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HomeMy WebLinkAboutResolution - 2003-R0530 - Client Service Agreement - Healthsmart Preferred Care II, LP - 11/24/2003Resolution No. 2003-RO530 November 24, 2003 Item No. 1 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock, by and between the City of Lubbock and HealthSmart Preferred Care, II L.P., a Client Service Agreement for HealthSmart Preferred Care II, L.P. to negotiate discount arrangements with healthcare providers and all related documents, and take appropriate action. Said Client Service Agreement is attached hereto and incorporated in this resolution as if fully set forth herein and shall be included in the minutes of the City Council. Passed by the City Council this 24th ATTEST: e� . Rebecca Garza City Secretary APPROVED AS TO CONTENT: h�v - 4 /V� illiam De Haas Contract Manager APPROVED AS TO FORM: Matthew L. Wade Natural Resources Attorney as/Cityatt/Matt/IhealthSmart Preferred Care.Res. November 19, 2003 day of November , 2003. CLIENT SERVICE AGREEMENT FOR PROVIDER NETWORK STATE OF TEXAS COUNTY OF LUBBOCK Resolution No. 2003—RO530 November 24, 2003 Item No. 1 This agreement (hereinafter referred to as "Agreement") is made this 11 day of January, 2004, by and between, HealthSmart Preferred Care, 11 L.P. (hereinafter referred to as "HSPC"), a Texas limited partnership , and City of Lubbock a home rule municipal corporation in the State of Texas (hereinafter referred to as "Client" whether one or more). WHEREAS, the purpose of this Agreement is to state the terms and conditions under which HSPC will provide services to Client and under which Client will compensate HSPC for services performed. WHEREAS, as part of HSPC's regular services to its clients, HSPC negotiates discount arrangements with healthcare providers in many areas, and the provider arrangements are negotiated on an on-going basis in an attempt to maximize the discounted rates from such healthcare providers; and WHEREAS, Client, in the regular course of its business, provides healthcare benefits to covered individuals and wishes to use the services of HSPC. Now therefore, in consideration of the mutual covenants and agreements contained herein, the receipt and sufficiency of which are hereby acknowledged, Client and HSPC agree as follows: 1. Services - HSPC will provide the following services to Client: (a) Hospital, and/or physician, and/or other healthcare providers price negotiation based on Client data; (b) Data entry of all Client in -network hospital, physician, and/or other healthcare providers claims prior to payment of the claim; (c) Forwarding of such claims, along with instructions for payment amounts, to the Client or to Client's third party payor; (d) Measuring, recording and reporting the amount of money saved by the Client as a result of the discount arrangements negotiated by HSPC. 2. Personnel - Physicians providing services are independent contractors with HSPC; other personnel will be independent contractors or employees of HSPC. 3. Compensation - HSPC will be compensated for all activities related to the HSPC provider network as described in the schedule of fees, attached hereto as Exhibit "A." HSPC retains the right to adjust attached fee schedule upon 30 days written notice, but in no event will there be more than one fee adjustment annually. HSPC will invoice Client on a monthly basis. Client is solely responsible for prompt payment of the aforementioned fees to HSPC. Confidential 1 12160_3> 4. Term - The term of this Agreement will be from January 1, 2004 (Effective Date) through December 31, 2005 provided the discounts obtained and warranted by HSPC and as outlined in Section 16 herein, are effective through December 31, 2005. In the event the discounts obtained and warranted by HSPC, as outlined in Section 16 herein, expire on December 31, 2004, this Agreement shall expire December 31, 2004. 5. Termination - This Agreement can be terminated for cause by either party upon sixty (60) days written notice. Cause is defined as any material breach of the terms of this Agreement, including but not limited to the failure of Client or Client's payor to remit payment to HSPC on a timely basis for its services rendered and billed hereunder. HSPC may terminate the participation of the Client for any reason by providing) ninety 90days written notice to the Client. Upon termination of this Agreement, should there be any pending case that requires additional work, upon the Client's specific request and authorization, HSPC will continue to render services and will bill for such remaining services in accordance with the then applicable schedule of fees. 6. Authorizations - Client authorizes HSPC to have access to all relevant medical, financial, and personal data and other documents and information pertaining to covered individuals, including any general statistical or summary data, and coverage description or plan documents helpful to the particular services requested. Client authorizes HSPC where appropriate to secure waiver or consent directly from the covered individual. 7. Limitations - Unless specifically agreed in writing to the contrary, HSPC shall have no authority to bind Client or its covered individuals to any of its assessments, recommendations, findings, or certifications with respect to utilization management. Client and its covered individuals reserve the right to act based upon their judgment with respect to any and all claims or issues reviewed hereunder. 