HomeMy WebLinkAboutResolution - 2015-R0210 - Servce Agreement - Sagebrush Solutions - Health Care Claims Auditing Services - 06_25_2015Resolution No. 2015-RO210
Item No. 5.6
June 25, 2015
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock is hereby authorized and directed to execute for
id on behalf of the City of Lubbock a Service Agreement to provide Self -Insured Health Care
laims Auding Services, by and between the City of Lubbock and Sagebrush Solutions, and
lated documents. Said Agreement is attached hereto and incorporated in this resolution as if
illy set forth herein and shall be included in the minutes of the City Council.
sed by the City Council on June 25 2015
ROBERTSON, MAYOR
TTEST:
Garza, City Secretary
ROVED AS TO CONTENT:
Hutcheson
Human Resources and Risk Management
ROVED AS TO FORM:
itchell Sattfbwhite, fist Assistant City Attorney
--S.Serviee Agnnnt-Sagebrush Solutions & COI,
19.2015
Resolution No. 2015-RO210
CITY OF LUBBOCK. TX
Sagebrush Solutions
Service Agreement
This Service Agreement (this "Agreement") is entered into as of the25th day of June 2015,
("Effective Date") by and between Sagebrusb Solutions, (the Contractor),and the City of Lubbock (the
City")
RECITALS
WHEREAS, the City has issued a Request for Proposals RFP 15-12307-MA for, Self -insured
Health Care Claims Auditing Services.
WHEREAS, the proposal submitted by Sagebrush Solutions has been selected as the proposal
which best meets the needs of the City for this service; and
WHEREAS. Contractor desires to perform as an independent contractor to provide Self -Insured
Health Care Claims Auding Services, upon terms and conditions maintained in this Agreement; and
NOW THEREFORE, for and in consideration of the mutual promises contained herein, the City
and Contractor agree as follows:
City and the Contractor acknowledge the Agreement consists of the following exhibits which are
attached hereto and incorporated herein by reference, listed in their order of priority in the event of
inconsistent or contradictory provisions:
I. This Agreement
2, Exhibit A — General Requirements
3. Exhibit B — Proposal
4. Exhibit C — Professional Fees
5. Exhibit D — Business Associate Agreement (BAA)
Scope of Work
Contractor shall provide the services that are specified in Exhibit A. The Contractor shall comply with all
the applicable requirements set Forth in Exhibit B, and hereto.
Article 1 Services
1.1 Contractor agrees to perform services for the City that are specified under the General
Requirements set forth in Exhibit A. The City agrees to pay the amounts stated in
Exhibit C, to Contractor for performing services.
1.2 Contractor shall use reasonable efforts to render Services under this Agreement in a
professional and business -like manner and in accordance with the standards and practices
recognized in the industry.
Nonappropriation clause. All funds for payment by the City under this Agreement are
subject to the availability of an annual appropriation for this purpose by the City. In the
event of nonappropriation of funds by the City Council of the City of Lubbock for the
goods or services provided under the Agreement, the City will terminate the Agreement,
without termination charge or other liability, on the last day of the then -current fiscal year
or when the appropriation made for the then -current year for the goods or services
covered by this Agreement is spent, whichever event occurs first. If at any time funds are
not appropriated for the continuance of this Agreement, cancellation shall be accepted by
the contractor on thirty (30) days prior written notice, but failure to give such notice shall
be of no effect and the City shall not be obligated under this Agreement beyond the date
of termination.
1.3 The City agrees and understands that Contractor does not not hold and will not obtain Cyber
Liability insurance as otherwise required by Section 1. B. of Exhibit A. In lieu of obtaining
such Cyber Liability insurance, Contractor shall be responsible for any and all liabilities that
shall accrue in the event that any personal information obtained by Contractor pursuant to
this agreement is accessed by any unauthorized parties. Such liaiblities shall include, but
not be limited to, providing any and all required notices required by law to affected parties
by the access of any personal information by unauthorized parties. Personal information
shall include, but not be limited to, names, dates of birth, social security numbers, health
care ID numbers, home addresses, email addresses, and personal health information.
FURTHER, CONTRACTOR SHALL INDEMNIFY AND HOLD THE CITY HARMLESS
TO THE FULLEST EXTENT PROVIDED BY LAW, THE CITY, AND THE
CITY'S RESPECTIVE OFFICERS, EMPLOYEES, ELECTED OFFICIALS AND
AGENTS, FROM AND AGAINST ANY AND ALL LOSSES, DAMAGES,
CLAIMS OR LIABILITIES, OF ANY KIND OR NATURE, WHICH ARISE
DIRECTLY OR INDIRECTLY, OR ARE RELATED TO, IN ANY WAY,
MANNER OR FORM, THE ACCESSING OF ANY PERSONAL INFORMATION
OBTAINED BY CONTRACTOR BY VIRTUE OF THIS AGREEMENT BY ANY
UNAUTHORIZED PARTIES, INCULDING, BUT NOT LIMITED TO, LOSSES,
DAMAGES, CLAIMS OR LIABILITIES ARISING FROM OR RELATED TO, IN
ANY WAY, MANNER OR FORM, THE ACCESSING OF SUCH PERSONAL
INFORMATION BY UNAUTHORIZED PARTIES BY VIRTUE OF THE ACT
OR OMISSION OF THIRD PARTIES AND/OR CAUSED OR CONTRIBUTED
TO THE NEGLIGENCE OR FAULT OF ANY KIND, TYPE, OR DEGREE OF
CITY, ITS RESPECTIVE OFFICERS, EMPLOYEES, ELECTED OFFICIALS,
AND/OR AGENTS.
CONTRACTOR FURTHER COVENANTS AND AGREES TO DEFEND ANY
SUITS OR ADMINISTRATIVE PROCEEDINGS BROUGHT AGAINST THE
CITY AND/OR THE CITY'S RESPECTIVE OFFICERS, EMPLOYEES.
ELECTED OFFICIALS, AND/OR AGENTS ON ACCOUNT OF ANY CLAIM
ARISING FROM THE ACCESSING OF SUCH PERONAL INFORMATION BY
UNAUTHORIZED PARTIES, AND TO PAY OR DISCHARGE THE FULL
AMOUNT OR OBLIGATION OF ANY SUCH CLAIM INCURRED BY,
OCCURRING TO, OR IMPOSED ON THE CITY, OR THE CITY'S
RESPECTIVE OFFICERS, EMPLOYEES, ELECTED OFFICIALS, AND/OR
AGENTS, AS APPLICABLE, RESULTING FROM ANY SUCH SUITS,
CLAIMS, AND/OR ADMINISTRATIVE PROCEEDINGS OR ANY MATTERS
RESULTING FROM THE SETTLEMENT OR RESOLUTION OF SAID SUITS,
CLAIMS, AND/OR ADMINISTRATIVE PROCEEDINGS. IN ADDITION,
CONTRACTOR SHALL PAY TO THE CITY, THE CITY'S RESPECTIVE
OFFICERS, EMPLOYEES, ELECTED OFFICIALS AND/OR AGENTS, AS
APPLICABLE, REASONABLE AND NECESSARY ATTORNEY'S FEES
INCURRD BY SUCH PARTIES IN ENFORCING CONTRACTOR'S
INDEMNITY IN THIS SECTION.
Article 2 Miscellaneous.
2.1 This Agreement is made in the State of Texas and shall for all purposes be construed in
accordance with the laws of said State, without reference to choice of law provisions.
2.2 This Agreement is performable in, and venue of any action related or pertaining to this
Agreement shall lie in, Lubbock, Texas.
2.3 This Agreement and its Exhibits contains the entire agreement between the City and
Contractor and supersedes any and all previous agreements, written or oral, between the
parties relating to the subject matter hereof. No amendment or modification of the terms
of this Agreement shall be binding upon the parties unless reduced to writing and signed
by both parties.
2.4 This Agreement may be executed in counterparts, each of which shall be deemed an
original.
