Loading...
4956 RENEWAL ASA Amend FRAT Add RX BRS 1.1.2012 (v2 add 2016 for Custo...FINANCIAL RENEW AL AND TERMS AMENDMENT This Am e ndment ("Amendment") is made to the Administrative Services Agreement ("Agreement") by and between U nited HealthCare Services, Inc. ("United") and City of Denton ("Customer"), Contract No. 715130, and is eff e c t ive on January I, 2011 unless otherwise specified. Any capit alize d te r ms used in this Amendment have the meanings shown in the Agreement. These terms may or may not have been capitalized in prior contractual documents between the parties but will have the same meaning as if capitaliz ed. The agr eeme nts that are being amended include any and all amendments , if any, that are effective prior to the effective d ate o f this Amendment. Nothin g show n in thi s Amendment alters, varies or affects any of the terms, provisions or conditions of the agreem e n ts othe r th a n as stated herein. The p a rti es, by s i g n ing b e low, agree to amend the agre e ment s as contained herein . City of D ento n By l~t,~~tt_,U <w Print Nam e Print Title Date ~~rl 0 . f?M>CV-- ~~ United HealthCare Services, Inc. ~d.· Autho 1ze · natur e . Pmt ~~~d Print Titl ~/t.YYliZ}nt«J(}~;(_ Date ( 5J:5L/20/{o - Renewal 4Q 2014 1 TheAdministrativeServicesAgreementisamendedasnotedbelow. EffectiveJanuary1,2011 1.Section1-Definitionsisamendedbytheadditionofthefollowing: NetworkPharmacy:Apharmacy,includingaspecialtypharmacyandhomedeliverypharmacywhichhas enteredintoorisgovernedbyacontractualarrangementwithUs,Ouraffiliate,Ourpharmacybenefitservices (PBS)subcontractor,orOurPBSsubcontractor’saffiliatesunderwhichthepharmacyagreestoprovide prescriptiondrugservicestoParticipants. 2.ThedefinitionofProprietaryBusinessInformationandRebatesshowninSection1–Definitionsareamendedto readasfollows: ProprietaryBusinessInformation:Nonpublicinformation,tradesecrets,andotherdataincluding,butnot limitedto,salesandmarketinginformation,managementsystems,strategicplansandotherinformationabout thedisclosingparty’sbusiness,industry,productsandservices,plans,specifications,operationmethods, pricing,costs,techniques,manuals,know-howandotherintellectualproperty,inwritten,oralorothertangible form,providedbyonepartytoanotheroritsrepresentative;andallinformation,documents,technology, products,andservicescontainingorderivedfromProprietaryBusinessInformationwhichwasormayhave beentransmitted,givenormadeavailabletoorviewedbyonepartyoranotherinthecourseofthereceiving party’srelationship.OurProprietaryBusinessInformationshallinclude,butnotbelimitedto,financial provisionsrelatedtoprescriptiondrugproductscoveredunderthemedicalbenefit,thePrescriptionDrugList, reimbursementrates,PBSsubcontractorandothersubcontractorcompensation,andallotherfinancial provisionsrelatedtothepharmacybenefitscontainedinthisAgreement.WhilethePrescriptionDrugListis consideredourProprietaryBusinessInformation,itmaybedisclosedinthelimitedcircumstancesoutlinedin thisAgreement. Rebates:Allrebates,discountsorotherfinancialincentives(whetheraccess,base,PrescriptionDrugList (PDL),incentive,marketshare,volume,orother),andadministrativefeeswhichWereceivedirectlyor indirectlyfromapharmaceuticalmanufacturerandwhichareobtainedinconnectionwithprescriptiondrug productsdispensedtoParticipantsunderthePlan'spharmacybenefitorthemedicalbenefit.Rebatesdonot includeanypurchasingdiscountsobtainedbyaPBSsubcontractororsubcontractororspecialtypharmacyor homedeliverypharmacywhenpurchasingprescriptiondrugproductsforhomedeliverypharmacyservicesor specialtypharmacyservicesthroughaPBSsubcontractorordirectdistribution.Rebatestocustomersare administeredandpaidunderthemedicalbenefitplanorpharmacybenefitplanasoutlinedinthisAgreement. 