8. Relationship of the Parties - The Client and HSPC are independent contractors. This Agreement is not intended to create an employer-employee relationship, partnership or joint venture between the Client and HSPC. Furthermore, this Agreement shall not be deemed to create any rights or remedies in persons who are not parties to this Agreement. 9. Provider Negotiations - Client empowers HSPC to negotiate provider arrangements on its behalf. The covered individuals of Client may choose whether or not to utilize HSPC Providers HSPC will use best efforts to keep the client fully informed of all negotiations affecting the Client between HSPC and providers. o.k. 10. Provider Claim Evaluation - HSPC will evaluate and format all covered individual's provider claims to determine the documented savings for covered individuals. The evaluation and formatting will be performed based upon the negotiated discount arrangements established by HSPC with the HSPC Providers. Following the evaluation and formatting of said provider claims, HSPC will transfer these claims to Client or to a third party designated by Client for adjudication and payment. 11. Documented Savings Report For each quarter of the year in which this Agreement is effective and covered individuals utilize the services of the HSPC provider network, HSPC will (i) prepare a documented savings report, accumulated from claims evaluated during such quarter, of the total documented savings for Client's covered individuals for such quarter and (ii) send the documented savings report for such quarter to Client by the twenty-fifth of the next month. 12. Disclaimer - While the duty of HSPC under this Agreement is to provide certain information designed to assist Client in providing better services to covered individuals, such duty of HSPC in no way affects Client's fiduciary responsibility to covered individuals, damages that may result from disputes (or judgments resulting from disputes) that arise between Client and any covered Confidential 2 individuals, insureds, clients, employees and/or their dependents, or with providers, or any other payee or other person in a contractual relationship with Client. 13. Indemnification - Each party shall indemnify and hold the other harmless from all claims, losses, damages, judgments, liabilities, causes, expenses or obligations (including but not limited to reasonable attorney's fees and expenses) arising out of or resulting from the indemnitor's own negligent or other wrongful act or omission or that of any of its officers, shareholders, directors, agents, representatives, or employees acting within the scope of his or her employment. HSPC shall indemnify and hold harmless, without limitation and to the fullest extent permitted by law, Client, and Client's respective officers, employees, elected officials and agents, from and against any and all losses, business 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, caused, or contributed to, by the negligence or fault of HSPC, it's officials, employees and/or agents in the improper or illegal release of confidential medical, financial or personal information kept, maintained or possessed by HSPC pursuant to this Agreement. This indemnity shall not apply to the release of any information by HSPC done solely at the intentional direction of the Client. HSPC further covenants and agrees to defend any suits or administrative proceedings brought against Client and/or Client's respective officers, employees, elected officials and/or agents on account of any such claim brought relating to an improper or illegal release of confidential medical, financial or personal information kept, maintained or possessed by HSPC pursuant to this Agreement, and HSPC agrees to pay or discharge the full amount or obligation of any such claim incurred by, accruing to, or imposed on Client, or Client'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, HSPC shall pay to Client, Client's respective officers, employees, elected officials and/or agents, as applicable, all attorneys' fees incurred by such parties in enforcing HSPC's indemnity in this section. 14. Confidentiality of Information Until the termination of this Agreement, and to the extent permitted by law, all information provided by HSPC to Client, and not otherwise expressly stated by HSPC in writing to be available for public distribution, will be deemed to be proprietary to HSPC and of a highly confidential nature including, but not limited to, information concerning any HSPC provider networks, other systems, fee scheduled, programs, processes and methods used by HSPC (collectively referred to as the "Information"), all of which it is agreed have substantial value to HSPC. 15. Insurance - HSPC is responsible for maintaining, during the life of this Agreement, liability insurance sufficient to protect it from claims of personal injury or property damage that may arise from its activities under this Agreement. The City of Lubbock shall be named as a certificate holder under such policies. HSPC shall provide to Client prior to the execution of this Agreement copies of such insurance agreements and HSPC agrees to provide updated copies of the insurance policies to Client on the reissuance or renewal of such polices. HSPC is also responsible. for maintaining, during the life of this Agreement, an Errors and Omissions insurance policy in the amount of two millions dollars ($2,000,000.00). However, if the Client should require additional coverage, HSPC shall purchase such coverage at the sole expense of the Client. 