2.5 In the event any provision of this Agreement is held illegal or invalid, the remaining
provisions of this Agreement shall not be affected thereby.
2.6 The waiver of a breach of any provision of this Agreement by any parties or the failure of
any parties otherwise to insist upon strict performance of any provision hereof shall not
constitute a waiver of any subsequent breach or of any subsequent failure to perform.
2.7 This Agreement shall be binding upon and inure to the benefit of the parties and their
respective heirs, representatives and successors and may be assigned by Contractor or the
City to any successor only on the written approval of the other party.
2.8 All claims, disputes, and other matters in question between the Parties arising out of or
relating to this Agreement or the breach thereof, shall be formally discussed and
negotiated between the Parties for resolution. In the event that the Parties are unable to
resolve the claims, disputes, or other matters in question within thirty (30) days of written
notification from the aggrieved Party to the other Party, the aggrieved Party shall be free
to pursue all remedies available at law or in equity.
2.9 At any time during the term of the contract, or thereafter, the City, or a duly authorized
audit representative of the City or the State of Texas, at its expense and at reasonable
times, reserves the right to audit Contractor's records and books relevant to all services
provided to the City under this Contract. In the event such an audit by the City reveals
any errors or overpayments by the City, Contractor shall refund the City the full amount
of such overpayments within thirty (30) days of such audit findings, or the City, at its
option, reserves the right to deduct such amounts owing the City from any payments due
Contractor.
2.10 The City reserves the right to exercise any right or remedy to it by law, contract, equity,
or otherwise, including without limitation, the right to seek any and all forms of relief in a
court of competent jurisdiction. Further, the City shall not be subject to any arbitration
process prior to exercising its unrestricted right to seek judicial remedy. The remedies set
forth herein are cumulative and not exclusive, and may be exercised concurrently. To the
extent of any conflict between this provision and another provision in, or related to, this
document, this provision shall control.
IN WITNESS WHEREOF, this Agreement is executed as of the Effective Date.
CITY OF LUBBOCK, TX:
Gldrflf. Kol5ertson, Mayor
T:
ebe ca Garza, City Secretary
APPR A5 TO NTENT:
Leiser cheson, Director Human Resources
and Risk Management
APPROV ED AS T FO
itc a atterwht rst Assitant City Attorney
CONTRACTOR:
IP, 1-1-���
Sa y Re
Sagebrush Solutions
COO
Title
EXHIBIT "A"
GE• _NEIZ-kL REQUIRENIE TS
The Cite OfI-tibbock (hereinafter called "City") is seeking proposals ftrom interested firms and individuals.
(hereinafter callers "Proposer") to provide Self -Insured IIealth Care :auditing Services.
2. PROJECT DESCRIPTION
Backuround
1'he City provides health and dental benefits to all active employees. pre-65 retirees and post-65 retirees.
I li`aible dependents play be covered as wc11. Blue Cross Blue Shield of 1'exas (BCBS) provided the
Administrative Services Only (ASO) for medical and dental coverayge for plan years 2012. 2013 and 2014.
BOBS provided one PPO plan with Blue Choice to the subscribers and dependents. Beginning 2014.
BCBS bel,an providln`u, pharmacy benefit scrvices thrUtr2?11 Prime therapeutics. IINI Isife provided step
loss insurance for 2012 and 2013 plan years. Stop Loss Coverae fin- calendar 2014 was throuuJh Blue
Cross Blue Shield ol`Texas. 4
"I'he plan is tinanccd on a self-ftmded basis where wcekiv medical, dental, and pharmaceutical claims for
the Cite plan are paid. In addition. 'l'hc Citx has maintained individual stop -loss insurance to miti4gate risk -
when claims reach over S 330.000 for all plan }ears referenced above. Standard medical ASO Fees and
stop loss insurance premlunls arc invoiced and paid on a monthly basis.
3. PJ.'RPOSE OF "I'HE PROJECT
'I'hc Cite believes its medical and prescription coverage through BCBS and Prinlc '1 hcrt}petttics.
respects%-elv. is a --grandfathered health plan'under the Patient Protection and Affordable Care Act (the
ACA). It is the intent of the City to verify that the BCBS has been administering the Cite of Lubbock
1-Icalth Benefit Pian in accordance with the terms Of the COntraCtS ill place at the time Of Claim adjUdiCation.
All data files necessary for testing will be requested from BCBS by the Proposer. Additionally, elicibility
verification for the claim population will be confirmed by the Cite. Provided below is a list of areas that
%will be expected to be covered in the audit. Due to the period bein�p audited and the chan4oes in contracts,
please provide time recommended sample technique and sire. The Proposer may recommend additional
testing areas as appropriate.
4. SCOPE; OF WORK
Services rcquc,ted in this RT P include. but arc not limnitcd to. rcviekvs of the f011o%\ in11:
Medical Claims Processing and Pat•ments
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"Ihrouoh analysis tit- paid nlcLlicui eiaiIlls data reccIved from the TPA for the 2011 ?Of ; and 2014 plan
years:
• Determine «hether ain- claimants mct the requirements to apple for stop loss insurance cluriilg the
audit period.
• Identify potential duplicate payments, including claims for same sen-ices with difttrent procedure
codes
• Perform an analysis of procedure codes taking into consideration all elements that affect pricing
(pnn ider type. point of ser�-ice. diagnosis. sccondary diagnosis. etc.) and identify questionable
variances. Report variances to the human Resources staff and assist in determining cause and
recommending possible steps for resolution.
• For all plan }ears. rep icN\ performance standards included in the contract beh`een BCRS and the
City and determine whether the stated benchmal-ks were met.
• For all plan %cars. rCViCNV cumulative claims data and determine whether annual nctwork provider
disCOUTll twMUCLs included in the contract betwCcn I3C I35 and the Cit., Here Inct.
• ProVidc sufficient CX'idcnce (such is Copies of billin1-7 errors. c(Idi112 erl-ors. etc.) to substantiate an,,
errors.
• For all plan %cars. rC iC%V claiins data and determine that claims were paid in accordance with the
City 's desire to reilulin urandlathcrcd.
For a sample of medical clauns, pert'orm a detailed line item review of proN idcr billings to include the
following tests:
• Verify the provider status on the date ofservice as being In Network Or Out Of Network.
• RC -adjudicate the claims sampled as appropriate. TCStS shOUld include a review of pricill.0
crikN'ing� that procedure codes on the date of scr< ice were for benefits c01-crcd under the plan, look
for potential LIpCOdlrl4" Or Unbundling. In appropriate CC[ edits and OCE edits. mutt -Mlle CXCIL1sIVe
codes. sex inappropriate codes. CXCCSSlVC billed quantities, etc. Review contracts as neccssan.
• Vcrifv that sufficient docuillCiltati011 Was provided to support the claim payment and all adequate
rc%,iC\\ WLIS perl0rmeL1. taking into consideration the claim dollar amount.
• Determine whether the proper application of deductibles and'or timely coordination of benefits and
subrogation took place (inteuration Stith Medicare, third party liabiliuv. duplicate covcraoe. and
worker's compensation), includin4g, retiree and active emplovecs over the age of'65. For identified
claims. where it is applicable, determine if fLinds were reccived and applied to the Cite or «erc
deducted from the bill accuratel%.
• For all plan years. determine %\ hether claims \%ere submitted b% the prop ider and paid b- }3C13� in
accordance with per form Lill CC contract standards for health benetit terms. includinu timeliness.
financial accurate. anti procedural accuracti.
• Provide sufficient evidence such as copies of billing errors, coding errors. etc. to substantiate any
errors.
Dental Claims Processi►a.; and Payments
Throwuh. analysis of paid dental claims data received [i-om the TPA for the ?Ol?. 2013 and 2014 plan
years:
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• Identify potential duplicate paynlerlts.
• Determine whether an%' claimarlt s annual llttitimc m,,I.KrllltlrllS % erc reached aild whether the
appropriate action was taken.