3.Section4–ServicesProvisionsisamendedbytheadditionofSection4.25PharmacyBenefitServicesasfollows: Section4.6PharmacyBenefitServices.WewillmakeNetworkPharmaciesavailabletoYour Participants.WewilldeterminewhichpharmaciesareNetworkPharmacies.NetworkPharmaciescan changeatanytime.WewillmakeareasonableefforttoprovideYouwithadvancenoticeifanymaterial changesoccurtotheNetworkPharmacy.WewillprovideYouinformationonthereimbursementrateto OuraffiliateNetworkPharmacyforspecialtypharmacy. HomeDeliveryPharmacyServices.WewillprovidehomedeliverypharmacyservicesforYour Participants.Yourpricingtermsforhomedeliverypharmacyservicesarebasedonpackagesizesof100 units,16ouncequantitiesorthenextclosestquantityavailable andatleasta46daysupply.Prescriptions filledthroughthehomedeliverypharmacythatarelessthana46daysupplywillbeprocessedatretail pricingandwillbecountedwithretailutilization.Wewillretainthedifferencebetweenthepackagesizeof 100unitsor16ouncesandtheactualmanufacturer’spackagesizewhichthehomedeliverypharmacy’s priceisbasedon. 2 PrescriptionDrugList(PDL)YouhaveadoptedoneormoreofOurPDLsforusewithYourbenefit plans.Youagreenottocopy,distribute,sell,orotherwiseprovidethePDLtoanotherpartywithoutOur priorwrittenapproval,excepttoParticipantsasdescribedbelow.OnterminationofthisAgreementorif YouterminatethePharmacyBenefitServicesportionofthisAgreement,,YouwillstopalluseofthePDL. WhileYouaretheultimatedecision-makeronselectingthedesignofyourPDL(s),Youhaverequestedthat Wesupply,andWehaveassistedYouwith,certainPDLdevelopmentandmanagementfunctionsincluding butnotlimitedtodrugtieringdecisions.OurintentistoprovideYouwiththesamePDLandmanagement strategiesthatWedevelopandemployinthemanagementofourfullyinsuredbusiness. WemakethefinalclassificationofanFDA-approvedprescriptiondrugproducttoacertaintierofthePDL byconsideringanumberoffactorsincluding,butnotlimitedto,clinicalandeconomicfactors.Clinical factorsmayinclude,butarenotlimitedto,evaluationsoftheplaceintherapy,relativesafetyorrelative efficacyoftheprescriptiondrugproduct,aswellaswhethersupplylimitsornotificationrequirements shouldapply.Economicfactorsmayinclude,butarenotlimitedto,theprescriptiondrugproduct's acquisitioncostincluding,butnotlimitedto,availableRebates,andassessmentsonthecosteffectivenessof theprescriptiondrugproduct. Wemayperiodicallydown-tiertheplacementofaprescriptiondrugproductamongthetiers.These changesmayoccurwithoutpriornotice.Onceayear,Wemayalsoup-tiertheplacementofaprescription drugproductamongthetiersand/orrecommendspecificprescriptiondrugproductexclusionsfrom coverage.WewillprovidenoticetoYouofmaterialchangestothePDL,ourdrugtierclassification procedures,coverageexclusions,andclinicalprograms.IfYouchoosenottoimplementaparticular coverageexclusionorclinicalprogramchange,YouneedtoinformUsinwritingsixty(60)dayspriorto theeffectivedateoftheexclusionorchange.Currentdrugplacementandrelatedinformationmaybe obtainedfromthememberwebsite,orbycallingcustomerservice. ClaimsProcessing.WewillprocesstheclaimsreceivedfromaNetworkPharmacyinaccordancewiththe SummaryPlanDescription,aswellasthepricingandothertermsoftheNetworkPharmacy’sparticipation agreement.Onhomedeliveryandretailpharmacyservices,Wewillretainthedifferencebetweenwhatwe reimbursetheNetworkPharmacyandYourpaymentforaprescriptiondrugproductorservice. 4.Section4–ServicesProvisionsisamendedbytheadditionofSection4.26PharmacyBenefitServicesasfollows: Section4.26PharmacyBenefitRebates. AllocationandPaymentofRebates.We,aPBSSubcontractor,orasubcontractorwillnegotiatewithdrug manufacturersforthepaymentofRebatestoUs.TheamountofRebatesthatisavailabledependsonmany factorsincludingwhetherYouhaveanincentivebenefitdesign,arrangementswithdrugmanufacturers,the volumeofprescriptiondrugclaimsandthestructureofthePDL.WewillpayYouanamountequalto80%of theRebatesWereceive(andWemaypayinterestonthisamountasdescribedinthisSection).Wewillretain thebalanceofsuchRebates(andanyrelatedinterest)aspartofOurcompensation.Youagreethatallpayments associatedwithRebatesandanyrelatedinterestarenotdueandowingtoYouuntilWeactuallypaythemto