of the Plan's books and records, including providing for the manner and time of their preservation in accordance with all applicable laws. Health Choices shall use reasonable efforts to protect the confidentiality of the records of the Plan. In this connection, medical records and other privileged information regarding Covered Persons will not be disclosed by Health Choices except (i) with the consent of the Covered Person, (ii) pursuant to a court order, (iii) if allowed by applicable law, as necessary for the operation of the Plan, or (iv) when required by applicable law. Health Choices shall maintain at its principal administrative office for the duration of this Agreement plus five (5) years, adequate books and records of all transactions between it, Purchaser, and Covered Persons. Health Choices' books and records shall be maintained in accordance with prudent standards of recordkeeping. Purchaser retains the right to continuing access to the Health Choices' books and records sufficient to permit Purchaser to fulfill all of its contractual obligations to Covered Persons, subject to any restrictions in this Agreement on the proprietary rights of the parties in Health Choices's books and records. In addition, the Iowa Commissioner of Insurance shall have access to such books and records for the purpose of examination, audit and inspection. Upon termination of this Agreement for any reason, Health Choices shall, as soon as practicable (i) deliver in usable form all records of the Plan to Purchaser or its designee, and (ii) deliver to Purchaser or its designee all data in its possession that are necessary to the Plan's operations. Health Choices may retain copies of information reasonably necessary for its operations. 1.9 Cooperation. Purchaser shall cooperate with Health Choices in the performance of its services hereunder and Health Choices shall not be liable for any breach of obligations of this Agreement caused, in whole or in part, by the lack of cooperation or breach of obligations by the Purchaser or lack of cooperation by Covered Persons. 1.10 Independent Contractors. Except as othelWise specifically provided herein, the relationship between Purchaser and Health Choices and between Health Choices and Contracting Providers is an independent contractor relationship, and Health Choices is not an employee or agent of Purchaser or of the Plan and will perform only those functions for Purchaser and the Plan as set forth in this Agreement. Contracting Providers are not employees or agents of Health Choices and neither Health Choices nor any employee of Health Choices is an employee or agent of Contracting Providers, Neither Health Choices nor Purchaser will hold Health Choices out to third parties as having any authority from Purchaser not granted by this Agreement. Health Choices is not responsible and shall not be liabie for any claims which may arise from the provision of medical and/or hospital services to Covered Persons by Contracting Providers. 1.11 Provider-Patient Relationship. Contracting Providers maintain the physician/hospital-patient relationship with Covered Persons and are solely responsible to Covered Persons for all services they provide. 1.12 Hold Harmless. In the event Health Choices, its officers, directors, employees or agents are made parties to any judicial, administrative or other proceeding arising, in whole or in part out of any function performed by one or more of them under this Agreement, Purchaser shall hold them harmless for all judgements, awards, settlements and costs (including attorneys' fees) which they incur or pay in connection therewith except that Purchaser shall not reimburse Health Choices for the amount of any judgement or award (or attorneys' fees with respect thereto) if the court rendering the judgement or the agency making the award determines that the liability underlying the judgement or award (or attorneys' fees with respect thereto) was caused by the sole negligence of Health Choices, its agents, employees, officers or directors. In the event Purchaser, its officers, directors, employees or agents are made parties to any judicial, administrative or other proceeding arising, in whole or in part, out of any function performed by one or more of them under this H..dm,",.",.'HMSClty,',' Agreement, Health Choices shall hold them harmless for all judgements, awards, settlements and costs (including attorneys' fees) which they incur or pay in connection therewith if the Court rendering the judgement or agency making the award determines that the liability underlying the judgement or award (or attorneys' fees with respect thereto) was caused by the sole negligence of Health Choices. 1.13 Legal Defense. The defense, including legal fees and costs, together with the amount of any judgement, of any legal action arising out of a claim for benefits under the Plan, shall be the responsibility of the Purchaser, and shall not be an obligation of Health Choices. Health Choices shall, however, cooperate with Purchaser by furnishing such material or information as it has available in connection with the defense of any such action, 1.14 Expenses. Health Choices will not be considered the insurer, guarantor or undelWriter of the liability of the Purchaser to provide benefits for the Purchaser's Covered Persons. Purchaser will be responsible for all expenses incident to the operation of the Plan, except as may be specifically assumed by Health Choices under this Agreement Purchaser shall in a timely fashion provide adequate funds to Health Choices to permit its payment of claims and other expenses when due. 1.15 Standard and Character of Performance. Health Choices shall use customary and reasonable care and proper diligence in the performance of its services under this Agreement. It is understood and agreed by the parties that the terms "customary and reasonable care and proper diligence" and "negligence" do not make Health Choices a guarantor of the correctness of all claim payments and other services performed under this Agreement, but refer to the usual business practice standards and conduct in such business. 