• Identify potential duplicate pavincnts, 11CILCII-CIaIIIIS 60r the same serviccs with diff-Crent
procedure cedes.
• Provide sufficient evidence to substantiate ariv errors.
For a sample of dental claims. perlorrll these additional tests:
• Determine whether dental claims here paid according to the agreed upon discount arrangements
and reirtlbursemertt rates and assioned to the appropriate tier tier payment.
• Re -adjudicate the claims sampled as appropriate. Tests should include a rc\-ie%% of pricing.
Verifying that procedure codes on the date of service were for benefits co%cred under the plan, took -
for potential excessive billed quantities, etc. Review contracts as necessarw.
• Provide sufficient evklencc (such as copies of billing, errors. coding errors, etc.) to substantiate art\
errors.
Pharmaceutical Claims Processing and Pavinents
Through analysis of paid pharmaceutical claims data recciVed from lic TPA for the ?U 14 plan year:
• Idenill'V potential duplicate payments.
• For all plan }ears. crlsltrc rebates were credited according to contract terms.
• Provide sufficient evidence to substantiate ariv errors.
For a sample of pharmaceutical claims. perform these additional tests:
• Determine N�hether pharmaceutical claims «ere paid according to the agreed upon discount
arran-,emcnts and reimbursement rates and assigned to the appropriate tier fir paynlcrlt.
• Determine calculation accuracy including ingredient costs and dispensing fees.
• Provide sufficient evidencc (such as copies of billing errors, codim-) errors. etc.) to substantiate any
errors.
When fieldwork is complete. review the results with BC BS and Prime-I_hcrapcutics. then meet with the
City- to present the results of the audit and assist with securing any corrective action necessary.
Communication and Collaboration with City Human Resources Strrff
Cit-V Human Resources staff may accompany the '~inning Proposer to the audit site. The IIuman
Resources staff, will expect progress reports throu4,hout the cngagcmetlt and. at the d€scretron of I Iunlarl
Resources- some of the pro�,ress report iritOrmation will be requested in ��ritin�,- These reports will
include details of issues to date. Also. it is expected that the I Iuman Resources staff may- consult with the
Proposers staff as the need arises and after the audit has been performed. The selcctcd Proposer %till be
reclllcsted to provide a cope of all electronic data obtained during, the course of the audit in a delimited text
file (including the table definition that describes the data elements), as legally permitted per BCBS and
Prime Therapeutics contracts.
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Deliverahles
A final report %g ill be presented to the Cite �%hich should Include. althouuh not be limited to. the folloyying:
• A proiection of the range of the total dollar population of Claims paid for the audit period
determined statistically from the sampling results and the sampling criteria for each calendar year
audited.
• A projection of total errors in the population based on the sampling results (bv plan } ear). inciuding
the file thodoIon. used i01. tilt projection.
• A schedule of kno%%n errors with sufficient detail to present to BCBS and`or Prime Therapeutics
for refund or settlement. including the cause(s) of the error. if detcrininable. The dollar amount of
the error should be presented in a iOrmat that will indicate a detailed description of the claim. the
ori�linal amount paid, amount per audit the difference between the original amount paid and
amount per audit. and explanation of the error.
• Specific recommendations on processes and procedures to prc%cnt and detect future errors.
S. PROJECT METHODOLOGY
The proposal should include the recommended sample size and how the sample will be selected to
ensure sufficient covera�ile of hi,rh risk claims as well as the number of strata used and the dollar range
of each stratum in the sampling methodology. if applicable. In addition, a description of the
methoduloi'y that will be used to extrapolate the sample audit results across the entire population shall
be provided. The f illow ing statistical parameters should be used for each sample from each plan year:
Confidence Level: 95�.�
Reliability (Precision):
Expected Frror Rate: Less than 59Q
b. EVALUATION CRITERIA
A Proposer may propose on all activities that it considers itselfqualilicd to rCvic%y. Proposcr(s) will he
selected based upon the criteria set forth in the Rh'P. Qualifications «-ill be in the area of
expertise and cited by the response of this RFP.
Any subcontractor must be identified in the initial proposal. inclUdin`a the name of the firm and all
other information as required of the principal firth in this RFP. The City reserves the right to reject an,,
proposed subcontractors. Once a contract is entered into with the successful Proposer. no additional
subcontractin4a will he alloyed without the express prior writtcn consent of the Cite.
a. Offerers are invited to submit demonstrated competence and qualifications of their firm for
providin�� these services.
b. The information Contained Within this document is intended to provide interested firms with the
rcquirements and criteria that will be used to make the selection.
The t61lowinta criteria will be used to evaluate and rank submittals:
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301/o - Substantial successful eXperienec in competing similar projects that includes representations
reaardina the frnil's qualifications and demonstrated skill appropriate to this project and the
technical capabilities and professional competence of the Proposer and assigned personnel.
25% - Record of performance on similar projects based on previous work with the Cite and/or
other client references.
25% - Cost.
20% - Substantial capability to meet schedules and deadlines as well as the capability to complete
projects W111-10ut having major cost escalations. change orders or overruns
7. PROPOSAL FORMAT
a) Proposals should provide a straightforward, concise description of the Offeror's capabilities to
satisfy the requirements of the RFP. Emphasis should be on completeness. clarity of content.
and conveyance of the information requested by the City.
b) The proposal should be bound in a single volume wwhere practical. All documentation
submitted with the proposal should be bound in that single volume. notebooks preferred.
C) If the proposal includes any comment over and above the specific infomiation requested in the
RFP, it is to be included as a separate appendix to the proposal.
d) The proposal must be organized into the following response item sections and submitted in an
indexed binder.
i) Cower letter addressed to the Honorable 'Mayor and Cit}' Council that states the Offeror's
Understanding of the services to be provided. include and additional information believed
necessan, that is not requested elsewhere in the RFP.
ii) Fl description of the methodology to be used to complete the project to include, but not be
limited to. hot%- recommendations will be formulated and commitment of adequate
appropriate resources to the project.
iii) Offeror's specific expertise in areas pertinent to the project to include a listing and brief
description of similar projects completed (with the dates of completion) or in progress and a
list of references by name. address. and telephone number for each project listed. This list
of projects in progress shall include the phase of work that each project is Currentl%' in (i.e.
design, bid, construction), and the estimated completion date.
iv) A brochure of past wvurk, with emphasis on comparable projects.
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v) List of principal(s) of the Proposer and amount of' time that principal(s) will be involvcd in
the project.
vi) List of other professionals to be used, if applicable, with a record of experience in projects
of this nature. Identification of principal(s) and percenta!e of time the principal(s) will be
involved in the project.
vii) The organizational structure of the employees who will be assigned to this project alone
with resumes of those individuals. If' a joint venture is expected, then provide the
orUanizational structure of the sub -contractor and resumes of those persons who will be
involved in the project.
viii) The Proposer must assure the Cite that he/she will to the best of his/her knowledge.
information and belief, be cognizant of. comply with, and enforce. where applicable and to
the extent required. all applicable federal or state statutes and local ordinances including,
but not limited to the Davis-I3acon federal minimum wage requirements.
ix) Describe the Off'cror's methodology for handling errors and omissions.
x) Disclosure of any obligations posing a potential conflict of interest, including service on
Cite boards and:'or commissions and any cuiTent contracts with the City of Lubbock. This
wouid apple to the Proposer as well as consultants subcontracted by the Proposer.
xi) Any material which the proponent wishes to submit and which is not specifically requested
in the above cate, orics.
Nil) Offerors are stron�17Iv cncaura"ed to explore and implement methods for the utilization of
local resources. and to outline how they would address outreach issues in their proposal. It
is also the desire of the City that the City of Lubbock program scree, as mach as
practicahle. to stimulate growth in all sectors of the local business community. Describe
how Four firm Would facilitate this process. and provide any relevant information about
similar efforts on previous projects.