YoupursuanttothisAgreement. YouwillonlyreceiveYourRebatestotheextentthatRebatesareactuallyreceivedbyUs.Forexample,ifa governmentactionoramajorchangeinpharmaceuticalindustrypracticeseliminatesormateriallyreduces manufacturerRebateprograms,Yourpaymentamountmaybereducedoreliminated.Insuchevent,Weshall promptlynotifyYouandreviseoreliminatesuchpaymenteffectivewiththedateofthereductionor eliminationinRebatepayments.Inaddition,reductionoreliminationofRebatesinthiseventshallconstitutea changeintheAgreementasdescribedintheServiceFeesSectionsuchthatWehavetherighttoincreasethe servicefeesforthePharmacyBenefitsManagementservicesorincreasethepercentageofRebatedollars retainedbyUs. PharmacyBenefitRebatesReceivedFromPBSSubcontractororOtherSubcontractor 3 WhenOurPBSsubcontractororanothersubcontractoronOurbehalfcontractswithdrugmanufacturersforthe paymentofRebatestoUs,WemayreceiveestimatedpaymentsbeforeRebatesareactuallyearned.The RebateYoureceivefromUswillincludeinterestfromthetimeWereceivetheestimatedpaymentsthroughthe dateWereceivethereportfromOurPBSsubcontractororanothersubcontractor.TheinterestWewillpay YouwillbecalculatedattheonemonthLondonInterbankOfferedRate(LIBOR)ineffectonthefirstbusiness dayofeachapplicablemonth. WewillpayRebatestoYou,generally,withinthirty(30)calendardaysafterWereceivetheactualRebates earnedreport.IfWearenotabletomakepaymenttoYouwithinthirty(30)calendardays,WewillpayYou additionalinterest,calculatedattheonemonthLondonInterbankOfferedRate(LIBOR)ineffectonthefirst businessdayofeachapplicablemonth,onsuchRebatesfromthedateofreceiptoftheRebatesearnedreport throughthedatethatWemaketheRebatepaymenttoYoulessapproximatelythirty(30)daysforprocessing. Wewillretaininterestearnedduringtheprocessingtimeframe. PharmacyBenefitRebatesReceivedDirectlyByUsFromaDrugManufacturer WhenWenegotiatedirectlywithdrugmanufacturersforthepaymentofRebatestoUs,WewillpayYouthe agreeduponRebateswithinthirty(30)calendardaysofOurreceiptofsuchRebatesfromthedrug manufacturer.IfWearenotabletomakepaymenttoYouwithinthirty(30)calendardays,WewillpayYou interestonsuchRebatesfromthedateofreceiptuntilWemakepaymenttoYou,lessapproximatelythirty(30) daysforprocessing.Wewillretaininterestearnedduringthisprocessingtimeframe.WewillpayRebatesto Youintheagreeduponamountnolessthanannually.InterestwillbepaidattheonemonthLondonInterbank OfferedRate(LIBOR)ineffectonthefirstbusinessdayofeachapplicablemonth. PBSSubcontractororOtherSubcontractorPaymentstoPharmacies.Inconnectionwithprescriptiondrug claims,WeforwardfundsfromYourclaimsaccounttoOurPBSsubcontractor'soranothersubcontractor’s accountpriortothetimethatpharmaciesandotherpayeespresentchecksforpayment.OurPBS subcontractororanothersubcontractorissuescheckstopharmaciesandotherpayeeswithin,onaverage,3days ofreceivingpaymentfromYouraccount.Thesechecksgenerallyarepresentedforpaymentwithin,on average,5½dayslater.OurPBSsubcontractororanothersubcontractormayretaininterestearnedonthese amountsduringthistime.InterestisexpectedtobepaidatovernightdepositratesbythePBSsubcontractor’s orothersubcontractor’sbankinginstitution. YourCompliance.YouagreethatduringthetermofthisAgreement,neitherYounorthePlanwillnegotiate orarrangeorcontractinanywayforRebatesonorthepurchaseofprescriptiondrugproductsfromany manufacturerwithrespecttothepharmacybenefits.IfyouorthePlandoes,Wemay,withoutlimitingOurright tootherremedies,immediatelyterminateYourandPlan'sentitlementtoRebates(includingforfeitureofany Rebatesearnedbutnotpaid)and/orterminatethepharmacybenefitservices.Terminationofpharmacybenefit servicesshallconstituteachangeintheAgreementasdescribedintheServiceFeesSectionsuchthatWehave therighttoincreasetheservicesfeesformedicalmanagementservicesunderthisAgreement. Inaddition,YouagreetoreasonablycooperatewithUsinordertoobtainRebates.YouwillencourageYour ParticipantstouseaNetworkPharmacy.YouwillalsoencourageYourParticipantstoelectronicallyaccessthe PDLonOurwebsite,andencourageParticipantstosharethePDLwiththeirphysiciansorrefertheir physicianstothePDLonOurwebsite. 