1.16 Incorrect Payments. If any payment is made hereunder to or for an ineligible employee or dependent, or if it is determined that more or less than the correct amount has been paid by Health Choices, Health Choices shall attempt to recover the payment made to or for the ineligible person or the amount of the overpayment, but Health Choices shall not be required to initiate court proceedings to recover any incorrect payment Health Choices agrees to investigate all questionable claims or payments referred to it by Purchaser, to report to Purchaser the results, and to attempt to collect any payments improperly paid. If Health Choices is unsuccessful in its attempts to recover any improper payment, it shall so notify Purchaser in order that Purchaser may take such actions as it shall deem appropriate to collect such amount, or in the event the error was a result of Health Choices' negligence, willful misconduct or failure to use customary reasonable and proper care in claims processing or payment, Health Choices shall indemnify Purchaser, 1.17 Reliance on Communications. In all matters pertaining to the performance of services under this Agreement, Health Choices, when it acts in good faith, may rely upon any notice, resolution, instruction, direction, order, certificate, opinion, letter, telegram or other document believed by it to be genuine and authorized by Purchaser. If the Plan is amended, Health Choices shall not be required to act in accordance with any amendment until it receives written notice thereof and until such amendment is approved by any insurance carrier providing excess or stop-loss insurance or reinsurance on behalf of the Plan. 1.18 Proprietary Information. Purchaser acknowledges that Health Choices, in providing services under this Agreement, will by necessity divulge to and provide Purchaser with confidential proprietary plans, programs, formulae, methods and other products and information ("Proprietary Material") relating to the business services and activities of Health Choices or its contractors, including Proprietary Material developed in the course of providing services hereunder. Purchaser agrees that, during the term of this Agreement and thereafter, Proprietary Material shall remain the property of Health Choices or its contractors and Purchaser shall maintain the confidentiality of such Proprietary Material and shall not use, divulge, furnish or make accessible such Proprietary Material to anyone other than is necessary for the Plan's operations, unless othelWise required by the Iowa Public Records Act, Iowa Code Ch.22 (1995). II. Term and Termination of Agreement 2.1 Effective Date. The Effective Date of this Agreement shall be the date first written above, and it shall continue in effect thereafter for an initial term of one year and from year to year thereafter, subject to the termination provisions set forth below, 2.2 Termination of Anniversary Date. Either party may terminate this Agreement effective on any anniversary date by written notice at least sixty (60) days prior to such anniversary date. H'.dm;o"",.'HMSClly.g, 2.3 Termination for Cause. Either party shall have the option to immediately terminate this Agreement upon the occurrence of any of the following with respect to the other party: (i) Health Choices or Purchaser shall violate any covenant and/or any other agreement that is mentioned herein including this Agreement and shall fail to cure such violation within thirty (30) days after written notice thereof; or (ii) Health Choices or Purchaser shall make an assignment for the benefit of creditors or apply to any tribunal for the appointment of a trustee or receiver for any substantial part of its assets, or cause to be commenced any proceeding relating to it under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution, or liquidation laws of any jurisdiction; or (iii) If any such application shall be filed or any such proceedings commenced against Health Choices or Purchaser or an order shall be entered appointing any such trustee or receiver, or adjudicating Health Choices or Purchaser bankrupt or insolvent, or approving a petition in any such proceedings, and where such application, proceedings, or order shall remain in effect for sixty (60) days; or (iv) There exists the issuance of an attachment, garnishment or similar process against any substantial part of the property of Health Choices or Purchaser and such attachment, garnishment or other similar process shall not be dismissed within sixty (60) days unless Health Choices or Purchaser shall contest the validity of such action by appropriate proceedings taken in good faith within the sixty (60) days period; or (v) The occurrence of any event, which with the passage of time or othelWise, would become an event of default under any other agreement, note, lease, mortgage or obligation to which Health Choices or Purchaser is a party, unless any such event of default shall be timely cured under any applicable cure provision, but without regard to any waiver by any other person of any event of default; or (vi) Health Choices or Purchaser shall admit in writing that it is unable to meet its current financial obligations. 