8. PROPOSAL QUESTIONNAIRE
a. State the full name and home office address of your or4aanization. Describe yoLir organizational
structure (e.g., publicly held corporation. private non-profit, partnership, etc.). and list the name of
anv entity or person owr inu 10% or more of your oreanization.
b. Provide the name, title, address. telephone number. and c-mail address of the contact person for
this proposal.
C. Provide the name(,) and experience levels of the auditor(s) who will perform the audit for Cite of
Lubbock.
d. Ifow mare- audits do you conduct annually?
S lu I BD 2015 Scl.`-Lt.;nred Chins Audit 1 �-1'_Jf]'-\L\ Seit-tasur:utce Healthcare Audmn¢ Scr%ice due
e. 'What distinguishes gout- company from your competition that provides these services? I fo,,v %yollld
you add yalLle to this project'?
f. It is the Citti- of Lubbock's intent to select a claims auditing, vendor that can provide the claims
audit services on a flat fee basis. Your sLlbmitted proposal should include an outtine of services
and the fee associated to administer those services.
LT. Ilave voti done an audit Wilh Blue Cross Blue Shield of` "Texas and Primc Therapeutics PBM
before. and are you familiar with and able to %work with their audit reLluirements
h. 140"' closely do your consultants work %with Blue Cross Blue Shield of Texas and'or Primc
Therapeutics PBM claims office personnel'? N-Vill the claims office be alloyed to provide
explanation or additional information as part of the report that will be furnished to City of
Lubbock`'
i. Rocs your sample selection compare to regUiretl7cilts Outlined in Scope of Work? If' not, describe
your sample selection methods in detail. How does it compare with other methods? Is there a
specific approach that yoLir firm GyOuld recommend'?
j. What different types of audits can your organization offer: describe each to detail, ` HI your audits
include:
Statistical Claims Audit''
Operations Assessment Audit'.
Fligiblc Dependent .-Audit?
IIILIh Dollar Claims Audit'?
Multiple Insurer Claims Audit"
Targeted Claims Audit based upon benefit, diagnosis or procedure code'?
Performance Guarantees in contract?
k. Describe any technology process to be used in conducting the audit.
1. List three current medical claim audit review references similar in size and indListry to City of
Lubbock.
M. Has your or,anization ever been involved in a lawsuit involving any area covered by this RI P'? If
yes, provide details including dates and outcomes.
n. Provide your su(7aested timeline for the audit project. Identify key action steps, responsible parties
and delivery dates. Also. please provide your soonest availability for such a project
O. Hoek ltlLlch of City of Lubbock's time \kill SOLI I-CClllll'C to Complete this project'.'
S Lr )!R W) 201 Self-Insmed C1;I1Tn� Audit f `•1' .WAIA Sell-ln.,watlee Iiealdecaie Akaim v Service doc
p. If City of Lubbock has outstanding" audit issues that 31-C not resol't'cd bQW'eell B1Llt Cross I31ue
Shield of Texas and Primo Therapeutics 1'13�1 and C'itt' of Lubbock's audit partner, it is Cite of
I.ubbock's desire to havc all issues diSCON-cred durinll the audit to be resolved between Blue Crass
Blue Shield oF-I-exas' Prime Therapeutics PRNI and the selected auditor. Please: confirm your firm
will follow all outstanding issues to resolution or explain situations Which M�1%- fall outside of this
commitment.
q. Indicate Vour «illim-mess to si`n a Business Associate agreement «ith City' ai' I.Llbbock per the
I IIPAA provisions.
r. Elaborate on your firm-s expertise X%ith C\IS. Detail -our experience in idcntit'Ving, and correcting
eligibility issues %�ithin this specific segment ftilcdicareAledicaidl.
5. Please provide In detall a description of your repoI-ting capablhnc� as refuted to this en`ra`ement.
Please include samples.
t. WIII Four audit inrlLldc a review of the ASO agrecments" It' so. \Hill Four firm make
recommendations for changes that will rep LICC claims payment crrors'?
Ll. Have VOU been SLICCCSSf Lll In % 10%% tmlu, hard cope provider contracts When aUlditingrf) If' thesc are not
available what materials are used instead"
V. Do VOLT have an crosting) relationship «ith Blue CrL)S.S Blue Shield oFl CX. Is and Prinle 1-herapeLit ics
PBM that may pose an ad%antage or possible conflict of interest"
5 itt 1iR iiD ='.+1 � tic!:=ll"m¢ .i t'Lall n, .\n ;I: I'-1' � '-Al,\ tial'-Ill IIILliIu' 11•,1IT11LM' \u?.lit: tistu_ JI'�
Cl FY OF LUBBOCK, TEXAS
RFP I;-12307-NIA
I11. INSURANCE
SECTION A. Prior to the approval of this contract by the City, the Contractor shall furnish a completed Insurance Certiticate
to the Cite, «hick shall be completed by an a'erlt authorized to bind the named under-writer(s) to the coverages, limits, and
termination provisions sho%kn thereon, and which shall furnish and contain all required information referenced or indicated
thereon. Till: CITY SHALL. HAVE NO DUTY TO PAY OR PERFORM UNDER TIIIS CONTRACT LENTIL SUCH
CERTIFICATE SHALL. HAVE BEEN DELIVERF,D TO `]'HE: CITY.
INSURANCE COVERAGE RrQUIRF.D
SECTION B, The Cite reserves the ri0rt to review the insurance requirements of this section during the effectitir period of the
contract and to require adjustment of insurance covcragcs and their limits when deemed necessary and prudent by the City, based
upon changes in statuton la'%, court decisions, or the claims history of the industry as Ncell as the Contractor.
SECTION C. Subject to the Contractor's right to maintain reasonable deductibles in such amounts as are approved by the Cite.
the Contractor shall obtain and maintain in full force and effect for the duration of this contract, and any extension hereof, at
Contractor's sole expense. insurance coverage «ritten b% companies approved by the State of Texas and acceptable to the City.
in the following tNpe(s) and amount(s):
TYPE
AMOUNT
L Commercial General (public) Liability insurance includim-, coverage for the follo%%ine:
a. General Agnrc_,-ate Combined single lirnit for
bodily injury and property
damage of SI.000.000 per"
occurrence or its equivalent.
b. Cvber Liability
?. Professional Liabilit.. ' S1.000.000
The Cith- of Lubbock shall be named as additional insured on Cyher Liability on primary and nott-contributory basis
covera,Ws. All copies of the Certificates of Insurance shall reference the RFII or proposal number ror which the insurance is
being supplied.
ADDITIONAL POLICY ENDORSEMENTS
The City shall be entitled, upon request. and without expense. to receive copies of the policies and all endorsements thereto and
may make aw, reasonable request for deletion. revision. or modification of particular policy terms, conditions, limitations, or
exclusions (except %%here police provisions are established b� lavv or regulation binding upon either of the parties hereto or the
underwriter of any of such policies). Upon such request by the City, the Contractor shall exercise reasonable efforts to
accomplish such chanties in police coverages. and shall pa% the cost thereof.
REQUIRED PROVISIONS
The Contractor agrees that «ith respect to tilt above required insurance, all insurance contracts and certificate(s) of insurance
will contain and state, in writing, on the certificate or its attachment, the follotiyin!g required provisions:
U. Name the City of Lnbboclt and its officers. employees, and elected representatives as additional insureds, (as the
interest of each insured may appear) as to ail applicable coverage:
b. Provide for 30 days notice to the City for cancellation, nonrcnev,-al, or niawrial change:
c. Provide for notice to the City at the address sho�yn below b`, registered mail:
S hr 11re nt) 2111 Suit-lneu:cd U!anns A1AtiI 15-1 `307-,dA Sch'-lusurance Itcal lhcarc AUL ilaiq Somcc Jac
d. The Contractor a,recs to waivc subru,atiun a<_ainst thw Cite of Lubbock. its officers. Lmplwccs. and elected
representatkes fur injuric,, iucludiwi &.ath. prup,no, da mauc, or any othor loss to the c,,tcnt �,arnc ma\ be co�ercd b'
the proceeds ofimurance:
e. Provide that all provisions of this contract concerning habilit%. dut.. and standard of care to-aethcr «ith the
indemnification pro%ision. Shall he undcrx+rittcn h% contractual IiabiIitx co`,era<< sufliCient to inc Iudc Such abIiv>ations
within applicable policies.