5.Section9.3Auditsissupersededandreplacedbythefollowing: Section9.3Audits.DuringthetermoftheAgreement,andatanytimewithinsix(6)monthsfollowingits termination,YouoramutuallyagreeableentitymayauditUsonceeachcalendaryeartodeterminewhetherWe arefulfillingthetermsofthisAgreement.Priortothecommencementofthisaudit,Wemustreceiveasigned, mutuallyagreeableconfidentialityagreement. SuchconfidentialityagreementmustgiveOurPBSsubcontractorthirdpartybeneficiaryrightstoenforcethe confidentialityrequirementswithrespecttoOurPBSsubcontractor’sconfidentialinformation. Withoutlimitingtheforegoing,withrespecttoauditsregardingthepaymentofRebatesbypharmaceutical manufacturers,theauditmustbeconductedsolelybya“bigfour”publicaccountingfirmthatmaintainsa separateandstand-aloneauditdepartmentandisnotprovidingsupportinconjunctionwithanylitigation 4 pendingagainstOurPBSsubcontractororUs.However,ifno“bigfour”publicaccountingfirmisqualifiedto performtheauditduetotheaboverequirements,anothermutuallyagreeablefirmmeetingsuchrequirements maybeused.YoumustadviseUsinwritingofYourintenttoaudit.Theplace,time,type,duration,and frequencyofallauditsmustbereasonableandagreedtobyUs.Allauditswillbelimitedtoinformation relatingtothecalendaryearinwhichtheauditisconducted,and/ortheimmediatelyprecedingcalendaryear. WithrespecttoOurtransactionprocessingservices,theauditscopeandmethodologywillbeconsistentwith generallyacceptableauditingstandards,includingastatisticallyvalidrandomsampleorotheracceptableaudit techniqueasapprovedbyUs(“Scope”). YouwillpayanyexpensesthatYouincurinconnectionwiththeaudit.Inaddition,Youwillbechargeda reasonableperclaimchargeanda$1,000chargeperdayforauditsoutsideofthefollowingparameters:(1) morethanoneauditpercalendaryear;(2)anyon-siteauditvisitthatisnotcompletedwithinfive(5)business days;(3)samplesizesexceedingtheScopespecifiedabove;or(4)anyauditinitiatedafterthisAgreementhas terminated.Theadditionalfeescovertheadditionalresources,facilityfees,andotherincrementalcosts associatedwithanauditthatexceedstheScope. InadditiontoYourexpensesandanyapplicablefees,YouwillalsopayanyextraordinaryexpensesWeincur inconnectionwiththeaudit.ForanyauditinitiatedafterthisAgreementisterminated,Youwillpayall expensesincurredbyUs. YouwillprovideUswithacopyofanyauditreportswithinthirty(30)daysafterYoureceivetheaudit report(s)fromtheauditor. EffectiveJanuary1,2012 1.Section4–ServicesProvisionsisamendedbytheadditionofSection4.27BariatricResourceServicesas follows: Section4.27BariatricResourceServices.FortheservicefeespecifiedinExhibitA,We,throughOur affiliate,UnitedResourceNetworks(U.R.N.)willprovideBariatricResourceServices(“BRS”)toeligible Participants.BRSmayincludepre-surgicalpatientconsultationandbehavioralhealthevaluation. coordinatedpost-surgeryfollow-upandbehavioralhealthsupport,long-termpatienttelephonicmonitoring forbehavioralhealthissues,aswellasaccesstoanetworkofprovidersfortheprovisionofbariatric services.U.R.N.willuseoutreachstrategiesdesignedtomaximizeeligibleParticipants’program utilization.OutreachstrategiesthatU.R.N.mayemploycurrentlyinclude,butarenotlimitedto, communicationstoalleligibleParticipantsregardingavailabilityofBariatricResourceServicefacilities, instructionsforrequestingeducationalmaterials,and/ordirectmailtoParticipantsdiagnosedwithbariatric conditions. U.R.N.isnotresponsibleforthemedicaloutcomesorthequalityorcompetenceofanyproviderorfacility renderingservices,orthepaymentforservicesrenderedbytheproviderorfacility. EffectiveJanuary1,2015 ThisAmendmentwillnotaffectanyoftheterms,provisionsorconditionsoftheAgreementexceptasstatedherein. FollowingtheEffectiveDateandafterCustomerhasprovidedone(1)months’worthofclaimsfunding,this Amendmentisdeemedexecutedbytheparties. 