2.4 Legal Requirements. In the event that any governmental agency determines that Health Choices is operating in violation of any law or regulation or othelWise requests that Health Choices cease operations for Purchaser, then this Agreement may be terminated by Health Choices upon fifteen (15) days written notice. III. Miscellaneous 3.1 Agreement to be Retained. This Agreement shall be retained as part of the official records of both the Purchaser and Health Choices for the duration of the Agreement, plus five (5) years. 3.2 Amendments. Except as provided herein, this Agreement or any part hereof may be amended at any time by written consent of both parties, Health Choices shall provide 90 days advance notice in the event of any proposed amendment to this Agreement regarding a change in the administrative fee. 3.3 Waiver. No covenant, condition, duty, obligation, or undertaking contained in or made a part of this Agreement shall be waived except by the express written consent of the party giving such waiver granted in accordance with the provisions hereof, and forbearance or indulgence in any form or manner by either party in any regard whatsoever shall not constitute a waiver of the covenant, condition, duty, obligation, or undertaking to be kept, performed, or discharged by the party to which the same may apply. 3.4 Notice to Covered Persons. Health Choices and Purchaser reserve the right to amend this Agreement or any provision hereof, to waive any rights granted to either party hereunder by mutual agreement, or to terminate this Agreement in any manner provided in any Article hereof without notice to or consent of any Covered Person. 3.5 References to Purchaser. Purchaser agrees that Health Choices may refer to and identify Purchaser in informing Contracting Providers and other prospective purchasers and health providers about the organizations and employers which utilize Health Choices services. H.dmm"",.'HMSC;~ ." 3.6 Third Party Rights. This Agreement is entered into by and between the parties hereto and for their benefit. Except as specifically provided herein, there is no intent by either party to create or establish third party beneficiary status or rights in any Covered Person, subcontractor, or other third party to this Agreement, and no such third party shall have any right to enforce any right or enjoy any benefit created or established under this Agreement. 3.7 Assessments. The Purchaser will pay Health Choices within a reasonable time after assessment any tax or charge assessed against Health Choices which may be incurred by reason of an imposition of or change in any charges imposed on Health Choices by any public body, exclusive of Federal or State Income Taxes, which affect this Agreement 3.8 Limitations. In the event the operations of Health Choices' facilities or any substantial portion thereof are interrupted by war, fire, insurrection, labor/provider contract troubles, riots, the elements, earthquakes or acts of God, the provision of this Agreement (or such portions hereof as Health Choices is thereby rendered incapable of performing) shall be suspended for the duration of such interruption. 3.9 Arbitration. In the event of any dispute of any kind concerning this Agreement and/or the performance of obligations hereunder, said dispute shall be submitted to arbitration in accordance with the rules of the American Arbitration Association. The parties agree to be bound by the results of such arbitration. The fees and expenses of the arbitrator shall be shared equally by the parties. 3.10 Duties of Termination. As of the effective date of termination pursuant to any provision of this Agreement, it shall be considered of no further force or effect, and each of the parties shall be relieved and discharged from the Agreement, and Health Choices' agency shall be automatically revoked, provided, however, each party shall remain liable for any obligations or liabilities arising from activities carried on by such party or its agents, servants, or employees during the period (including any period covered above) this Agreement shall have been in effect, and the arbitration provision of Section 3.9 shall survive termination. Termination shall not, at Purchaser's option, terminate the duties and obligations of the parties hereto for Covered Persons then being treated by Contracting Providers on an inpatient basis, including payment therefore, until the Covered Person is discharged or for thirty (30) days, whichever is sooner, 3.11 Performance by Health Choices. Health Choices shall perform its obligations under this Agreement through, at its discretion, employees or arrangements or contracts with agents or independent contractors. Obligations under this Agreement which will be performed solely by Health Choices and not delegated to any other party or entity shall include payment of Purchaser's claims. 3.12 Successors and Assigns. The provisions of this Agreement and obligations arising hereunder shall extend to, be binding upon, and inure to the benefit of the executors, administrators, successors, and assigns of the parties hereto. 3.13 Assignment. Purchaser shall not assign its rights and obligations under this Agreement without the prior written consent of Health Choices. Health Choices may assign its respective rights and responsibilities under this Agreement to any entity which owns or controls Health Choices, to any entity which is currently owned or controlled by Health Choices, or to any entity which is currently under common ownership or control with Health Choices. 