NOTICES
The Contractor shall n )tits the C it% in th" e',cnt o;, am chtin,e in COVera,e and shall ,ire Such 110ticc. not leS, th,rn 30 djNS
prior the change. %%hich none; mu,t be acCOlnpanicd h% a replacoino t CERTIFICATE OF INSURANCE.
All notices shall be Liken to the Ci.% at the folkm ine address:
Marta Akare/. Director or Purchasing and Contract X13nuancn1
Cit% of Luhhuck
IG_S 13''' Street. ROOM 204
i-ubbock. Teas 79401
SECTION D. Approval. disappro\al. Or failure to act b} the Cit`< I-CLardin4a an', insurance supplied b, the Contractor shall flat
relieve the Contractor Offull responsibilit', or kahilit� fur damagcs anal accidents as set forth in the contract documents. Neither -
shall the bankruptc}. insohcnc,.. or denial 01'habilit\ b� the insurance cornpan% exonerate the Contractor from habilitn.
S h 7 2R iiI) , Ao,ic I -1: ;I '-V \ ti_:I in,r.rn..:,r.r:I:rt.:,; 1w!: G::' \CTl;C: ,hr.
Proposal for Self -Insured Health Care Auditing Services EXHIBIT "B
Our Understanding of Your deeds
The City of Lubbock offers medical, including pharmacy, and dental benefits to its employees,
retirees and their dependents_ Since 2009. B1ueCross BlueShield of Texas has served as the
administrator for the medical and dental benefits. Prime Therapeutics, a related company, is the
pharmacy benefit manager (PBM).
The benefits plans are self -insured; tivhere the City pays the medical, dental and pharmacy clams
on a weekly basis. The City maintains stop loss insurance -v,;ith a specific attachment point of
S350,000 to mitigate the risk: of potentially catastrophic claims
The City wishes to conduct audits of the administration of the medical. dental and pharmacy
benefits to determine overall claims processing accuracy- and efficiency, verify the accuracy of
distribution of manufacturer rebates, and to identify opportunities for improved administration.
In addition to conducting a statistical audit to verify administrative accuracy, the City wishes to
include the follo'Mrig tests-
* Review of a sample of medical and dental claims to the corresponding provider contracts;
o Test the application of stop loss provisions for accuracy;
o Determine the value, if any, of claims paid for ineligible participants;
o Interrogate the claims data electronically for clinical edits (procedure codes), duplicate
payments and other recoverable claims overpayments:
o Verify' the payments to providers and corresponding drativ from the City funds; and
Conduct an audit of manufacturer rebates to ensure the correct amounts have been
credited to the City account.
Methodology Overview
Sagebrush proposes to audit a statistical sample and conduct focused electronic testing on 100%
of the claims for each of the medical, dental and pharmacy claim populations.
Statistical testing provides a good overviev,- of the administrator's overall performance. Each
sampled claim is reviewed for the accuracy of every step in the adjudication process, from
medical necessity to benefits to pricing to payment. The review will include verification of the
administration of grandfathered provisions. The results of a statistical audit can be compared to
performance guarantees. The administrative services only (ASO) agreement between the City
and BCBSTX anticipated that a statistical audit will be used to evaluate overall performance:
"Audit samples be limited to no more than three hundred (3) randomly selected claims."i
Administ-attve Services Agreement p. 12. Section 12.1.
Prepared for
The City of Lubbock_ 1 _ Sagebru oh
Proposal for Self -insured Health Care Auditing Services
The medical and dental statistical audits are conducted in the administrator's offices. using the
administrators systems and supporting documentation. PBMs often provide supporting
documentation to conduct th-audit in Sagebrush"s offices. However, 1ve have typically
conducted the Prime Therapeutics audits in the BCBS Richardson, Texas office. I ach potential
error Swill be reviewed and verified with the administrator/PB4l.
Electronic testing is used to evaluate 100% of the claims For specific or focused types of potential
errors. Sagebrush proposes to use its technology to test for specific error types that_ while
comprising a small percentage of the overall claim population; are indisputable and can typically
be recovered by the administrator. The electronic testing will be conducted in Sagebrush"s
offices and potential exceptions ,vill be verified with the administratorIPBM.
In addition to the statistical and electronic testing of each of the medical, dental and pharmacy
claims, Sagebrush it.111 conduct a review of the rebates to the City from the pharmaceutical
manufacturers.
Per the Pre -Bid conference. Sagebrush has also included separate pricing in this proposal to
conduct an onsite review of operations and controls at the BCBS medical processing facility in
Wichita Falls.
Prior to the statistical and electronic audit of claims, Sagebrush Nvill request the.
Administrator/PBM to complete our Administrative Questionnaire. The purpose of the
Questionnaire is to create a framework of stated policies, procedures and controls to be reviewed
duirina the audit of the claims.
Sagebrush rill prepare a N ritten repmr t for each of the medical_ dental and pharmacy (including
rebates} revie��s. The administrator.'PB�I will be asked to prepare a «titter response to the
reports. including any action plans. The administrator?BNI response will be included in the
final report.
Statistical Audit Tests
Sampling Methodology
Sagebrush will select stratified random samples of approximately 250 claims from the each of
the populations of medical. dental, and pharmacy claims. Sagebrush anticipates selecting the
samples across all claims in each respective population, including actives. retirees. and
dependents.
Based on the RFP. the pharmacy population or study period encompasses all claims processed in
calendar year 2014. The medical and dental populations encompass all claims processed in
2012, 2013 and 2014. However, the ASO agreement provides: "the audit period Will be limited
to the current Agreement year and he immediately preceding Agreement year."2 If possible.
Administrative Sen ices Agreement, p. 12. Section 12.1.
Prepared for
The City. of Lubbock _ 2 _ Sagebrush 4
Proposal for Self -Insured Health Care Auditing Services
Sagebrush «ill select 250 medical and 250 dental claims from across the 2012 - 2014 period. If
this is not acceptable to BCBSTX, Sagebrush can select the 250 claims from the 2013 - 2014
period.
The ASO agreement provided allows for the selection of 300 claims for each audit. We propose
to select 250 for statistical testing and reser-�-,e the remaining 50 to verify- any exceptions
identified through electronic testing.
The statistical samples "ill be selected using a stratified random sampling technique. A sample
size of 250 claims is more than large enough to be statistically valid with an expected error rate
of 5% at 9511ro confidence with 2-3 precision points. The stratified random methodology will
allow us to draw statistically valid conclusions about the financial accuracy- rate with %,,'hich the
entire prescription population �,vass processed.
Sample Audit Tests
Each sampled claim VVIII be tested ("re -adjudicated") on the claim administratorPBM's systems
for financial and procedural accuracy. Specifically, we will verify:
% as the paper submission (if paper) an unaltered original? Did it contain all
required information to process the claim?
Was the claimant eligible for benefits on the date(s) of sen-ice?
• W'as the claim submitted within the specified timely filing limit?
• Were thti managed care pricing discounts correct?
o Medical D-Intal: Are the discounts taken as described in the provider's
contract andior contract summary?
o Pharmacy: Was the applicable MAC or AWP pricing applied'? Were
ffeneric or formulary- substitutions made in accordance with the plan of
benefits?
• Pharmacy: Were step therapies followed, if applicable?
Were the services/drugs covered and medically necessary and appropriate
according to the plan and administratorrPBM's utilization re%zew procedures?
Were benefit coordination and subroaation accurately determined if the claimant
had other coveraae a-vailable?
• Did the claim contain all required information and was it coded properly in the
claim processing system?
• Dental: Did the claim contain the correct tooth and surface number?
Were benefits applied in accordance with plan requirements. including
grandfathered provisions?