16. HSPC Provider Network/Discounts - HSPC provider network created and maintained by HSPC shall be the property of HSPC and shall remain in HSPC's possession. HSPC hereby represents and warrants that Client shall be entitled to receive the benefits of the provider arrangements Confidential 3 negotiated with each of the healthcare providers in the HSPC provider network during the term of this Agreement., A copy of each provider arrangement between HSPC and the respective healthcare providers are attached hereto as Exhibit "B". HSPC hereby represents and warrants that all price negotiations and/or discounts secured by HSPC with Covenant Medical System, University Medical Center and Highland Medical Center, will be equal to or greater than those discounts enjoyed by Client either directly or through Client's preferred provider network as of October 23, 2003. HSPC shall provide written documentation to Client verifying such discounts within thirty (30) days of execution of this Agreement. It is understood by the parties to this Agreement that failure to meet the terms and conditions of this provision by HSPC shall be considered a material breech of this Agreement and, notwithstanding any other provision contained in this Agreement, Client may immediately terminate this Agreement and pursue whatever rights and remedies, whether legal or equitable, available to Client. 17. Governing Law - This Agreement will be controlled, construed and enforced in accordance with the laws of the State of Texas. 18. Counterparts - This agreement may be executed simultaneously in one or more counterparts with the same effect as if the signatories executing the several counterparts had executed one counterpart. 19. Severability - If any part of any provision of this agreement is held to be invalid or unenforceable under applicable law, said part or provision shall be ineffective to the extent of such invalidity or unenforceability, without in any way affecting the remaining parts of the agreement, which shall be construed and enforced as if such invalid or unenforceable part or provision had not been inserted. 20. Merger Clause - This Agreement constitutes the entire agreement of the parties hereto with respect to the matters covered by this Agreement, and correctly sets forth the rights, duties and obligations of the parties as of its date. Any prior agreements, promises, negotiations or representations, be they written or oral, not set forth in this Agreement, are of no force and effect, and are superseded by this Agreement. 21. Force Majeure Clause - In the event that the performance by either party hereto of any of its obligations or undertakings hereunder shall be interrupted or delayed by any occurrence and not occasioned by the conduct of either party hereto, whether such occurrence be an act of God or the common enemy or the result of war, riot, civil commotion, sovereign conduct or the act or conduct of any person or persons not a party or privy hereto, then it shall be excused from such performance for such period of time as it is reasonably necessary after such occurrence to remedy the effects thereof. Confidential 4 22. Notice - All notices and communications under this agreement shall be in writing and shall be deemed to have been duly given to a party if when delivered in person to such party or three (3) business days after such notice is enclosed in a properly sealed envelope, certified or registered, and deposited "postage and certification or registration prepaid" in a post office or collection facility regularly maintained by the United States Postal Service and addressed as follows: If to HSPC: HealthSmart Preferred Care, II L.P. Attention: David M. Adams, CEO 2002 West Loop 289, Suite 103 Lubbock,Texas 79407 (800) 687-0500 If to Client: City of Lubbock Attention: Director of Human Resources Mailing Address: P.O. Box 2000 Lubbock,Texas 79457 Physical Address: 1625 13`h Street Lubbock, TX 79401-3830 23. Amendments - This Agreement may be amended or modified only by a further instrument in writing executed by the parties hereto. 24. Waiver of Breach or Default - Waiver by either party of any breach or default of the other, or failure of either party to enforce at any time any of the provisions hereof, shall not be deemed a waiver by such party of any other breach or default or the right of such party thereafter to enforce any provision of this Agreement. 25. Benefit Plan Design - Client shall have a minimum financial incentive of ten percent (10%) in the health benefit plan(s) for covered individuals to access the HSPC preferred provider network. 26. Physician Component Access - Client is required to include a per office visit co- payment component in the health benefit plan(s) for covered individuals to access physicians in the HSPC preferred provider network. 