3.14 Headings. The headings of the various section of this Agreement are inserted merely for the purpose of convenience and do not, expressly or by implication, limit, define or extend the specific terms of the section so designated, Hodm;o"",.'HMSClty." 3.15 Notice. Any notice required to be given pursuant to the terms and provisions of this Agreement shall be in writing and may either be personally delivered or sent by registered or certified mail by United States Postal Service, return receipt requested, postage prepaid, addressed to each party at the addresses which follow: i) PURCHASER CitY of Dubuaue 50 West 13th Street Dubuaue Iowa 52001 ii) HMS PREFERRED HEALTH CHOICES, INC. 700 Locust Street Suite 230 Dubuaue Iowa 52004-5003 3.16 Entire Agreement. This Agreement (together with all attachments) contains the entire agreement between the parties relating to the rights granted and tbe obligations assumed by this Agreement Any prior agreements, promises, negotiations, or representations relating to the subject matter of this Agreement not expressly set forth in this Agreement are of no force or effect 3.17 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Iowa. 3.18 Insurance. During the term of this Agreement, HMS Preferred Health Choices, Inc. shall maintain insurance as set forth on Attachment E. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers, this :~,:;)."'. day o~ k-\>"'. "'i ,2000, 'URCHASERr l L/ L"... HMS PRE:ER~DHEALTH C:OICES, INC. " ¡Il..,l A"fJtL " r""-/ ¿/~-"'J Title: C¡"¡'y In a/lia(~a-,<, Title: President H"moo"",.'HMSClly'" Attachment List Attachment A Purchaser's Health Care Plan Attachment B Administrative Services Attachment C Contracting Provider Compensation Attachment D Compensation to Health Choices, Inc. Attachment E Schedule of Insurance H."m,o"",.'HMSClty,'" Attachment A Purchaser's Health Care Plan H."m,",."..'HMSClty." Attachment B Administrative Services Health Choices shall perform the following administrative services for Purchaser with respect to the Plan: 1. Stop-Loss Coverage. Upon request, Health Choices shall make a recommendation to Purchaser for the procurement of stop-loss coverage and shall, if requested, assist in placing such coverage through a reinsurance company, 2. Preparation of Plan Document(s). Health Choices shall assist Purchaser in preparation, or revision as appropriate, of the coverage documents for the Plan. 3. Financial Systems and Services. Health Choices shall establish and administer accounting procedures and systems for the preparation of appropriate financial reports for the efficient management of and planning for the Plan. The foregoing shall include, but not be limited to: (a) Health Choices shall prepare and deliver to Purchaser non-certified financial reports on a quarterly basis. The reports shall include a statement of expenses in reasonable detail, an estimate of claims incurred but not reported and a comparison of budget with actual results; (b) On a quarterly basis or when reasonably requested by Purchaser, Health Choices shall furnish Purchaser with reports regarding the utilization and cost of health services and supplies rendered to Covered Persons by providers of these services. Such reports shall include, but not be limited to, eligibility data and information regarding the types and costs of services rendered and the frequency with which each type of service was performed; and (c) Health Choices shall provide the necessary information to enable Purchaser to prepare and file all financial reports required of Purchaser regarding the Plan by any federal, state or other agency or authority. 4. Claims Processing and Administration. Subject to the restrictions in Section 4(c) below, Health Choices shall design, implement and maintain such systems and procedures as may be necessary for the appropriate adjudication and timely payment of all claims for payment submitted to Purchaser (including Covered Person and provider claims) and to assure the availability of appropriate and accurate information for the administration of the Plan's programs, Health Choices services shall include, but not be limited to, the following: (a) Drafting or specifying all documents, forms and records to be used by provider for their claims of reimbursement and to be used by the Plan to reimburse them and also to develop procedures to be utilized in the adjudication of claims; (b) Evaluating and processing all claims for payment submitted to Health Choices under the Plan, Health Choices shall investigate reported health care claims in the manner and to the extent necessary and supervise a settlement of those health care claims and other demands that the Plan is legally obligated to pay; prepare checks or drafts drawn against Purchaser's funds allocated to the Plan to settle such claims or demands; and maintain files for the Plan; H."m"",...\HMSClty,.g, (c) In all cases, using its best efforts to advise Purchaser of any disputed health care claim by Covered Persons over which litigation has been commenced or threatened or which is reasonably likely to result in litigation, Health Choices shall also refer to Purchaser any other health care claims where the facts available to Health Choices do not provide adequate basis for resolution of the claim by Health Choices or determination of the claim may involve the exercise of discretion. In all such disputed or unresolved cases, the ultimate authority to resolve such claims is expressly retained by Purchaser. Purchaser also retains the authority to decide whether an investigation of any disputed claims is to be conducted and, if so, the extent of that investigation; (d) Cooperating with Purchaser in the administration of a grievance and appeal mechanism for Covered Persons; and (e) Administration of a coordination of benefits and third party recovery program. 