Prepared For
Sagpbrush
The City of Lubbock - 3 - ��>, ' C -7 5
Proposal for Self -Insured Health Care Auditing Services
C�
Dental: I4ere annual and lifetime benefit maximums, including orthodontia,
correctly tabulated?
NVere the mathematical computations and the application of copayments and
deductibles/out-of-pocket limits. if applicable_ accurate?
Were preauthorization/precertification procedures followed and documenied. when
required by the plan of benefits?
Was the claimant vvithin their maximum number of prescription!services?
Did the correct provider/pharmacy- or claimant receive payment?
. Vas the claim paid only once"
Did claim payment response time meet generally accepted industry• standards and the
administrator's internal standards'.)
Was the payment disbursed from the correct account`?
Electronic Tests
Electronic Medical and Dertal Clinical Coding Tests
Sagebrush has developed proprietary software. SageSuite�. specifically- to support our computer
based auditing services. We use SageSuite� at our insurance company clients to identiA-
payment errors.
We propose to apply- this same technology to the medical and dental claims processed by
Sagebrush uses clinical editing softvi-are to:
Bundle multiple procedures
• Identify incidental and mutually- exclusive procedures
Flag potentially cosmetic procedures
Flag potentially inappropriate use of assistant surgeons
ldenrify unbundled pre and post operative visits
Sagebrush proposes to pass all of the client's medical and dental data through the clinical editor
logic for the above tests. The tesi results Neill confirm whether the administrator is appropriately
using clinical editing logic In processing the client's claims.
Prepared for tA, S ag e b ru s h
om:
The City of Lubbock - 4 - tka. s o , ; c
Proposal for Self -insured Health Care Auditing Services
Electronic Pharmacv Tests
Sagebrush will electronically t;:st 100% of the pharmacy claims for improper payments,
including:
• Participant copay s
• Improper units. often leading to overpaid amounts
• Dispensed frequency greater that allowed by the plan of benefits and/or law
• Invalid NDC and HCPCS codes
• Over -utilization of scheduled drugs and drugs with strcct value
Claims Paid for Ineligible Participants
Sagebrush will request electronic eligibility information from the Cite and electronically
compare the eligibility records to the claims records. The written report will quantify- the value
of claims paid for ineligible participants for the study period. Additionally, a database of claims
paid for ineligible members can be provided to the City for analysis.
In our experience, the Administrator,TBM's liability for ineligible claimants and instances of
COB are typically strictly- limited by the administrative services contract. However, examinina
claims paid for ineligible participants is useful for determin3n6 the root cause of the error and
improving processes that would reduce such payments in the future.
Duplicate Pavments
Sagebrush .vill electronically test all claims data for claims that resulted in a duplicate payment
to the participant or provider of sen-ice.
Stop Loss Claims
Sagebrush will electronically identify participants meeting the specific stop loss limit for each
contract year reviewed. We would then produce a report of the amiregate medical claims for
these members and verify the accuracy of the coordination with the stop loss carrier.
Operational Tour
At the City's request, Sagebrush Mtl conduct a tour of the medical claims processing and
customer service facilities, including financial and fraud controls. Our review- will include a
comparison of BCBSTX's operational benchmarks for accuracy and customer service to industry -
benchmarks. A separate price for operational tour has been included in this proposal document.
Prepared for
5'4 � Sageb,rush
The City of Lubbock - 5 - �� , ;, _ , .- 5
Proposal for Self -insured Health Care Auditing Services
C) Claims Administration Questionnaire
Prior to the onsite portion of the audit, we Ni ill request that the Administratov?BM complete a
detailed Claims Administration Questionnaire addressing issues such rya claim adjudication
procedures, system capabilities, claim pricing. training, utilization re«ev4. and internal fraud
control procedures. The claims administrator's response to the Questionnaire will be used as a
framev.-ork for the audit by establishing the procedures and protocols used for processing the the
Citv's claims.
System Access
Sagebnish requires inquiry -only access to the Administrator/PBNI's claim systems. The
following screens are required for the audit of the statistical samples:
Eligibility; including COB verif`icatior: screens
Claim history
• Claim payment
Pricin-
• Authorizations and/or step therapies (pharmacy only), if any
Claim and mernber sVstern notes
Benefit acctunulator screen
• Claim document Lm. ages for paper claims
Prescription copies for a subsample of pharmacy claims
Claim status screen: used to calculate turnaround time
Sagebrush has conducted numerous audits at BCBSTX and Prime Therapeutics. Our auditors
are familiar xvith their systems.
Rebate Audit
Sagebrush will electronically identify the top fire (5) brand drugs by total ingredient cost
dispensed to the City population using the paid claims data containing all drugs dispensed during
the study period. For each of the fi".e selected drugs, Sagebrush �Drug kZll identify the National Dr
Code {N;DQ and drug name, and tally the number of dispensed scripts. total quantity dispensed
and ingredient cost by month.
Prepared for
Sagebrush
The City of Lubbock - 6 -
Proposal for Self -Insured Health Care Auditing Services
Sagebrush will request that Prime Therapeutice make available supporting records acid
documents to verifv the calculation and allocation to the City of rebate arnoun.ts for these
selected dru¢s. Items to be requested and proEided include:
zz
• PB1I-Manufacturer agreements for the five drugs; and
• Financial records shoMnG the calculation and allocation of the rebate amount to the City
account.
Prime Therapeutics Nvill likely require that Sagebrush review the supporting documentation at
Prime Therapeutics's facilities due to the confidential nature of the manufacturer amreements.
Sagebrush's report vall include our determination of the accuracy of the rebates allocated to the
City- and our general_ observations about the City's agreement vNith Prune Therapeutics with
regard to rebates.
Data Request
In order to select the sample and perform the electronic tests as outlined above. will request a
data tape from BCBSTX and Prime Therapeutics containing all claims processed during the
study period determined by the City. Our standard data request is attached. Both BCBSTX and
Prime Therapeutics have standard data extracts which has proved sufficient in previous audits.
Prepared for
The City of Lubbock -7- Sagebrush 5
Proposal for Self -Insured Health Carve Auditing Services
C), Reporting
U
Deliverables
At the completion of our audit. �,ve will provide you vith a written report detailing our fmdinus
for the administration of the medical. dental, and ph=act- (including rebates) plans. The
reports «ill include:
Listing of all identified errors.
Accuracy statistics, including financial. payment and procedural accuracy.
• Claim turnaround time.
Claims paid for ineligible participant test results,
Electronic improper payment test results,
Our observations and recommendations. and
Administrator's response, including any plans for corrective actions.
The audit reports v ill quantify the dollar ,,alue of erroneous claim payments in the population,
identify the root cause of errors and areas for improvements, and allow the comparison of
administrator's performance to contractual agreements for performance, if any, and to industry
standards.
A copy of the draft report will be provided to BCBSTX and Prim,- Therapeutics for review.
Sagebrush gill request that BCBSTX and Prime Therapeutics prepare a Nvritten response to the
draft report, including any action plans that they intend to undertake as a result of the review.
The administrator's response will bo included in the final report. Any instances where
Sagebrush and the administrator disagree on a particular error %will be clearly noted as such in the
final report.
After all reports are finalized, Sagebrush «ill present the findings to the City either by a face-to-
face meeting or via conference call depending on your preference.
Prepared for
The City of Lubbock - s _ Sagebrush s
Proposal for Self -Insured Health Care Auditing Services
C
Sagebrush Contacts and ResOUrces
Sally Reaves «ill be responsible for the overall service delivery to the City. Darlene
Wojnaro,.vski , ill manage the claim audit tearn and will be responsible for t e day-to-day
activities of the audit, including supervision of the audit tea rr..
The audits will be staffed entirel-v by Sagebrush personnel. All proposed personnel have
sipificant experience with auditing the BCBSTX companies.