1.Section4.3ManagedCareNetworkServicesoftheAgreementisamendedbytheadditionofthefollowing: ValueBasedContractingProgram. United’scontractswithsomeNetworkProvidersmayincludewithholds,incentives,and/oradditionalpaymentsthat maybeearned,conditionedonmeetingstandardsrelatingtoutilization,qualityofcare,efficiencymeasures, compliancewithUnited’sotherpoliciesorinitiatives,orotherclinicalintegrationorpracticetransformation 5 standards.CustomershallfundthesepaymentsduetheNetworkProvidersassoonasUnitedmakesthe determinationtheNetworkProviderisentitledtoreceivethepaymentundertheNetworkProvider'scontract,either upfrontorafterthestandardhasbeenmet.Forupfrontfunding,ifUnitedmakesthedeterminationthattheNetwork Providerfailedtomeetastandard,UnitedwillreturntoCustomertheapplicableamount.Unitedshallprovide CustomerreportsdescribingtheamountofpaymentsmadeonbehalfofCustomer’sPlan. OnlytheinitialclaimsbasedreimbursementtoNetworkProviderswillbesubjecttotheParticipant’scopayment, coinsuranceordeductiblerequirements.CustomerwillpaytheNetworkProviderthefullamountearnedor attributabletoitsParticipants,withoutareductionforcopaymentsordeductiblesandagreethattherewillbeno impactfromthesepaymentsonthecalculationoftheParticipant’ssatisfactionoftheirannualdeductibleamount. 1 EXHIBITA ContractNumber715130 ThefollowingfinancialtermsareeffectivefortheperiodJanuary1,2015throughDecember31,2016. TheStandardMedicalServiceFeesarethesumofthefollowing: TheStandardMedicalServiceFeesareasstatedbelow.ThesefeesdonotincludestateorFederalsurcharges, assessments,orsimilarTaxesimposedbygovernmentalentitiesoragenciesonthePlanorUnited,includingbutnot limitedtothoseimposedpursuanttoThePatientProtectionandAffordableCareActof2010,asamendedfromtime totimeasthesearetheresponsibilityofthePlan.TheStandardMedicalFeesarebaseduponanestimatedminimum of1,268enrolledEmployeesfor2015and1,313enrolledEmployeesfor2016. EffectiveJanuary1,2015throughDecember31,2016 •$40.52perEmployeepermonthcoveredunderthePlan. •AverageContractSize:2.56 PharmacyAWPContractRate Customer’scontractrateforprescriptiondrugsisasprovidedinExhibitB.UnitedusesMedi-Span’snationaldrug datafileasthesourceforaveragewholesaleprice(AWP)information.Unitedreservestherighttorevisethepricing andadoptanewsourceorbenchmarkiftherearematerialindustrychangesinpricingmethodologies. ServiceDescription Fee FraudandAbuseManagement Feeequaltothirty-twoandfive-tenthspercent(32.5%)of thegrossrecoveryamount HospitalAuditProgramServices Feenottoexceedthirty-onepercent(31%)ofthegross recoveryamount CreditBalanceRecoveryServices Feenottoexceedtenpercent(10%)ofthegrossrecovery amount. ThirdPartyLiabilityRecovery(Subrogation)Services Feeequaltothirty-threeandone-thirdpercent(33.3%)of thegrossrecoveryamount SharedSavingsProgram Customerwillpayafeeequalto35%oftheSavings ObtainedasaresultoftheSharedSavingsProgram. SavingsObtainedmeanstheamountthatwouldhavebeen payabletoahealthcareprovider,includingamounts payablebyboththeParticipantandthePlan,ifnodiscount wereavailable,minustheamountthatispayabletothe healthcareprovider,again,includingamountspayableby boththeParticipantandthePlan,afterthediscountis taken. AdvancedAnalyticsandRecoveryServices Feeequaltotwentyfourpercent(24%)ofthegross recoveryamount ExternalReviews Foreachsubsequentexternalreviewbeyond5total reviewsperyear,afeeof$500willapplyperreview. Care24 EffectiveJanuary1,2015throughDecember31,2015 $1.45Perparticipantpermonthforeachmedicalandnon- medicalEmployee WellnessAllowance UnitedwillprovideawellnessallowancesoCustomermayenhanceCustomer’smedicalbenefitsduringthetermof theAgreement.ThewellnessallowancemaybeusedatCustomer’sdiscretionasCustomerutilizeswellness programmingandservicesfromUnited. 