5. Provider and Covered Person Services and Records. Health Choices shall design and implement the following services related to provider and Covered Person services and records: (a) Health Choices shall design for Purchaser for distribution to Covered Persons identification cards, instructional brochures, booklets, announcements, and disclosure statements as may be reasonably necessary and/or required by law, to assure the availability of accurate and appropriate information regarding the health care services to be provided and the administration and operations of the Plan's programs. Enrollment or other material prepared by Health Choices for Covered Persons or potential Covered Persons shall be approved by Purchaser in advance of its use. (b) Health Choices shall develop and provide information for distribution to Contracting Providers as may be reasonably necessary and/or required by iaw to fully describe billing procedures, payment for services, the schedule of Covered Services and any applicable risk sharing arrangements. (c) Health Choices shall develop and maintain Covered Person and provider files to permit eligibility verification, rate and provider compensation computations, claims adjudication and efficient and timely response to inquiries from Covered Persons and providers. Health Choices shall be responsible for informing Covered Persons in a timely fashion of the lapse or termination of their eligibility to receive Covered Services. Notwithstanding the foregoing, Health Choices shall have no obligation to inform Covered Persons of their rights for continuation of coverage or of any qualifying event under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, except as may be specifically agreed upon by Health Choices and Purchaser, In accordance with Section 1,5, Health Choices may rely on information regarding the eligibility of Covered Persons provided by Purchaser. 6. Information System. Health Choices shall employ an information system appropriate for the purposes of claims processing, provider compensation computation, utilization review, quality assessment, eligibility of Covered Persons, billing and making required reports described in Section 3 above. Health Choices shall bear all reasonable costs associated with the acquisition and maintenance of the information system, including purchase or lease of equipment, hardware and software development, installation, maintenance and modification, and computer time-sharing and all personnel costs, The system, including all software programs related thereto, shall be proprietary to Health Choices or its contractor. 7. Utilization and Peer Review. Health Choices shall maintain systems and procedures necessary or appropriate for the operation of a reasonable and appropriate utilization review and quality assurance program. H.dmoo",...'HMSClly'" 8. Reports. (a) Health Choices shall provide Purchaser with such information to enable Purchaser to file such reports as may be required by any regulatory agency having jurisdiction over the operations of the Plan including, to the extent applicable, the U,S, Department of Labor (including Form 5500 and Summary Annual Report), the Internal Revenue Service, and state governmental agencies, (b) Health Choices shall report, at Purchaser's request, concerning the activities of the Plan as shall be reasonably necessary for Purchaser, its officers and directors, to fulfill their corporate responsibilities. 9. Government Regulation. Health Choices shall use reasonable efforts, within the scope of its authority and responsibilities hereunder, to ensure that the Plan complies with the requirements of any applicable state or federal statute, ordinance, law, rule, regulation, or order of any governmental or regulatory body having jurisdiction over the Plan. 10. Deposit and Disbursement of Funds. (a) Health Choices shall make appropriate banking arrangements for the deposit in designated bank accounts of all monies received from Purchaser or othelWise arising from the operation of the Plan and shall make disbursements from such accounts on behalf of the Purchaser in such amounts and at such times as the same are required, To effectuate those arrangements, the Purchaser agrees to enter into a bank funding agreement subject to the approval of Health Choices, and to take all necessary actions for the execution, implementation and performance of that agreement. To the extent Health Choices receives payments directly from Covered Persons on behalf of Purchaser, they shall be deemed to have been received by the Purchaser. Any payments to Covered Persons by Health Choices shall not be deemed received until the time of actual receipt by the Covered Person, (b) Health Choices shall serve as Purchaser's true and lawful attorney-in-fact to bill and collect such amounts as may be payable to the Purchaser for the Plan; to collect in the Purchaser's name accounts receivable generated by such billing; and to take possession of and endorse in Purchaser's name any cash, notes, checks, money orders, insurance payments, and any other instruments received in payment 11. Legal Services and Actions. Health Choices shall arrange with the prior written consent of the Purchaser for the provision of legal services as are necessary to meet the legal needs of the Plan; however, the cost of such services are the responsibility of the Purchaser. 