Prepared for
The Cite of Lubbock
�a�. Sagpbrush
Sciu,eons
Proposal for Self -Insured Health Care Auditing Services
Proposal Questionnaire Responses
a) Sagebrush Solutions is a Texas Limited Liability Corporation located at 14681 Mid'.vav
Road, Suite 105, Addison, Texas 75001. We private and for profit. Sally Reaves and Faith
Glover each o«n more than 10% of Sagebrush Solutions.
b) Proposal Contact:
Sally Reaves
COO
Sagebrush Solutions
14681 Midway Road, Suite 105
Addison. TX 75001
(214) 27?-1102 direct
(972) 467-8149 mobile
5a ii'.reai:.S LZ
c) Experience of Team \Members:
Sally Reaves — 30 years
Darlene Wojnarowski -- 17 years
Dent Dennis — 15 years
L� Bill Grass — 16 years
Faith Glover — 3 0- years
Pat Walker — 30—' rears
d) Sagebrush conducts 25—. audits annually.
e) Sagebrush's core business is the conduct of health care audits. We have audits d BCBSTX
and related companies numerous times. Sagebrush is a BCBSTX-approved audit firm.
Sagebrush is also an auditor for CNIS.
f) Please see the Fees section of this proposal. Sagebrush has proposed a flat fee.
Or Sagebrush has audited BCBSTX and Prime Therapeutics numerous times, and ,,ti'e are
familiar with their systems, data. and policies and procedures. Sagebrush is a BCBSTX-
approved auditor.
h) Sagebrush ti i11 work directly with Administrator/PBM personnel. Each potential exception
wi11 be revie�,�-ed ,pith AdministratorlPBN-1 personnel in )�rriting and their response will be
recorded in v�TitinQ. The Auditor and AdministratonP$M iNill receive and retain a copy of
the written dialogue of each potential error. The Administrator,PBM will be provided the
opportunity to respond to the report. The response will be incorporated into the report.
Prepared for
The City of Lubbock Sagebrush
01 I C !1 $
Proposal for Self -Insured Hearn Care Auditing Services
i) Yes, our sample selection methodology is compliant With the UP requi_roments. Please see
the Methodology section of this proposal.
j} please see the Methodology section of this proposal. All of the audits types described in
this question have been included in our methodology. The operational review of the
medical claims processing and customer service facility has been included in this proposal
as an optional component of the audit.
k) Pleas% see the Electronic Audit Tests heading under the Methodologti- section of th s
proposal.
1) Please see the References Section of this proposal.
m) Sagebrush has never been involved in a lawsuit involving any area covered by this Rl= P
other than providing expert testimony- on behalf of a client. Sagebrush has never been a
Party to a lawsuit involving any area covered by this RFP.
n) The time table below illustrates a "typical' project timeline with the Administrator/P13M
and the level of client involvement. Sagebrush commits to meeting the tasks within our
control (in italics) in the timeframes denoted below-:
1. City notifies Administrator of the intent to audit. (Week 1)
.% 2. Cit; notifies Eligibility Vendor,Department that Audit Team will be requesting eligibility
data to support the audit. (Week 1)
3. _4 it N Tenn requests claims data tape front Administrator (T eek 1)
7. rizidit Tewn requests eligibility data tape front Eligibility Vendor/Department OVeek 1)
5. Administrator provides database containing all transactions processed during the stud'
period for the specified populations. (Week;) 4
6. Eligibility VendorDepartment provides database containing eligibility- transactions.
(� eek 3 )
7. Audit Team sends a pre -audit gliestlonnaire to Adininistrator (R'eek 1)
8. 4zidit Team recei.°es data tape. selects sample and provides sample to :Idnlinistralor
(Meek 4)
9. Audit Team conducts electronic tests can claims data, including, claims paid to ineligibles.
(J-Veek 5)
10. Administrator retrieves claim copies and other supporting documentation for onsite visit
and returns completed questionnaire to Audit Team in advance of onsite (may be up to 4
weeks depending on Administrator)
11, Audit Team conducts onsite azedit (1 week)
12. Audit Tearer prepares draft audit report and submits to .-Idministrator (1 tireek)
Prepared for
The City of Lubbock -26- S agebrush 5
Proposal for Self -insured Health Care Auditing Services
13. Administrator prepares written response to draft report and submits to Audit Team (up to
r' 0 days, depending upon the Administrator)
14. Audit Tears binds final report. including, Adrainistrator Is response W761 presents to the
Cit}• (I creek)
In summary. the City 01 need to:
• Notify the Administrators and Eligibility- VendorTepartment of the audit.
i Provide the Audit Team with copies of the SPD and ASO agreements; and
• May be asked the City's intent concerning certain SPD provisions_
It is not necessary that the City- be present, _ onsite during the audit activities.
o) Please see the response to question (n) above.
p) In most cases. Sagebrush and the Administrator/PBM Nvill agree on the determination of an
error or issue. In cases where the parties do not agree.. each party's position will be noted i❑
the report.
q) Sagebrush v,-ili sign a BAA -6th the City.
'—' r) Sagebrush has provided audit services to CMS for 16 }ears. Saaebnish has conducted more
than 200 audits of Medicare Managed Care and Part D plans on behalf of CMS. Sagebrush
has also conducted Medicare and M- dicaid audits for potential fraud, risk: addjusiment
payment, and ACOs.
s) Reports can be tailored to meet client needs. Please sce the attached sample medical and
phannacy- audit reports.
t) Sagebrush «-ill review the provisions of the ASO agreements related to audit rights and
make suggestions for future revisions, if needed.
u) Sagebrush uses the BCBSTX provider contract summaries to review all sampled claims. In
addition to the summaries, Sagebrush routinely requests 10 copies of provider contracts
corresponding to sampled claims during each audit of BCBSTX.
v) Sagebrush, other than auditor, does not have relationships with BCBSTX and/or Prime
Therapeutics. Sagebrush does not have any real or perceived conflicts with this audit.
Prepared for
*,Sa ebrush
The City of Lubbock - 27 - > g, s
Proposal for Self -Insured Health Care Auditing Services
EX1113IT "C"
C.
Professional Fees
Our fees for the scope of services outlined above a.e shown in the table below.
Seri ices ! Professional Fees
Audit of 250 medical, 250 dental. and 250 S72.000 i
pharmacy claims administered by
BCBSTX1Prime Therapeutics, including all
statistical_ audit services described herein; 4
100% electronic audit of all medical, dental,
and pharmacy claims, including verification of
potential errors and all other electronic audit
services described herein: and
Conduct of a rzvieW of re'oatas from
pharmaceutical manufacturer as described
herein.
Operational review of the medical claims 55,000
processing and customer sen-ice facility as
described herein.
Reasonable out-of-pocket expenses, such as travel to Prune Therapeutics site for rebate audit
purposes or for presentation to Council_ are not included in these estimates and Will be billed
separately. We assume that, at a rrunimum, the medical audit -v6ll be conducted in Richardson,
TX. Travel expenses u-ill not exceed S5,000.
'We u711 issue an in -voice for one half of the estimated professional fees at the commencement of
the en}agement. A final invoice for remaining fees and out-of-pocket expenses, if any, tell be
issued upon completion and delivery of the final reports.
Prepared for
The City of Lubbock
-28-
Sagebrush
0 1 c r s
1 XHIBIT `'D"
CITY OF LUBBOCK
BUSINESS ASSOCIATES AGREEMENT
This Business Associates Agreement is entered into by and between the City of Lubbock
(the City), and Sagebrush Solutions, (the Business Associate), which is a person or
entity who performs functions or activities on behalf of, or provides certain services to,
the City that involve access by the Business Associate to protccted health information.
Business Associates include subcontractors that create, receive, maintain, or transmit
protected health information on behalf of another business associate.
I. DEFINITIONS
A. Business Associate -Shall generally have the same meaning as the term `'Business
Associate" at 45 CFR 160.103, and in reference to the party of this Agreement, shall
mean the Business Associate named herein.
B. Covered Entire - shall generally have the same meaning as the term "Covered Entity"
at 45 CFR 160.103, and in reference to the party to this Agreement, shall mean City
of Lubbock.