27. Identification Cards - Client is required to provide covered individuals an identification card that identifies the covered individuals as a participant in the HSPC preferred provider network. 28. Exclusive Use of the HSPC Preferred Provider Network - Client shall use the HSPC preferred provider network exclusively under the terms of this Agreement, and not access any other PPO or discount arrangements of any kind in the same geographical area that the HSPC preferred provider network services for any particular employer group, so long as all health care providers currently serving the Client are included in the HSPC preferred provider network. 29. Prompt Payment to HSPC - Client is solely responsible for prompt payment to HSPC. Invoices are due and payable upon receipt thereof and are considered delinquent 30 days after date of invoice. Past due accounts are charged 1.5% interest per month, or an annual percentage rate of eighteen (18) percent per annum. Collection fees, when necessary, will be paid by the Client. Client agrees not to contract with individual providers or provider based/owned networks. Failure to comply with this clause will constitute material breech of the terms of this Agreement. Confidential 5 2G�3 -0��3C 30. Arbitration - The parties agree that in the event of a dispute and prior to initiating arbitration proceedings, the parties will each designate one (1) senior company officer to negotiate a resolution to the dispute. If the designated representatives are unable to agree upon a resolution within thirty (30) days, or any agreed upon extension, then the parties agree to submit the dispute to Arbitration for final and binding resolution. Any dispute, controversy, or claim arising out of or relating to this Agreement or the breach, interpretation, termination, or validity thereof shall be settled by final and binding arbitration by a single arbitrator in accordance with this agreement and the Texas General Arbitration Act (TEX. Civ. PRAC. AND REM. CODE, § 171.001 et seq.). The parties shall select an American Arbitration Association ("AAA") approved arbitrator pursuant to the rules and procedures of AAA. The place of arbitration shall be Lubbock, Texas, U.S.A. The arbitrator shall apply the laws of Texas to the substance of the dispute. The parties agree that the award of the arbitrator shall be the sole exclusive remedy between them regarding any claims, counterclaims, issues or accountings presented or pleaded to the arbitrators. Any award issued by the arbitrator shall be promptly paid to the prevailing party by the losing party and such payment shall be payable free of any tax, deduction or offset. If the losing party fails or refuses to promptly pay such award, or inhibits or unduly delays the payment of such award shall pay to the prevailing party any and all costs, fees, taxes or attorneys fees incurred by the prevailing party in enforcing the arbitrator's award. 31. Eligibility Requirement - All clients agree to provide information designed to verify eligibility on a monthly basis. Such notification shall be in a format agreed upon by both parties. HSPC retains the right to audit eligibility on a quarterly basis. 32. Refunds - Requests for refund will not be accepted if said refund request is filed within six months of the expiration of this Agreement. 33. Run Out Claim Service - Run out provider coverage and repricing will be provided upon request of Client. Fees for said service are described in Exhibit "A" and/or Exhibit "B" attached hereto and hereby incorporated into this Agreement. 34. Geographic Coverage - In the event that the Client does not use the HSPC network of providers for the entire state in which coverage is contracted, said Client shall provide HSPC with a map by county or a listing of counties that would specify HSPC provider network coverage. 34. Payer Licensure - Payer certifies that they maintain current applicable license(s), certificates and/or approved filing with appropriate State agencies. 35. Final Payment Decision - HSPC and/or Q -elements, or its vendors, in the course and scope of providing precertification services is not the final authority on eligibility or for payment of a claim but is only acting as a vendor resource for information to the carrier/plan who has the final decision authority on payment. Confidential 6 HealthSmart Preferred Care, II L.P. EXECUTED AT Lubbock, Lubbock County, State of Texas on the ! day of .3 eclk' , 2003 David M. Adams, CEO The City of Lubbock CITY OF LUBBOC 4Mirc McDougal, Mayo ATTEST: Re ecca Garza, City Secretary APPROVED AS TO CONTENT: illiam de Haas, Contract Manager APPROVED AS TO FORM: Matthew L. Wade, Natural Resources Attorney \\cityatt\matt\City of Lubbock and Healthsmart 311-14 Confidential h EXHIBIT "A" SCHEDULE OF SERVICES PROVIDED (For Contract Period Beginning January 1, 2004) Client hereby agrees to compensate HEALTHSMART PREFERRED CARE, II L.P. (HSPC) for services rendered under the attached Client Service Agreement. Such compensation shall be: $4.00 per employee per month for Network Access Directories shall be $..25 pepm or $3.00 each. Run Out Claim Service shall be no additional charge for 90 days- Thereafter 20% of Savings. Client shall have access to the following portions of the HSPC provider network: Entire HSPC provider network Effective Date: January 1, 2004 Confidential 8 EXHIBIT "B" Confidential 26a3- (Z��3O