12. Excluded Expenses and Services. Expenses incurred by the Plan, or by Health Choices on behalf of the Plan with authorization obtained in advance from Purchaser, for the following services shall be the sole responsibility of Purchaser: (a) All direct and indirect costs for providers and suppliers in connection with the delivery of health care services and supplies to Covered Persons, including all compensation and reimbursement paid to medical and paramedical personnel and health care facilities; (b) Expenses associated with meetings, brochures, communications and mailings to Purchaser (including its management, or Board of Directors or committees), and Covered Persons; (c) All insurance costs, including professional liability/malpractice, general liability and all reinsurance and stop-loss, which may be purchased for Purchaser or the Plan; Hodm;""...'HMSClty." (d) Taxes or other governmental obligations of the Plan or Purchaser; (e) Purchaser's annual corporate financial audit, and such other audits and financial statements required by state or federal law and costs associated with preparation of Purchaser's corporate tax returns; (I) Costs of legal services for the Plan which arise in the normal course of the Plan's operations, including in the course of Health Choices' provision of services for the Plan; (g) Filing fees and penalties and other fees associated with annual and other reports required by federal and state statutes and regulations applicable to the Plan; and (h) Expenses for independent legal, independent accounting, and independent actuarial services of Purchaser or the Plan. Attachment C Contracting Provider Compensation For Covered Services provided by Contracting Providers in accordance with the terms and conditions of the Plan and the provisions of agreements through which Health Choices has arranged for the provision of Covered Services to Covered Persons, Purchaser shall provide compensation in the amounts charged up to the maximum rate to which each Contracting Provider, or an entity acting on the Contracting Provider's behalf, has agreed with Health Choices or its designee, as such rate of schedule may be amended from time to time in accordance with the terms of the applicable agreement governing such Contracting Provider, Such payment shall be subject to the applicable copayments, deductibles, claim review and claim audits under the Plan. Contracting Providers shall accept the above compensation as payment in full for Covered Services, except for applicable copayments, deductibles, and adjustments as a result of claim review and claim audits under the Plan. Attachment D Compensation to Health Choices Purchaser shall pay Health Choices on the first day of each month the following amounts per Covered Person per month for its Administrative Services and Provider Contracting Services under this Agreement during each such month: 1 Administrative Services for Medical and Short Term Disability Plans (as described in Section 1.1) and Provider Contracting Services (as described in Section 1.2) $ 14.65 Der covered emDlovee Der month beginning July 1, 1999. Exceptions and Additions: beainnina Julv 1 1998. $3,25 Der covered DarticiDant Der month for Cafeteria Plan Administration There shall be periodic retroactive and prospective adjustments to the above payments to reflect the actual number of Covered Person per month and portions thereof. Attachment E Schedule of Insurance Insurance Requirements for Professional Services 1, Any policy of insurance or certificate of insurance required hereunder shall be with a carrier authorized to do business in Iowa and a carrier that has received a rating of A or better in the current Best's Rating Guide. 2. Any policy of insurance required hereunder shall provide for a thirty (30) day notice to the City of any material change or cancellation of the policy prior to its expiration date. 3. HMS Preferred Health choices shall have its insurance agent or company certify in writing that any policy of insurance required herein with an aggregate limit of liability has not been reduced by paid or reserved claims at the time of issuance of policy or certificate, 4, HMS Preferred Health Choices shall furnish copies of the following policies upon request to the City, with limits not less than the following, or greater if required by law. Commercial General Liability: General Aggregate Limit Products - Completed Operation Aggregate Limit Personai and Advertising Injury Limit Each Occurrence Limit Fire Damage Limit (anyone occurrence) Medical Payments $2,000,000 $1,000,000 $1,000,000 $1,000,000 $ 50,000 $ 5,000 or Combined Single Limit Medical Payments $2,000,000 $ 5,000 Umbrella or Excess Liability' $ Coverage is to include: occurrence form, premises/operations/products/completed operations coverage, independent contractors' coverage, contractual liability, broad form property damage, personal injury, City of Dubuque to be notified with thirty (30) days written notice of change or cancellation. Professional Liability Statement: HMS Preferred Health Choices shall furnish upon request a certificate of insurance showing professional liability limits with limits of not less than $1,000,000 during the term of the project . To be determined on a case-by-case basis. H odmm'o".o\HMSClty 0"