2 $20,000Wellnessallowancein2015 $20,000Wellnessallowancein2016 3 EXHIBITB–PERFORMANCEGUARANTEESFORHEALTHBENEFITS TheStandardMedicalServiceFees(excludingOptionalandNon-StandardFeesandthatportionoftheStandard MedicalServiceFeesattributabletoCommissionFunds,ifapplicable,asdescribedinExhibitB),(hereinafter referredtoas“Fees”)payablebyCustomerunderthisAgreementwillbeadjustedthroughacredittoitsfeesin accordancewiththeperformanceguaranteessetforthbelowunlessotherwisedefinedintheguarantee.Unless otherwisespecified,theseguaranteesapplytomedicalbenefitsandareeffectivefortheperiodbeginningJanuary1, 2015andendingonDecember31,2016(eachtwelvemonthperiodisa“GuaranteePeriod”).Withrespecttothe aspectsofourperformanceaddressedinthisexhibit,thesefeeadjustmentsareCustomer’sexclusivefinancial remedies. Unitedreservestherightfromtimetotimetoreplaceanyreportorchangetheformatofanyreportreferencedin theseguarantees.Insuchevent,theguaranteeswillbemodifiedtothedegreenecessarytocarryouttheintentofthe parties.UnitedshallnotberequiredtomeetanyoftheguaranteesprovidedforinthisAgreementoramendments theretototheextentUnited’sfailureisduetoCustomer’sactionsorinactionsorifUnitedfailstomeetthese standardsduetofire,embargo,strike,war,accident,actofGod,actsofterrorismorUnited’srequiredcompliance withanylaw,regulation,orgovernmentalagencymandateoranythingbeyondUnited’sreasonablecontrol. PriortotheendoftheGuaranteePeriod,andprovidedthatthisAgreementremainsinforce,Unitedmayspecifyto CustomerinwritingnewperformanceguaranteesforthesubsequentGuaranteePeriod.IfUnitedspecifiesnew performanceguarantees,UnitedwillalsoprovideyouwithanewExhibitthatwillreplacethisExhibitforthat subsequentGuaranteePeriod. ClaimisdefinedasaninitialandcompletewrittenrequestforpaymentofaPlanbenefitmadebyanenrollee, physician,orotherhealthcareprovideronanacceptedformat.Unlessstatedotherwise,theclaimsarelimitedto medicalclaimsprocessedthroughtheUNETclaimssystems.Claimsprocessedandproductsadministeredthrough anyothersystem,includingclaimsforotherproductssuchasvision,dental,flexiblespendingaccounts,health reimbursementaccounts,healthsavingsaccounts,orpharmacycoverage,arenotincludedinthecalculationofthe performancemeasurements.Also,servicesprovidedundercapitatedarrangementsarenotprocessedasatypical claim;thereforecapitatedpaymentsarenotincludedintheperformancemeasurements. PharmacyFinancials Definition Contractedpharmacyratesthatwill bedeliveredtoYou. Measurement 01/01/2015 01/01/2016 andCriteria CombinedDiscountGuarantee RetailBrand,AverageWholesale Price(AWP)less 16.9%16.9% RetailGeneric-30Day,AWPless 81.3%81.3% MailOrderBrand,AWPless 25.1%25.1% MailOrderGeneric,AWPless 70.5%70.7% TheGuaranteedDiscountamountwillbedeterminedbymultiplyingtheAWPbytheguaranteed discountoffAWPbyeachcomponentandaddingtheamountstogether. DispensingFees RetailBrand $1.40 $1.40 RetailGeneric $1.40 $1.40 Dispensingfeetotalsarecalculatedbymultiplyingtheactualscriptsforeachtypebythecontractedrate forthatscripttype. MinimumRebateGuarantee RebateSharingPercentage 80.0%80.0% Basis,perscript Brand Brand Retail $20.29 $23.42 4 MailOrder $43.56 $45.01 Level CustomerSpecific Period Annually PaymentPeriod Annually PaymentAmount-- Discounts Theamounttheactualdiscountsarelessthanthecombinedcontracteddiscount amount. PaymentAmount-- DispensingFees Theamountthecombinedactualdispensingfeeexceedsthecombinedcontracteddispensingfee. PaymentAmount-- Rebates TheamountthecombinedactualRebateamountarelessthanthecombinedguaranteedRebateamount. Conditions DiscountSpecificConditions •DiscountsarebasedonactualNetworkPharmacybrandandgenericusageofretailandmailorder drugs TheguaranteeddiscountamountwillbedeterminedbymultiplyingtheAWPbythecontracteddiscount rate offAWPbycomponent. •DoesnotapplytoitemscoveredunderthePlanforwhichnoAWPmeasure exists. •DiscountscalculatedbasedonAWPlesstheingredientcost;discountpercentagesarethediscounts divided bytheAWP.DiscountsforretailgenericprescriptionsrepresenttheaveragesavingsoffAWPbasedon MaximumAllowableCost(MAC)pricingforMACgenericsandpercentagediscountsavingsoffAWP for non-MACgenerics.Allotherdiscountsrepresentthepercentagediscountsavings