C. HIPAA Rules - shall mean the Privacy, Security, Breach Notification and
Enforcement Rules at CFR Part 160 and Part 164.
D. Catch -All Definitions - The following terms used in this Agrccment shall have the
same meaning as those terms in the HIPAA Rules: Breach, Data Aggregation;
Designated Record Set. Disclosure, Health Care Operations, Individual; Minimum
Necessary, Notice of Privacy Practices, Protected Health [nfonrtation, Required By
Law, Secretary, Security Incident; Subcontractor, Unsecured Protected Health
Information, and Use.
[I. OBLIGATIONS AND ACTIVITIES OF BUSINESS ASSOCIATE
A. Rusiress Associate agrees to:
Not use or disclose protected health information other than as permitted or
required by the Agreement or as required by law;
2. Use appropriate safeguards, and comply with Subpart C of 45 CFR Part 164 with
respect to electronic health information, to prevent use or disclosure of protected
health information other than as provided for by the Agreement;
3. Report to Covered Entity any use or disclosure of protected health information not
provided for by the Agreement of which it becomes aware, including breaches of
unsecured protected health information as required at 45 CFR 164.410, and anv
security incident or which it becomes aware. The Business Associate will notify
City of Lubbock Business Associates A-reerneut Page : or3
the City as soon as practicable after learning of any such use, disclosure, breach,
or incident.
4. In accordance with 45 CFR 164.502 (e)(i)(ii) and 164.308 (b)(2), if applicable,
ensure that any subcontractors that create, receive, maintain, or transmit protected
health information on behalf of the Business Associate agree to the same
restrictions, conditions and requirements that apply to the Business Associate with
respect to such information;
5. Make available protected health information in a designated record set to the
Covered Entity as necessary to satisfy Covered Entity's obligations under 45 CFR
164.524;
6. Make any amendments to protected health information in a designated record set
as directed or agreed to by the Covered Entity pursuant to 45 CFR 164.526, or
take other measures as necessary to satisfy Covered Entity's obligations under 45
CFR 164.526. The Business Associate will notify the Citv as soon as practicable
after receiving a request under this section;
7. Maintain and make available the information required to provide an account of
disclosures to the Covered Entity as necessary to satisfy Covered Entity's
obligations under 45 CFR 164.528. The Business Associate will notify the City as
soon as practicable after receiving a request under this section:
8. To the extend the Business Associate is to carry out one or more of Covered
Entity's obligations under Subpart E of 45 CFR Part 164, comply with the
requirements of Subpart E that apply to the Covered Entity :n the performance of
such obligation; and
9. Make its internal practices, books, and records available to the Secretary for
purposes of determining compliance with HIPAA Rules.
I11. PERMITTED USES AND DISCLOSURES BY BUSII\ESS ASSOCIATE
A. Business Associate may only use or disclose protected health information.
B. Business Associate may use or disclose protected health information as required by
law.
C. Business Associate agrees to make uses and disclosures and requests for protected
health information only as necessary to perform the services requested and/or
required of the Business Associate by the City or as set forth in any service agreement
between the Business Associate and the City.
Ciry of Lubbock Busiiiess Associates agreement pane 2 of 5
D. Business Associate may not use or disclose protected health information in a manner
that would violate Subpart E of 45 CFR Part 164 if done by Covered Entity except for
the specific uses and diSClostlCeS set for belov,%
E. Business Associate may use protected health information for the proper management
and administration of the Business Associate or to carry out the legal responsibilities
of the Business Associate.
F. Business Associate may disclose protected 'health infonnation for the proper
management and administration of Business Associate or to carry out the legal
responsibilities of the Business Associate, provided the disclosures are required by
law, or Business Associate obtains reasonable assurances from the person to whom
the information is disclosed that the information will remain confidential and used or
farther disclosed only as required by law or for the purposes for which it was
disclosed to the person, and the person notifies Business Associate of any instances of
which it is aware in which the confidentiality of the information has been breached-
G. Business Associate may provide data aggregation services relating to the health care
operations of the Covered Entity.
IV. PROVISIONS FOR COVERED ENTITY TO INFORM BUSINESS ASSOCIATE
OF PRIVACY PRACTICES AND RESTRICTIONS
A. Covered Entity shall notify Business Associate of any limitations in the notice of
privacy practices of Covered Entity under 45 CFR 164.520, to the extend that such
limitation may aft-ect Business Associate's use or disclosure of protected health
information.
B. Covered Entity shall notify Business Associate of any changes in, or revocation of.
the permission by an individual to use or disclose his or her protected health
information, to the extent that such changes may affec[ Business Associate's use or
disclosure of protected health information.
C. Covered Entity shall notify Business Associate of any restriction on the use or
disclosure of protected health information that Covered Entity has agreed to or, is
required to abide by under 45 CFR 164.522, to the extent that such restriction may
affect Business Associate's use or disclosure of protected health information.
V. PERI``,IISSIBLE REQUESTS BY COVERED ENTITY
Covered Entity shall not request Business Associate to use or disclose protected health
information in any manner that would not he permissible under Subpart E of 45 CFR Part
164 if done by Covered Entity unless the Business Associate will use or disclose
protected health information for, and this Agreement includes provision for, data
aggregation or manaoctnent and administration and legal responsibilities of the Business
Associate.
City or Lubbock Business Associates yruemcnt Page 3 of S
VI. TERM AND TERMINATION
A. Term. This Agreement shall be effective on June 25. 2015, and shall terminate on
December 31, 2015, or when terminated as authorized herein, whichever is sooner.
B. Tcrmination for CaLISc. Business Associate authorizes termination of this Agreement
by Covered Entitv, if Covered Entity determines Business Associate has violated a
material term of the Agreement and Business Associate has not cured the breach or
ended the violation within the time spccif ed by the Covered Entity. BLISiness
Associate shall have seven (7) days to cure a violation or breach of the contract
before termination for cause.
C. Obligation of Business Associate Upon Termination. Upon termination of this
Agreement for any reason, Business Associate, with respect to protected izcalth
information received from Covered Entity, or created; maintained, or received by
Business Associate on behalf of Covered Entity, shall:
1. Retain only that protected health information which is necessary for Business
Associate to continue its proper management or administration or to carry out its
legal responsibilities;
2. Return to Covered Entity the remaining protected health information that the
Business Associate still maintains in any form,
3. Continue to use appropriate safeguards and comply %vith Subpart C of 45 CFR
Part 164 with respect to information, other than as provided for in this Section; for
as long as Business Associate retains the protected health information;
4. Not use or disclose the protected health information retained by Business
Associate other than for the purposes for which such protected health information
was retained and sub iect to the same conditions set out at under "Permitted uses
and Disclosures by Business Associate, above, which applied prior to termination;
and
5. Returned to Covered Entity the protected health information retained by Business
Associate when it is no longer needed by Business Associate for its proper
management and administration or to carry out its legal responsibilities.
6. It shall be the responsibility of the Business Associate to obtain protected health
information created, received or maintained by any subcontractors of Business
Associate.
D. Survival. The obligations of Business Associate under this Section shall sur-%ive the
termination of this Agreement.
Ci-y of hH)ock Business Assuciates Agrecrucnt pa-c 4 ni5
VII. MISCELLANEOUS
A. A reference in this Agreement to a section in the HIPAA Rules means the section as
in effect or as arnerided.
B. The parties agree to take such action as is necessary to amend this Agreement from
time to time as is necessary for compliance with the requirements of the HIPAA
Rules and any other applicable law.
C. Any ambiguity in this Agreement shall he interpreted to permit compliance %vith the
HIPAA Rules.
FOR CI Y:
Date.
L.eisa Hutcheson, Director Human Resources
And Risk Management
FOR T ES ASSOCIATE:
S aIX Reavf�
�6
Title
Date: S-- 2z - r s
City of Lubbock Business Associates Agreement Paa,e 5 or 3