offofAWP. •Thearrangementexcludesallspecialtydrugs,genericmedicationslaunchedasan"at-risk"product, generic medicationwithpendinglitigation,compounddrugs,retailoutofnetworkclaims,mailorderdrugs(for dispensingfee arrangement)andnon-drugitems. •Theretailandmailordergenericdiscountsexcludeanygenericdrugthathastwoorfewergeneric manufacturers;theretailandmailorderbranddiscountsincludeanygenericdrugthathastwoorfewer genericmanufacturers. RebateSpecificConditions WereservetherighttomodifyoreliminatethisarrangementasfollowsbaseduponchangesinRebates: •ifchangesmadetoOurPDL,forthepurposeofachievingalowernetdrugcostforYouandOurother ASO customers,resultinsignificantreductionstotheRebate level •intheeventthattherearematerialdeviationstotheanticipatedtimingofdrugsthatwillcomeoff patentandno longergenerateRebates •ifYouchangeordonotelectan Incentedplandesign •WewillpayRebatesconsistentwiththeAgreement.AreconciliationoftheRebateamountswilloccur after theendofeachannualcontractperiodandwhenRebatepaymentsaresubstantiallycomplete.The reconciliationcalculatestheminimumrebateamountbymultiplyingtheactualnumberofscriptsfilled bythe applicablerebateamountforthat scripttype. GeneralConditions •Onmailorderdrugsandretailpharmacydrugsandservicesincludingdispensingfees,Wewillretain the differencebetweenwhatwereimbursetheNetworkPharmacyandYourpaymentforaprescriptiondrug productorservice. 5 •Aminimumof1,141Employeesand2,918Participantsenrolledinthepharmacyplanisrequired. •AllpricingguaranteesrequiretheselectionofUnitedastheexclusivemailproviderandamailbenefit designasapplicabletothehistoricaldataprovidedforthepurposeofthiscostproposal.Allratesand feesare subjecttochangeotherwise. •Wereservetherighttoreviseorrevokethisarrangementif:a)changesinfederal,stateorother applicablelaw orregulationrequiremodifications;b)therearematerialchangestotheAWPaspublishedbythepricing agencythatestablishestheAWPasusedinthesearrangements;c)Youmakebenefitchangesthatimpact the arrangements;d)thereisamaterialindustrychangeinpricingmethodologiesresultinginanewsource or benchmark;e)itisnotacceptedwithinninety(90)daysoftheissuanceofour initialquote; TRRX(02/2014) f)ifyouchangeyourmailservice benefit. EffectiveJanuary1,2016throughDecember31,2016 PharmacyFinancials Definition ContractedpharmacyratesthatwillbedeliveredtoYou. Measurement 01/01/2016 andCriteria CombinedDiscountGuarantee RetailBrand,AverageWholesalePrice(AWP)less 16.9% RetailGeneric-30Day,AWPless 81.3% MailOrderBrand,AWPless 25.1% MailOrderGeneric,AWPless 70.5% TheGuaranteedDiscountamountwillbedeterminedbymultiplyingtheAWPbytheguaranteed discountoffAWPbyeachcomponentandaddingtheamountstogether. DispensingFees RetailBrand $1.40 RetailGeneric $1.40 Dispensingfeetotalsarecalculatedbymultiplyingtheactualscriptsforeachtypebythecontracted rateforthatscripttype. MinimumRebateGuarantee RebateSharingPercentage 80.0% Basis,perscript Brand Retail $40.39 MailOrder $97.59 Fees Level CustomerSpecific Period Annually PaymentPeriod Annually PaymentAmount-- Discounts Theamounttheactualdiscountsarelessthanthecombinedcontracteddiscount amount. PaymentAmount-- DispensingFees Theamountthecombinedactualdispensingfeeexceedsthecombinedcontracted dispensingfee. PaymentAmount-- Rebates TheamountthecombinedactualRebateamountarelessthanthecombinedguaranteedRebate amount. 6 Conditions DiscountSpecificConditions •DiscountsarebasedonactualNetworkPharmacybrandandgenericusageofretailandmailorder drugs TheguaranteeddiscountamountwillbedeterminedbymultiplyingtheAWPbythecontracted discountrate offAWPbycomponent. •DoesnotapplytoitemscoveredunderthePlanforwhichnoAWPmeasureexists. •DiscountscalculatedbasedonAWPlesstheingredientcost;discountpercentagesarethe discountsdivided bytheAWP.Discountsforretailgenericprescriptionsrepresenttheaverage savingsoffAWPbasedon MaximumAllowableCost(MAC)pricingforMACgenericsandpercentage discountsavingsoffAWPfor non-MACgenerics.Allotherdiscountsrepresentthepercentagediscountsavings offofAWP. •Thearrangementexcludesallspecialtydrugs,genericmedicationslaunchedasan'at-risk'product, genericmedicationwithpendinglitigation,compounddrugs,retailoutofnetworkclaims,mailorder drugs(fordispensingfeearrangement)andnon-drugitems. •Theretailandmailordergenericdiscountsexcludeanygenericdrugthathastwo orfewergeneric manufacturers;theretailandmailorderbranddiscountsincludeanygenericdrugthathastwoor fewer genericmanufacturers. RebateSpecificConditions Unitedreservestherighttomodifyoreliminatethisarrangementasfollowsbaseduponchangesin Rebates: •ifchangesmadetoUnited'sPDL,forthepurposeofachievingalowernetdrugcostforCustomer andUnited'sotherASO customers,resultinsignificantreductionstotheRebatelevel •intheeventthattherearematerialdeviationstotheanticipatedtimingofdrugsthatwillcomeoff patentandno longergenerateRebates •ifCustomerchangesordoesnotelectanIncentedplandesign •UnitedwillpayRebatesconsistentwiththeAgreement.AreconciliationoftheRebateamounts willoccurafter theendofeachannualcontractperiodandwhenRebatepaymentsaresubstantially complete.The reconciliationcalculatestheminimumrebateamountbymultiplyingtheactualnumberofscripts filledbythe applicablerebateamountforthatscripttype. GeneralConditions •Onmailorderdrugsandretailpharmacydrugsandservicesincludingdispensingfees,Unitedwill retainthe differencebetweenwhatUnitedreimbursestheNetworkPharmacyandCustomer'spaymentfora prescriptiondrug productorservice. •Aminimumof1,182Employeesand3,020Participantsenrolledinthepharmacy planisrequired. •Thelessoroftwologic(ZBL)willapplytoParticipantpayments.Participantspaythelessorofthe usualandcustomarychargeorthecostshareamount. •AllpricingguaranteesrequiretheselectionofUnitedastheexclusivemail providerandamailbenefit designasapplicabletothehistoricaldataprovidedforthepurposeofthiscostproposal.Allrates 7 andfeesare subjecttochangeotherwise. •Unitedreservestherighttoreviseorrevokethisarrangementif:a)changesinfederal,stateor otherapplicablelaw orregulationrequiremodifications;b)therearematerialchangestotheAWPaspublishedbythe pricing agencythatestablishestheAWPasusedinthesearrangements;c)Customermakesbenefitchanges thatimpactthe arrangements;d)thereisamaterialindustrychangeinpricingmethodologiesresultinginanew sourceor benchmark;e)itisnotacceptedwithinninety(90)daysoftheissuanceofourinitial quote; TRRX(05/2015)f)ifCustomerchangestheirmailservicebenefit. EffectiveJanuary1,2016throughDecember31,2016 ClaimCalculations:FeeCalculations: ChoicePlus ChoicePlus MatureexpectedpaidclaimsMed&Rx $1,337.83 AssumedRx%16.2% ExpectedMedonlyclaims $1,121.10 Base administrationfee $34.94 ExpectedNetworkDiscount%50.9% ExpectedNetworkUtilization%88.0%Optionalservices: OVERALLUHCNetworksavings discountfactor*44.8%StandardUBH $2.20 Threshold%40.0%Nurseline $1.05 Rx $0.00 Billedclaims@44.8%Discount $2,030.69 BRS $0.31 Fiduciary $0.75 PEPMsavings@44.8%Discount $909.59 3rdpartyISL $0.00 PEPMsavings@40%Discount $812.27 WellnessBudget $1.27 ChoicePlus %ofsavingschargedforadmin 12.1% Totalfixedtarget fee $40.52 FlexShareFeeCalculations: 1/01/2016to 1/01/2017 ChoicePlus FixedPEPM $23.12 Variable%ofSavingsover40%Savings 12.1% OptionalServices: StandardUBH $2.20 Nurseline $1.05 Rx $0.00 BRS $0.31 Fiduciary $0.75 8 3rdpartyISL $0.00 WellnessBudget $1.27 TotalFixedFeePEPM(incl.Optional Services)$28.70 BilledCappedat:$40.52 Reconciledatyearend. ASSUMPTIONS: Variablefeetobewithdrawnfromcustomersbankaccountasdiscountsharerewardon aquarterlybasis. Reconciledatyearend. OptionalServiceselectedwillbeaddedtothe$23.12fixedforbillingproposes. AssumesInNetworkUtilizationof88.0% orbetter. AssumesIn-NetworkOnlydiscountssavingsfactorof50.9%andInNetwork Utilizationof88.0%. OverallUHCNetworkSavingsdiscountfactorcalculatedas:50.9%x88.0%= 44.8%. FlexShareRewardbillingwillbebasedontheOverallUHCNetworkSavings discountfactor.